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 October 31, 1998
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)
Nine West Plaza
1129 Westchester Avenue
White Plains, New York 10604
(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 October 31, 1998: 33,985,098.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Page
----
Item 1 Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Statements of Income - 13 and 39
weeks ended October 31, 1998 and November 1, 1997 3
Condensed Consolidated Balance Sheets - October 31, 1998
and January 31, 1998 4
Condensed Consolidated Statements of Cash Flows - 39 weeks
ended October 31, 1998 and November 1, 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 14
Item 3 Quantitative and Qualitative Disclosures About Market Risk 19
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 20
Item 6 Exhibits and Reports on Form 8-K 20
Signatures 21
Exhibit Index 22
<TABLE>
NINE WEST GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
<S> <C> <C> <C> <C>
13 Weeks Ended 39 Weeks Ended
---------------------- ----------------------
October 31 November 1 October 31 November 1
1998 1997 1998 1997
-------- -------- ---------- ----------
Net revenues......................... $485,720 $496,563 $1,461,960 $1,398,330
Cost of goods sold................... 277,197 275,145 848,001 788,432
-------- -------- ---------- ----------
Gross profit....................... 208,523 221,418 613,959 609,898
Selling, general and
administrative expenses............. 166,277 147,120 490,878 429,542
Amortization of acquisition goodwill
and other intangibles............... 2,674 2,458 8,022 7,210
-------- -------- ---------- ----------
Operating income................... 39,572 71,840 115,059 173,146
Interest expense..................... 13,549 14,882 41,628 39,782
-------- -------- ---------- ----------
Income before income taxes......... 26,023 56,958 73,431 133,364
Income tax expense................... 10,150 22,356 28,638 52,345
-------- -------- ---------- ----------
Income before extraordinary item... 15,873 34,602 44,793 81,019
Extraordinary gain (net of income
taxes of $1,869).................... 2,923 - 2,923 -
-------- -------- ---------- ----------
Net income......................... $ 18,796 $ 34,602 $ 47,716 $ 81,019
======== ======== ========== ==========
Weighted average common shares and
common share equivalents used in
earnings per share calculation:
Basic.............................. 34,797 35,845 35,550 35,826
======== ======== ========== ==========
Diluted............................ 34,797 39,516 35,558 39,552
======== ======== ========== ==========
Basic earnings per share:
Income before extraordinary item... $ 0.46 $ 0.97 $ 1.26 $ 2.26
Extraordinary gain - net........... 0.08 - 0.08 -
-------- -------- ---------- ----------
Net income....................... $ 0.54 $ 0.97 $ 1.34 $ 2.26
======== ======== ========== ==========
Diluted earnings per share:
Income before extraordinary item... $ 0.46 $ 0.92 $ 1.26 $ 2.18
Extraordinary gain - net........... 0.08 - 0.08 -
-------- -------- ---------- ----------
Net income....................... $ 0.54 $ 0.92 $ 1.34 $ 2.18
======== ======== ========== ==========
The accompanying Notes are an integral part of the Condensed Consolidated
Financial Statements
</TABLE>
NINE WEST GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands except share data)
(Unaudited)
October 31 January 31
1998 1998
---------- ----------
ASSETS
Current Assets:
Cash.............................................. $ 16,330 $ 23,674
Accounts receivable............................... 6,551 40,715
Securitized interest in accounts receivable....... 98,198 91,208
Inventories....................................... 502,456 543,503
Prepaid expenses and other current assets......... 57,383 100,031
---------- ----------
Total current assets............................ 680,918 799,131
Property and equipment - net........................ 175,278 172,795
Goodwill - net...................................... 231,509 231,130
Trademarks and trade names - net.................... 138,537 139,750
Other assets........................................ 46,456 48,733
---------- ----------
Total assets.................................. $1,272,698 $1,391,539
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.................................. $ 87,737 $ 100,075
Accrued expenses and other current liabilities.... 89,935 105,444
Current portion of long-term debt................. 3,623 4,235
---------- ----------
Total current liabilities....................... 181,295 209,754
Long-term debt...................................... 558,669 687,263
Other non-current liabilities....................... 65,945 55,674
---------- ----------
Total liabilities............................. 805,909 952,691
---------- ----------
Stockholders' Equity:
Preferred stock ($0.01 par value, 25,000,000
shares authorized; none issued and outstanding).. - -
Common stock ($0.01 par value, 100,000,000 shares
authorized; 35,937,998 and 35,818,831 shares
issued, respectively)............................ 359 358
Additional paid-in capital........................ 144,096 143,278
Retained earnings................................. 345,634 297,918
Cumulative currency translation adjustment........ (3,309) (2,706)
---------- ----------
486,780 438,848
Less treasury stock, at cost (1,952,900 shares). (19,991) -
---------- ----------
Total stockholders' equity.................... 466,789 438,848
---------- ----------
Total liabilities and stockholders' equity.. $1,272,698 $1,391,539
========== ==========
The accompanying Notes are an integral part of the Condensed Consolidated
Financial Statements
NINE WEST GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
39 Weeks Ended
----------------------
October 31 November 1
1998 1997
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................ $ 47,716 $ 81,019
Adjustments to reconcile net income to net cash
used by operating activities:
Extraordinary gain................................. (4,792) -
Depreciation and amortization...................... 36,167 28,787
Deferred income taxes and other.................... 4,094 11,654
Changes in assets and liabilities:
Accounts receivable including securitized
interest in accounts receivable................ 28,452 (53,761)
Inventories..................................... 43,891 (27,182)
Prepaid expenses and other assets............... 31,091 (4,721)
Accounts payable................................ (12,338) 24,822
Accrued expenses and other liabilities.......... (10,272) (21,852)
-------- --------
Net cash provided by operating activities............. 164,009 38,766
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment................... (30,948) (56,599)
Proceeds from sale of property and equipment.......... 16,351 -
Acquisition of business - net of cash acquired........ (9,049) (20,503)
Other investing activities............................ (2,291) (148)
-------- --------
Net cash used by investing activities................. (25,937) (77,250)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under financing agreements (92,904) 49,138
Net proceeds from issuance of long-term debt.......... - 316,865
Repayments of long-term debt.......................... (32,737) (326,913)
Purchases of stock for treasury....................... (19,991) -
Net proceeds from issuance of stock and other......... 216 3,307
-------- --------
Net cash (used) provided by financing activities...... (145,416) 42,397
-------- --------
NET (DECREASE) INCREASE IN CASH....................... (7,344) 3,913
CASH, BEGINNING OF PERIOD............................. 23,674 25,176
-------- --------
CASH, END OF PERIOD................................... $ 16,330 $ 29,089
======== ========
The accompanying Notes are an integral part of the Condensed Consolidated
Financial Statements
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 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 39
weeks ended October 31, 1998 are not necessarily indicative of the results to
be expected for the 52 weeks ending January 30, 1999 ("1998").
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 Company's Annual Report on Form 10-K for the 52 weeks ended
January 31, 1998 ("1997") and Quarterly Reports on Form 10-Q for periods
subsequent thereto.
2. EXTRAORDINARY ITEM
During the 13 weeks ended October 31, 1998, the Company repurchased $31.0
million face amount of its 9% Series B Senior Subordinated Notes due 2007 and
$4.0 million face amount of its 8-3/8% Series B Senior Notes due 2005, at a
discount, resulting in a $4.8 million extraordinary gain ($2.9 million on an
after-tax basis) on early extinguishment of debt.
3. EARNINGS PER SHARE
Following is a reconciliation of the earnings and shares used in the basic
and diluted per share computations for income before extraordinary item (in
thousands):
13 Weeks Ended 39 Weeks Ended
------------------ ------------------
Oct. 31 Nov. 1 Oct. 31 Nov. 1
1998 1997 1998 1997
-------- -------- -------- --------
Earnings:
Income before extraordinary item
(numerator for basic calculation) $ 15,873 $ 34,602 $ 44,793 $ 81,019
Effect of convertible notes....... - 1,671 - 5,010
-------- -------- -------- --------
Numerator for diluted calculation. $ 15,873 $ 36,273 $ 44,793 $ 86,029
======== ======== ======== ========
Shares:
Weighted average common shares
outstanding (denominator for
basic calculation)............... 34,797 35,845 35,550 35,826
Effect of stock options........... - 615 8 670
Effect of convertible notes....... - 3,056 - 3,056
-------- -------- -------- --------
Denominator for diluted
calculation...................... 34,797 39,516 35,558 39,552
======== ======== ======== ========
Earnings per share before
extraordinary item:
Basic ............................ $ 0.46 $ 0.97 $ 1.26 $ 2.26
======== ======== ======== ========
Diluted .......................... $ 0.46 $ 0.92 $ 1.26 $ 2.18
======== ======== ======== ========
The impact of the convertible notes was excluded from the diluted earnings
per share calculation for the 13 and 39 weeks ended October 31, 1998 as its
effect on the reported per share amounts was anti-dilutive.
For the 13 and 39 weeks ended October 31, 1998 and November 1, 1997,
certain outstanding stock options were not included in the computation of
diluted earnings per share, because the respective exercise prices were greater
than the average market price of the Common Stock. For the 13 weeks ended
October 31, 1998 and November 1, 1997, the number of stock options whose impact
was not included in the diluted computation was 5.8 million and 1.3 million,
respectively. For the 39 weeks ended October 31, 1998 and November 1, 1997,
the number of stock options whose impact was not included in the diluted
computation was 5.7 million and 1.2 million, respectively. These options were
outstanding at the end of each of the respective periods.
4. COMPREHENSIVE INCOME
Effective with the first quarter of 1998, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive
Income." Comprehensive income is generally defined as all changes in
stockholders' equity exclusive of transactions with owners. SFAS No. 130
requires the disclosure of comprehensive income and its components.
Comprehensive income, net of taxes, is comprised of (in thousands):
13 Weeks Ended 39 Weeks Ended
------------------ ------------------
Oct. 31 Nov. 1 Oct. 31 Nov. 1
1998 1997 1998 1997
-------- -------- -------- --------
Net income...................... $ 18,796 $ 34,602 $ 47,716 $ 81,019
Currency translation adjustment. 1,603 (88) (603) 25
-------- -------- -------- --------
Comprehensive income....... $ 20,399 $ 34,514 $ 47,113 $ 81,044
======== ======== ======== ========
5. INVENTORIES
Inventories are valued at the lower of cost or market. Approximately 57%
and 60% of inventory values were determined by using the FIFO (first in, first
out) method of valuation as of October 31, 1998 and January 31, 1998,
respectively; the remainder was determined by using the weighted average cost
method.
Inventories are comprised of (in thousands):
October 31 January 31
1998 1998
---------- ----------
Raw materials................................ $ 18,128 $ 19,672
Work in process.............................. 1,924 1,987
Finished goods............................... 482,404 521,844
-------- --------
Total inventories....................... $502,456 $543,503
======== ========
6. LONG-TERM DEBT
Effective December 15, 1998, the Company reduced the commitment under its
revolving credit facility to $500.0 million from $600.0 million. Under the
terms of the revolving credit facility, up to $150.0 million may be utilized
for letters of credit and up to $250.0 million may be in the form of
multicurrency borrowings. As of October 31, 1998, $72.0 million of borrowings
and $50.6 million of letters of credit were outstanding on a revolving basis
and, on a pro forma basis after the commitment reduction, $377.4 million was
available for future borrowing.
7. CASH FLOWS
Cash paid for income taxes was $12.7 million and $33.1 million for the 39
weeks ended October 31, 1998 and November 1, 1997, respectively. Cash paid for
interest was $49.7 million and $28.4 million for the 39 weeks ended October 31,
1998 and November 1, 1997, respectively.
8. SUBSEQUENT EVENTS
On November 6, 1998, the Company's Board of Directors approved the
consolidation of certain manufacturing operations in order to optimize global
sourcing activities. As part of this process, the Company will close its
footwear manufacturing facility in Osgood, Indiana and a Caribbean-based
component facility, and it will reconfigure and integrate certain operations at
three facilities in Vanceburg and Hebron, Kentucky, and Vevay, Indiana. The
closings and reconfigurations will begin in January 1999 and will continue
through the first half of 1999. Approximately 700 positions are affected by
this action and are evenly distributed between domestic and foreign operations.
A pre-tax charge of approximately $7.0 million will be recorded in the fourth
quarter of 1998 for this action, of which approximately $4.0 million represent
cash outlays, substantially all of which are expected to be paid by the end of
1999.
9. CONDENSED CONSOLIDATING FINANCIAL INFORMATION
Certain of the Company's debt is fully and unconditionally guaranteed on a
joint and several basis by certain wholly-owned domestic subsidiaries of the
Company. Accordingly, condensed consolidating balance sheets as of October 31,
1998 and January 31, 1998, and condensed consolidating statements of income and
cash flows for the 13 and 39 week periods ended October 31, 1998 and November
1, 1997, respectively, for such guarantor subsidiaries are provided. These
condensed consolidating financial statements have been prepared using the
equity method of accounting in accordance with the requirements for
presentation of such information. Separate financial statements and other
disclosures concerning the guarantor subsidiaries are not presented because
management has determined that they are not material to investors. There are
no contractual restrictions on distributions from each of the guarantor
subsidiaries to the Company.
<TABLE>
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
13 WEEKS ENDED OCTOBER 31, 1998
(In thousands)
<S> <C> <C> <C> <C> <C>
Nine
West
Group Guarantor Non-Guarantor Elimination
Inc. Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
Net revenues......................... $241,764 $609,066 $77,923 $(443,033) $485,720
Cost of goods sold................... 130,027 514,583 40,055 (407,468) 277,197
-------- -------- ------- --------- --------
Gross profit....................... 111,737 94,483 37,868 (35,565) 208,523
Selling, general and
administrative expenses............. 109,741 57,728 34,373 (35,565) 166,277
Amortization of acquisition goodwill
and other intangibles............... 1,412 929 333 - 2,674
-------- -------- ------- --------- --------
Operating income................... 584 35,826 3,162 - 39,572
Interest expense..................... 2,646 8,121 2,782 - 13,549
Equity in net earnings of
subsidiaries........................ 19,899 - - (19,899) -
-------- -------- ------- --------- --------
Income before income taxes......... 17,837 27,705 380 (19,899) 26,023
Income tax expense................... 1,964 7,576 610 - 10,150
-------- -------- ------- --------- --------
Income before extraordinary item.. 15,873 20,129 (230) (19,899) 15,873
Extraordinary gain (net of income
taxes of $1,869)................... 2,923 - - - 2,923
-------- -------- ------- --------- --------
Net income......................... $ 18,796 $ 20,129 $ (230) $ (19,899) $ 18,796
======== ======== ======= ========= ========
</TABLE>
<TABLE>
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
13 WEEKS ENDED NOVEMBER 1, 1997
(In thousands)
<S> <C> <C> <C> <C> <C>
Nine
West
Group Guarantor Non-Guarantor Elimination
Inc. Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
Net revenues......................... $219,931 $638,957 $72,567 $(434,892) $496,563
Cost of goods sold................... 107,404 521,695 39,189 (393,143) 275,145
-------- -------- ------- --------- --------
Gross profit....................... 112,527 117,262 33,378 (41,749) 221,418
Selling, general and
administrative expenses............. 97,120 66,542 25,237 (41,779) 147,120
Amortization of acquisition goodwill
and other intangibles............... 1,387 929 142 - 2,458
-------- -------- ------- --------- --------
Operating income................... 14,020 49,791 7,999 30 71,840
Interest expense..................... 4,845 8,171 1,836 30 14,882
Equity in net earnings of
subsidiaries........................ 29,609 - - (29,609) -
-------- -------- ------- --------- --------
Income before income taxes......... 38,784 41,620 6,163 (29,609) 56,958
Income tax expense................... 4,182 16,631 1,543 - 22,356
-------- -------- ------- --------- --------
Net income......................... $ 34,602 $ 24,989 $ 4,620 $ (29,609) $ 34,602
======== ======== ======= ========= ========
</TABLE>
<TABLE>
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
39 WEEKS ENDED OCTOBER 31, 1998
(In thousands)
<S> <C> <C> <C> <C> <C>
Nine
West
Group Guarantor Non-Guarantor Elimination
Inc. Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
Net revenues......................... $696,492 $1,822,065 $248,438 $(1,305,035) $1,461,960
Cost of goods sold................... 375,040 1,534,703 127,998 (1,189,740) 848,001
-------- ---------- -------- --------- --------
Gross profit....................... 321,452 287,362 120,440 (115,295) 613,959
Selling, general and
administrative expenses............. 308,734 195,175 102,264 (115,295) 490,878
Amortization of acquisition goodwill
and other intangibles............... 4,235 2,787 1,000 - 8,022
-------- ---------- -------- --------- --------
Operating income................... 8,483 89,400 17,176 - 115,059
Interest expense..................... 9,829 24,785 7,014 - 41,628
Equity in net earnings of
subsidiaries........................ 49,138 - - (49,138) -
-------- ---------- -------- --------- --------
Income before income taxes......... 47,792 64,615 10,162 (49,138) 73,431
Income tax expense................... 2,999 23,350 2,289 - 28,638
-------- ---------- -------- --------- --------
Income before extraordinary item..... 44,793 41,265 7,873 (49,138) 44,793
Extraordinary gain (net of income
taxes of $1,869)................... 2,923 - - - 2,923
-------- ---------- -------- --------- --------
Net income......................... $ 47,716 $ 41,265 $ 7,873 $ (49,138) $ 47,716
======== ========== ======== ========= ========
</TABLE>
<TABLE>
CONDENSED CONSOLIDATING STATEMENTS OF INCOME
39 WEEKS ENDED NOVEMBER 1, 1997
(In thousands)
<S> <C> <C> <C> <C> <C>
Nine
West
Group Guarantor Non-Guarantor Elimination
Inc. Subsidiaries Subsidiaries Entries Consolidated
-------- ------------ ------------- ----------- ------------
Net revenues......................... $633,405 $1,763,754 $169,666 $(1,168,495) $1,398,330
Cost of goods sold................... 313,908 1,427,000 96,201 (1,048,677) 788,432
-------- ---------- ------- --------- --------
Gross profit....................... 319,497 336,754 73,465 (119,818) 609,898
Selling, general and
administrative expenses............. 288,079 206,766 54,698 (120,001) 429,542
Amortization of acquisition goodwill
and other intangibles............... 4,165 2,787 258 - 7,210
-------- ---------- ------- --------- --------
Operating income................... 27,253 127,201 18,509 183 173,146
Interest expense..................... 10,256 23,847 5,496 183 39,782
Equity in net earnings of
subsidiaries........................ 71,748 - - (71,748) -
-------- ---------- ------- --------- --------
Income before income taxes......... 88,745 103,354 13,013 (71,748) 133,364
Income tax expense................... 7,726 42,101 2,518 - 52,345
-------- ---------- ------- --------- --------
Net income......................... $ 81,019 $ 61,253 $10,495 $ (71,748) $ 81,019
======== ========== ======= ========= ========
</TABLE>
<TABLE>
CONDENSED CONSOLIDATING BALANCE SHEETS
OCTOBER 31, 1998
(In thousands)
<S> <C> <C> <C> <C> <C>
Nine
West
Group Guarantor Non-Guarantor Elimination
Inc. Subsidiaries Subsidiaries Entries Consolidated
---------- ------------ ------------- ----------- ------------
ASSETS
Current Assets:
Cash............................... $ 6,466 $ 19 $ 9,845 $ - $ 16,330
Accounts receivable................ 58,635 (73,275) 21,191 - 6,551
Securitized interest in accounts
receivable........................ - - 98,198 - 98,198
Inventories........................ 173,131 247,707 81,618 - 502,456
Prepaid expenses and other
current assets.................... 23,603 27,597 5,883 300 57,383
Due (to) from affiliates........... (223,026) 328,510 (105,184) (300) -
---------- -------- -------- --------- ----------
Total current assets............. 38,809 530,558 111,551 - 680,918
Property and equipment - net......... 125,080 21,471 28,727 - 175,278
Goodwill - net....................... 204,039 - 27,470 - 231,509
Trademarks and trade names - net..... 1,106 135,835 1,596 - 138,537
Other assets......................... 36,357 3,288 6,977 (166) 46,456
Investment in subsidiaries........... 745,093 - - (745,093) -
---------- -------- -------- --------- ----------
Total assets................... $1,150,484 $691,152 $176,321 $(745,259) $1,272,698
========== ======== ======== ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable................... $ 18,018 $ 59,077 $ 10,642 $ - $ 87,737
Accrued expenses and other current
liabilities....................... 59,711 12,248 17,976 - 89,935
Current portion of long-term debt.. - - 3,623 - 3,623
---------- -------- -------- --------- ----------
Total current liabilities........ 77,729 71,325 32,241 - 181,295
Long-term debt....................... 538,344 - 20,325 - 558,669
Other non-current liabilities........ 64,334 - 913 698 65,945
---------- -------- -------- --------- ----------
Total liabilities.............. 680,407 71,325 53,479 698 805,909
Stockholders' equity................. 470,077 619,827 122,842 (745,957) 466,789
---------- -------- -------- --------- ----------
Total liabilities and
stockholders' equity........ $1,150,484 $691,152 $176,321 $(745,259) $1,272,698
========== ======== ======== ========= ==========
</TABLE>
<TABLE>
CONDENSED CONSOLIDATING BALANCE SHEETS
JANUARY 31, 1998
(In thousands)
<S> <C> <C> <C> <C> <C>
Nine
West
Group Guarantor Non-Guarantor Elimination
Inc. Subsidiaries Subsidiaries Entries Consolidated
---------- ------------ ------------- ----------- ------------
ASSETS
Current Assets:
Cash............................. $ 10,526 $ 39 $ 13,109 $ - $ 23,674
Accounts receivable.............. 44,723 (18,824) 15,376 (560) 40,715
Securitized interest in accounts
receivable...................... - - 91,208 - 91,208
Inventories...................... 174,674 305,180 63,649 - 543,503
Prepaid expenses and other
current assets.................. 43,628 31,984 10,515 13,904 100,031
Due (to) from affiliates......... (72,262) 156,341 (83,803) (276) -
---------- -------- -------- --------- ----------
Total current assets........... 201,289 474,720 110,054 13,068 799,131
Property and equipment - net....... 123,945 23,701 38,738 (13,589) 172,795
Goodwill - net..................... 207,417 - 23,713 - 231,130
Trademarks and trade names - net... 1,128 138,622 - - 139,750
Other assets....................... 35,688 1,270 11,962 (187) 48,733
Investment in subsidiaries......... 719,273 - - (719,273) -
---------- -------- -------- --------- ----------
Total assets................. $1,288,740 $638,313 $184,467 $(719,981) $1,391,539
---------- -------- -------- --------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable................. $ 38,554 $ 52,723 $ 8,798 $ - $ 100,075
Accrued expenses and other
current liabilities............. 80,298 7,283 18,423 (560) 105,444
Current portion of long-term debt - - 4,235 - 4,235
---------- -------- -------- --------- ----------
Total current liabilities...... 118,852 60,006 31,456 (560) 209,754
Long-term debt..................... 674,267 - 12,996 - 687,263
Other non-current liabilities...... 54,107 - 868 699 55,674
---------- -------- -------- --------- ----------
Total liabilities............ 847,226 60,006 45,320 139 952,691
Stockholders' equity............... 441,514 578,307 139,147 (720,120) 438,848
---------- -------- -------- --------- ----------
Total liabilities and
stockholders' equity...... $1,288,740 $638,313 $184,467 $(719,981) $1,391,539
========== ======== ======== ========= ==========
</TABLE>
<TABLE>
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
39 WEEKS ENDED OCTOBER 31, 1998
(In thousands)
<S> <C> <C> <C> <C> <C>
Nine
West
Group Guarantor Non-Guarantor Elimination
Inc. Subsidiaries Subsidiaries Entries Consolidated
--------- ------------ ------------- ----------- ------------
Net cash provided (used) by operating
activities.......................... $ 151,472 $ 2,301 $ 10,237 $ (1) $ 164,009
--------- --------- -------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.. (19,309) (2,622) (9,017) - (30,948)
Proceeds from sale of property and
equipment........................... 16,351 - - - 16,351
Acquisition of business - net of cash
acquired............................ - - (9,049) - (9,049)
Other investing activities........... (1,063) 46 (1,274) - (2,291)
--------- --------- -------- -------- ---------
Net cash used by investing
activities.......................... (4,021) (2,576) (19,340) - (25,937)
--------- --------- -------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (repayments) borrowings under
financing agreements................ (102,860) - 9,956 - (92,904)
Repayments of long-term debt......... (29,498) - (3,239) - (32,737)
Purchases of stock for treasury...... (19,991) - - - (19,991)
Net proceeds from issuance of stock
and other........................... 838 255 (878) 1 216
--------- --------- -------- -------- ---------
Net cash (used) provided by financing
activities.......................... (151,511) 255 5,839 1 (145,416)
--------- --------- -------- -------- ---------
NET DECREASE IN CASH................. (4,060) (20) (3,264) - (7,344)
CASH, BEGINNING OF PERIOD............ 10,526 39 13,109 - 23,674
--------- --------- -------- -------- ---------
CASH, END OF PERIOD.................. $ 6,466 $ 19 $ 9,845 $ - $ 16,330
========= ========= ======== ======== =========
</TABLE>
<TABLE>
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
39 WEEKS ENDED NOVEMBER 1, 1997
(In thousands)
<S> <C> <C> <C> <C> <C>
Nine
West
Group Guarantor Non-Guarantor Elimination
Inc. Subsidiaries Subsidiaries Entries Consolidated
--------- ------------ ------------- ----------- ------------
Net cash (used) provided by operating
activities.......................... $ (11,418) $ 8,785 $ 41,314 $ 85 $ 38,766
--------- -------- -------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment.. (41,213) (7,291) (8,095) - (56,599)
Acquisition of business - net of cash
acquired............................ - - (20,503) - (20,503)
Other investing activities........... 454 (184) (343) (75) (148)
--------- -------- -------- -------- ---------
Net cash used by investing
activities.......................... (40,759) (7,475) (28,941) (75) (77,250)
--------- -------- -------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under financing
agreements.......................... 45,001 - 4,137 - 49,138
Net proceeds from issuance of
long-term debt...................... 316,865 - - - 316,865
Repayments of long-term debt......... (322,000) - (4,913) - (326,913)
Net proceeds from issuance of stock
and other........................... 3,281 4 32 (10) 3,307
--------- -------- -------- -------- ---------
Net cash provided (used) by financing
activities.......................... 43,147 4 (744) (10) 42,397
--------- -------- -------- -------- ---------
NET (DECREASE) INCREASE IN CASH...... (9,030) 1,314 11,629 - 3,913
CASH, BEGINNING OF PERIOD............ 23,505 26 1,645 - 25,176
--------- -------- -------- -------- ---------
CASH, END OF PERIOD.................. $ 14,475 $ 1,340 $ 13,274 $ - $ 29,089
========= ======== ======== ======== =========
</TABLE>
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.
RESULTS OF OPERATIONS
NET INCOME. Net income for the third quarter of 1998 was $18.8 million,
or $0.54 per diluted share, a 45.7% decrease from net income of $34.6 million,
or $0.92 per diluted share, for the third quarter of 1997. Net income for the
39 weeks ended October 31, 1998 was $47.7 million, or $1.34 per diluted share,
a 41.1% decrease from net income of $81.0 million, or $2.18 per diluted share,
for the 39 weeks ended November 1, 1997. The 1998 net income figures include
an extraordinary gain of $4.8 million ($2.9 million on an after-tax basis)
related to the Company's repurchase of $31.0 million face amount of its 9%
Series B Senior Subordinated Notes due 2007 and $4.0 million face amount of its
8-3/8% Series B Senior Notes due 2005, at a discount. Excluding the effect of
this repurchase, net income for the third quarter and 39 weeks ended October
31, 1998 was $15.9 million, or $0.46 per diluted share, and $44.8 million, or
$1.26 per diluted share, respectively.
The Company anticipates that net revenues and operating margins through at
least the fourth quarter of 1998 will be negatively impacted by the factors
which adversely affected the Company's net revenues and operating margins
during the 13 weeks and 39 weeks ended October 31, 1998, principally the
continuing weakness in consumer demand in the domestic and international retail
footwear markets. This weakness has resulted in excess inventory at the retail
level and corresponding heavy promotional pricing activity in the Company's
wholesale and retail businesses. In addition, the Company anticipates that its
operating margins will continue to be negatively impacted by the continuing
shift in the sales mix towards retail operations which provide higher gross
profit margins but also carry higher selling, general and administrative
expense ("SG&A") margins than wholesale operations. See "--Net Revenues,"
"--Gross Profit" and "--Selling, General and Administrative Expenses."
NET REVENUES. Net revenues were $485.7 million in the third quarter of
1998 compared to $496.6 million in the third quarter of 1997, a decrease of
$10.9 million, or 2.2%. For the 39 weeks ended October 31, 1998, net revenues
were $1.5 billion compared to $1.4 billion in the comparable prior year period,
an increase of $63.6 million, or 4.6%.
Domestic wholesale net revenues decreased by $15.5 million, or 6.1%, and
$25.7 million, or 3.5%, for the 13 weeks and 39 weeks ended October 31, 1998,
respectively, due primarily to heavy promotional pricing activity resulting
from the weakness in consumer demand in the domestic retail footwear market.
This decrease was offset in part by an increase in net revenues for the
Company's wholesale accessories business of $15.7 million, or 88.5%, for the
third quarter of 1998, and $36.0 million, or 86.2%, for the 39 weeks ended
October 31, 1998.
Domestic retail net revenues decreased $6.9 million, or 3.7%, for the 13
weeks ended October 31, 1998, due primarily to a comparable store sales
decrease of $15.3 million, or 8.7%, partially offset by increased volume from
11 retail locations opened (net of closings) since November 1, 1997 ($8.4
million). For the 39 weeks ended October 31, 1998, domestic retail net
revenues increased $5.4 million, or 1.0%, due primarily to increased volume
from 11 retail locations opened (net of closings) since November 1, 1997 ($42.2
million), partially offset by a comparable store sales decrease of $36.8
million, or 7.1%. Domestic comparable store sales decreased due to weakness in
consumer demand in the domestic retail footwear market.
International net revenues, which are primarily derived from retail
operations, increased $11.5 million, or 20.3%, for the third quarter of 1998,
and $83.9 million, or 68.5%, for the 39 weeks ended October 31, 1998, due
primarily to increased volume from 104 retail locations opened or acquired (net
of closings) since November 1, 1997 ($13.9 million and $87.7 million for the 13
weeks and 39 weeks ended October 31, 1998, respectively). International
comparable store sales decreased by $2.5 million, or 5.9%, for the third
quarter of 1998, and decreased $5.1 million, or 5.0%, for the 39 weeks ended
October 31, 1998, due to weakness in the international retail footwear market.
During the 13 weeks and 39 weeks ended October 31, 1998, wholesale
operations accounted for 51% and 50%, respectively, of the Company's
consolidated net revenues, while retail operations accounted for the remaining
49% and 50%, respectively. During the 13 weeks and 39 weeks ended November 1,
1997, wholesale operations accounted for 53% and 54% of the Company's
consolidated net revenues, respectively, while retail operations accounted for
the remaining 47% and 46%, respectively. Net revenues from the Company's
international segment are included in the wholesale and retail percentages
noted above and accounted for 14% of the Company's consolidated net revenues
for both the 13 weeks and 39 weeks ended October 31, 1998, compared to 11% and
9% of consolidated net revenues for the comparable prior year periods.
GROSS PROFIT. Gross profit was $208.5 million in the third quarter of
1998 compared to $221.4 million in the third quarter of 1997, a decrease of
$12.9 million, or 5.8%. Gross profit for the 39 weeks ended October 31, 1998
was $614.0 million, compared to $609.9 million for the comparable prior year
period, an increase of $4.1 million, or 0.7%. Gross profit as a percentage of
net revenues was 42.9% and 42.0% for the third quarter and first 39 weeks of
1998, compared to 44.6% and 43.6% for the comparable prior year periods. The
decrease in gross profit as a percentage of net revenues was due primarily to
decreased gross margins in the Company's domestic wholesale business and, to a
lesser extent, in its domestic retail business, due primarily to the weakness
in consumer demand in the domestic retail footwear market which resulted in
excess inventory and corresponding heavy promotional pricing activity.
SELLING, GENERAL & ADMINISTRATIVE EXPENSES. SG&A expenses were $166.3
million in the third quarter of 1998, compared to $147.1 million in the third
quarter of 1997, an increase of $19.2 million, or 13.0%. SG&A expenses were
$490.9 million for the 39 weeks ended October 31, 1998, compared to $429.5
million in the comparable prior year period, an increase of $61.4 million, or
14.3%. SG&A expense expressed as a percentage of net revenues was 34.2% and
33.6% for the third quarter and first 39 weeks of 1998, respectively, up from
29.6% and 30.7% for the comparable prior year periods. The increase in SG&A
expenses as a percentage of net revenues is due primarily to the continued
shift in the sales mix in both the Company's domestic and international
segments towards retail operations, which carry higher SG&A margins than
wholesale operations, and decreased comparable store sales in the Company's
domestic retail business.
INTEREST EXPENSE. Interest expense was $13.5 million in the third quarter
of 1998, compared to $14.9 million in the third quarter of 1997. The decrease
of $1.4 million, or 8.9%, was due primarily to a decrease in the Company's
weighted average debt. Interest expense was $41.6 million for the first 39
weeks of 1998, compared to $39.8 million for the comparable prior year period,
an increase of $1.8 million, or 4.6%. The increase in interest expense during
the first 39 weeks of 1998 relates primarily to an increase in the Company's
weighted average interest rates. Weighted average debt outstanding was
approximately $585 million for the third quarter of 1998, compared to
approximately $705 million for the comparable prior year period. For the 39
weeks ended October 31, 1998, weighted average debt outstanding was
approximately $645 million, compared to approximately $680 million for the
comparable prior year period. The decrease in weighted average debt in both
the third quarter and first 39 weeks of 1998 is attributable primarily to the
increase in cash provided by operating activities discussed below, as well as
to additional factors impacting working capital. Weighted average interest
rates were 7.5% and 7.3% for the third quarter of 1998 and 1997, respectively,
and 7.3% and 6.7% for the first 39 weeks of 1998 and 1997, respectively. The
increase in the weighted average interest rate during the first 39 weeks of
1998 is attributable primarily to the refinancing of the Company's debt at the
end of the second quarter of 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company relies primarily upon cash flow from operating activities and
borrowings under the Company's revolving credit facility to finance its
operations and expansion. Cash provided by operating activities was $164.0
million for the first 39 weeks of 1998, compared to $38.8 million for the first
39 weeks of 1997. The increase in cash provided by operating activities is due
primarily to enhancements to the Company's accounts receivable securitization
program and inventory management improvements which resulted in a significant
decrease in the Company's investment in inventory.
Working capital was $499.6 million at October 31, 1998, compared to $589.4
million at January 31, 1998, a decrease of $89.8 million. The decrease in
working capital was primarily due to a $27.2 million decrease in accounts
receivable, including securitized interest in accounts receivable, a $41.0
million decrease in inventories, and a $42.6 million decrease in prepaid
expenses and other current assets. These factors were partially offset by a
$12.3 million decrease in accounts payable and a $15.5 million decrease in
accrued expenses and other current liabilities. 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.
Cash used by investing activities was $25.9 million for the first 39 weeks
of 1998, compared to $77.3 million for the first 39 weeks of 1997. Cash used
by investing activities during the 39 weeks ended October 31, 1998 includes
$9.0 million for the purchase of Cable & Co. (UK) Limited, a United Kingdom-
based footwear and accessories company, involving 25 retail locations situated
primarily in the United Kingdom, and during the comparable prior year period
includes $20.5 million for the purchase of The Shoe Studio Group Limited and 52
retail concessions from British Shoe Corporation. Proceeds from the sale of
property and equipment includes $16.4 million for the sale of certain office
and warehouse facilities located in Cincinnati, Ohio, which the Company had
acquired in connection with the acquisition of the Footwear Division of The
United States Shoe Corporation. Capital expenditures totaled $30.9 million and
$56.6 million in the 39 weeks ended October 31, 1998 and November 1, 1997,
respectively, and related primarily to the Company's retail location expansion
and remodeling programs ($19.0 million and $25.4 million for the 39 weeks ended
October 31, 1998 and November 1, 1997, respectively), and in 1997, include
expenditures related to the consolidation and relocation of the Company's
offices in Stamford, Connecticut and Cincinnati, Ohio to a new facility in
White Plains, New York ($19.3 million). The Company estimates that total
capital expenditures for 1998 will be approximately $47 million. The actual
amount of the Company's capital expenditures depends, in part, on the number of
new retail locations opened, the number of retail locations remodeled and the
amount of any construction allowances the Company may receive from the
landlords of its new retail locations. The Company's ongoing evaluation of its
retail operations has led to a decision to grow its retail network at a slower
pace by applying rigorous standards to all retail location opening and closing
decisions. The opening and success of new retail locations 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 October 31, 1998, the
Company had commitments for approximately $6.0 million of capital expenditures,
related to commitments to open 27 domestic retail locations (12 during the
fourth quarter of 1998 and 15 during 1999) and 17 international retail
locations (10 during the fourth quarter of 1998 and 7 during 1999).
Cash used by financing activities was $145.4 million for the first 39
weeks of 1998, compared to cash provided by financing activities of $42.4
million for the first 39 weeks of 1997. Cash used by financing activities
includes a $92.9 million reduction in borrowings under the Company's revolving
credit facility. The decrease in borrowings is primarily attributable to the
factors impacting cash provided by operating activities noted above. Effective
December 15, 1998, the Company reduced the commitment under its revolving
credit facility to $500.0 million from $600.0 million. Under the terms of the
revolving credit facility, up to $150.0 million may be utilized for letters of
credit and up to $250.0 million may be in the form of multicurrency borrowings.
As of October 31, 1998, $72.0 million of borrowings and $50.6 million of
letters of credit were outstanding on a revolving basis and, on a pro forma
basis after the commitment reduction, $377.4 million was available for future
borrowing. Cash used for repayments of long-term debt includes $29.5 million
for the repurchase of $31.0 million face amount of its 9% Series B Senior
Subordinated Notes due 2007 and $4.0 million face amount of its 8-3/8% Series B
Senior Notes due 2005, at a discount, resulting in a $4.8 million extraordinary
gain ($2.9 million on an after-tax basis). Cash used for purchases of stock
for treasury relates to the Company's repurchase of approximately 2.0 million
shares of its outstanding common stock for $20.0 million, which reflects the
limitation currently imposed under the Company's credit agreement.
On November 6, 1998, the Company's Board of Directors approved the
consolidation of certain manufacturing operations in order to optimize global
sourcing activities. As part of this process, the Company will close its
footwear manufacturing facility in Osgood, Indiana and a Caribbean-based
component facility, and it will reconfigure and integrate certain operations at
three facilities in Vanceburg and Hebron, Kentucky, and Vevay, Indiana. The
closings and reconfigurations will begin in January 1999 and will continue
through the first half of 1999. Approximately 700 positions are affected by
this action and are evenly distributed between domestic and foreign operations.
A pre-tax charge of approximately $7.0 million will be recorded in the fourth
quarter of 1998 for this action, of which approximately $4.0 million represent
cash outlays, substantially all of which are expected to be paid by the end of
1999.
The Company expects that its current cash balances, cash provided by
operations and borrowings under the revolving credit facility will continue to
provide the capital flexibility necessary to fund future opportunities and
expansion as well as to meet existing obligations. The Company continuously
evaluates potential acquisitions of businesses which complement its existing
operations. Depending on various factors, including, among others, the cash
consideration required in such potential acquisitions and the market value of
the Company's common stock, the Company may determine to finance any such
transaction with its existing sources of liquidity, or may pursue financing
through one or more public or private offerings of the Company's securities, or
both.
YEAR 2000 COMPLIANCE
The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. The Company's
computer equipment, software and devices with imbedded technology that are
time-sensitive may recognize a date using "00" as the year 1900 rather than the
year 2000. The Company has undertaken a comprehensive analysis and remediation
program with respect to its information technology ("IT") systems and other
systems and facilities to identify the systems that could be affected by the
technical problems associated with the year 2000 and to ensure that they will
function properly with respect to dates in the year 2000 and thereafter (the
"Year 2000 Program"). If modifications and replacements are not made in a
timely manner, the Company could experience a temporary inability to process
transactions, send invoices or engage in other important business activities
due to system failures or miscalculations, the impact of which cannot be
quantified at this time.
The Company's Year 2000 Program is divided into the following four phases
with the following estimated time frames:
(1) PLANNING (fourth quarter of 1996 - second quarter of 1998) - Establishing
a Year 2000 program team and developing a comprehensive strategy.
(2) ASSESSMENT (third quarter of 1997 - first quarter of 1999) - Assessing
the Year 2000 impact on the Company through inventory and analysis of
systems supporting the core business areas and processes, prioritizing
their conversion or replacement and identifying and securing necessary
resources to do so. This phase may include developing contingency plans,
if necessary.
(3) RENOVATION (fourth quarter of 1997 - second quarter of 1999) -
Converting, replacing, or eliminating selected platforms, applications,
databases and utilities and modifying interfaces.
(4) VALIDATION AND IMPLEMENTATION (first quarter of 1998 - third quarter of
1999) - Testing, verifying and validating converted or replaced
platforms, applications, databases and utilities in an operational
environment and implementing contingency plans, if necessary.
In the third quarter of 1997, the Company commenced the assessment of its
domestic IT software and hardware. The Company expects to substantially
complete the development, programming changes and unit testing, including
compatibility testing, and be Year 2000 compliant with respect to its domestic
IT systems in the first quarter of 1999. In the first quarter of 1998, the
Company commenced the assessment of its international IT software and hardware.
The Company expects to substantially complete the development, programming
changes and unit testing, including compatibility testing, and be Year 2000
compliant with respect to its international IT systems in the second quarter of
1999. The Company plans to complete the assessment of its non-computer
equipment that could be affected by the technical problems associated with the
Year 2000 issue by the first quarter of 1999 and to fully test such equipment
by the end of the second quarter of 1999. As of October 31, 1998, the Company
has completed approximately 60% of all phases of the Year 2000 Program,
consistent with its timetable.
Through the third quarter of 1998, the Company has expended approximately
$3.4 million related to its global Year 2000 Program. The Company currently
expects that the total costs of the Year 2000 Program, including both
incremental spending and redeployed resources, will be approximately $6.0
million. The costs of the Year 2000 Program will be funded through existing
sources of liquidity. Time and cost estimates are based on currently available
information. Developments that could affect estimates include, but are not
limited to, the availability and cost of trained personnel and the ability to
locate and correct all relevant computer code and systems.
The Company has been communicating, and continues to communicate, directly
with selected key vendors, suppliers and customers regarding various critical
systems. Additionally, the Company has mailed questionnaires to other
significant third parties to determine the extent to which the Company is
vulnerable to the failure of these third parties to become Year 2000 compliant.
Third parties are under no contractual obligation to provide Year 2000
compliance information to the Company, and any failure of such third parties to
become Year 2000 compliant involves risks and uncertainties.
Based upon its assessment and remediation efforts to date, the Company is
not aware of any material issues that would prevent it or its significant third
party vendors, suppliers and customers from completing efforts necessary to
achieve Year 2000 compliance on a timely basis. Accordingly, the Company is
not able to develop a contingency plan for dealing with the most reasonably
likely worst case scenario at this time.
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. Because the timing of shipment 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.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Report which are not historical facts
contain forward-looking information with respect to the Company's plans,
projections or future performance, the occurrence of which involve certain
risks and uncertainties that could cause the Company's actual results or plans
to differ materially from those expected by the Company. Certain of such risks
and uncertainties relate to the overall strength of the general domestic and
international retail environments including the continuation of weakness in the
domestic and international footwear markets; the ability of the Company to
predict and respond to changes in consumer demand and preferences in a timely
manner; increased competition in the footwear and accessory industry and the
Company's ability to remain competitive in the areas of style, price and
quality; acceptance by consumers of new product lines; the ability of the
Company to manage general and administrative costs; changes in the costs of
leather and other raw materials, labor and advertising; the ability of the
Company to secure and protect trademarks and other intellectual property
rights; retail store construction delays; the availability of desirable retail
locations and the negotiation of acceptable lease terms for such locations; and
the ability of the Company to place its products in desirable sections of its
department store customers.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 1, 1997, the Company learned that on April 10, 1997, the Securities
and Exchange Commission ("SEC") entered a formal order of investigation of the
Company. Based on conversations with the staff of the SEC dating back to the
Fall of 1996, when an informal investigation was commenced, the Company
believes that this investigation is primarily focused on the revenue
recognition policies and practices of certain of the Company's divisions that
were acquired from The United States Shoe Corporation in 1995. On October 29,
1997, the Company received a subpoena issued by the SEC in connection with its
investigation requesting the Company to produce certain documents relating to
the purchase by the Company of products manufactured in Brazil from 1994 to
date, including documents concerning the prices paid for such products and the
customs duties paid in connection with their importation into the United
States. The Company has been cooperating fully with the staff of the SEC and
intends to continue its cooperation. Based on the information presently
available to it, the Company does not anticipate that the investigation of its
revenue recognition policies and practices will have a material adverse
financial effect on the Company. The Company believes that no issues exist in
respect of its customs policies and practices. Therefore, based on the limited
information presently available to it concerning this aspect of the
investigation, the Company does not anticipate that it will have a material
adverse financial effect on the Company, although no assurances can be given as
to its ultimate impact on the Company.
In addition, on October 29, 1997, the Company learned that the United
States Customs Service had commenced an investigation of the Company relating
to the Company's importation of Brazilian footwear from 1995 to date. On April
14, 1998, the United States Customs Service informed the Company that such
investigation had been terminated with no action taken against the Company.
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 amount of any 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 financial effect on the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
See Index to Exhibits
(b) Reports on Form 8-K:
None
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: December 15, 1998
INDEX TO EXHIBITS
Exhibit
Number Exhibit
------ -------
4.7.1 Supplemental Indenture, dated as of September 15, 1998, among
the Registrant, Nine West Manufacturing II Corporation, a
subsidiary of the Registrant, Nine West Development Corporation,
Nine West Distribution Corporation, Nine West Footwear
Corporation and Nine West Manufacturing Corporation
(collectively, the "Existing Guarantors") and The Bank of New
York, as trustee under the Senior Note Indenture dated as of
July 9, 1997.
4.8.1 Supplemental Indenture, dated as of September 15, 1998, among
the Registrant, Nine West Manufacturing II Corporation, the
Existing Guarantors and The Bank of New York, as trustee under
the Senior Subordinated Note Indenture dated as of July 9, 1997.
10.25 Amended and Restated Series 1995-1 Supplement to Pooling and
Servicing Agreement, dated as of July 31, 1998, among Nine West
Funding Corporation, The Bank of New York and the Registrant.
10.26 Amended and Restated Series 1995-1 Certificate Purchase
Agreement, dated as of July 31, 1998, among Nine West Funding
Corporation, Corporate Receivables Corporation, the Liquidity
Providers named therein, Citicorp North America, Inc. and The
Bank of New York.
10.27 Employment Agreement, dated October 19, 1998, between
Robert C. Galvin and the Registrant.
27 Financial Data Schedule.
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE") dated as of
September 15, 1998, between NINE WEST GROUP INC. (the "COMPANY"), NINE WEST
MANUFACTURING II CORPORATION (the "SUBSIDIARY GUARANTOR"), a subsidiary of the
Company, NINE WEST DEVELOPMENT CORPORATION, NINE WEST DISTRIBUTION
CORPORATION, NINE WEST FOOTWEAR CORPORATION and NINE WEST MANUFACTURING
CORPORATION (collectively, the "EXISTING GUARANTORS") and THE BANK OF NEW
YORK, as trustee under the indenture referred to below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "INDENTURE"), dated as of July 9, 1997, providing
for the issuance of $200,000,000 in the aggregate of 8-3/8% Senior Notes due
2005 and 8-3/8% Series B Senior Notes due 2005 (collectively, the "NOTES");
WHEREAS, the Company intends to permit the Subsidiary Guarantor to
fully and unconditionally guarantee, on a senior basis, the Indebtedness of
the Company under the Notes and the obligations of the Company under the
Indenture;
WHEREAS, Section 1013 of the Indenture provides that, in connection
with such guarantee, the Subsidiary Guarantor shall simultaneously execute and
deliver a supplemental indenture to the Indenture;
WHEREAS, there exists an ambiguity between Section 1013(b) and
Article Thirteen to the Indenture and the parties have agreed to correct it in
this Supplemental Indenture;
WHEREAS, pursuant to Sections 901(3) and 901(5) of the Indenture,
the Trustee is authorized to execute and deliver this Supplemental Indenture
without the consent of the Holders; and
WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid, binding and legal instrument in accordance
with its terms have been performed and fulfilled by the parties hereto and the
execution and delivery hereof have been in all respects duly authorized by the
parties hereto.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto mutually covenant and agree for the equal and ratable benefit
of the holders of the Notes as follows:
1. DEFINED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. ISSUANCES OF GUARANTEES BY NEW RESTRICTED SUBSIDIARIES. This
Supplemental Indenture is being executed and delivered, in part, pursuant to
Sections 901(5) and 1013 of the Indenture.
3. GUARANTEE. The Subsidiary Guarantor hereby agrees that the
Guarantee contained in Article Thirteen of the Indenture, including any rights
or obligations of a Guarantor thereunder, shall apply to it, MUTATIS MUTANDIS,
as of the date hereof.
4. AMENDMENT OF SECTION 1013 (LIMITATION ON GUARANTEES OF
INDEBTEDNESS BY RESTRICTED SUBSIDIARIES). Section 1013 is hereby amended by
inserting immediately after the words "and (b)" the following: "except as
provided in Article Thirteen,".
5. WAIVER PURSUANT TO SECTION 1013(b). The Subsidiary Guarantor
hereby agrees that, except as provided in Article Thirteen of the Indenture,
it waives and shall not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any
other rights against the Company or any other Restricted Subsidiary as a
result of any payment by it under its Guarantee.
6. CONDITIONS TO EFFECTIVENESS. (a) This Supplemental Indenture
shall become effective as of the date first written above upon execution of
this Supplemental Indenture by the Company, the Subsidiary Guarantor and the
Trustee and upon execution of the Acknowledgment and Consent attached hereto
by each Guarantor.
(b) If an officer whose signature is on this Supplemental Indenture
no longer holds that office at the time the Trustee authenticates the Note on
which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be
valid nevertheless.
7. INDEMNITY. The Company agrees to indemnify the Trustee and to
hold the Trustee 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 its part, arising out of
or in connection with the execution of this Supplemental Indenture by the
Trustee.
8. TRUSTEE DISCLAIMER. The Trustee shall not be responsible for
any recital herein, all of which are made solely by the Company, or the
validity of the execution by the Company, of this Supplemental Indenture.
9. GOVERNING LAW. This Supplemental Indenture shall be governed
by, and construed and interpreted in accordance with, the laws of the State of
New York.
10. COUNTERPARTS. This Supplemental Indenture may be executed in
any number of counterparts by the parties hereto, each of which counterparts
when so executed shall be an original, but all the counterparts shall together
constitute one and the same instrument.
11. EFFECTS OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
NINE WEST GROUP INC.
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
NINE WEST MANUFACTURING II
CORPORATION
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
NINE WEST DEVELOPMENT CORPORATION
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
NINE WEST DISTRIBUTION CORPORATION
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
NINE WEST FOOTWEAR CORPORATION
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
NINE WEST MANUFACTURING
CORPORATION
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
THE BANK OF NEW YORK, as Trustee
By: /s/ Mary La Gumina
--------------------
Name: Mary La Gumina
Title:Assistant Vice President
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE") dated as of
September 15, 1998, between NINE WEST GROUP INC. (the "COMPANY"), NINE WEST
MANUFACTURING II CORPORATION (the "SUBSIDIARY GUARANTOR"), a subsidiary of the
Company, NINE WEST DEVELOPMENT CORPORATION, NINE WEST DISTRIBUTION
CORPORATION, NINE WEST FOOTWEAR CORPORATION and NINE WEST MANUFACTURING
CORPORATION (collectively, the "EXISTING GUARANTORS") and THE BANK OF NEW
YORK, as trustee under the indenture referred to below (the "TRUSTEE").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "INDENTURE"), dated as of July 9, 1997, providing
for the issuance of $125,000,000 in the aggregate of 9% Senior Subordinated
Notes due 2007 and 9% Series B Senior Subordinated Notes due 2007
(collectively, the "NOTES");
WHEREAS, the Company intends to permit the Subsidiary Guarantor to
fully and unconditionally guarantee, on a senior subordinated basis, the
Indebtedness of the Company under the Notes and the obligations of the Company
under the Indenture;
WHEREAS, Section 1013 of the Indenture provides that, in connection
with such guarantee, the Subsidiary Guarantor shall simultaneously execute and
deliver a supplemental indenture to the Indenture;
WHEREAS, there exists an ambiguity between Section 1013(b) and
Article Thirteen to the Indenture and the parties have agreed to correct it in
this Supplemental Indenture;
WHEREAS, pursuant to Sections 901(3) and 901(5) of the Indenture,
the Trustee is authorized to execute and deliver this Supplemental Indenture
without the consent of the Holders; and
WHEREAS, all conditions and requirements necessary to make this
Supplemental Indenture a valid, binding and legal instrument in accordance
with its terms have been performed and fulfilled by the parties hereto and the
execution and delivery hereof have been in all respects duly authorized by the
parties hereto.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto mutually covenant and agree for the equal and ratable benefit
of the holders of the Notes as follows:
1. DEFINED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.
2. ISSUANCES OF GUARANTEES BY NEW RESTRICTED SUBSIDIARIES. This
Supplemental Indenture is being executed and delivered, in part, pursuant to
Sections 901(5) and 1013 of the Indenture.
3. GUARANTEE. The Subsidiary Guarantor hereby agrees that the
Guarantee contained in Article Thirteen of the Indenture, including any rights
or obligations of a Guarantor thereunder, shall apply to it, MUTATIS MUTANDIS,
as of the date hereof.
4. AMENDMENT OF SECTION 1013 (LIMITATION ON GUARANTEES OF
INDEBTEDNESS BY RESTRICTED SUBSIDIARIES). Section 1013 is hereby amended by
inserting immediately after the words "and (b)" the following: "except as
provided in Article Thirteen,".
5. WAIVER PURSUANT TO SECTION 1013(b). The Subsidiary Guarantor
hereby agrees that, except as provided in Article Thirteen of the Indenture,
it waives and shall not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any
other rights against the Company or any other Restricted Subsidiary as a
result of any payment by it under its Guarantee.
6. CONDITIONS TO EFFECTIVENESS. (a) This Supplemental Indenture
shall become effective as of the date first written above upon execution of
this Supplemental Indenture by the Company, the Subsidiary Guarantor and the
Trustee and upon execution of the Acknowledgment and Consent attached hereto
by each Guarantor.
(b) If an officer whose signature is on this Supplemental Indenture
no longer holds that office at the time the Trustee authenticates the Note on
which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be
valid nevertheless.
7. INDEMNITY. The Company agrees to indemnify the Trustee and to
hold the Trustee 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 its part, arising out of
or in connection with the execution of this Supplemental Indenture by the
Trustee.
8. TRUSTEE DISCLAIMER. The Trustee shall not be responsible for
any recital herein, all of which are made solely by the Company, or the
validity of the execution by the Company, of this Supplemental Indenture.
9. GOVERNING LAW. This Supplemental Indenture shall be governed
by, and construed and interpreted in accordance with, the laws of the State of
New York.
10. COUNTERPARTS. This Supplemental Indenture may be executed in
any number of counterparts by the parties hereto, each of which counterparts
when so executed shall be an original, but all the counterparts shall together
constitute one and the same instrument.
11. EFFECTS OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
NINE WEST GROUP INC.
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
NINE WEST MANUFACTURING II
CORPORATION
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
NINE WEST DEVELOPMENT CORPORATION
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
NINE WEST DISTRIBUTION CORPORATION
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
NINE WEST FOOTWEAR CORPORATION
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
NINE WEST MANUFACTURING
CORPORATION
By: /s/ Robert C. Galvin
----------------------
Name: Robert C. Galvin
Title: Executive Vice
President, Chief
Financial Officer
& Treasurer
THE BANK OF NEW YORK, as Trustee
By: /s/ Mary La Gumina
--------------------
Name: Mary La Gumina
Title:Assistant Vice President
NINE WEST FUNDING CORPORATION,
Transferor
NINE WEST GROUP INC.,
Servicer
and
THE BANK OF NEW YORK
Not in its individual capacity,
but solely as Trustee of the Nine
West Trade Receivables Master Trust
AMENDED AND RESTATED SERIES 1995-1 SUPPLEMENT
Dated as of July 31, 1998
to
POOLING AND SERVICING AGREEMENT
Dated as of December 28, 1995
NINE WEST TRADE RECEIVABLES MASTER TRUST
AMENDED AND RESTATED FLOATING RATE
RECEIVABLES BACKED CERTIFICATES,
SERIES 1995-1
TABLE OF CONTENTS
Page
ARTICLE I
The Series 1995-1 Certificates
SECTION 1.01. Designation. . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Definitions. . . . . . . . . . . . . . . . . . 2
SECTION 1.03. Other Definitional Provisions. . . . . . . . .13
SECTION 1.04. Conditions Precedent to the Effectiveness of
this Amended and Restated Series Supplement
Agreement. . . . . . . . . . . . . . . . . . .15
ARTICLE II
Additional Covenants
SECTION 2.01. Covenants of the Servicer. . . . . . . . . . .17
ARTICLE III
Servicing Fee
SECTION 3.01. Servicing Compensation . . . . . . . . . . . .18
ARTICLE IV
Rights of Series 1995-1 Certificateholders and
Allocation and Application of Collections
SECTION 4.01. Establishment of Series Accounts . . . . . . .18
SECTION 4.02. Settlement Procedures. . . . . . . . . . . . .21
SECTION 4.03. New Issuances. . . . . . . . . . . . . . . . .26
ARTICLE V
Distributions and Reports to
Series 1995-1 Certificateholders
SECTION 5.01. Distributions. . . . . . . . . . . . . . . . .26
SECTION 5.02. Annual Certificateholders' Statement . . . . .30
ARTICLE VI
Series 1995-1 Early Amortization Events
SECTION 6.01. Series 1995-1 Early Amortization Events. . . .31
ARTICLE VII
Miscellaneous Provisions
SECTION 7.01. Ratification of Agreement. . . . . . . . . . .32
SECTION 7.02. Counterparts . . . . . . . . . . . . . . . . .32
SECTION 7.03. Governing Law; Jurisdiction; Service of
Process. . . . . . . . . . . . . . . . . . . .32
SECTION 7.04. Appointment of Successor Servicer. . . . . . .33
SECTION 7.05. The Trustee. . . . . . . . . . . . . . . . . .33
SECTION 7.06. Assignment by CRC and the Liquidity
Provider . . . . . . . . . . . . . . . . . . .33
SECTION 7.07. No Assignability by Transferor or
Servicer . . . . . . . . . . . . . . . . . . .35
SECTION 7.08. Amendments and Waivers . . . . . . . . . . . .35
SECTION 7.09. Indemnification of the Trustee, the Trust and
the Investor Certificateholders. . . . . . . .36
SECTION 7.10. Servicer Indemnification . . . . . . . . . . .38
SECTION 7.11. Additional Reporting Requirements. . . . . . .40
SECTION 7.12. Effect on Original Series 1995-1 Supplement. .40
THIS AMENDED AND RESTATED SERIES 1995-1 SUPPLEMENT, dated as of July
31, 1998 (this "SERIES SUPPLEMENT"), amends and restates that certain Series
1995-1 Supplement, dated as of December 28, 1995, entered into among NINE WEST
FUNDING CORPORATION, a Delaware special purpose corporation, as Transferor
(the "TRANSFEROR"), NINE WEST GROUP INC., a Delaware corporation, as Servicer
(the "SERVICER"), and The Bank of New York, a New York banking corporation, as
Trustee (the "TRUSTEE").
PRELIMINARY STATEMENT
WHEREAS, the parties hereto previously entered into that certain
Series 1995-1 Supplement dated as of December 28, 1995 (the "ORIGINAL SERIES
1995-1 SUPPLEMENT") which, among other things, sets forth the terms of Series
1995-1 as required by Section 6.08 of the Pooling and Servicing Agreement,
dated as of December 28, 1995 (as amended, restated, supplemented and
otherwise modified from time to time, the "Agreement") to provide for the
issuance, authentication and delivery of the Floating Rate Receivables Backed
Certificates, Series 1995-1, Class A (the "CLASS A CERTIFICATES") and the
Floating Rate Receivables Backed Certificates, Series 1995-1, Class B (the
"CLASS B CERTIFICATES");
WHEREAS, the parties hereto desire to amend and restate, in their
entirety (i) the Class A Certificates (as so amended and restated, the
"CERTIFICATES" or the "SERIES 1995-1 CERTIFICATES") and (ii) together with the
other parties thereto, the Class A Certificate Purchase Agreement, dated as of
December 28, 1995, among the Transferor as seller, CRC as purchaser, the
financial institutions parties thereto as Liquidity Providers, the Program
Agent and the Trustee (as so amended and restated, the "CERTIFICATE PURCHASE
AGREEMENT");
WHEREAS, the parties hereto desire to repay and terminate, in their
entirety (i) the Class B Certificates, and (ii) the Class B Certificate
Purchase Agreement, dated as of December 28, 1995, among the Transferor as
seller, the financial institutions parties thereto as "Purchasers", the
Program Agent and the Trustee (the "CLASS B CERTIFICATE PURCHASE AGREEMENT"),
in each case pursuant to the Termination Agreement dated as of July 31, 1998,
among the parties to the Class B Certificate Purchase Agreement (the
"TERMINATION AGREEMENT");
WHEREAS, in furtherance of the foregoing desired amendments,
restatements and terminations, the parties hereto now wish to enter into this
Series Supplement in order to amend and restate the Original Series 1995-1
Supplement and the terms of the Class A Certificates as of the Effective
Restatement Date.
ARTICLE I
THE SERIES 1995-1 CERTIFICATES
SECTION 1.01. DESIGNATION. (a) On and after the Effective
Restatement Date, after giving effect to the amendment and restatement of the
Class A Certificates and the termination of the Class B Certificates, the
"Series 1995-1 Certificates" shall be designated generally as Floating Rate
Receivables Backed Certificates, Series 1995-1.
(b) In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Agreement, the terms and provisions of this Series Supplement shall govern.
SECTION 1.02. DEFINITIONS. (a) Whenever used in this Series
Supplement the following words and phrases shall have the following meanings.
"ADJUSTED EURODOLLAR RATE" has the meaning assigned to such term in
the Certificate Purchase Agreement.
"ALTERNATE BASE RATE" shall mean a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall at
all times be equal to the highest of:
(i) the rate of interest announced publicly by the Reference
Bank in New York, New York, from time to time as the Reference
Bank's base rate; or
(ii) 0.50% per annum above 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
Banking Day on the next succeeding Banking Day) for the three-week
period ending on the previous Friday by the Reference Bank on the
basis of such rates reported by certificate of deposit dealers to
and published by the Federal Reserve Bank of New York in Federal
Reserve Statistical Release H.15(519) or, if such publication shall
be suspended or terminated, on the basis of quotations for the
latest three-week average of secondary market morning offering rates
received by the Reference Bank from three New York certificate of
deposit dealers of recognized standing selected by the Reference
Bank, in either case adjusted to the nearest 1/4 of one percent or,
if there is no nearest 1/4 of one percent, to the next higher 1/4 of
one percent; or
(iii) 0.50% per annum above the Federal Funds Rate.
"AMORTIZATION DATE" shall mean September 30, 2000.
"ASSIGNEE RATE" shall mean an interest rate per annum equal to the
Adjusted Eurodollar Rate PLUS 0.50%; PROVIDED, HOWEVER, that (i) if it shall
become unlawful for the Reference Bank to obtain funds in the London interbank
market in order to purchase, fund or maintain any Increase hereunder, or
deposits in dollars (in the applicable amounts) are not being offered by the
Reference Bank in the London interbank market, then the "Assignee Rate" shall
be the Alternate Base Rate in effect from time to time; (ii) if the date of an
Increase requested under the Certificate Purchase Agreement is not the last
day of an Interest Period, the "Assignee Rate" applicable to the portion of
the Invested Amount consisting of such Increase shall be the Alternate Base
Rate in effect from time to time until the end of the then applicable Interest
Period; and (iii) following the occurrence and during the continuation of an
Early Amortization Period, the "Assignee Rate" shall be the applicable
interest rate per annum determined pursuant to provisions set forth above plus
1.0% per annum.
"BANKING DAY" shall have the meaning assigned to such term in the
Agreement; PROVIDED, HOWEVER, that if this definition of "Banking Day" is
utilized in connection with the Adjusted Eurodollar Rate (as set forth in the
Certificate Purchase Agreement), "Banking Day" shall mean any day other than a
Saturday or Sunday on which dealings are carried out in the London interbank
market and banks are open for business in London and are not required or
authorized to close in New York, New York.
"BREAKAGE COSTS" shall mean, for each Interest Period during which
the Invested Amount is reduced, the amount, if any, by which (i) the
additional interest at the Certificate Rate (calculated without taking into
account any Breakage Costs), which would have accrued on the reduction of the
Invested Amount or, with respect to each Liquidity Provider, its pro rata
portion of such reduction of the Invested Amount during such Interest Period
(as so computed) if such reduction had remained as Invested Amount through the
last day of the Interest Period exceeds (ii) the income, if any, received by
CRC or a Liquidity Provider funding such Invested Amount or its pro rata
portion of such Invested Amount from CRC's or such Liquidity Provider's
investing the proceeds of such reductions of Invested Amount.
"BUSINESS DAY" shall mean a Banking Day other than a day on which
the corporate chief executive office of Nine West is closed for business
pursuant to a regularly scheduled closing date for Nine West, which closing
date is notified in writing to the Program Agent no later than 60 days prior
to the occurrence thereof.
"CAPITALIZED INTEREST" means the principal amount of any CP Notes
issued or other funding obtained by CRC at any time to pay any interest or
discount on (i) CP Notes or (ii) other funding of CRC allocated to the funding
or maintenance of the Invested Amount.
"CERTIFICATE PURCHASE AGREEMENT" shall mean the Amended and Restated
Series 1995-1 Certificate Purchase Agreement, dated as of July 31, 1998, among
the Transferor, as seller, CRC, as purchaser, the financial institutions
parties thereto as Liquidity Providers, the Program Agent and the Trustee, on
behalf of the Trust.
"CERTIFICATE RATE" shall mean, with respect to any Interest Period
and the related Collection Period (a) unless the Program Agent notifies the
Transferor and the Servicer that the Invested Amount, or a portion thereof,
will not be funded by the issuance of CP Notes, the CP Rate; or (b) to the
extent the Program Agent has provided notice to the Transferor and the
Servicer that funding with respect to the Series 1995-1 Certificates is not
being provided by the issuance of CP Notes, a per annum rate equal to the
Assignee Rate.
"CLOSING DATE" shall mean December 29, 1995.
"COLLECTION PERIOD" shall mean, with respect to any Distribution
Date, the Accounting Period (or, in the case of the Accounting Period in which
the Closing Date occurs, the portion of such Accounting Period following the
Closing Date) immediately preceding the Accounting Period in which such
Distribution Date occurs.
"CONCENTRATION LIMIT" shall mean, with respect to the following
types of Receivables and the Series 1995-1 Certificate, the amounts set forth
as follows: (a) Receivables of any single Obligor having an indebtedness
rating of at least "A-1" by Standard & Poor's or its equivalent, 100% of the
Loss and Dilution Reserve; (b) Receivables of any single Obligor having an
indebtedness rating of below "A-1" or its equivalent, but at least "A-2" by
Standard & Poor's or its equivalent, 50% of the Loss and Dilution Reserve; (c)
Receivables of any single Obligor having an indebtedness rating of below "A-2"
or its equivalent, but at least "A-3" by Standard & Poor's or its equivalent,
the lesser of (i) 10% of the Invested Amount and (ii) 50% of the Loss and
Dilution Reserve; and (d) Receivables of any other single Obligor, the lesser
of (i) 5% of the Invested Amount and (ii) 25% of the Loss and Dilution
Reserve; PROVIDED, HOWEVER, that Receivables of Federated Department Stores,
Inc., together with any of its "Affiliates" (as such term is defined in the
next succeeding sentence) shall have a "Concentration Limit" of the greater of
(x) 15.0% of the aggregate Outstanding Balance of Eligible Receivables, and
(y) 50% of the Loss and Dilution Reserve. For the purposes of this defined
term "Concentration Limit", each reference herein to a "single Obligor" shall
include all other Obligors which are "Affiliates" of such Obligor, treating
each reference in the definition of the term "Affiliates" to 5% as if it were,
instead, a reference to 50%.
"CP NOTE" shall mean any commercial paper note issued by CRC.
"CP RATE" shall mean, with respect to CRC for each Interest Period,
the per annum rate equivalent to the weighted average of the per annum rates
paid or payable by CRC from time to time as interest on or otherwise with
respect to those CP Notes issued by CRC that are allocated, in whole or in
part, by CRC to fund the purchase or maintenance of the Invested Amount during
such Interest Period, as determined by CRC and reported to the Transferor and
the Servicer, which rates shall reflect and give effect to the commissions of
placement agents and dealers with respect to such CP Notes; PROVIDED, HOWEVER,
that if any component of such rate is a discount rate, in calculating the "CP
Rate" for such Interest Period, CRC shall for such component use the rate
resulting from converting such discount rate to an interest-bearing equivalent
rate per annum.
"CRC" shall mean Corporate Receivables Corporation, a corporation
organized and existing under the laws of the State of California, and any
successor or assign of CRC that is an Eligible Assignee and that is a
receivables investment company which in the ordinary course of its business
issues commercial paper or other securities to fund its acquisition and
maintenance of receivables.
"CURE ACCOUNT" shall have the meaning specified in Section 4.01(c).
"DEBT SERVICE AMOUNT" shall mean, as of any Interest Payment Date
relating to a Collection Period, an amount equal to the aggregate amount of
interest with respect to the Invested Amount which has accrued during the
Interest Period relating to such Collection Period and remains unpaid
(including, without limitation, Capitalized Interest arising during such
Interest Period, if any, and any interest thereon). The accrued interest for
the Invested Amount for each Interest Period used in computing the Debt
Service Amount for such Collection Period shall be determined by the Program
Agent based upon the actual number of days in such Interest Period, the
Invested Amount outstanding and the Certificate Rate in effect on each day in
such Interest Period, and a year consisting of 360 days, and the Program Agent
shall give notice thereof to the Transferor and the Servicer at least two
Banking Days prior to the Interest Payment Date relating to such Collection
Period.
"DAILY REPORT" shall mean an Officer's Certificate of the Servicer
substantially in the form of Exhibit E to the Agreement.
"DEFAULT RATIO" shall be, as of any date, equal to the average of
the ratios (each expressed as a percentage) for each of the three most
recently ended Accounting Periods of (i) aggregate Receivables that were 151-
180 days past due at the end of each such Accounting Period plus Receivables
which were charged off as uncollectible during such Accounting Period to (ii)
aggregate Receivables that were acquired by the Trust during the seventh
Accounting Period preceding such date.
"DETERMINATION DATE CERTIFICATE" shall mean, with respect to each
Accounting Period, the certificate prepared by the Servicer, substantially in
the form of Exhibit C hereto.
"DILUTION RATIO" shall mean, as of any date, the average of the
ratios (each expressed as a percentage) for each of the six most recently
ended Accounting Periods of (i) the aggregate Outstanding Balance of
Receivables that were Diluted Receivables at the end of the most recently
ended Accounting Period to (ii) the aggregate Outstanding Balance of all
Receivables acquired by the Trust during the third Accounting Period next
preceding the commencement of such Accounting Period.
"DILUTION VOLATILITY FACTOR" shall mean, as of any date, a
percentage equal to the product of (a) the amount by which (i) the highest
Dilution Ratio during the most recently ended period of 12 Accounting Periods
exceeds (ii) the average of the Dilution Ratios during such period and (b)(i)
the highest Dilution Ratio during such period divided by (ii) the average of
the Dilution Ratios during such period.
"DYNAMIC LOSS AND DILUTION RESERVE PERCENTAGE" shall mean, as of any
date, the sum of (a) the product of (i) 2.0 times (ii) the average Dilution
Ratio during the preceding 12 Accounting Periods times (iii) a fraction the
numerator of which is the total sales for the past three Accounting Periods
and the denominator of which is the aggregate Outstanding Balance of Eligible
Receivables as of the end of the most recently ended Accounting Period, plus
(b) the product of the Dilution Volatility Factor times the fraction specified
in clause (a)(iii) above, plus (c) the product of (i) 2.0 times (ii) the
highest Default Ratio during the preceding 12 Accounting Periods times (iii) a
fraction the numerator of which is the total sales for the past four
Accounting Periods and the denominator of which is the aggregate outstanding
balance of Eligible Receivables as of the end of the most recently ended
Accounting Period times (iv) a fraction the numerator of which is 18 if the
Weighted Average Term is less than 31 days, 19.4 if the Weighted Average Term
is greater than or equal to 31 days but less than 41 days, 20.9 if the
Weighted Average Term is greater than or equal to 41 days but less than 51
days, 22.5 if the Weighted Average Term is greater than or equal to 51 days
but less than 61 days, or 24 if the Weighted Average Term is greater than or
equal to 61 days, and the denominator of which is 18.
"EARLY AMORTIZATION EVENT" shall mean any Trust Early Amortization
Event specified in Section 9.01 of the Agreement, together with any Series
1995-1 Early Amortization Event specified in Section 6.01 of this Series
Supplement.
"EFFECTIVE RESTATEMENT DATE" shall mean the date on which the
conditions precedent specified in SECTION 1.04 shall have been satisfied.
"ELIGIBLE ASSIGNEE" shall mean a Person which certifies to the
Trustee, the Transferor and the Servicer that it (i) is a receivables
investment company which customarily issues commercial paper to fund its
acquisition and maintenance of receivables or a bank, insurance company or
other financial institution, and (ii) has a short-term debt rating or short-
term certificate of deposit rating of at least A-1 from Standard & Poor's or
at least P-1 from Moody's, or, if such Person does not have a short-term debt
rating or short-term certificate of deposit rating, a long-term senior debt
rating of at least A from Standard & Poor's or A2 from Moody's; PROVIDED that
if such Person is an insurance, bonding or surety company which does not have
a certificate of deposit rating or a debt rating, such Person has a claims
paying rating or a surety rating of at least A from Standard & Poor's or A2
from Moody's; PROVIDED, FURTHER, in any case, if such Person is rated by both
Standard & Poor's and Moody's, it must have the prescribed minimum ratings
from both Standard & Poor's and Moody's.
"ESCROW ACCOUNT" shall have the meaning specified in Section
4.01(d).
"ESCROW AMOUNT" shall mean, on any day during an Early Amortization
Period or the Amortization Period, the amount equal to the excess, if any, of
(a) the product of (i) the Series 1995-1 Floating Allocation Percentage (as
calculated on the last day of the Revolving Period) TIMES (ii) Collections
deposited to the Concentration Account on such day, over (b) the product of
(i) the Fixed Allocation Percentage (calculated on the last day of the
Revolving Period) TIMES (ii) Collections deposited to the Concentration
Account on such day.
"ESCROW PAYMENT" shall mean as of any Distribution Date during an
Early Amortization Period or the Amortization Period, to the extent funds are
available therefor in the Escrow Account an amount equal to the sum of (a) the
aggregate Outstanding Balance of Receivables that became Diluted Receivables
or Defaulted Receivables or as to which payment had not been received on the
due date specified on the records of the Servicer (in each case as indicated
on the records of the Servicer and reflected on the Daily Report for such day
and the Determination Date Certificate) since the preceding Distribution Date
(or in the case of the first Distribution Date during such Early Amortization
Period or Amortization Period, Receivables that are Diluted Receivables,
Defaulted Receivables or are past due (as described above) on such first
Distribution Date), PLUS (b) the aggregate principal balance of Receivables
that were Diluted Receivables, Defaulted Receivables or were past due (as
described above) on the preceding Distribution Date and for which funds in the
Escrow Account on such Distribution Date were insufficient to make an Escrow
Payment, PLUS (c) an amount equal to the sum of the amounts payable to the
Series 1995-1 Certificateholder, the Trustee, the Servicer and the Program
Agent pursuant to Section 5.01(b) (other than subclause(ii) of Section
5.01(b)(y)) on such Distribution Date.
"FACILITY FEE" shall have the meaning specified in the Fee Letter.
"FEE LETTER" shall mean that certain amended and restated fee letter
dated as of the date of the Certificate Purchase Agreement between the
Transferor and the Program Agent, as the same may be amended, restated or
modified from time to time in accordance with the terms thereof.
"FIXED ALLOCATION PERCENTAGE" shall mean the fraction, calculated on
the last day of the Revolving Period, the numerator of which is the Series
1995-1 Invested Amount (computed as if reduced by (A) the amount of Cure Funds
held in the Cure Account for Series 1995-1 at such time and (b) the cumulative
amount of funds held at such time in the Concentration Account allocated to
the Series 1995-1 Partial Amortization Amount), and the denominator of which
is the Net Receivables Balance.
"INCREASE" shall mean the amount of each increase in the Invested
Amount funded by the issuance of CP Notes or by the Liquidity Providers and
paid to the Transferor by the Program Agent pursuant to the terms of the
Certificate Purchase Agreement.
"INTEREST PAYMENT DATE" shall mean, with respect to each Interest
Period and the related Collection Period
(a) if the Certificate Rate for such Interest Period is determined
by reference to the CP Rate, the second Banking Day following the last
day of such Interest Period and
(b) if the Certificate Rate for such Interest Period is not
determined by reference to the CP Rate, the last day of such Interest
Period.
"INTEREST PERIOD" shall mean
(a) if the Certificate Rate for such Interest Period is determined
by reference to the CP Rate, initially, the period beginning on the
Closing Date and ending on the last day of the month in which the Closing
Date occurs and, thereafter, shall mean the period beginning on the day
following the last day of the immediately preceding Interest Period and
ending on the last day of the month next succeeding such immediately
preceding Interest Period; and
(b) if the Certificate Rate for such Interest Period is not
determined by reference to the CP Rate, initially, the period beginning
on the Closing Date and ending on the second Banking Day following the
last day of the month in which the Closing Date occurs and, thereafter,
shall mean the period beginning on the day following the last day of the
immediately preceding Interest Period and ending on the second Banking
Day following the last day of the month in which such Interest Period
began.
Notwithstanding the foregoing, each Interest Period to occur during the Early
Amortization Period shall be of a duration selected by the Program Agent.
"INVESTED AMOUNT" shall mean, when used with respect to any date, an
amount equal to (a) $57,426,134.00 [initial Invested Amount on the Closing
Date] plus (b) the aggregate amount of Increases made under the Certificates
after the Closing Date minus (c) the aggregate amount of Series 1995-1
Investor Collections received and distributed to the Series 1995-1
Certificateholders in reduction of the Invested Amount from time to time on or
prior to such date; PROVIDED, HOWEVER, that the "Invested Amount" shall not be
reduced by any amount of Series 1995-1 Investor Collections so received and
distributed if at any time such distribution of such amount of Series 1995-1
Investor Collections is rescinded or must otherwise be returned for any
reason; and PROVIDED, FURTHER, that, on any date of determination, the
Invested Amount shall not exceed the Purchase Limit. For purposes of the
Agreement, the "Invested Amount" hereunder shall be deemed to be the "Class A
Invested Amount" for Series 1995-1.
"LIQUIDITY PROVIDERS" shall mean any liquidity providers specified
in the Certificate Purchase Agreement and any of their successors and assigns
that are Eligible Assignees.
"LOSS AND DILUTION RESERVE PERCENTAGE" shall mean, as of any date,
the greater of (a) the Specified Loss and Dilution Reserve Percentage and (b)
the Dynamic Loss and Dilution Reserve Percentage.
"LOSS TO LIQUIDATION RATIO" shall mean, as of any date, the ratio
(expressed as a percentage) calculated by dividing (a) the aggregate
Outstanding Balance of all Receivables written off as uncollectible in
accordance with the Credit Policy and Procedures Manual by the Servicer during
the Accounting Period then most recently ended by (b) the aggregate amount of
Collections during such Accounting Period.
"MONTHLY TRUST EXPENSE AMOUNT" shall mean, with respect to any
Collection Period, the sum of (a) expenses of the Trustee incurred during such
Collection Period (which expenses shall not exceed $200.00 during any single
calendar year at any time during the Revolving Period), plus (b) the Series
Trustee's Fee, plus (c) the Series Servicing Fee, plus (d) Service Transfer
expenses, if any, incurred during such Collection Period.
"OTHER FEES" shall have the meaning specified in the Fee Letter.
"PROGRAM AGENT" shall mean Citicorp North America, Inc., in its
capacity as agent for CRC and the Liquidity Providers under the Series 1995-1.
"PROGRAM FEE" shall have the meaning specified in the Fee Letter.
"PURCHASE LIMIT" shall mean $132,000,000 or such lesser amount as
may be mutually agreed upon by the Program Agent and the Transferor pursuant
to the Certificate Purchase Agreement.
"PURCHASER FEES" shall mean, with respect to any Collection Period,
the Program Fee for such Collection Period, the Facility Fee for such
Collection Period, the Other Fees for such Collection Period, and all other
fees and expenses payable to any of CRC or the Liquidity Providers and
incurred during such Collection Period, including, without limitation,
increased costs, indemnities and Breakage Costs.
"REFERENCE BANK" shall mean, for purposes of determining the
Alternate Base Rate and the Certificate Rate, Citibank, N.A., a national
banking association, or its successors and assigns.
"REVOLVING PERIOD" shall mean the period beginning on the Closing
Date and terminating on the earliest of (a) the close of business on the
Business Day immediately preceding the Amortization Date and (b) the close of
business on the day on which any Early Amortization Event shall occur.
"SERIES 1995-1 ACCOUNTS" shall have the meaning specified in Section
4.01(e).
"SERIES 1995-1 CERTIFICATEHOLDERS" means the Holder or Holders, from
time to time, of the Series 1995-1 Certificates.
"SERIES 1995-1 CERTIFICATES" shall mean the Amended and Restated
Floating Rate Receivables Backed Certificates, Series 1995-1 issued pursuant
to this Series Supplement.
"SERIES 1995-1 DISCOUNT AMOUNT" shall mean with respect to any
Interest Period and the related Collection Period, an amount equal to the sum
of (a) the sum of (i) the amount of Debt Service Amount accrued on the
Invested Amount payable on the Interest Payment Date for such Interest Period
(the Invested Amount not being reduced by the amount of Cure Funds held in the
Cure Account at such time, or by the cumulative amount of funds held in the
Concentration Account at such time allocated to the Series 1995-1 Partial
Amortization Amount) PLUS (ii) interest accrued on unpaid amounts of the Debt
Service Amount at the applicable rates due and payable on such Interest
Payment Date, PLUS (b) the Monthly Trust Expense Amount for such Collection
Period, PLUS (c) the sum of the Purchaser Fees payable on the Distribution
Date with respect to such Collection Period; PROVIDED, that for purposes of
allocating Collections to the Series 1995-1 Discount Amount pursuant to
SECTION 4.02, the foregoing calculation shall be subject to the following: (A)
if the Certificate Rate is being calculated for an Interest Period by
reference to the CP Rate, the Certificate Rate for such Interest Period shall
be equal to the sum of (x) the Certificate Rate applicable to the immediately
preceding Interest Period and (y) 1.50% (or such other higher rate as may
actually accrue on the outstanding Invested Amount during an Interest Period
and as notified in writing to the Servicer and the Trustee by the Program
Agent), and (B) the portion of the Monthly Trust Expense Amount constituting
expenses of the Trustee shall equal the product of the Series Allocation
Percentage for Series 1995-1 TIMES $5,000. Notwithstanding anything in the
foregoing to the contrary, the "Series 1995-1 Discount Amount" shall be
increased, for all purposes under this Series Supplement, under the Agreement
and under the Certificate Purchase Agreement, to reflect the making of any
Increase to the Invested Amount during any applicable Collection Period.
"SERIES 1995-1 EARLY AMORTIZATION EVENT" shall have the meaning
specified in Section 6.01.
"SERIES 1995-1 FLOATING ALLOCATION PERCENTAGE" shall mean at any
time, a fraction, the numerator of which is the sum of (a) the Invested Amount
(computed as if reduced by (i) the amount of Cure Funds held in the Cure
Account for Series 1995-1 at such time and by (ii) the cumulative amount of
funds held at such time in the Concentration Account allocated to the Series
1995-1 Partial Amortization Amount) plus (b) the Series 1995-1 Yield/Fee
Reserve plus (c) the Series 1995-1 Loss and Dilution Reserve, and as the
denominator, the Net Receivables Balance. The Floating Allocation Percentage
is calculated on each Business Day during the Revolving Period, and during a
Partial Amortization Period, Cure Period or the Amortization Period, remains
fixed at the percentage calculated at the close of business on the last
Business Day prior to such Partial Amortization Period, Cure Period or the
Amortization Period.
"SERIES 1995-1 INVESTOR COLLECTIONS" shall mean, as of any date,
that portion of the Collections deposited to the Concentration Account on such
date equal to the product of (A) the Series 1995-1 Floating Allocation
Percentage on such date and (B) the aggregate amount of such Collections.
"SERIES 1995-1 LOSS AND DILUTION RESERVE" or "LDR" shall mean, as of
any date, an amount equal to:
LDR = (IA + YR) x LDRP
where,
IA = Invested Amount (computed as if reduced by the amount of Cure
Funds held in the Cure Account at such time and the cumulative
amount of funds held in the Concentration Account at such time
allocated to the Series 1995-1 Partial Amortization Amount)
YR = Series 1995-1 Yield/Fee Reserve
LDRP = Loss and Dilution Reserve Percentage
"SERIES 1995-1 PARTIAL AMORTIZATION AMOUNT" shall mean the product
of (i) the Series Allocation Percentage for Series 1995-1 times (ii) the Trust
Partial Amortization Amount.
"SERIES 1995-1 TRUSTEE'S ACCOUNT" shall mean the account established
pursuant to Section 4.01(a) of this Series Supplement.
"SERIES 1995-1 YIELD/FEE RESERVE" shall mean, as of any date, the
product of (a) the Turnover Rate for such date multiplied by (b) the Series
1995-1 Discount Amount with respect to the Collection Period in which such
date occurs; PROVIDED that for the purpose of calculating the Series 1995-1
Yield/Fee Reserve, the Series 1995-1 Discount Amount shall be deemed to
include (a) Trustee's expenses equal to one twelfth the product of the Series
Allocation Percentage for Series 1995-1 times $5,000, and (b) the Series
Servicing Fee calculated on the basis of a rate of 1.00% per annum.
"SERIES SERVICING FEE" shall have the meaning specified in
Section 3.01.
"SERIES TRUSTEE'S FEE" shall mean the product of (a) the Trustee's
Fee and (b) the Series Allocation Percentage with respect to Series 1995-1.
"SPECIFIED LOSS AND DILUTION RESERVE PERCENTAGE" shall mean the sum
of (a) 20.0% plus (b) the product of (i) the average Dilution Ratio during the
preceding 6 Accounting Periods times (ii) a fraction (stated as a percentage)
the numerator of which is the total sales for the past three Accounting
Periods and the denominator of which is the aggregate Outstanding Balance of
Eligible Receivables as of the end of the most recently ended Accounting
Period.
"TERMINATION DATE" shall mean the date of payment in full to all of
the Series 1995-1 Certificateholders of the Invested Amount, all accrued and
unpaid interest thereon and any other amounts due the Series 1995-1
Certificateholders under the Transaction Documents, payment in full to the
Servicer of the Series Servicing Fee, and payment in full to the Trustee of
the Series Trustee's Fee.
"TURNOVER RATE" is, as of any date, the highest average for any of
the six most recently ended Accounting Periods of the average of the fractions
(each stated as a percentage) for the three then most recently-ended
Accounting Periods, the numerator of which is equal to the Net Receivables
Balance as of the end of each such Accounting Period and the denominator of
which is the amount of Receivables acquired by the Trust during each such
Accounting Period.
"UNDIVIDED FRACTIONAL INTEREST" shall mean the undivided fractional
interest in the Invested Amount to which a Holder of a Series 1995-1
Certificate is entitled, as applicable, the numerator being the principal
amount of such Series 1995-1 Certificate held by such Holder at the time of
determination and the denominator being the Invested Amount at such time.
SECTION 1.03. OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Series Supplement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) All capitalized terms used herein and not otherwise defined
herein have the meanings ascribed to them in the Agreement. Each capitalized
term defined herein shall relate only to the Series 1995-1 Certificates and
not to any other Series of Certificates issued by the Trust.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Series Supplement shall refer to this Series
Supplement as a whole and not to any particular provision of this Series
Supplement; references to any Article, Section, Schedule or Exhibit are
references to Articles, Sections, Schedules and Exhibits in or to this Series
Supplement unless otherwise specified; and the term "including" means
"including without limitation".
(d) Whenever the term "including" (whether this term is followed by
the phrase "but not limited to" or "without limitation" or words of similar
effect) is used in this Series Supplement in connection with a listing of
items without a particular classification, that listing will not be
interpreted as a limitation on, or exclusive listing of, the items within that
classification.
(e) In computing periods from a specified date to a later specified
date, when precise times of day are not stated, the words "from" and
"commencing on" (and the like) mean "from and including," and the words "to,"
"until" and "ending on" (and the like) mean "to but excluding."
(f) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. Each gender-
specific term used in this Series Supplement has a comparable meaning whether
used in a masculine, feminine or gender-neutral form.
(g) Notwithstanding anything to the contrary in the Agreement,
Series Supplement, unless there is then outstanding one or more Series, or any
Class of a Series, of Investor Certificates rated in the highest investment
category by Standard & Poor's, no action which would be subject to the Rating
Agency Condition or which would otherwise require Rating Agency consent
pursuant to the terms of the Agreement or this Series Supplement with respect
to one or more Series, or any Class of a Series, of Investor Certificates,
shall be taken unless the Program Agent shall have first consented in writing
to such action; PROVIDED, HOWEVER, that nothing in this PARAGRAPH shall be
deemed to require the consent of the Program Agent to the issuance of any
Series, or any Class of a Series, of Investor Certificates rated in the
highest investment category by Standard & Poor's. As used in this Series
Supplement and in the Agreement with respect to Series 1995-1, "highest
investment category" shall mean AAA.
SECTION 1.04. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
SERIES SUPPLEMENT. The Original 1995-1 Series Supplement shall be amended and
restated hereby, in its entirety, effective upon the occurrence of each of the
following:
(a) receipt by the Trustee and the Program Agent of counterpart
signature copies of this Series Supplement, duly executed by each of the
parties hereto;
(b) receipt by the Trustee and the Program Agent of counterpart
signature copies of each of the Certificate Purchase Agreement and the
Termination Agreement, in each case duly executed by each of the parties
thereto;
(c) receipt by the Trustee and the Program Agent of an Officer's
Certificate in the form set forth in Exhibit D to the Certificate Purchase
Agreement, duly executed by an authorized officer of each of the Transferor
and the Servicer;
(d) receipt by the Program Agent of a Notice of Increase duly
executed by an authorized officer of the Transferor requesting an Increase
under the Certificate Purchase Agreement of $41,500,000.00;
(e) receipt by the Trustee of surrendered originals of each of the
Class A Certificate and the Class B Certificate, in each case marked
"canceled";
(f) due authentication by the Trustee of the original of the
Certificate, duly executed by the Transferor, and receipt by the Program Agent
of the same;
(g) receipt by the Liquidity Providers of all fees and expenses due
and payable on or prior to the Effective Restatement Date under the Fee
Letter;
(h) receipt by the Trustee and the Program Agent of the opinion of
General Counsel to Nine West Group Inc. and the Transferor as to various
matters, including (a) the authorization, due execution and delivery by Nine
West Group Inc., the Transferor and the Servicer of the documents respectively
executed by them in connection with the transactions contemplated to take
place on or prior to the Effective Restatement Date (the "RESTATEMENT
DOCUMENTS") and (b) no conflict with other agreements and documents binding
upon Nine West Group Inc., the Transferor and the Servicer and such other
matters as may be requested by the Trustee and the Program Agent, satisfactory
in form and substance to the Trustee and the Program Agent;
(i) receipt by the Trustee and the Program Agent of the opinion(s)
of counsel to the Transferor, Nine West Group Inc. and the Servicer as to
various matters, including (a) the perfection and priority of the security
interests granted pursuant to the Transaction Documents, satisfactory in form
and substance to the Trustee and the Program Agent and (b) the enforceability
against Nine West Group Inc., the Transferor and the Servicer of the
Restatement Documents respectively executed by them and such other matters as
may be requested by the Trustee and the Program Agent, satisfactory in form
and substance to the Trustee and the Program Agent;
(j) receipt by the Trustee and the Program Agent of the opinion of
counsel to the Transferor, Nine West and the Servicer with regard to non-
consolidation matters, in form and substance satisfactory to the Trustee and
the Program Agent;
(k) receipt by the Program Agent of good standing certificates for
each of the Transferor and the Servicer issued by the Secretaries of State of
the States of Delaware, Missouri and New York;
(l) receipt by the Program Agent of the certificates of
incorporation for each of the Transferor and the Servicer certified by the
Secretary of State of the State of Delaware;
(m) receipt by the Program Agent of a certificate of the Secretary
or Assistant Secretary of the Transferor certifying (i) the names and
signatures of certain officers of the Transferor, (ii) that the copy of the
certificate of incorporation of the Transferor attached thereto is a complete
and correct copy and that such certificate of incorporation has not been
amended, modified or supplemented and is in full force and effect, (iii) that
the copy of the by-laws of the Transferor attached thereto is a complete and
correct copy and that such by-laws have not been amended, modified or
supplemented and are in full force and effect, and (iv) that the copy attached
thereto of certain resolutions of the Transferor's directors, approving and
authorizing, among other things, the execution and delivery of this Series
Supplement and all other agreements, documents and instruments delivered by or
on behalf of the Transferor, is a true and complete copy thereof and that such
resolutions have not been amended, modified or otherwise supplemented and are
in full force and effect as of the date of such certificate; and
(n) receipt by the Program Agent of a certificate of the Secretary
or Assistant Secretary of the Servicer certifying (i) the names and signatures
of certain officers of the Servicer, (ii) that the copy of the certificate of
incorporation of the Servicer attached thereto is a complete and correct copy
and that such certificate of incorporation has not been amended, modified or
supplemented and is in full force and effect, (iii) that the copy of the by-
laws of the Servicer attached thereto is a complete and correct copy and that
such by-laws have not been amended, modified or supplemented and are in full
force and effect, and (iv) that the copy attached thereto of certain
resolutions of the Servicer's directors, approving and authorizing, among
other things, the execution and delivery of this Series Supplement and all
other agreements, documents and instruments delivered by or on behalf of the
Servicer, is a true and complete copy thereof and that such resolutions have
not been amended, modified or otherwise supplemented and are in full force and
effect as of the date of such certificate.
ARTICLE II
ADDITIONAL COVENANTS
SECTION 2.01. COVENANTS OF THE SERVICER. The Servicer hereby
covenants that, until the termination of the Amortization Period:
(a) The Servicer will furnish to the Program Agent, promptly after
delivery to the Trustee, all notices, reports and other information given to
the Trustee under the Agreement other than the Daily Reports required
thereunder.
(b) At any time and from time to time during the Servicer's regular
business hours and at the Servicer's expense, on reasonable prior notice; the
Servicer shall, in response to any reasonable request of the Trustee or the
Program Agent, permit the Trustee or the Program Agent, or their agents or
representatives, (i) to examine and make copies of and abstracts from all
books, records and documents (including, without limitation, computer tapes,
microfiche and disks) in the possession or under the control of the Servicer
relating to the Trust Assets, the Receivables and the related Contracts and
(ii) to visit the offices and properties of the Servicer for the purpose of
examining such materials and to discuss matters relating to the Receivables or
the Servicer's performance hereunder with any of the Responsible Officers of
the Servicer having knowledge thereof; such audits and/or visits may take
place annually, or more frequently if so required at the reasonable discretion
of the Program Agent, or its agents or representatives (which agents in
connection with any audit, shall be Deloitte & Touche, or another Independent
Accounting Firm mutually acceptable to the Servicer and the Program Agent);
PROVIDED, HOWEVER, that prior to the time of any such required audit or visit
by the Program Agent (or its agents or representatives) which is less than
eleven months after the most recent such audit or visit, the Program Agent
will give written notice to the Servicer of its intention to so require such
an audit or visit, and the Servicer shall have a reasonable opportunity, on
the same Business Day on which such notice is given, to respond by telephone
or in writing to any questions identified by the Program Agent (or its agents
or representatives) as giving rise to such intended audit or visit; PROVIDED
FURTHER, HOWEVER, that nothing in the foregoing shall in any way limit the
right of the Program Agent (or its agents or representatives) to require such
an audit or visit, if after receiving the Servicer's response to such
questions, the Program Agent (or its agents or representatives) believes that
such audit or visit is so required in the exercise of its reasonable
discretion. The Servicer agrees that the Program Agent will have the right to
require changes in the scope of the Annual Servicing Report furnished by the
Independent Public Accountants pursuant to Section 3.07 of the Agreement.
(c) The Servicer will deliver or cause to be delivered in
duplicate, to each Series 1995-1 Certificateholder and the Trustee, for so
long as Nine West is the Servicer, copies of each report of Nine West filed
with the Securities and Exchange Commission on Forms 10-K and 10-Q within 95
days after end of each fiscal year, in the case of Forms 10-K, and within 50
days after end of each fiscal quarter in the case of Forms 10-Q.
ARTICLE III
SERVICING FEE
SECTION 3.01. SERVICING COMPENSATION.
The portion of the Servicing Fee allocable to the Series 1995-1
Certificateholders with respect to any Distribution Date (the "SERIES 1995-1
SERVICING FEE") shall be equal to the product of (a) 1.00% per annum and (b)
the Invested Amount.
ARTICLE IV
RIGHTS OF SERIES 1995-1 CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.01. ESTABLISHMENT OF SERIES ACCOUNTS.
(a) The Servicer, for the benefit of the Series 1995-1
Certificateholders, shall establish and maintain in the name of the Trustee,
on behalf of the Trust, with an Eligible Institution a segregated trust
account accessible only by the Trustee (the "SERIES 1995-1 TRUSTEE'S
ACCOUNT"), which shall be identified as the "Series 1995-1 Trustee's Account
for the Nine West Trade Receivables Master Trust, Series 1995-1" and shall
bear a designation clearly indicating that the funds deposited therein are
held for the benefit of the Series 1995-1 Certificateholders. The Series
1995-1 Trustee's Account initially shall be established at The Bank of New
York.
(b) The Program Agent, for the benefit of CRC and the Liquidity
Providers, shall establish and maintain in its own name, on behalf of CRC and
the Liquidity Providers, with an Eligible Institution a segregated account
accessible only by the Program Agent (the "PROGRAM AGENT'S ACCOUNT"), which
shall be identified as the "Program Agent's Account for the Nine West Trade
Receivables Master Trust, Series 1995-1" and shall bear a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Series 1995-1 Certificateholders. The Program Agent's Account initially shall
be established at Citibank, N.A.
(c) (i) The Servicer, for the benefit of the Series 1995-1
Certificateholders, shall establish and maintain in the name of the Trustee,
on behalf of the Trust, with an Eligible Institution a segregated trust
account accessible only by the Trustee (the "CURE ACCOUNT"), which shall be
identified as the "Cure Account for the Nine West Trade Receivables Master
Trust, Series 1995-1" and shall bear a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 1995-1
Certificateholders.
(ii) At the direction of the Servicer (which may be a standing
direction), funds on deposit in the Cure Account shall be invested by the
Trustee in Eligible Investments selected by the Servicer. All such Eligible
Investments shall be held by the Trustee for the benefit of the Series 1995-1
Certificateholders. On each Distribution Date and on each Interest Payment
Date, all interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Cure Account shall be applied as set
forth in SECTION 4.02. Funds on deposit in the Cure Account shall be invested
at the written direction of the Servicer in Eligible Investments that will
mature so that such funds will be available on or before the close of business
on the Business Day next preceding the earlier of (x) the next following
Interest Payment Date, or (y) the next following Distribution Date. Funds
deposited in the Cure Account on a Business Day which immediately precedes an
Interest Payment Date or a Distribution Date upon the maturity of any Eligible
Investments are not required to be invested overnight.
(d) (i) The Servicer, for the benefit of the Series 1995-1
Certificateholders, shall establish and maintain in the name of the Trustee,
on behalf of the Trust, with an Eligible Institution a segregated trust
account accessible only by the Trustee (the "ESCROW ACCOUNT"), which shall be
identified as the "Escrow Account for the Nine West Trade Receivables Master
Trust, Series 1995-1" and shall bear a designation clearly indicating that the
funds deposited therein are held for the benefit of the Series 1995-1
Certificateholders.
(ii) At the direction of the Servicer (which may be a standing
direction), funds on deposit in the Escrow Account shall be invested by the
Trustee in Eligible Investments selected by the Servicer. All such Eligible
Investments shall be held by the Trustee for the benefit of the Series 1995-1
Certificateholders. On each Distribution Date and on each Interest Payment
Date, all interest and other investment earnings (net of losses and investment
expenses) on funds on deposit in the Escrow Account shall be applied as set
forth in SECTION 4.02. Funds on deposit in the Escrow Account shall be
invested at the written direction of the Servicer in Eligible Investments that
will mature so that such funds will be available on or before the close of
business on the Business Day next preceding the earlier of (x) the next
following Interest Payment Date, or (y) the next following Distribution Date.
Funds deposited in the Escrow Account on a Business Day which immediately
precedes an Interest Payment Date or a Distribution Date upon the maturity of
any Eligible Investments are not required to be invested overnight.
(e) (i) The Trustee shall possess all right, title and interest in
and to all funds on deposit from time to time in, and all Eligible Investments
credited to, the Series 1995-1 Trustee's Account, the Cure Account and the
Escrow Account (collectively, the "SERIES 1995-1 ACCOUNTS") and in all
proceeds thereof. The Series 1995-1 Accounts shall be under the sole dominion
and control of the Trustee for the benefit of the Series 1995-1
Certificateholders. If, at any time, any of the Series 1995-1 Accounts are
held by an institution other than an Eligible Institution, the Trustee, if it
has actual knowledge that such institution is not an Eligible Institution, (or
the Servicer, at the direction of the Trustee and on its behalf) shall within
five Business Days establish a new Series 1995-1 Account meeting the
conditions specified in paragraph (a),(c) (i) or (d)(i) above, as applicable,
and shall transfer any cash and/or any investments to such new Series 1995-1
Account. Neither the Transferor, the Servicer nor any Person or entity
claiming by, through or under the Transferor, the Servicer or any such Person
or entity shall have any right, title or interest in, or any right to withdraw
any amount from, any Series 1995-1 Account, except as expressly provided
herein. Schedule I identifies each Series 1995-1 Accounts and the Program
Agent's Account by setting forth the account number of each such account, the
account designation of each such account and the name and location of the
institution with which such account has been established. If a substitute
Series 1995-1 Account or Program Agent's Account is established pursuant to
this Section 4.01, the party establishing such substitute Series 1995-1
Account shall promptly provide to the Servicer or the Trustee, as applicable,
an amended Schedule I, setting forth the relevant information for such
substitute Series 1995-1 Account.
(ii) Notwithstanding anything herein to the contrary, the Servicer
shall have the power, revocable by the Trustee, to instruct the Trustee to
make withdrawals and payments from the Series 1995-1 Accounts for the purposes
of carrying out the Servicer's or Trustee's duties hereunder.
(f) Unless the Rating Agency Condition is satisfied, at no time may
greater than 10% of the funds on deposit in any Series 1995-1 Account be
invested in Eligible Investments (other than obligations of the United States
government or agencies the obligations of which are guaranteed by the United
States government) of any single entity or its Affiliates.
(g) Any request by the Servicer to invest funds on deposit in any
Series 1995-1 Account shall be in writing, or by telephone, confirmed promptly
in writing, and shall certify that the requested investment is an Eligible
Investment which matures at or prior to the time required hereby.
SECTION 4.02. SETTLEMENT PROCEDURES.
(a) REVOLVING PERIOD. On each Deposit Date during each Collection
Period during the Revolving Period, unless a Partial Amortization Period or a
Cure Period shall have occurred and be continuing, the Servicer shall instruct
the Trustee by a Daily Report delivered to the Trustee by 12:00 noon (New York
City time) to, and the Trustee shall, at such time and in the following order:
(i) allocate Collections received since receipt of the last such
Daily Report and held in the Concentration Account on such day, based on
the Series 1995-1 Floating Allocation Percentage on such day and the
Daily Report, either as Series 1995-1 Investor Collections, Collections
allocable to another Series or Transferor Collections;
(ii) out of such Series 1995-1 Investor Collections, allocate to,
and hold in the Concentration Account, in trust for the Series 1995-1
Certificateholders, the Trustee and the Servicer, an amount equal to the
Series 1995-1 Discount Amount for such Collection Period to the extent
such amount has not been previously so allocated by the Servicer;
(iii) deposit the remainder of such Series 1995-1 Investor
Collections to the Transferor's Account to be invested by the Transferor
in Receivables; PROVIDED that if immediately following any such deposit
such Deposit Date would be a Pool Non-compliance Date, the Trustee shall
retain all such remaining Series 1995-1 Investor Collections in the
Concentration Account to be applied pursuant to Section 4.02(b)(iii); and
(iv) deposit to the Transferor's Account the Transferor
Collections.
On the Business Day immediately prior to (A) each Interest Payment
Date, the Servicer shall direct the Trustee to deposit to the Series 1995-1
Trustee's Account for the account of the Series 1995-1 Certificateholders that
portion of the Series 1995-1 Discount Amount allocated and held in trust as
described in clause (ii) above equal to the Debt Service Amount due and
payable on such Interest Payment Date; (B) each Distribution Date, the
Servicer shall direct the Trustee to deposit to the Series 1995-1 Trustee's
Account for the account of the Series 1995-1 Certificateholders, the Liquidity
Providers, the Trustee and the Servicer, that portion of the Series 1995-1
Discount Amount allocated and held in trust as described in clause (ii) above
equal to the sum of (1) the Monthly Trust Expense Amount and (2) the sum of
the Purchaser Fees then due and owing; PROVIDED, HOWEVER, that the Servicer
shall instruct the Trustee to deposit such Trustee's expenses only to the
extent of expenses actually incurred by the Trustee (as certified to the
Servicer in writing by the Trustee) during the Collection Period relating to
such Distribution Date or remaining unpaid with respect to any prior
Collection Period. The Daily Report delivered by the Servicer to the Trustee
on the first day of each Collection Period shall set forth the Series 1995-1
Discount Amount for such Collection Period.
(b) PARTIAL AMORTIZATION/CURE PERIOD. On each Deposit Date during
each Collection Period if and so long as a Partial Amortization Period or a
Cure Period shall have occurred and be continuing, the Servicer shall instruct
the Trustee by a Daily Report delivered to the Trustee by 12:00 noon (New York
City time) to, and the Trustee shall, at that time and in the following order:
(i) allocate Collections received since receipt of the last such
Daily Report and held in the Concentration Account on such day, based on
the Series 1995-1 Floating Allocation Percentage for such Partial
Amortization Period or Cure Period and the Daily Report, either as Series
1995-1 Investor Collections, Collections allocable to another Series or
Transferor Collections;
(ii) out of such Series 1995-1 Investor Collections, allocate to,
and hold in the Concentration Account, in trust for the Series 1995-1
Certificateholders, the Trustee and the Servicer, an amount equal to the
Series 1995-1 Discount Amount for such Collection Period to the extent
such amount has not been previously so allocated by the Servicer;
(iii) (A) in the case of a Partial Amortization Period, set aside
and hold in the Concentration Account, in trust for the Series 1995-1
Certificateholders, the Trustee and the Servicer, such Series 1995-1
Investor Collections until the amount so held equals the Series 1995-1
Partial Amortization Amount and (B) in the case of a Cure Period, deposit
such Series 1995-1 Investor Collections to the Cure Account in an amount
sufficient (together with the amounts on deposit in the Cure Accounts of
all outstanding Series) to make the Net Receivables Balance equal or
exceed the Required Net Receivables Balance;
(iv) deposit the remainder of such Series 1995-1 Investor
Collections to the Transferor's Account to be invested by the Transferor
in Receivables; provided that if immediately following any such deposit
such Deposit Date would be a Pool Non-compliance Date, the Trustee shall
retain all such remaining Series 1995-1 Investor Collections in the
Concentration Account to be applied pursuant to Section 4.02(b)(iii);
(v) deposit to the Transferor's Account the Transferor Collections.
On the Business Day immediately following the day on which any
Partial Amortization Period ends, the Servicer shall deposit to the Series
1995-1 Trustee's Account all amounts set aside as described in clause
(iii)(A) of this Section 4.02(b) PROVIDED, HOWEVER, that if such following
Business Day is a Distribution Date, an Interest Payment Date or a date on
which the Transferor elects to reduce the Invested Amount pursuant to SECTION
4.02(d), the Servicer shall also deposit to the Series 1995-1 Trustee's
Account, from funds held in the Concentration Account as Series 1995-1
Discount Amount pursuant to clause (ii) of SECTION 4.02(a) and clause (ii) of
this SECTION 4.02(b), the funds necessary to be distributed on such date as
interest, Breakage Costs (if any) or other amounts due and payable from the
Series 1995-1 Discount Amount.
On the Business Day immediately prior to (A) each Interest Payment
Date during a Partial Amortization Period or Cure Period, the Servicer shall
direct the Trustee to deposit to the Series 1995-1 Trustee's Account for the
account of the Series 1995-1 Certificateholders that portion of the Series
1995-1 Discount Amount allocated and held in trust as described in clause (ii)
above equal to the Debt Service Amount due and payable on such Interest
Payment Date; and (B) each Distribution Date during a Partial Amortization
Period or Cure Period, the Servicer shall direct the Trustee to deposit to the
Series 1995-1 Trustee's Account for the account of the Series 1995-1
Certificateholders, the Liquidity Providers, the Trustee and the Servicer,
that portion of the Series 1995-1 Discount Amount allocated and held in trust
as described in clause (ii) above equal to the sum of (1) the Monthly Trust
Expense Amount and (2) the sum of the Purchaser Fees then due and owing;
PROVIDED, HOWEVER, that the Servicer shall instruct the Trustee to deposit
such Trustee's expenses only to the extent of expenses actually incurred by
the Trustee (as certified to the Servicer in writing by the Trustee) during
the Collection Period relating to such Distribution Date or remaining unpaid
with respect to any prior Collection Period.
All funds held in the Concentration Account during a Partial
Amortization Period as all or a portion of the Series 1995-1 Partial
Amortization Amount shall remain in the Concentration Account, without
reduction, until such funds are distributed to the Series 1995-1
Certificateholders as provided in Section 5.01(d).
(c) EARLY AMORTIZATION/AMORTIZATION PERIOD. On each Deposit Date
during each Collection Period during an Early Amortization Period or the
Amortization Period, the Servicer shall instruct the Trustee by a Daily Report
delivered to the Trustee by 12:00 noon (New York City time) to, and the
Trustee shall, at that time and in the following order:
(i) allocate Collections received since receipt of the last such
Daily Report and held in the Concentration Account, based on the Fixed
Allocation Percentage for such Early Amortization Period or the
Amortization Period and the Daily Report, either as Series 1995-1
Investor Collections, Collections allocable to another Series or as
Transferor Collections;
(ii) set aside and hold in the Concentration Account in trust for
the Series 1995-1 Certificateholders, the Trustee and the Servicer, such
Series 1995-1 Investor Collections;
(iii) deposit to the Escrow Account, from the Transferor
Collections, the Escrow Amount, if any; and
(iv) deposit to the Transferor's Account any Transferor
Collections.
The Trustee shall deposit to the Series 1995-1 Trustee's Account for
the account of the Series 1995-1 Certificateholders, the Liquidity Providers,
the Trustee and the Servicer (A) all amounts set aside as described in clause
(ii) of this SECTION 4.02(c), (B) all amounts then on deposit in the Cure
Account, (C) the amount of funds held in the Concentration Account
representing all or a portion of the Series 1995-1 Partial Amortization
Amount, and (D) the Escrow Payment, if any, from funds on deposit in the
Escrow Account, as follows:
(x) on the Business Day immediately prior to each Interest Payment
Date, in an aggregate amount not to exceed (1) the Debt Service Amount
for the related Interest Period, and (2) the Invested Amount; and
(y) on the Business Day immediately prior to each Distribution Date,
in an aggregate amount not to exceed the sum of (1) the sum of the
Purchaser Fees payable on such Distribution Date, (2) the Monthly Trust
Expense Amount payable on such Distribution Date, and (3) the aggregate
of all other amounts then owed to the Holders of the Series 1995-1
Certificates hereunder (other than the amounts described in clause (x)
above).
(d) REDUCTIONS TO INVESTED AMOUNT - REVOLVING PERIOD. On any
Business Day during the Revolving Period, unless a Partial Amortization Period
or a Cure Period shall have occurred and be continuing, the Transferor may
(i) instruct the Servicer to direct the Trustee (as set forth in the Daily
Report) to deposit to the Series 1995-1 Trustee's Account all or a portion of
(A) the Collections otherwise to be deposited into the Transferor's Account
pursuant to Sections 4.02(a)(iii) and (iv) and (B) the Series 1995-1 Discount
Amount held in the Concentration Account pursuant to Section 4.02(a)(ii), and
(ii) deposit to the Series 1995-1 Trustee's Account its own funds, in each
case for distribution on the next Business Day pursuant to Section 5.01(c) to
the relevant Series 1995-1 Certificateholders, to repay all or a portion of
the Invested Amount and related Debt Service Amount, if any, and Breakage
Costs (in the event any such payment takes place on any day other than a
related Interest Payment Date) and any other amounts due the 1995-1
Certificateholders under the Transaction Documents.
(e) REDUCTIONS TO INVESTED AMOUNT - AMORTIZATION PERIOD. On the
Business Day prior to any Distribution Date during an Early Amortization
Period or the Amortization Period, the Transferor may deposit to the Series
1995-1 Trustee's Account its own funds in an amount sufficient, when added to
the amounts deposited to the Series 1995-1 Trustee's Account pursuant to
Section 4.02(c), to reduce the Invested Amount and to pay the Debt Service
Amount, if any, any Breakage Costs and any other amounts due the Series 1995-1
Certificateholders under the Transaction Documents. Upon the termination of
such Early Amortization Period or the Amortization Period, the Servicer shall
instruct the Trustee to, and the Trustee shall, withdraw from the Cure Account
all remaining amounts then on deposit therein and deposit such funds to the
Series 1995-1 Trustee's Account for use by the Trustee in making the
distribution required under Section 5.01(e).
(f) WITHDRAWAL OF CURE FUNDS. On any Business Day during the
Revolving Period, the Transferor may instruct the Trustee by an Officer's
Certificate (which may be a standing instruction) delivered to the Trustee by
12:00 noon (New York City time) to, and the Trustee shall, deposit to the
Transferor's Account all amounts then on deposit in the Cure Account; PROVIDED
that the Transferor shall have delivered to the Trustee at the time of such
request an Officer's Certificate (in substantially the form of Exhibit D
hereto) stating that, after taking account of the requested withdrawal, the
Net Receivables Balance on such day is equal to or greater than the Required
Net Receivables Balance and setting forth the calculation supporting such
statement.
(g) DETERMINATION OF RATES. At any time that the Certificate Rate
is required to be determined hereunder, for any reason whatsoever, the
Servicer shall give the Trustee written notice of such rate at such time, and
to the extent that the Servicer shall not have sufficient information in order
to calculate such rate at such time, the Servicer shall obtain such additional
information from the Program Agent.
SECTION 4.03. NEW ISSUANCES. In addition to the conditions to the
issuance of a new Series of Investor Certificates described in Section 6.08(b)
of the Agreement, on or before the Series Issuance Date relating to any new
Series, each Rating Agency shall have notified the Series 1995-1
Certificateholders, the Servicer and the Trustee in writing that the issuance
of such new Series of Investor Certificates will not in and of itself result
in a reduction or withdrawal of the rating of any outstanding commercial paper
issued by any Series 1995-1 Certificateholder with respect to which it is a
Rating Agency.
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
SERIES 1995-1 CERTIFICATEHOLDERS
SECTION 5.01. DISTRIBUTIONS.
(a) REVOLVING PERIOD. (x) During the Revolving Period, on the
Distribution Date with respect to each Collection Period, the Trustee shall
distribute the funds on deposit in the Series 1995-1 Trustee's Account on such
Distribution Date, in the following order of priority, in accordance with the
Servicer's Determination Date Certificate:
(i) to the Trustee as the accrued and unpaid Series Trustee's Fee
and expenses of the Trustee, not in excess of the product of (A) $5,000
and (B) the Series Allocation Percentage for Series 1995-1 (PROVIDED,
HOWEVER, that (A) the distribution described in this clause (i) shall
take place only on the last Distribution Date to occur in each calendar
year, and on the earlier to occur of the termination of the Trust or the
effectiveness of the resignation or removal of a Trustee in accordance
with the provisions of Section 11.07 of the Agreement, and (B) in the
case of any Distribution Date other than such last Distribution Date to
occur in a calendar year, such amount of accrued and unpaid Series
Trustee's Fee and expenses so accrued during such Collection Period shall
be set aside by the Trustee in the Series 1995-1 Trustee's Account, and
shall not be available for application under any of the following clauses
of this SECTION 5.01(a));
(ii) to the Servicer (if the Servicer is other than Nine West Group
Inc.) as the accrued and unpaid Series Servicing Fee and any Service
Transfer expenses incurred by a Successor Servicer which have not been
paid by the initial Servicer;
(iii) unless otherwise instructed by the Program Agent, to the
Program Agent's Account, for payment of the Purchaser Fees (including,
without limitation, Breakage Costs);
(iv) to the Servicer (if the Servicer is Nine West Group Inc.) as
the accrued and unpaid Series Servicing Fee; and
(v) after the payment in full of the amounts specified in clauses
(i) through (iv) above, to the Transferor.
(y) During the Revolving Period, on each Interest Payment Date
with respect to each Collection Period, the Trustee shall distribute the funds
on deposit in the Series 1995-1 Trustee's Account on such Interest Payment
Date, to the Program Agent's Account, to be applied in the following order of
priority:
(i) for distribution to the Series 1995-1 Certificateholders,
ratably in accordance with their respective Undivided Fractional
Interests, of the Debt Service Amount; and
(ii) after the payment in full of the amounts specified in clause
(i) and (ii) above, to the Transferor;
PROVIDED, HOWEVER, to the extent there are insufficient funds on deposit in
the Series 1995-1 Trustee's Account to fully pay the amounts described in this
SECTION 5.01(a), the funds on deposit in the Series 1995-1 Trustee's Account
shall be distributed among the amounts described in this SECTION 5.01(a) in
the following order of priority: FIRST, to the amounts described in clause
(x)(i); SECOND, to the amounts described in clause (x)(ii); THIRD, to the
amounts described in clause (y)(i); FOURTH, to the amounts described in clause
(x)(iii); FIFTH, to the amounts described in clause (x)(iv); and SIXTH, to the
Transferor as described in clauses (x)(v) and (y)(ii).
(b) EARLY AMORTIZATION/AMORTIZATION PERIOD. (x) On each
Distribution Date during an Early Amortization Period or the Amortization
Period, the Trustee shall distribute the funds on deposit in the Series 1995-1
Trustee's Account on such Distribution Date, in the following order of
priority, in accordance with the Servicer's Determination Date Certificate:
(i) to the Trustee as the accrued and unpaid Series Trustee's Fee
and expenses of the Trustee, not in excess of the product of (A) $5,000
and (B) the Series Allocation Percentage for Series 1995-1 (PROVIDED,
HOWEVER, that (A) the distribution described in this clause (i) shall
take place only on the last Distribution Date to occur in each calendar
year, and on the earlier to occur of the termination of the Trust or the
effectiveness of the resignation or removal of a Trustee in accordance
with the provisions of Section 11.07 of the Agreement, and (B) in the
case of any Distribution Date other than such last Distribution Date to
occur in a calendar year, such amount of accrued and unpaid Series
Trustee's Fee and expenses so accrued during such Collection Period shall
be set aside by the Trustee in the Series 1995-1 Trustee's Account, and
shall not be available for application under any of the following clauses
of this SECTION 5.01(b));
(ii) to the Servicer (if the Servicer is other than Nine West Group
Inc.) as the accrued and unpaid Series Servicing Fee and, if a default in
payment to any Series of Certificateholders shall have occurred, Service
Transfer expenses incurred by a Successor Servicer which have not been
paid by the initial Servicer;
(iii) unless otherwise instructed by the Program Agent, to the
Program Agent's Account, for payment of the Purchaser Fees (including,
without limitation, Breakage Costs);
(iv) to the Trustee as Trustee's expenses in excess of the product
of (A) $5,000 and (B) the Series Allocation Percentage for Series 1995-1;
(v) to the Servicer (if the Servicer is Nine West Group Inc.) as
the accrued and unpaid Series Servicing Fee for such Collection Period;
and
(vi) after the payment in full of the amounts specified in clauses
(i) through (v) above, to the Transferor.
(y) On each Interest Payment Date during an Early Amortization
Period or the Amortization Period, the Trustee shall distribute the funds on
deposit in the Series 1995-1 Trustee's Account on such Interest Payment Date,
to the Program Agent's Account, to be applied in the following order of
priority:
(i) for distribution to the Series 1995-1 Certificateholders,
ratably in accordance with their respective Undivided Fractional
Interests, of the Debt Service Amount and any accrued and unpaid Debt
Service Amount;
(ii) to the Series 1995-1 Certificateholders, ratably in accordance
with their respective Undivided Fractional Interests, in reduction of the
Invested Amount until the Invested Amount is reduced to zero, and any
other amounts due the Certificateholders under the Transaction Documents;
and
(iii) after the payment in full of the amounts specified in clauses
(i) above, to the Transferor;
PROVIDED, HOWEVER, to the extent there are insufficient funds on deposit in
the Series 1995-1 Trustee's Account to fully pay the amounts described in this
SECTION 5.01(b), the funds on deposit in the Series 1995-1 Trustee's Account
shall be distributed among the amounts described in this SECTION 5.01(b) in
the following order of priority: FIRST, to the amounts described in clause
(x)(i); SECOND, to the amounts described in clause (x)(ii); THIRD, to the
amounts described in clause (y)(i); FOURTH, to the amounts described in clause
(x)(iii), but only to the extent of the Program Fee and the Facility Fee;
FIFTH, to the amounts described in clause (y)(ii); SIXTH, to the amounts
described in clause (x)(iii) other than the Program Fee, and the Facility Fee;
SEVENTH, to the amounts described in clause (x)(iv); EIGHTH, to the amounts
described in clause (x)(v); and NINTH, to the Transferor as described in
clauses (x)(vi) and (y)(iii).
(c) In accordance with the provisions of Section 4.02(d), the
Trustee shall distribute the funds on deposit in the Series 1995-1 Trustee's
Account to the Series 1995-1 Certificateholders, in reduction of the Invested
Amount and payment of any related Debt Service Amount, if any, any Breakage
Costs and all other amounts due the Series 1995-1 Certificateholders under the
Transaction Documents.
(d) In accordance with the provisions of the last paragraph in
SECTION 4.02(b), the Trustee shall distribute the amount of funds representing
the Trust Partial Amortization Amount that have been deposited to the Series
1995-1 Trustee's Account to the Series 1995-1 Certificateholders, in reduction
of the Invested Amount and payment of the Debt Service Amount, if any, any
Breakage Costs and all other amounts due the Series 1995-1 Certificateholders
under the Transaction Documents.
(e) Upon payment in full to all of the Series 1995-1
Certificateholders of the Invested Amount, all accrued and unpaid interest
thereon and all other amounts due the Series 1995-1 Certificateholders under
the Transaction Documents, payment in full to the Servicer of the Series
Servicing Fee, and payment in full to the Trustee of the Series Trustee's Fee,
and provided that no amounts are then due and unpaid to the Holders of any
other outstanding Series, all amounts remaining on deposit in the Series 1995-
1 Trustee's Account shall be distributed by the Trustee to the Holder of the
Transferor Certificate, and all amounts, if any, remaining in the Collection
Accounts, the Concentration Account, the Cure Account and the Escrow Account
shall be distributed by the Trustee to the Holder of the Transferor
Certificate; PROVIDED, HOWEVER, that if at any time after the payment that
would have otherwise resulted in such payment in full, such payment is
rescinded or must otherwise be returned for any reason, effective upon such
rescission or return such payment in full shall automatically be deemed, as
between the Series 1995-1 Certificateholders and the Transferor, never to have
occurred, and the Transferor shall be required, to the extent it received any
amounts under this Section 5.01, to remit to the Series 1995-1
Certificateholders an amount equal to the rescinded or returned payment.
(f) Except as provided in Section 12.02 of the Agreement with
respect to a final distribution, distributions to the Series 1995-1
Certificateholders hereunder shall be made by wire transfer to the Program
Agent's Account, unless otherwise instructed by the Program Agent, at such
account as may be designated in writing, received by the Trustee on or prior
to the relevant Record Date, by each Series 1995-1 Certificateholder without
presentation or surrender of any Certificate or the making of any notation
thereon. In the absence of such timely wire transfer instructions, payment
will be made by check to the addresses of record of the Series 1995-1
Certificateholders. Any payments due the Series 1995-1 Certificateholders and
received to the credit of the Program Agent's Account shall be considered to
have been received by the Series 1995-1 Certificateholders for the purposes of
the Agreement, this Series Supplement and the Series 1995-1 Certificates.
SECTION 5.02. ANNUAL CERTIFICATEHOLDERS' STATEMENT. On or before
January 31 of each calendar year, beginning with January 31, 1997, the
Servicer shall provide to the Trustee and the Trustee shall forward or cause
to be forwarded to each Person who at any time during the preceding fiscal
year was a Series 1995-1 Certificateholder, a statement prepared by the
Servicer containing the information which is required to be contained in the
Determination Date Certificates provided to Certificateholders pursuant to
Section 3.05(b) of the Agreement, aggregated for such fiscal year or the
applicable portion thereof during which such Person was a Certificateholder,
together with other information as is required to be provided under the
Internal Revenue Code and such other customary information as is necessary to
enable the Certificateholders to prepare their tax returns (all as determined
by the Servicer). The obligation of the Servicer to provide such other
information and such other customary information shall be deemed to have been
satisfied to the extent that information substantially comparable to such
other information and such other customary information shall be provided by
the Trustee pursuant to any requirements of the Internal Revenue Code as from
time to time in effect.
ARTICLE VI
SERIES 1995-1 EARLY AMORTIZATION EVENTS
SECTION 6.01. SERIES 1995-1 EARLY AMORTIZATION EVENTS. If a Trust
Early Amortization Event or any one of the following events shall occur (each,
an "EARLY AMORTIZATION EVENT")
(a) the Default Ratio shall exceed 6.0%; or
(b) the average of the Dilution Ratios for the six next preceding
Collection Periods shall exceed 15.0%; or
(c) the average of the Loss to Liquidation Ratios for the three
next preceding Collection Periods shall exceed 1.0% or
(d) the senior debt rating of the initial Servicer is rated below
B- or its equivalent by either Standard & Poor's or Moody's, or, if not rated
by Standard & Poor's or Moody's, such senior debt is deemed rated below B-
based upon the Citibank, N.A. internal debt rating model; or
(e) The Transferor shall fail to perform any of its obligations
under the Certificate Purchase Agreement; or
(f) Either of the Transferor or the Servicer (provided that the
Servicer is the Transferor, Nine West or an Affiliate of either thereof) shall
fail to make any payment, transfer or deposit required to be paid, effected or
made by it under the Agreement or this Series Supplement (including pursuant
to Section 3.04(b) of the Agreement), under any other Supplement or under any
agreement, documentation or report delivered in connection herewith or
therewith; or
(g) The Transferor shall fail at any time to maintain net worth
(exclusive of its interests in the Trust or similar arrangements) in an amount
equal to or exceeding the greater of (i) $5,000,000 and (ii) an amount equal
to 5.0% of the excess of (x) the Outstanding Balance of Eligible Receivables
at such time over (y) the aggregate amount of the Invested Amount at such time
and the Invested Amount at such time of any Series (or Class thereof) in
respect of which a Tax Opinion in the form described in clause (d)(ii) of the
definition of "Tax Opinion" in the Agreement has been delivered to the
Trustee;
then, either the Trustee or the Program Agent (unless otherwise directed by a
Majority in Interest of Series 1995-1 Certificateholders) or a Majority in
Interest of Series 1995-1 Certificateholders, by notice then given in writing
to the Transferor and the Servicer (and to the Trustee if given by such Series
1995-1 Certificateholders), may declare (PROVIDED that such Early Amortization
Event shall not have been remedied) that an Early Amortization Event has
occurred as of the date of such notice, and, in the case of any Early
Amortization Event, additional Receivables will not be transferred to the
Trust.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.01. RATIFICATION OF AGREEMENT. As supplemented by this
Series Supplement, the Agreement is in all respects ratified and confirmed and
the Agreement as so supplemented by this Series Supplement shall be read,
taken and construed as one and the same instrument.
SECTION 7.02. COUNTERPARTS. This Series Supplement may be executed
in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original but all of which together
shall constitute one and the same instrument.
SECTION 7.03. GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS.
(a) GOVERNING LAW. THIS SERIES SUPPLEMENT, INCLUDING THE RIGHTS
AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(b) JURISDICTION. Each of the parties hereto hereby irrevocably
and unconditionally submits to the nonexclusive jurisdiction of any New York
State court or federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Series Supplement, and each of
the parties hereto hereby irrevocably and unconditionally (i) agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, such federal court
and (ii) waives the defense of an inconvenient forum. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law.
(c) CONSENT TO SERVICE OF PROCESS. Each party to this Series
Supplement irrevocably consents to service of process by personal delivery,
certified mail, postage prepaid or overnight courier. Nothing in this Series
Supplement will affect the right of any party to this Series Supplement to
serve process in any other manner permitted by law.
SECTION 7.04. APPOINTMENT OF SUCCESSOR SERVICER. Notwithstanding
anything to the contrary in Section 10.02 of the Agreement, the Trustee's
appointment of a Successor Servicer shall be subject to the consent of a
Majority in Interest of the Series 1995-1 Certificateholders.
SECTION 7.05. THE TRUSTEE. The Trustee shall not be responsible in
any manner whatsoever for or with respect to the validity or sufficiency of
this Series Supplement, or for or with respect to the recitals contained
herein, all of which recitals are made solely by the Transferor and the
Servicer.
SECTION 7.06. ASSIGNMENT BY CRC AND THE LIQUIDITY PROVIDERS. (a)
Subject to the limitations on transfer contained in the Agreement and this
Series Supplement, at any time and from time to time, CRC or any Liquidity
Provider may, by notice and delivery to the Program Agent of a fully executed
assignment and assumption agreement (in sufficient counterparts for each party
hereto), assign to any Person all or any portion of its rights and obligations
hereunder; PROVIDED that such Person is an Eligible Assignee. The Program
Agent shall, promptly upon its receipt of any such notice and assignment and
assumption agreement, notify the Transferor, the Servicer and the Trustee of
such assignment. The Transferor and the Servicer agree to execute or obtain
such other documentation as may be reasonably requested by CRC or any
Liquidity Provider in order to effectuate such assignment. The assignee
shall, upon the effectiveness of such assignment and assumption agreement and
delivery thereof and of such other requested documentation to the Program
Agent, become entitled to the benefits hereof and subject to the obligations
of CRC or such Liquidity Provider hereunder, as the case may be.
(b) Subject to the limitations on transfer contained in the
Agreement and this Series Supplement, at any time and from time to time, CRC
may assign to any Liquidity Provider, and any Liquidity Provider may assign to
any other Liquidity Provider, all or any portion of its Series 1995-1
Certificateholders' Interest or its interest therein; PROVIDED that such
assignee shall be an Eligible Assignee; and PROVIDED, FURTHER, that such
assignment shall comply with any applicable legal requirements including,
without limitation, the Act. Each such assignment shall be upon such terms
and conditions as the assignor and the assignee may mutually agree. CRC or
the Liquidity Provider making any such assignment shall provide notice to the
Trustee, the Transferor and the Servicer thereof.
(c) No Series 1995-1 Certificateholder may sell, transfer or
otherwise dispose of (each, a "SALE") any Series 1995-1 Certificate, or any
interest in any Series 1995-1 Certificate, held by it (other than, in the case
of CRC, any assignment to the Liquidity Providers pursuant to Section 2.06 of
the Certificate Purchase Agreement, PROVIDED, that each such Liquidity
Provider shall have previously delivered a Non-Rule 144-A Letter to the
Trustee and the Transferor) unless:
(i) such Sale is to a "qualified institutional buyer" within
the meaning of Rule 144A ("RULE 144A") promulgated under the Act
that purchases for its own account or for the account of another
Person that is a qualified institutional buyer, which Person is
aware that the proposed Sale is being made in reliance on Rule 144A
and to whom such Sale is being made pursuant to an available
exemption from the registration requirements of applicable state
securities laws, and, prior to the proposed Sale, such transferring
Holder has executed and delivered to the Trustee and the Transferor
an investor letter, substantially in the form of EXHIBIT D-1 to the
Agreement (a "RULE 144-A LETTER"), or
(ii) the transferee to whom such Sale is being made is a
sophisticated institutional investor that is an "accredited
investor" (within the meaning of Rule 501(a) (1), (2), (3) or (7)
under the Act) in a transaction not involving any general
solicitation or advertising as evidenced by a certificate of the
proposed transferor thereof delivered to the Trustee, and to whom
such Sale is being made pursuant to an available exemption from the
registration requirements of applicable state securities laws, and,
prior to the proposed Sale, such transferring Holder has executed
and delivered to the Trustee and the Transferor an investor letter,
substantially in the form of EXHIBIT D-2 to the Agreement (a "NON-
RULE 144-A LETTER"), or
(iii) such Sale is being made pursuant to an applicable
exemption from the registration requirements of the Act and
applicable state securities laws and, prior to the proposed Sale
such transferring Holder and the proposed transferee each provide
the Trustee and the Transferor with an investor letter,
substantially in the form of EXHIBIT D-2 to the Agreement and, if
requested by the Trustee or the Transferor, an Opinion of Counsel,
in each case satisfactory in form and substance to the Trustee and
the Transferor, concerning the proposed Sale and the availability of
such exemption.
No Holder of a Series 1995-1 Certificate or other Person acting on behalf of a
Certificateholder shall use any means of general solicitation or distribution
in connection with the Sale of any Series 1995-1 Certificates. Each of the
Series 1995-1 Certificates shall bear a legend substantially as set forth in
the form of the certificate attached to this Series Supplement.
(d) Notwithstanding anything in the foregoing to the contrary, each
Series 1995-1 Certificateholder, and each Person at any time holding an
interest in any Certificate (including, without limitation, each of CRC, the
Liquidity Providers and each of their respective assignees) shall be deemed to
have represented and warranted to each of the Transferor, the Program Agent
and the Trustee, effective as of the first date on which it acquires any
Certificate (or any interest therein) that it is a commercial lender which
makes loans in the ordinary course of its business and that it shall make or
acquire its purchases and/or Increases (or interests therein) under and
pursuant to the Certificate Purchase Agreement for its own account in the
ordinary course of such business. Each such Person, by acquiring its
Certificate (or interest therein) further understands and agrees that by
entering into the transactions contemplated by this Series Supplement and the
other Transaction Documents, it is entering into a funding commitment under a
commercial credit facility and that by making the foregoing representation, it
is not characterizing any of the transactions contemplated by this Series
Supplement, the Certificate Purchase Agreement or any of the other Transaction
Documents as the making of an investment in "securities" as defined in the
Securities Act of 1993, as amended.
SECTION 7.07. NO ASSIGNABILITY BY TRANSFEROR OR SERVICER. Neither
the Servicer nor the Transferor may assign any of its rights and obligations
hereunder or any interest herein without the prior written consent of CRC and
the Program Agent.
SECTION 7.08. AMENDMENTS AND WAIVERS. No amendments, waivers or
other modifications may be made to this Series Supplement without the prior
written consent of the Program Agent (which consent of the Program Agent shall
in all circumstances be given in accordance with the applicable provisions of
the Certificate Purchase Agreement). In addition, no such amendment, waiver
or modification shall be made, the effect of which would be to
(i) change the Debt Service Amount, Dynamic Loss and Dilution
Reserve Percentage, Loss and Dilution Reserve Percentage, Purchase Limit,
Specified Loss and Dilution Reserve Percentage, Concentration Limit,
Default Ratio, Dilution Ratio, Loss to Liquidation Ratio, Revolving
Period, Series 1995-1 Discount Amount, Series 1995-1 Loss and Dilution
Reserve, Series 1995-1 Yield/Fee Reserve or Early Amortization Events,
unless and to the extent that the amendment, waiver or modification
effecting such change shall be consented to by the Program Agent acting
pursuant to the authority granted the Program Agent in the relevant
Certificate Purchase Agreement,
(ii) reduce in any manner the amount of, or delay the timing of,
distributions to be made to any Series 1995-1 Certificateholder or
deposits of amounts to be so distributed, in each case without the prior
written consent of such Series 1995-1 Certificateholder, or
(iii) adversely affect in any other material respect the interests
of any Series 1995-1 Certificateholder, in each case unless the Rating
Agency Condition is satisfied and a Majority in Interest of the Series
1995-1 Certificateholders has consented in writing.
SECTION 7.09. INDEMNIFICATION OF THE TRUSTEE, THE TRUST AND THE
INVESTOR CERTIFICATEHOLDERS. Without limiting any other rights which the
Trustee, the Trust, the Program Agent, any Series 1995-1 Certificateholder or
any Liquidity Provider (each, an "INDEMNIFIED PARTY") may have under the
Agreement, under this Series Supplement, under the Certificate Purchase
Agreement or under applicable law, the Transferor hereby agrees to indemnify
each Indemnified Party from and against any and all damages, losses,
liabilities and related costs and expenses actually incurred (excluding
consequential damages and lost profits), including reasonable attorneys' fees
and disbursements (all of the foregoing being collectively referred to as
"INDEMNIFIED AMOUNTS") awarded against or incurred by any of them arising out
of or resulting from the Agreement, this Series Supplement, the Certificate
Purchase Agreement, the activities of the Trust or the Trustee in connection
therewith, the Transferor's use of proceeds of transfers of Receivables or
reinvestments of Collections, the interest conveyed under the Agreement in
Trust Assets, or in respect of any Receivable or the Receivables Purchase
Agreement (excluding however (a) Indemnified Amounts to the extent resulting
from willful misconduct, bad faith, gross negligence, the reckless disregard
by such Indemnified Party of any of his, her or its obligations and duties or
breach of fiduciary duty on the part of such Indemnified Party (if any), (b)
losses in respect of Receivables to the extent reimbursement therefor would
constitute credit recourse to the Transferor for nonpayment of any Receivable
by any Originator, (c) any income or franchise taxes or similar taxes (or any
interest or penalties with respect thereto) incurred by such Indemnified Party
arising out of or as a result of this Series Supplement or the interest
conveyed hereunder in Trust Assets or in respect of any Receivable or the
Receivables Purchase Agreement), to the extent caused by:
(i) reliance on any representation, warranty or covenant made or
statement made or deemed made by the Transferor (or any of its
Responsible Officers) under or in connection with the Agreement, this
Series Supplement, the Certificate Purchase Agreement or the Receivables
Purchase Agreement which shall have been incorrect in any material
respect when made or deemed made or which the Transferor shall have
failed to perform;
(ii) the failure by the Transferor or any of the Originators to
comply with the Agreement, this Series Supplement, the Certificate
Purchase Agreement or the Receivables Purchase Agreement or any
applicable Requirement of Law with respect to any Receivable or the
related Contract or the Receivables Purchase Agreement, or the failure of
any Receivable or the related Contract to conform to the Receivables
Purchase Agreement or any Requirement of Law;
(iii) the failure to vest in the Transferor a first priority
perfected ownership interest in and to the Receivables, or the failure to
vest in the Investor Certificateholders either an undivided fractional
beneficial ownership interest, to the extent of their respective
Undivided Fractional Interests, or a first priority perfected security
interest, in and to the Receivables and the other Trust Assets, in each
case free and clear of any Lien (other than any Lien in favor of the
Transferor pursuant to the Receivables Purchase Agreement or in favor of
the Trustee pursuant to this Series Supplement);
(iv) the failure to have filed, or any delay in filing, any
financing statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws that are
necessary for perfection or priority of the ownership and/or security
interests (as the case may be) created by the Receivables Purchase
Agreement and/or the Agreement;
(v) any commingling of Collections with other funds of the
Transferor or any Affiliate;
(vi) any investigation, litigation or proceeding related to the
Agreement, this Series Supplement, the Certificate Purchase Agreement or
the Receivables Purchase Agreement or the Trust or the use of proceeds or
reinvestments of proceeds by the Transferor or Nine West of Transfers of
Receivables or the ownership of or security interest in Trust Assets or
in respect of any Receivable or Contract;
(vii) any claim brought by any Person other than an Indemnified
Party arising from any activity by the Transferor or any Affiliate of the
Transferor in servicing, administering or collecting any Receivable;
(viii) any failure by the Transferor or any Originator (as the case
may be) to perform its duties or obligations in accordance with the
provisions of the Agreement, this Series Supplement, the Certificate
Purchase Agreement or the Receivables Purchase Agreement (as
appropriate); or
(ix) any tax (other than any income or franchise tax, or any
interest or penalties with respect thereto) imposed by reason of
ownership of the Receivables or other Trust Assets by the Trustee; or
(x) any Receivable which is not an Eligible Receivable at the time
of its Transfer to the Trust under the Agreement.
Any Indemnified Amounts due hereunder shall be payable within five
business days following submission of a claim by the Indemnified Party
accompanied by information and documentation reasonably supporting such claim.
Indemnification pursuant to this SECTION 7.09 shall be payable from
assets of the Transferor. The agreement contained in this SECTION 7.09 shall
survive the collection of all Receivables, the termination of the Trust and
the payment of all amounts otherwise payable hereunder.
All rights of indemnification under this SECTION 7.09 are in
addition to, and not by way of substitution for, the obligations and
liabilities of the Transferor and/or the Servicer in favor of the Indemnified
Parties under the Agreement and under this Series Supplement.
SECTION 7.10. SERVICER INDEMNIFICATION. The Servicer hereby agrees
to indemnify each Indemnified Party from and against Indemnified Amounts
awarded against or incurred by any of them arising out of or resulting from
the Agreement, this Series Supplement, the activities of the Trust or the
Trustee in connection therewith, the Transferor's use of proceeds of Transfers
of Receivables or reinvestments of Collections, the interest conveyed under
the Agreement in Trust Assets, or in respect of any Receivable or the
Receivables Purchase Agreement (excluding however (a) Indemnified Amounts
resulting from negligence or willful misconduct on the part of such
Indemnified Party to which such Indemnified Amount would otherwise be due, (b)
losses in respect of Receivables to the extent reimbursement therefor would
constitute credit recourse to the Transferor for nonpayment of any Receivable
by any Originator and (c) any income or franchise taxes or similar taxes (or
any interest or penalties with respect thereto) incurred by such Indemnified
Party arising out of or as a result of this Series Supplement or the interest
conveyed hereunder in Trust Assets or in respect of any Receivable or the
Receivables Purchase Agreement, in each case to the extent caused by:
(i) reliance on any representation, warranty or covenant made by
the Servicer (or any of its Responsible Officers) under or in connection
with the Agreement or this Series Supplement which shall have been
incorrect in any material respect when made or which the Servicer shall
have failed to perform;
(ii) the failure by the Servicer to comply with any applicable
Requirement of Law with respect to any Receivable or the related
Contract;
(iii) any commingling of Collections with other funds of the
Servicer or any Affiliate;
(iv) any claim brought by any Person other than an Indemnified
Party arising from any activity by the Servicer or any Affiliate of the
Servicer in servicing, administering or collecting any Receivable; or
(v) any failure by the Servicer to perform its duties or
obligations in accordance with the provisions of the Agreement or this
Series Supplement.
Indemnification pursuant to this SECTION 7.10 shall only be payable
from the assets of the Servicer. The agreement contained in this SECTION 7.10
shall survive the collection of all Receivables, the termination of the Trust
and the payment of all amounts otherwise due under the Agreement and this
Series Supplement.
Any Indemnified Amounts due hereunder shall be payable following
submission of a claim by the Indemnified Party accompanied by information and
documentation reasonably supporting such claim.
All rights of indemnification under this SECTION 7.10 are in
addition to, and not by way of substitution for, the obligations and
liabilities of the Transferor and/or the Servicer in favor of the Indemnified
Parties under the Agreement and under this Series Supplement (including,
without limitation, under Section 8.04 of the Agreement).
SECTION 7.11. ADDITIONAL REPORTING REQUIREMENTS.
(a) On each Business Day, the Trustee shall provide by telecopy to
each of the Series 1995-1 Certificateholders and the Program Agent, a copy of
the Daily Report received from the Servicer.
(b) The Trustee shall deliver to each of the Series 1995-1
Certificateholders and the Program Agent, promptly upon its receipt thereof, a
copy of (i) the Annual Certificate of Servicer (described at Section 3.06 of
the Agreement) and (ii) the Annual Servicing Report of Independent Public
Accountants (described at Section 3.06 of the Agreement).
SECTION 7.12. EFFECT ON ORIGINAL SERIES 1995-1 SUPPLEMENT. Each of
the parties hereto ratifies the Purchase, Invested Amount, Increases,
payments, representations, warranties, covenants and indemnities made by, to,
in favor of, or otherwise on behalf of, such party under the Original Series
1995-1 Supplement and agrees that such agreement is, as of the date hereof and
until the Effective Restatement Date has occurred, in full force and effect.
From and after the Effective Restatement Date, (i) the terms and provisions of
this Series Supplement shall amend and supersede the terms and provisions of
the Original Series 1995-1 Supplement in their entirety and the continuing
rights, remedies and obligations of the parties with respect to any such
Purchase, Invested Amount, Increases, payments, representations, warranties,
covenants and indemnities under the Original Series 1995-1 Supplement shall be
governed by the terms and provisions of this Series Supplement to the same
extent as if such Purchase, Invested Amount, Increases, payments,
representations, warranties, covenants and indemnities had been made under
this Series Supplement, (ii) all references in any of the other Transaction
Documents to the Original Series 1995-1 Supplement shall mean and be a
reference to the Original Series 1995-1 Supplement as the same is amended and
restated hereby, and (iii) each reference to the "Purchase", "Invested
Amount", "Increase" and "Class A Certificates" in the Original Series 1995-1
Supplement, or in any other Transaction Document, shall mean and be a
reference to the Purchase, Invested Amount, Increase and Series 1995-1
Certificates hereunder (as the case may be). It is expressly understood and
agreed that the execution and delivery of this Series Supplement is not
intended to be, and shall not be construed as, a novation of the Original
Series 1995-1 Supplement, any of the other Transaction Documents, or any of
the transactions evidenced thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
NINE WEST FUNDING CORPORATION
Transferor
By: /s/Robert C. Galvin
--------------------------
Name: Robert C. Galvin
Title: Executive Vice President
Chief Financial Officer
& Treasurer
NINE WEST GROUP INC.,
Servicer
By: /s/Robert C. Galvin
-------------------------
Name: Robert C. Galvin
Title: Executive Vice President
Chief Financial Officer
& Treasurer
THE BANK OF NEW YORK
not in its individual capacity,
but solely as Trustee of the
Trust
By: /s/Cheryl L. Laser
----------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
THE AMENDED AND RESTATED SERIES 1995-1
CERTIFICATE PURCHASE AGREEMENT
Dated as of July 31, 1998
among
NINE WEST FUNDING CORPORATION
as Seller,
CORPORATE RECEIVABLES CORPORATION,
as Purchaser,
THE LIQUIDITY PROVIDERS NAMED HEREIN,
as Liquidity Providers,
CITICORP NORTH AMERICA, INC.
As Program Agent for
Corporate Receivables Corporation
and the Liquidity Providers
and
THE BANK OF NEW YORK,
Not in its individual capacity,
but solely as Trustee of the Nine
West Trade Receivables Master Trust
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Other Definitional Provisions. . . . . . . . . . 6
ARTICLE II
THE SERIES 1995-1 CERTIFICATES; INCREASES
SECTION 2.01. Exchange of Certificates . . . . . . . . . . . . 7
SECTION 2.02. Increases. . . . . . . . . . . . . . . . . . . . 7
SECTION 2.03. Certificates . . . . . . . . . . . . . . . . . . 7
SECTION 2.04. Reductions to the Purchase Limit . . . . . . . . 8
SECTION 2.05. Procedures for Making the Purchase and Increases 8
SECTION 2.06. Assignments by CRC to Liquidity Providers. . . . 9
SECTION 2.07. Defaulting Liquidity Provider. . . . . . . . . . 11
SECTION 2.08. Term . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.09. Use of Proceeds. . . . . . . . . . . . . . . . . 13
ARTICLE III
FEES, INTEREST AND YIELD PROTECTION
SECTION 3.01. Fees . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.02. Interest . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.03. Yield Protection; Increased Costs. . . . . . . . 13
SECTION 3.04. Taxes. . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.05. Sharing of Payments. . . . . . . . . . . . . . . 17
ARTICLE IV
CONDITIONS PRECEDENT TO THE RESTATEMENT AND ALL INCREASES
SECTION 4.01. Conditions Precedent to the Effectiveness of this
Amended and Restated Certificate Purchase
Agreement. . . . . . . . . . . . . . . . . . . . 17
SECTION 4.02. Conditions Precedent to Each Increase. . . . . . 17
ARTICLE V
THE PROGRAM AGENT
SECTION 5.01. Authorization and Action of the
Program Agent. . . . . . . . . . . . . . . . . . 19
SECTION 5.02. The Program Agent's Reliance, Etc. . . . . . . . 19
SECTION 5.03. The Program Agent and Affiliates . . . . . . . . 20
SECTION 5.04. Amendments, Waivers and Consents . . . . . . . . 20
SECTION 5.05. Internal Reporting Requirement of the Program
Agent. . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE VI
ASSIGNMENTS
SECTION 6.01. Assignment . . . . . . . . . . . . . . . . . . . 22
SECTION 6.02. Rights of Assignee . . . . . . . . . . . . . . . 22
SECTION 6.03. Notice of Assignment . . . . . . . . . . . . . . 22
ARTICLE VII
PARTICIPATION
SECTION 7.01. Participation. . . . . . . . . . . . . . . . . . 22
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. . . . . . . . . . . . . . . . . 23
SECTION 8.02. Notices, Etc.. . . . . . . . . . . . . . . . . . 23
SECTION 8.03. No Waiver; Remedies. . . . . . . . . . . . . . . 23
SECTION 8.04. Binding Effect; Survival . . . . . . . . . . . . 24
SECTION 8.05. No Proceedings . . . . . . . . . . . . . . . . . 24
SECTION 8.06. Captions and Cross References. . . . . . . . . . 25
SECTION 8.07. Integration. . . . . . . . . . . . . . . . . . . 25
SECTION 8.08. Governing Law. . . . . . . . . . . . . . . . . . 25
SECTION 8.09. Submission to Jurisdiction . . . . . . . . . . . 25
SECTION 8.10. Consent to Service of Process. . . . . . . . . . 25
SECTION 8.11. Waiver of Jury Trial . . . . . . . . . . . . . . 26
SECTION 8.12. Execution in Counterparts. . . . . . . . . . . . 26
SECTION 8.13. Removal and Replacement of Liquidity Providers . 26
SECTION 8.14. Reimbursement of Program Agent . . . . . . . . . 27
SECTION 8.15. Limited Recourse . . . . . . . . . . . . . . . . 27
SECTION 8.16. Effect on Class A Certificate Purchase Agreement 28
SECTION 8.17. Role of Credit Lyonnais New York Branch. . . . . 28
THIS AMENDED AND RESTATED SERIES 1995-1 CERTIFICATE PURCHASE
AGREEMENT dated as of July 31, 1998 (this "AGREEMENT"), amends and restates
that certain Class A Certificate Purchase Agreement, dated as of December 28,
1995(the "ORIGINAL CLASS A CERTIFICATE PURCHASE AGREEMENT"), entered into
among NINE WEST FUNDING CORPORATION ("NINE WEST FUNDING"), a Delaware
corporation, as seller (the "SELLER"), CORPORATE RECEIVABLES CORPORATION
("CRC"), as purchaser (the "PURCHASER"), THE FINANCIAL INSTITUTIONS LISTED
FROM TIME TO TIME ON THE SIGNATURE PAGES HERETO AS LIQUIDITY PROVIDERS
(individually, a "LIQUIDITY PROVIDER" and collectively, the "LIQUIDITY
PROVIDERS"), CITICORP NORTH AMERICA, INC., as agent (the "PROGRAM AGENT") for
the Purchaser and the Liquidity Providers, and THE BANK OF NEW YORK, not in
its individual capacity, but solely as trustee of the Nine West Trade
Receivables Master Trust (the "TRUSTEE").
W I T N E S S E T H:
WHEREAS, the parties hereto previously entered into the Original
Class A Certificate Purchase Agreement pursuant to which, among other things,
CRC was permitted, and the "Liquidity Providers" thereunder were required, to
fund from time to time Increases in the Class A Invested Amount subject to the
terms and conditions of the Original Series 1995-1 Supplement and the Original
Class A Certificate Purchase Agreement (as such terms are defined thereunder);
WHEREAS, on the terms and subject to the conditions set forth in the
Pooling and Servicing Agreement, the Original Series 1995-1 Supplement and the
Original Class A Certificate Purchase Agreement, and in reliance on the
covenants, representations and agreements set forth therein, the Seller caused
the Trust to issue to the Seller, and the Seller sold to CRC as the Purchaser,
and the Purchaser purchased from the Seller, the Class A Certificate on the
Closing Date for an initial price agreed to by the Seller and the Purchaser
(the "PURCHASE PRICE");
WHEREAS, in connection with the contemplated amendment and
restatement of the Original Series 1995-1 Supplement, the parties hereto now
wish to enter into this Agreement in order to amend and restate the Original
Class A Certificate Purchase Agreement, and to evidence the terms and
conditions on which, from and after the Effective Restatement Date, CRC may
and the Liquidity Providers shall fund Increases in the Invested Amount from
time to time; and
WHEREAS, in connection with the amendment and restatement of the
Original Class A Certificate Purchase Agreement, the parties hereto desire to
cause the Purchaser to surrender the Class A Certificate to the Trustee in
exchange for an amended and restated Certificate duly executed and delivered
by the Transferor, and duly authorized by the Trustee;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS. As used in this Agreement, terms
defined in the foregoing paragraphs shall have their defined meanings when
used herein and the following terms shall have the following meanings:
"ADJUSTED EURODOLLAR RATE" shall mean, for any Interest Period, an
interest rate per annum obtained by dividing (i) the rate per annum at which
deposits in U.S. Dollars are offered by the principal office of Citibank in
London to prime banks in the London interbank market at 11:00 a.m. (London
time) two Eurodollar Business Days (as defined below) before the first day of
such Interest Period in an amount substantially equal to the Invested Amount
for a period equal to such Interest Period by (ii) the percentage equal to
100% minus the Eurodollar Reserve Percentage (as defined below) for such
period. "EURODOLLAR BUSINESS DAY" means a day on which dealings are carried
on in the London interbank market and banks are open for business in London
and are not required or authorized to close in New York City. "EURODOLLAR
RESERVE PERCENTAGE" for Citibank in London for any period means the reserve
percentage applicable during such period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any
successor) (or, if more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such period during which
any such percentage shall so be applicable) for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for Citibank in London in
respect of liabilities or assets consisting of or including Eurocurrency
liabilities as that term is used in Regulation D of the Board of Governors of
the Federal Reserve System (or any successor), having a term equal to such
period.
"AFFECTED PERSON" shall have the meaning assigned to such term in
SECTION 3.03.
"AGGREGATE LIQUIDITY PROVIDER COMMITMENT" shall mean the aggregate
of the amounts of the Liquidity Provider Commitments.
"ASSIGNEE RATE" shall have the meaning assigned to such term in the
Series 1995-1 Supplement.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
in substantially the form of Exhibit A pursuant to which a Liquidity Provider
assigns all or a portion of its rights and obligations under this Agreement in
accordance with the terms of SECTION 6.01.
"CERTIFICATE" shall mean the Amended and Restated Series 1995-1
Certificate in substantially the form set forth in Exhibit A of the Series
1995-1 Supplement.
"CERTIFICATE INTEREST" shall mean each interest in the Certificates
acquired by CRC or a Liquidity Provider in connection with the Purchase or any
Increase in the Invested Amount.
"CERTIFICATEHOLDER" or "SERIES 1995-1 CERTIFICATEHOLDER" shall mean
CRC or the Liquidity Providers, as applicable.
"CLOSING DATE" shall mean December 29, 1995.
"CRC" shall mean Corporate Receivables Corporation and its
successors and assigns, but shall not include the Liquidity Providers as
assignees under SECTION 2.06.
"EFFECTIVE RESTATEMENT DATE" shall have the meaning assigned to such
term in the Series 1995-1 Supplement.
"EXTENSION TERM" shall have the meaning assigned to such term in
SECTION 2.08.
"FEE LETTER" shall have the meaning assigned to such term in SECTION
3.01.
"INITIAL TERM" shall mean, with respect to each Liquidity Provider
Commitment, the period which commences on the later to occur of (i) the date
such Liquidity Provider enters into this Agreement, and (ii) the Effective
Restatement Date, and ends on July 30, 1999.
"LIQUIDITY PROVIDER COMMITMENT" shall mean, as to any Liquidity
Provider, the obligation of such Liquidity Provider to purchase the
Certificate Interests of CRC pursuant to SECTION 2.06 up to the amount set
forth opposite such Liquidity Provider's name on the signature pages hereto,
or as otherwise set forth in an Assignment and Acceptance in connection with
an assignment from a Liquidity Provider of its obligations hereunder in
accordance with the terms of SECTION 6.01, as such amount may be reduced from
time to time pursuant to SECTION 2.04.
"LIQUIDITY PROVIDER COMMITMENT PERCENTAGE" shall mean, on any day
and as to any Liquidity Provider, a fraction, the numerator of which is such
Liquidity Provider's Liquidity Provider Commitment and the denominator of
which is the Aggregate Liquidity Provider Commitment on such day, as such
percentage may be modified by assignments made from time to time pursuant to
SECTION 6.01.
"LIQUIDITY PROVIDERS" shall mean the banks and financial
institutions parties hereto from time to time as "Liquidity Providers"
hereunder, as their names appear on the signature pages hereto under the
heading "Liquidity Providers" or as otherwise set forth in an Assignment and
Acceptance in connection with an assignment from a Liquidity Provider of all
or a portion of its rights and obligations hereunder in accordance with the
terms of SECTION 6.01.
"MAJORITY OF CERTIFICATE INTERESTS" shall mean holders of
Certificate Interests evidencing 51% or more of the aggregate Certificate
Interests; PROVIDED that, solely for purposes of this computation,
(i) Liquidity Providers shall be deemed to hold Certificate Interests equal to
their respective Liquidity Provider Commitment Percentages of such aggregate
Certificate Interests, whether or not they have made the Purchase or funded
any Increases, and (ii) CRC's Certificate Interest will be reduced by the
amount set forth in clause (i) and also by the amount of any Certificate
Interests held by Persons other than Liquidity Providers.
"OBLIGATIONS" shall mean all obligations of the Seller, or the
Servicer to the Trustee, the Trust, the Purchaser, the Liquidity Providers,
any Enhancement Provider, the other Indemnified Parties and their respective
successors, permitted transferees and assigns, arising under or in connection
with the Transaction Documents, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due.
"POOLING AND SERVICING AGREEMENT" shall mean the Pooling and
Servicing Agreement, dated as of December 28, 1995, among the Seller, as
transferor, the Servicer and the Trustee, as amended, supplemented or
otherwise modified from time to time.
"PURCHASE" shall mean the initial purchase of the Class A
Certificates by CRC under the Class A Certificate Purchase Agreement on the
Closing Date.
"PURCHASE DATE" shall mean the date of the Purchase.
"PURCHASE PRICE" shall mean the price specified in the notice from
the Seller (substantially in the form of Exhibit B) delivered pursuant to
SECTION 2.01 on the Closing Date.
"PURCHASER" shall mean either CRC or the Liquidity Providers, as
provided in SECTION 2.01.
"REGULATION D" shall mean Regulation D of the Board of Governors (or
any successor) of the Federal Reserve System, as the same may be amended or
supplemented from time to time.
"REGULATORY CHANGE" shall mean, relative to any Person:
(a) any change in (or the adoption or commencement of effectiveness
of) any
(i) United States Federal or state law or foreign law
applicable to such Person;
(ii) regulation, interpretation, directive, requirement or
request (whether or not having the force of law) applicable to such
Person made by (A) any court or government authority charged with the
interpretation or administration of any law referred to in clause (a)(i)
or (B) any fiscal, monetary or other authority having jurisdiction over
such Person; or
(iii) generally accepted accounting principles or regulatory
accounting principles applicable to such Person and affecting the
application to such person of any law, regulation, interpretation,
directive, requirement or request referred to in clause (a)(i) or (a)(ii)
above; or
(b) any change in the application to such Person of any existing
law, regulation, interpretation, directive, requirement, request or accounting
principles referred to in clause (a)(i), (a)(ii) or (a)(iii) above, which
change has been instigated or communicated by the court, governmental
authority or other Person charged with the interpretation and/or application
of such existing law, regulation, interpretation, directive, requirement,
request or accounting principles.
"SELLER" shall have the meaning assigned to such term in the
preamble hereto.
"SERIES 1995-1 SUPPLEMENT" shall mean the Amended and Restated
Series 1995-1 Supplement dated as of July 31, 1998, among the Seller, the
Servicer and the Trustee.
"SERVICER" shall have the meaning assigned to such term in the
Pooling and Servicing Agreement.
"TERM" shall mean, with respect to each Liquidity Provider
Commitment and the Aggregate Liquidity Provider Commitment, the Initial Term
and each Extension Term as provided in SECTION 2.08.
"TRANSACTION DOCUMENTS" shall mean the collective reference to this
Agreement, the Series 1995-1 Certificates, the Pooling and Servicing
Agreement, the Receivables Purchase Agreements, the Series 1995-1 Supplement,
the Certificate of Incorporation and the By-Laws of Nine West Funding and any
other agreement or instrument related or delivered pursuant to any of the
foregoing documents.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS. (a) All capitalized
terms not otherwise defined herein are defined in the Series 1995-1
Supplement.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined in SECTION 1.01 and
accounting terms partly defined in SECTION 1.01 to the extent not defined,
shall have the respective meanings given to them under generally accepted
accounting principles as in effect in the United States from time to time.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) Whenever the term "including" (whether this term is followed by
the phrase "but not limited to" or "without limitation" or words of similar
effect) is used in this Agreement in connection with a listing of items
without a particular classification, that listing will not be interpreted as a
limitation on, or exclusive listing of, the items within that classification.
(e) In computing periods from a specified date to a later specified
date, when precise times of day are not stated, the words "from" and
"commencing on" (and the like) mean "from and including," and the words "to,"
"until" and "ending on" (and the like) mean "to but excluding."
(f) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. Each gender-
specific term used in this Agreement has a comparable meaning whether used in
a masculine, feminine or gender-neutral form.
(g) For purposes of this Agreement, unless otherwise specifically
set forth herein, each reference herein to "CRC" shall be deemed to include
any Person (other than a Liquidity Provider) that succeeds to CRC's rights in
respect of the Series 1995-1 Certificates held by CRC (whether directly or
through the Program Agent) and its obligations hereunder, and "Program Agent"
shall be deemed to include any Person (other than a Liquidity Provider) that
succeeds to the Program Agent's obligations hereunder.
ARTICLE II
THE SERIES 1995-1 CERTIFICATES; INCREASES
SECTION 2.01. EXCHANGE OF CERTIFICATES. On and as of the Effective
Restatement Date, the Purchaser shall surrender the Class A Certificate to the
Trustee, in exchange for a Certificate substantially in the form of Exhibit A
to the Series 1995-1 Supplement, duly executed and delivered by the Seller and
duly authenticated by the Trustee.
SECTION 2.02. INCREASES. On the terms and subject to the
conditions set forth in this Agreement and the Series 1995-1 Supplement
(including, without limitation, the conditions precedent set forth in Article
IV hereof):
(a) The Certificateholder may in its sole discretion (in the case
of CRC), and shall (in the case of the Liquidity Providers) from time to time
during the period from the Closing Date to the last day of the Revolving
Period for the Certificates, upon the request of the Seller, fund Increases,
and, upon so funding an Increase, shall acquire Certificate Interests in an
amount corresponding to the amount of such Increase.
(b) During the period specified in clause (a) above, if CRC elects
not to fund a requested Increase, and shall assign its Certificate Interests
to the Liquidity Providers in accordance with the terms and subject to the
conditions of Section 2.06, each Liquidity Provider shall, upon the request of
the Seller fund such Increase in an amount equal to its Liquidity Provider
Commitment Percentage of the amount of such requested Increase (and, upon
funding such Increase, shall acquire Certificate Interests corresponding to
the amount of such increase funded by such Liquidity Provider). All Increases
funded by the Liquidity Providers shall be at the Assignee Rate and shall be
made on a pro rata basis in accordance with the Liquidity Provider
Commitments.
(c) Under no circumstances shall CRC or any Liquidity Provider fund
any Increase to the extent that, after giving effect to such Increase and the
other Increases to be funded by the other Liquidity Providers concurrently
therewith, (i) the Invested Amount would exceed the Purchase Limit or
(ii) with respect to any Liquidity Provider, the funding of such Increase
would cause the portion of the Invested Amount relating to such Liquidity
Provider's Certificate Interest to exceed an amount equal to its Liquidity
Provider Commitment.
SECTION 2.03. CERTIFICATES. On the Purchase Date, on each date an
Increase in the Invested Amount is funded hereunder and on each date the
Invested Amount is reduced, a duly authorized officer or employee of the
Program Agent shall make appropriate notations in its books and records of the
Purchase Price, the amount of such Increase and the amount of such reduction,
as applicable. Each of the Servicer and the Seller authorizes each duly
authorized officer and employee of the Program Agent to make such notations on
the books and records as aforesaid and every such notation made in accordance
with the foregoing authority shall be prima facie evidence of the accuracy of
the information so recorded and shall be binding on the Seller and the
Servicer absent manifest error. All Increases in the Invested Amount shall be
subject to reduction in accordance with the provisions of this Agreement and
the Series 1995-1 Supplement.
SECTION 2.04. REDUCTIONS TO THE PURCHASE LIMIT The Seller may, from
time to time, upon at least ten Business Days' prior written notice to the
Program Agent (with copies to the Servicer and the Trustee), elect to reduce
the Purchase Limit by an amount up to the difference between the Purchase
Limit at such time and the Invested Amount at such time. Any such reduction
shall be permanent and shall reduce the amount of the Liquidity Provider
Commitments of the Liquidity Providers hereunder ratably in accordance with
the Liquidity Provider Commitment Percentages.
SECTION 2.05. PROCEDURES FOR MAKING THE INCREASES.
(a) NOTICE OF THE PURCHASE AND INCREASES. Each Increase shall
occur on a Business Day and shall be made or funded on notice from the Seller
(substantially in the form of Exhibit C) to the Program Agent (with copies to
the Servicer and the Trustee) received by the Program Agent not later than
12:00 noon (New York City time) on, in the case of the Purchase, the fifth
Business Day immediately preceding the Purchase Date or, in the case of an
Increase, on the Business Day immediately preceding the date of such increase
(with a copy provided to the Trustee); PROVIDED that if the Certificate Rate
for the initial Interest Period for the resulting Increase is to be calculated
at a rate based on the Adjusted Eurodollar Rate, then such notice must be
received not later than 12:00 noon (New York City time) on the third Business
Day next preceding the date of such Increase. Each notice shall specify the
amount of the Increase (in each case, not to be less than $2,000,000, and
increments of $1,000,000 in excess thereof) and the date of the Increase. The
Program Agent shall promptly notify the Seller and each Liquidity Provider if
CRC elects in its discretion not to make an Increase.
(b) FUNDING OF THE PURCHASE AND INCREASES. On any date on which an
Increase is funded, CRC or the Liquidity Providers, as applicable, shall, upon
satisfaction of the applicable conditions set forth in Article IV, deposit to
the Program Agent's account, which shall be identified as the "Nine West
Master Trust Remittance Account" (Account No. 40687951), established at
Citibank, N.A., the amount of the Increase (in the case of CRC) or an amount
equal to its Liquidity Provider Commitment Percentage of the Purchase Price or
the amount of the Increase (in the case of each Liquidity Provider) in same
day funds, and after receipt by the Program Agent of such funds, the Program
Agent will deposit the same into the Seller's account, which shall be
identified as "Nine West Transferor Account", established at The Bank of New
York, the Program Agent to use its best efforts to make such deposit by not
later than 2:00 p.m. (New York City time).
SECTION 2.06. ASSIGNMENTS BY CRC TO LIQUIDITY PROVIDERS. (a) On
any date during the Term of the Aggregate Liquidity Provider Commitment
(including, without limitation, any date on which CRC has elected in its
discretion not to fund an Increase hereunder pursuant to SECTION 2.02), CRC
may, in its sole discretion, upon written notice given to the Program Agent,
the Servicer and the Trustee and shall, at the request of the Seller (which
request shall be made only with the consent of the Program Agent, which
consent shall not be unreasonably withheld, conditioned or delayed), assign to
the Liquidity Providers (in accordance with their respective Liquidity
Provider Commitment Percentages) and the Liquidity Providers shall purchase
all of the right and title to and interest in all Certificate Interests which
are then owned by CRC. Any such election by CRC or request by the Seller to
assign CRC's Certificate Interests to the Liquidity Providers shall be made in
writing to the Program Agent on a Business Day no later than 11:00 a.m. (New
York City time), and notice of such assignment and purchase shall be given by
the Program Agent to the Liquidity Providers no later than 12:00 noon (New
York City time) on such Business Day. Prior to 3:00 p.m. (New York City time)
on such Business Day, each Liquidity Provider shall pay to the Program Agent,
for the account of CRC, consideration (in cash) for the assignment of
Certificate Interests then owned by CRC in an amount equal to the lesser of
(i) the aggregate amount of outstanding Invested Amount plus
accrued but unpaid interest thereon, and
(ii) FAP x (NRB-Writeoffs)
Where:
FAP = the Series 1995-1 Floating Allocation Percentage
NRB = the Net Receivables Balance
Writeoffs = the Outstanding Balance of any Defaulted Receivables
included in such NRB;
PROVIDED that no Liquidity Provider shall be required to purchase any
Certificate Interest to the extent that, after giving effect thereto, its
Liquidity Provider Commitment Percentage of the then outstanding Invested
Amount would exceed its Liquidity Provider Commitment. For purposes of the
foregoing computations, (A) NRB shall be calculated on the date the Series
1995-1 Floating Allocation Percentage was last computed or deemed computed
pursuant to the Agreement, (B) Writeoffs shall be computed since the date the
Series 1995-1 Floating Allocation Percentage was last computed or deemed
computed pursuant to the Agreement, on the date of the most recently delivered
Determination Date Certificate, (C) from the date, if any, that FAP became
fixed pursuant to Section 4.01(b) of the Agreement, NRB shall only be reduced
by Collections on Receivables to the extent such Collections are remitted to
the Program Agent and applied to reduce the outstanding amount of the Invested
Amount, and (D) notwithstanding anything herein or elsewhere to the contrary,
for the purposes of the calculation of "NRB" and "Writeoffs", the Outstanding
Balance of "Defaulted Receivables" shall be determined as if the reference to
"90 days" in the definition of such term was, instead, a reference to "150
days". If after the date of any assignment by CRC pursuant to this SECTION
2.06, the Program Agent determines that the Determination Date Certificate on
which the amount of Writeoffs was based did not reflect the actual amount of
Writeoffs as of such date, the Program Agent shall, if necessary, adjust the
amount of consideration so paid to CRC for the Certificate Interests purchased
by the Liquidity Providers and shall, on behalf of CRC, remit to, or collect
from (as the case may be), the Liquidity Providers, any resulting difference
(and each Liquidity Provider hereby agrees to make such adjustment, and any
related required payment to the Program Agent, promptly upon request therefor
by the Program Agent).
(b) Upon the assignment described in SUBSECTION (a) above, (i) all
Certificate Interests previously owned by CRC and so assigned shall become
Certificate Interests owned by the Liquidity Providers, (ii) the current
Interest Period shall terminate immediately, (iii) the Program Agent will
present the Certificates to the Trustee for transfer to the Liquidity
Providers and the Trustee shall register new Certificates in the name(s) of
the Liquidity Providers (as provided by the Program Agent) and the Program
Agent shall make appropriate notations in its books and records of such
assignment, (iv) the Invested Amount related to such Certificate Interests
shall be assigned a new Interest Period commencing on the date of such
assignment and terminating on the date the prior Interest Period would have
terminated and the Certificate Rate for which new Interest Period shall be
determined in accordance with the "Certificate Rate" definition in the Series
1995-1 Supplement, and (v) the Program Agent shall, to the extent provided
under the Series 1995-1 Supplement, pay to CRC on the date of such assignment
if such assignment occurs on an Interest Payment Date, or on the next
succeeding Interest Payment Date, out of Collections available for such
payments as provided in the Series 1995-1 Supplement, (A) to the extent the
Program Agent received, for the account of CRC, the amount described in clause
(ii) of SECTION 2.06(a) above, all accrued and unpaid interest with respect to
the Invested Amount related to the Certificate Interests so assigned and (B)
any Breakage Costs.
(c) The assignment of Certificate Interests and the Certificates
from CRC to the Liquidity Providers pursuant to this SECTION 2.06 shall be
without recourse or warranty, express or implied, except that such Certificate
Interests and the Certificates are free and clear of adverse claims created by
or arising as a result of claims against the Program Agent or CRC. Nothing in
this SECTION 2.06 shall be deemed to limit any rights of CRC under any other
provisions of this Agreement to assign its right, title to and interest in and
to any portion of the Certificate Interests or the Certificates owned by it.
(d) The Program Agent shall promptly notify the Servicer and Nine
West Funding of any assignment described in subsection (a) of this SECTION
2.06.
SECTION 2.07 DEFAULTING LIQUIDITY PROVIDER. In the event any
Liquidity Provider is required to make an Increase under SECTION 2.02(b), or a
purchase of a ratable portion of all Certificate Interests then owned by CRC
under SECTION 2.06(a) (a "CRC CERTIFICATE PURCHASE") and such Liquidity
Provider (the "DEFAULTING LIQUIDITY PROVIDER") fails, for any reason, to make
available to the Program Agent its Liquidity Provider Commitment Percentage of
the amount of such Increase or such CRC Certificate Purchase, then, in
addition and without prejudice to any other rights that Nine West Funding may
have as a result of such Defaulting Liquidity Provider's failure to provide
such funds, and solely for the purposes of determining the remaining Liquidity
Providers' funding obligations with respect to such requested Increase or such
CRC Certificate Purchase, as applicable, the Liquidity Provider Commitment
Percentage of the Defaulting Liquidity Provider shall be zero with respect to
such Increase or such CRC Certificate Purchase, and
(a) if the Program Agent has not made available to Nine West
Funding the amount of such Increase or such CRC Certificate Purchase
which the Defaulting Liquidity Provider was required to provide, then the
Liquidity Provider Commitment Percentages of each of the other Liquidity
Providers shall be proportionately increased so that such Liquidity
Provider Commitment Percentages aggregate to 100%; and
(b) if the Program Agent has made available to Nine West Funding or
CRC (as applicable) the amount of such Increase or such CRC Certificate
Purchase which the Defaulting Liquidity Provider was required to provide,
unless and until the amount of such Increase or such CRC Certificate
Purchase (along with any interest accrued thereon in accordance with the
Series 1995-1 Supplement) is reimbursed to the Program Agent by Nine West
Funding, the Trustee or the Defaulting Liquidity Provider, the Program
Agent shall be a "Liquidity Provider" hereunder for all purposes relevant
to such Increase or such CRC Certificate Purchase and the related
Certificate Interest with respect to such Increase or such CRC
Certificate Purchase and, notwithstanding anything herein to the
contrary, the Program Agent shall be deemed to have a Certificate
Interest equal to that of the Defaulting Liquidity Provider (determined
without giving effect to this SECTION 2.07) and the Defaulting Liquidity
Provider's Certificate Interest shall be reduced to zero until such time
as the Program Agent is reimbursed by the Defaulting Liquidity Provider.
Notwithstanding anything in the foregoing, in SECTIONS 2.02, 2.05 or 2.06 or
elsewhere in this Agreement to the contrary, the Program Agent shall have no
commitment whatsoever to make, pursuant to SECTION 2.07(b), any Increase or
CRC Certificate Purchase and no Liquidity Provider shall have any obligation
to make available the amount of any Increase or CRC Certificate Purchase to
the Program Agent in connection with any Increase or CRC Certificate Purchase
pursuant to this SECTION 2.07 in an amount of funds which, when taken together
with the amount of the Invested Amount represented by the Certificate
Interests then held by such Liquidity Provider, would exceed an amount equal
to its Liquidity Provider Commitment Percentage (without giving effect to the
adjustments provided for under this SECTION 2.07) of the Purchase Limit.
SECTION 2.08. TERM. (a) The Initial Term of each Liquidity
Provider Commitment hereunder shall be for a period commencing on the later to
occur of (i) the date such Liquidity Provider enters into this Agreement and
(ii) the Effective Restatement Date and ending on July 30, 1999. Prior to the
expiration of the Initial Term or any Extension Term, the Program Agent may
request an extension of such Term (such extended period being an "EXTENSION
TERM") and each Liquidity Provider may, in its sole and absolute discretion,
extend its Liquidity Provider Commitment by delivering to the Program Agent a
written notice of such Liquidity Provider's commitment to extend, PROVIDED,
HOWEVER, that any such extension shall be ineffective if an Early Amortization
Event has occurred and is continuing at the time of the proposed commencement
of such Extension Term. Failure of a Liquidity Provider to deliver a notice
of such Liquidity Provider's intent to grant an Extension Term shall be deemed
to be an election by such Liquidity Provider not to grant an Extension Term.
If less than all of the Liquidity Providers have elected to grant an Extension
Term and the Program Agent has been unable to replace any Liquidity Provider
which has declined to grant an Extension Term, such request for an Extension
Term shall be withdrawn and the Program Agent will so notify the Liquidity
Providers prior to the day on which the Term expires.
SECTION 2.09 USE OF PROCEEDS. The Seller agrees to use the
proceeds received from the funding of the Purchase and each Increase for
purposes permitted by its certificate of incorporation which are not otherwise
expressly prohibited pursuant to the terms of the Transaction Documents.
ARTICLE III
FEES, INTEREST AND YIELD PROTECTION
SECTION 3.01. FEES. The Seller shall pay to the Program Agent such
fee for its own account and for the account of CRC and the Liquidity Providers
in such amounts and at such times as set forth in Fee Letter).
SECTION 3.02. INTEREST. Yield shall accrue with respect to the
Invested Amount as provided in the definition of "Debt Service Amount" in the
Series 1995-1 Supplement and shall be payable as provided in the Series 1995-1
Supplement.
SECTION 3.03. YIELD PROTECTION; INCREASED COSTS. (a) If (i)
compliance by any Liquidity Provider with Regulation D or any other guideline
or request from any central bank or other Governmental Authority (whether or
not having the force of law) or (ii) any Regulatory Change occurring, in each
case, after the date hereof
(A) shall subject CRC or any Liquidity Provider (each, an "Affected
Person") to any tax, duty or other charge with respect to any Certificate
Interest owned, or the Purchase, any Increase or any CRC Certificate
Purchase funded, by it, or any obligations or right to fund Increases or
to provide funding therefor, or shall change the basis of taxation of
payments to an Affected Person of any Certificate Interest or Debt
Service Amount owned by, owed to or funded by it or any other amounts due
under this Agreement or any other Transaction Document in respect of any
Certificate Interest owned by or funded by it or its obligations or
rights, if any, to fund any Increases or any CRC Certificate Purchase or
to provide funding therefor (except for changes in the rate of tax on the
overall net income of, franchise taxes imposed on, and taxes (other than
withholding taxes) imposed on the gross receipts or gross income of, such
an Affected Person imposed by the United States of America, by the
jurisdiction in which such an Affected Person's principal executive
office or the relevant funding branch is located or in which it is
otherwise doing business and, if such Affected Person's principal
executive office is not in the United States of America, by the
jurisdiction where such Affected Person's principal office in the United
States is located, or any political subdivision of any such foreign
jurisdictions); or
(B) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Federal Reserve Board, but
excluding any reserve included in the determination of the Adjusted
Eurodollar Rate), special deposit or similar requirement against assets
of any Affected Person, deposits or obligations with or for the account
of any affiliate (or entity deemed by the Federal Reserve Board to be an
affiliate) of any Affected Person, or credit extended by any Affected
Person; or
(C) shall change the amount of capital maintained or required or
requested or directed to be maintained by any Affected Person; or
(D) shall impose any other condition affecting any Certificate
Interest owned or funded by any Affected Person, or its obligations or
rights, if any, to make any Increases or any CRC Certificate Purchase, or
to provide funding therefor;
and the result of any of the foregoing is or would be
(x) to increase the cost to or impose a cost on an Affected Person
funding or making or maintaining the Purchase or any Increase or other
extensions of credit under this Agreement, or any commitment of such
Affected Person with respect to any of the foregoing (after taking into
account amounts included in the calculation of the Adjusted Eurodollar
Rate), or
(y) to reduce the amount of any sum received or receivable by a
Affected Person under this Agreement or any other Transaction Document
with respect thereto, or
(z) in the sole determination of an Affected Person, to reduce the
rate of return on the capital of such Affected Person as a consequence of
its obligations hereunder or arising in connection herewith to a level
below that which such Affected Person could otherwise have achieved,
then within ten days after demand by such Affected Person to Nine West Funding
and the Program Agent (which demand shall be accompanied by a statement
addressed to Nine West Funding setting forth the basis of such demand), such
Affected Person shall be entitled to payment for such additional amount or
amounts as will compensate such Affected Person for such additional or
increased cost or such reduction pursuant to the terms of the Series 1995-1
Supplement.
(b) Each Affected Person will promptly notify Nine West Funding and
the Program Agent of any event of which it has knowledge which is reasonably
likely to entitle such Affected Person to compensation pursuant to this
SECTION 3.03; PROVIDED, HOWEVER, no failure to give or delay in giving such
notification shall adversely affect the rights of any Affected Person to such
compensation.
(c) In determining any amount provided for or referred to in this
SECTION 3.03, an Affected Person may use any reasonable averaging and
attribution methods that it (in its sole discretion) shall in good faith deem
applicable. Any Affected Person when making a claim under this SECTION 3.03
shall submit to Nine West Funding a statement as to such increased cost or
reduced return (including calculation thereof in reasonable detail), which
statement shall, in the absence of manifest error, be conclusive and binding
upon Nine West Funding.
(d) Notwithstanding anything in this Section 3.03 to the contrary,
the Seller shall not be required to make a payment in respect of any of the
above-described increased or imposed costs, reductions in amounts received or
receivable or reductions in the rate of return (as the case may be), which are
paid, incurred or otherwise suffered to exist by the relevant Affected Person
more than 180 days prior to the date of submission to the Seller of the demand
accompanied by a statement as described above in clause (a).
SECTION 3.04. TAXES. (a) Any and all payments and deposits
required to be made hereunder or under any other Transaction Document by the
Seller or the Trustee to or for the benefit of any Affected Person 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 taxes imposed on, or measured by
reference to, the net income of, franchise taxes imposed on, and taxes (other
than withholding taxes) imposed on the receipts or gross receipts that are
imposed on such Affected Person by any of (i) the United States or any State
thereof, (ii) the jurisdiction under the laws of which such Affected Person is
organized or in which it is otherwise doing business or (iii) any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Seller or the Trustee shall be required by law to deduct any
Taxes from or in respect of any sum required to be paid or deposited hereunder
or under any instrument delivered hereunder to or for the benefit of an
Affected Person (A) such sum shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums required to be paid or deposited under this SECTION 3.04) the
amount received by such Affected Person, or otherwise deposited hereunder or
under such instrument, shall be equal to the sum which would have been so
received or deposited had no such deductions been made, (B) the Seller or the
Trustee (as appropriate) shall make such deductions and (C) the Seller or the
Trustee (as appropriate) shall pay the full amount of such deductions to the
relevant taxation authority or other authority in accordance with applicable
law. Notwithstanding the foregoing, the obligations of the Trustee under this
SECTION 3.04(a) shall be payable only out of the Trust Assets.
(b) The Seller shall indemnify each Affected Person for the full
amount of Taxes (including, without limitation, any Taxes imposed by any
jurisdiction on amounts payable under this SECTION 3.04) paid by such Affected
Person and any liability (including penalties, interest and expenses) arising
therefrom or required to be paid with respect thereto. Each Affected Person
shall promptly notify the Seller of any payment of Taxes made by it and, if
practicable, any request, demand or notice received in respect thereof prior
to such payment. Each Affected Person shall be entitled to payment of this
indemnification within ten days from the date such Affected Person makes
written demand therefor to the Program Agent and the Seller. A certificate as
to the amount of such indemnification submitted to the Seller and the Program
Agent by an Affected Person setting forth the calculation thereof, shall
(absent manifest error) be conclusive and binding for all purposes.
(c) Within 30 days after the date of any payment of Taxes, the
Seller or the Trustee (as the case may be) will furnish to the Program Agent
the original or a certified copy of a receipt evidencing payment thereof.
Each Affected Person that is organized under the laws of a
jurisdiction other than the United States or a state thereof hereby agrees to
complete, execute and deliver to the Trustee from time to time prior to the
first Distribution Date on which such Affected Person will be entitled to
receive distributions pursuant to the Series 1995-1 Supplement and this
Agreement, Internal Revenue Service Form 4224 (or any successor form) or such
other forms or certificates as may be required under the laws of any
applicable jurisdiction in order to permit the Seller or the Trustee to make
payments to, and deposit funds to or for the account of, such Affected Person
hereunder and under the other Transaction Documents without any deduction or
withholding for or on account of any tax or with such withholding or deduction
at a reduced rate.
(e) Notwithstanding anything in the foregoing to the contrary, the
Seller shall not be required to make any compensatory payment under this
SECTION 3.04 with respect to any Taxes imposed by any jurisdiction, or any
liability arising therefrom, paid or otherwise incurred by an Affected Person,
occurring more than one year prior to the submission to the Seller of the
demand and certificate described in CLAUSE (b) above.
SECTION 3.05. SHARING OF PAYMENTS. If any Affected Person shall
obtain any payment or other recovery (whether voluntary, involuntary, by
application of set-off or otherwise) on account of any Obligation (other than
pursuant to SECTION 3.03 or SECTION 3.04 of this Agreement) which is in excess
of its PRO RATA share of the sum of payments then or theretofore obtained by
the Affected Person, such Affected Person shall purchase from the other
Affected Persons, such participation in Obligations held by them as shall be
necessary to cause such purchaser to share the excess payment or other
recovery ratably with each of them; PROVIDED, HOWEVER, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Affected Person, the purchase of such participation shall be
rescinded and the seller of such participation shall repay to such purchaser
the purchase price of such participation to the ratable extent of such
recovery together with an amount equal to such Affected Person's ratable share
(according to the proportion of the amount of such seller's required repayment
to such purchaser to the total amount so recovered from such purchaser) of any
interest or other amount payable by such purchaser in respect of the total
amount so recovered.
ARTICLE IV
CONDITIONS PRECEDENT TO THE RESTATEMENT AND ALL INCREASES
SECTION 4.01. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS
AGREEMENT. The Class A Certificate Purchase Agreement shall be amended and
restated, in its entirety, effective upon the occurrence of each of the
following:
(a) receipt by the Trustee and the Program Agent of counterpart
signature copies of this Agreement, duly executed by each of the parties
hereto; and
(b) the occurrence of the Effective Restatement Date.
SECTION 4.02. CONDITIONS PRECEDENT TO EACH INCREASE. (a) The
making of each Increase is subject to the following conditions precedent:
(i) the Purchaser shall have received a certificate substantially
in the form of EXHIBIT D hereto, dated the date of such Increase of the
Chairman of the Board, the President, the Executive Vice President, any
Vice President, the Treasurer, any Assistant Treasurer, the principal
financial officer or the principal accounting officer of each of the
Seller and the Servicer in which such officer shall state that:
(A) no Termination Event (as defined in the Receivables
Purchase Agreement), Early Amortization Event or Servicer Default,
and no event that (a) if notice of such event were given or (b)
after a specified amount of time had elapsed would become a
Termination Event, Early Amortization Event or Servicer Default, has
occurred and is continuing;
(B) the Revolving Period has not ended and no Early
Amortization Period has occurred and is continuing;
(C) all representations and warranties made by the Seller or
by the Servicer, as applicable, in any of the Series 1995-1
Supplement, the Receivables Purchase Agreement and the Pooling and
Servicing Agreement are true and correct in all material respects,
as if repeated on such date with respect to the facts and
circumstances then existing;
(D) each of the Pooling and Servicing Agreement, the Series
1995-1 Supplement, the Receivables Purchase Agreement and the
Footwear Receivables Purchase Agreement is in full force and effect;
(E) after making the Purchase (or, for the purposes of SECTION
4.02, funding each Increase), the Invested Amount shall not exceed
the Purchase Limit; and
(F) after making the Purchase (or, for the purposes of SECTION
4.02, funding each Increase), the Net Receivables Balance equals or
exceeds the Required Net Receivables Balance;
(ii) the Program Agent shall have received by 12:00 noon (New York
City time), on the date of such Increase, the Daily Report which shall be
prepared on a pro forma basis and shall show that the Seller is in
compliance with all Transaction Documents (after giving effect to such
Increase); and
(iii) Nine West (or the Seller on behalf of Nine West in the
certificate described in clause (i) above) shall certify that it has a
long-term senior unsecured debt rating of higher than "B-" from either
S&P or Moody's or, if Nine West is not then rated by either of S&P or
Moody's, Nine West shall have a long term senior unsecured debt rating of
at least "B-", based upon the internal debt rating model of Citibank,
N.A.
(b) If CRC is the Purchaser, the funding of any Increase is subject
to the additional conditions precedent that (i) the Program Agent shall not
have given notice to the Seller that CRC will not fund an Increase, and (ii)
an Aggregate Liquidity Provider Commitment which is equal to or greater than
the Purchase Limit is then in full force and effect.
(c) If an Increase is to be funded by the Liquidity Providers, the
funding of such Increase is subject to the additional condition precedent that
CRC shall have made the assignment contemplated in SECTION 2.06(a) of all
Certificate Interests it then holds.
ARTICLE V
THE PROGRAM AGENT
SECTION 5.01. AUTHORIZATION AND ACTION OF THE PROGRAM AGENT. CRC
and each Liquidity Provider hereby appoints and authorizes the Program Agent
to take such action as agent on its behalf and to exercise such powers under
this Agreement and the other Transaction Documents as are delegated to the
Program Agent by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto (including, without limitation, the right to
agree, for and on behalf of the Liquidity Providers, to amendments,
modifications and waivers of the provisions of this Agreement and/or the other
Transaction Documents pursuant to SECTION 5.04 hereof).
SECTION 5.02. THE PROGRAM AGENT'S RELIANCE, ETC. Neither the
Program Agent nor any of its directors, officers, agents or employees shall be
liable to CRC or any Liquidity Provider for any action taken or omitted to be
taken by it or the Program Agent under or in connection with the Transaction
Documents, except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Program Agent (a) may
consult with independent legal counsel (including counsel for the Trust, the
Seller or the Servicer), independent certified 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, (b) makes no representation or warranty to CRC, any
Liquidity Provider or any such other holder of any interest in the Trust
Assets and shall not be responsible to CRC, any Liquidity Provider or any
other holder for any statements, representations or warranties made in or in
connection with this Agreement or any of the other Transaction Documents, (c)
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 the Transaction
Documents on the part of the Trust, the Seller or the Servicer or to inspect
the property (including the books and records) of the Trust, the Seller or the
Servicer, (d) shall not be responsible to CRC, any Liquidity Provider or any
other holder of any interest in Trust Assets for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Transaction
Document (except for the execution by the Program Agent of, and legality,
validity and enforceability against the Program Agent of its obligations
under, the Transaction Documents to which the Program Agent is a party), and
(e) shall incur no liability under or in respect of the Transaction Documents
by acting upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by facsimile or telex
believed by it to be genuine and signed or sent by the proper party or
parties; except in each case for gross negligence or wilful misconduct on the
part of the Program Agent.
SECTION 5.03. THE PROGRAM AGENT AND AFFILIATES. Citicorp North
America, Inc. and its Affiliates (including Citibank, N.A.) may generally
engage in any kind of business with the Seller or the Servicer or any Obligor,
any of their respective Affiliates and any Person who may do business with or
own securities of the Servicer or any Obligor or any of their respective
Affiliates, all as if Citicorp North America, Inc. were not the Program Agent
and without any duty to account therefor to CRC, any Liquidity Provider or any
other holder of an interest in Trust Assets.
SECTION 5.04. AMENDMENTS, WAIVERS AND CONSENTS. CRC and the
Program Agent each reserves the right, in its sole discretion (subject to the
next following sentence), to exercise any rights and remedies available to the
Purchaser or the Program Agent under the Transaction Documents or pursuant to
applicable law, and also to agree to any amendment, modification or waiver of
any Transaction Document, to the extent such Transaction Document provides
for, or requires, the Purchaser's or the Program Agent's agreement,
modification or waiver. Notwithstanding the foregoing, each of CRC and the
Program Agent agrees (x) that if CRC is the Series 1995-1 Certificateholder,
it shall not agree to any such material amendment, modification or waiver
prior to its receipt from each rating agency then rating CRC's commercial
paper, if any, of a confirmation that such rating agency will not modify the
rating then assigned to such commercial paper as a result of such amendment,
modification or waiver, and (y) for the benefit of the Liquidity Providers
that it shall not, subject to the terms of the Transaction Documents:
(a) without the prior written consent of each of the Liquidity
Providers,
(i) reduce in any manner the amount of, or delay the timing of,
distributions to be made to any Series 1995-1 Certificateholder or
deposits of amounts to be so distributed, or
(ii) reduce any fees payable to the Program Agent or CRC which
relate to payments to Liquidity Providers or delay the dates on which
such fees are payable, or
(iii) modify any provision relating to the Series 1995-1 Loss and
Dilution Reserve, the Series 1995-1 Yield/Fee Reserve or extend the
Revolving Period, or
(iv) amend or waive any Event of Termination or Early Amortization
Event under any Transaction Document relating to the bankruptcy of the
Seller, the Servicer or Nine West, or
(v) amend or waive any provision of CLAUSE (ii) of SECTION 2.02(c) of
this Agreement, or
(b) without the prior written consent of the Majority of
Certificate Interests,
(i) amend, modify or waive any provision of any Transaction
Document which would impair any rights expressly granted to an assignee
or participant, or
(ii) change the definitions of Defaulted Receivable, Default Ratio,
Eligible Receivable, Loss to Liquidation Ratio, Net Receivables Balance,
Required Net Receivables Balance, Dilution Ratio or Concentration Limit,
or
(iii) amend any Series 1995-1 Early Amortization Event to increase
the maximum permitted Default Ratio, Dilution Ratio or Loss to
Liquidation Ratio, or
(iv) waive violations of the maximum permitted levels for the
Default Ratio, Dilution Ratio or Loss to Liquidation Ratio which
violations occur for more than two consecutive Accounting Periods or by
more than 10% of such permitted levels for any time.
SECTION 5.05. INTERNAL REPORTING REQUIREMENT OF THE PROGRAM AGENT.
Citicorp North America, Inc., in its capacity as Program Agent, agrees that,
in respect of the internal debt rating model of Citibank, N.A., it shall:
(a) at any time that Nine West does not have a long term senior
unsecured debt rating from either of S&P or Moody's, use its reasonable
efforts to cause Citibank, N.A. to update its internal debt rating of
Nine West no less frequently than once every calendar year; and
(b) upon the Seller's request from time to time, at such intervals
as shall be reasonable, notify the Seller of such internal debt rating of
Nine West.
ARTICLE VI
ASSIGNMENTS
SECTION 6.01. ASSIGNMENT. At any time and from time to time, CRC
or any Liquidity Provider may assign all or any portion of its right, title
and interest hereunder, all or any portion of its obligations hereunder and
all or any portion of its Certificate Interest, in accordance with the
provisions of Section 6.03 of the Pooling and Servicing Agreement and Section
7.06 of the Series 1995-1 Supplement, and in the case of any such assignment
by a Liquidity Provider, the assignor and assignee thereof shall evidence such
assignment by executing and delivering an Assignment and Acceptance.
Notwithstanding anything herein, in the Pooling and Servicing Agreement or in
the Series 1995-1 Supplement to the contrary, any such assignment by CRC or a
Liquidity Provider of less than all of its right, title and interest hereunder
and its obligations hereunder (including, without limitation, its respective
Liquidity Provider Commitment, in the case of a Liquidity Provider), and its
Certificate Interest, shall constitute an assignment corresponding to a pro-
rata portion of the Purchase Limit (and the Aggregate Liquidity Provider
Commitment, in the case of a Liquidity Provider) of no less than $5,000,000.
SECTION 6.02. RIGHTS OF ASSIGNEE. Upon any assignment in
accordance with this Article VI, (a) the assignee receiving such assignment
shall have all of the rights of such assignor hereunder with respect to the
Certificate or Certificate Interest (or portion thereof) or rights associated
therewith being assigned and (b) all references to such assignor in the
Transaction Documents shall be deemed to apply to such assignee to the extent
of its interest in the related Collections.
SECTION 6.03. NOTICE OF ASSIGNMENT. Each assignor shall provide
notice to the Seller, the Program Agent and the Trustee of any assignment of
any Certificate or Certificate Interest (or portion thereof) or rights or
obligations associated therewith by such assignor to any assignee.
ARTICLE VII
PARTICIPATION
SECTION 7.01. PARTICIPATION. Each Liquidity Provider may sell a
participation to one or more banks or other entities in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Liquidity Provider Commitment and the
Certificate Interests owned by it); PROVIDED, HOWEVER, that (i) such Liquidity
Provider's obligations under this Agreement (including, without limitation,
its Liquidity Provider Commitment) shall remain unchanged and (ii) such
Liquidity Provider shall remain solely responsible to the other parties hereto
for the performance of such obligations. The Seller, the Program Agent and
the other Liquidity Providers shall continue to deal solely and directly with
such Liquidity Provider in connection with such Liquidity Provider's rights
and obligations under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. AMENDMENTS, ETC. Subject to SECTION 5.04, no
amendment of any provision of this Agreement shall in any event be effective
unless the same shall be in writing and signed by the parties hereto. Any
waiver or consent shall be effective only if signed by the party waiving any
right, in the specific instance and for the specific purpose for which given.
SECTION 8.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including telex and facsimile communication) and shall be personally
delivered or sent by certified mail, postage prepaid, or overnight courier or
facsimile, to the intended party at the address or facsimile number of such
party set forth under its name on the signature pages hereof or at such other
address or facsimile number as shall be designated by such party in a written
notice to the other parties hereto. All such notices and communications shall
be effective (a) if personally delivered, when received, (b) if sent by
certified mail, four Business Days after having been deposited in the mail,
postage prepaid, (c) if sent by overnight courier, two Business Days after
having been given to such courier, unless sooner received by the addressee and
(d) if transmitted by facsimile, when sent, upon receipt confirmed by
telephone or electronic means, except that notices and communications pursuant
to Article III shall not be effective until received. Notices and
communications sent hereunder on a day that is not a Business Day shall be
deemed to have been sent on the following Business Day. Promptly upon the
exercise by CRC or any Liquidity Provider of such right of set-off, such
person shall give written notice to the Seller.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of the
Program Agent, any Liquidity Provider, any Indemnified Party, CRC or any other
holder of any Certificate Interest to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder 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. Without
limiting the foregoing, the Program Agent and each Liquidity Provider is
hereby authorized by the Seller 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 the Program Agent and each
Liquidity Provider to or for the credit or the account of the Seller, now or
hereafter existing under this Agreement, to the Program Agent, any Liquidity
Provider, any Indemnified Party or CRC, or their respective successors and
assigns; PROVIDED, HOWEVER, that no such Person shall exercise any such right
of set-off without the prior written consent of the Program Agent. Each set-
off by CRC or any Liquidity Provider under this SECTION 8.03 against the
Invested Amount shall reduce the Invested Amount accordingly. Each of CRC,
the Program Agent, each Indemnified Party and each Liquidity Provider shall
provide the Seller with prompt written notice of the exercise by such Person
of any of its rights of set-off hereunder (provided, however, that no failure
to give or delay in giving such notification shall adversely affect the set-
off rights of any such Person, whether arising under this Section 8.03 or
otherwise).
SECTION 8.04. BINDING EFFECT; SURVIVAL. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, and the provisions of SECTION 3.02 shall
inure to the benefit of the Liquidity Providers and their respective
successors and assigns; PROVIDED, HOWEVER, that nothing in the foregoing shall
be deemed to authorize any assignment not permitted by SECTION 6.01. This
Agreement shall create and constitute the continuing obligation of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until one year and one day after the earlier of the date on which all
Obligations are paid in full or the Trust shall terminate in accordance with
the Pooling and Servicing Agreement. The provisions of SECTION 3.03 and
SECTION 3.04 shall be continuing and shall survive any termination of this
Agreement.
SECTION 8.05. NO PROCEEDINGS.
(a) Each of CRC, the Seller (on its own behalf and on behalf of its
Affiliates), the Trustee, Citicorp North America, Inc., individually and as
Program Agent, and each Liquidity Provider (each, a "RESTRICTED PERSON")
hereby agrees that it will not institute against CRC, or join any other Person
in instituting against CRC, any insolvency proceeding (namely, any proceeding
of the type referred to in the definition of "INSOLVENCY EVENT") so long as
any CP Notes issued by CRC shall be outstanding or there shall not have
elapsed one year plus one day since the last day on which any such CP Notes
shall have been outstanding.
(b) Each Restricted Person hereby agrees that it will not institute
against the Trust or the Seller, or join any other Person in instituting
against the Trust or the Seller, any insolvency proceeding of the type
described in CLAUSE (a) above, prior to the date which is one year and one day
after the termination of the Pooling and Servicing Agreement with respect to
the Trust.
(c) Nothing in either of the foregoing CLAUSES (a) or (b) shall limit
the right of any Restricted Person to file any claim in or otherwise take any
action with respect to any insolvency proceeding of the type described in
CLAUSE (a) above that was instituted against CRC, the Trust or the Seller by
any Person other than such Restricted Person.
SECTION 8.06. CAPTIONS AND CROSS REFERENCES. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning
or interpretation of any provision of this Agreement.
SECTION 8.07. INTEGRATION. This Agreement, together with the other
Transaction Documents, contains a final and complete integration of all prior
expressions by the parties hereto with respect to the subject matter hereof
and, together with all the other Transaction Documents, shall constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof, superseding all prior oral or written understandings.
SECTION 8.08. GOVERNING LAW. THIS AGREEMENT, INCLUDING THE RIGHTS
AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SECTION 8.09. SUBMISSION TO JURISDICTION. Each of the parties
hereto hereby irrevocably and unconditionally submits to the nonexclusive
jurisdiction of any New York State court or federal court of the United States
of America sitting in New York City, and any appellate court from any thereof,
in any action or proceeding arising out of or relating to this Agreement, and
each of the parties hereto hereby irrevocably and unconditionally (i) agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, such
federal court and (ii) waives the defense of an inconvenient forum. Each of
the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
SECTION 8.10. CONSENT TO SERVICE OF PROCESS. Each party to this
Agreement irrevocably consents to service of process by personal delivery,
certified mail, postage prepaid or overnight courier. Nothing in this
Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 8.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN),
ACTIONS OF ANY OF THE PARTIES HERETO AND THE LIQUIDITY PROVIDER OR ANY OTHER
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 8.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same Agreement. By acknowledging and agreeing to this Agreement, the Servicer
represents that it is instructing the Trustee to execute this Agreement on
behalf of the Trust.
SECTION 8.13. REMOVAL AND REPLACEMENT OF LIQUIDITY PROVIDERS. (a)
The Program Agent shall have the right, in its sole discretion, to terminate
the rights and obligations of a Liquidity Provider to fund Increases in the
event that the unsecured, unsubordinated indebtedness of such Liquidity
Provider is withdrawn or downgraded below the applicable rating described in
the definition of "Eligible Assignee" in the Series 1995-1 Supplement. Such
termination shall be effective upon written notice to such effect delivered by
the Program Agent to such Liquidity Provider and the Seller, whereupon the
Term of such Liquidity Provider's Commitment shall be deemed to have
terminated. Upon such termination, the Liquidity Provider shall cease to have
any rights or obligations with respect to future Increases under this
Agreement but shall continue to have the rights and obligations of a Liquidity
Provider with respect to any Increases funded by it under this Agreement prior
to such termination (until such time as such Liquidity Provider's Commitment
is assigned to an Eligible Assignee pursuant to an Assignment and Acceptance
duly executed by such Liquidity Provider and such Eligible Assignee).
(b) In the event that any Liquidity Provider (a "Specified
Liquidity Provider") (i) shall have notified the Program Agent or the Seller
(and shall not have retracted such notification) that such Specified Liquidity
Provider's compliance with any of its obligations hereunder would be unlawful,
(ii) fails to fund any of its obligations hereunder upon request, or (iii)
makes a demand on the Seller for payment pursuant to Section 3.03 or Section
3.04 hereof, then the Seller shall have the right, upon notice to the Program
Agent, to require the Program Agent to use its best efforts to identify an
Eligible Assignee to which such Specified Liquidity Provider's rights and
obligations hereunder, and under the Certificate, may be assigned, and
promptly upon receipt of such notice, the Program Agent shall use its best
efforts to identify such an Eligible Assignee. Upon the Seller's acceptance
of any Eligible Assignee so identified (or upon identification by the Seller
of such an Eligible Assignee) the Seller may require a Specified Liquidity
Provider, and such Specified Liquidity Provider hereby agrees, to transfer and
assign, pursuant to an Assignment and Acceptance duly executed by such
Specified Liquidity Provider and such Eligible Assignee, all the interests,
rights and obligations of such Specified Liquidity Provider hereunder, under
the Series 1995-1 Supplement, under the Agreement and under the Certificate,
to such Eligible Assignee, PROVIDED, HOWEVER, that (w) no such assignment
shall conflict with any law, rule, regulation or order of any Governmental
Authority, (x) such assignment shall be without recourse, representation and
warranty (other than as a result of such Specified Liquidity Provider's
failure to transfer such interests free and clear of any Lien created or
suffered to exist by such Specified Liquidity Provider) and shall be on terms
and conditions reasonably satisfactory to such replaced Specified Liquidity
Provider and such replacement Eligible Assignee, (y) the purchase price paid
by such replacement Eligible Assignee shall be an amount equal to the amount
of the portion of the Invested Amount relating to such Specified Liquidity
Provider's Certificate Interest, and (z) the Seller or such Eligible Assignee
as the case may be, shall pay to such Specified Liquidity Provider in same day
funds on the date of such assignment an amount equal to sum of the portion of
the Invested Amount relating to such Specified Liquidity Provider's
Certificate Interest and the Debt Service Amount accrued thereon to the date
of such payment, and all other amounts accrued for such Specified Liquidity
Provider's account or owed to it hereunder, including those amounts owed
pursuant to Section 3.03 or Section 3.04 hereof.
SECTION 8.14. REIMBURSEMENT OF PROGRAM AGENT. Each Liquidity
Provider will on demand reimburse the Program Agent its Liquidity Provider
Commitment Percentage of any and all reasonable costs and expenses (including,
without limitation, reasonable fees and disbursements of counsel) which may be
incurred in connection with collecting amounts owed with respect to any
Certificate in which such Liquidity Provider purchases Certificate Interests
for which the Program Agent is not promptly reimbursed by the Seller or
otherwise. Should the Program Agent later be reimbursed by the Seller or CRC
for any such amount, the Program Agent shall immediately pay to each Liquidity
Provider its Liquidity Provider Commitment Percentage of such amount.
SECTION 8.15. LIMITED RECOURSE. Each of the Trustee, CRC, Citicorp
North America, Inc., individually or as the Program Agent, and the Liquidity
Providers hereby agrees that its only recourse for the repayment of any
Obligations owing to such Person by the Seller will be to the extent of the
Seller's assets. Each of the Trustee, CRC, Citicorp North America, Inc.,
individually or as the Program Agent, the Liquidity Providers and the other
Indemnified Parties hereby agrees that it will not otherwise take or pursue
any judicial or other steps or proceedings, or exercise any other right or
remedy that it might otherwise have against the Seller for the repayment of
any Obligations owing to any such Person and that the Seller shall not be
otherwise liable for such Obligations or amounts.
SECTION 8.16. EFFECT ON CLASS A CERTIFICATE PURCHASE AGREEMENT.
Each of the parties hereto ratifies the Purchase, Invested Amount, Increases,
payments, representations, warranties, covenants and indemnities made by, to,
in favor of, or otherwise on behalf of, such party under the Original Class A
Certificate Purchase Agreement and agrees that such agreement is, as of the
date hereof and until the Effective Restatement Date has occurred, in full
force and effect. From and after the Effective Restatement Date, (i) the
terms and provisions of this Agreement shall amend and supersede the terms
and provisions of the Original Class A Certificate Purchase Agreement in their
entirety and the continuing rights, remedies and obligations of the parties
with respect to any such Purchase, Invested Amount, Increases, payments,
representations, warranties, covenants and indemnities under the Original
Class A Certificate Purchase Agreement shall be governed by the terms and
provisions of this Agreement to the same extent as if such Purchase, Invested
Amount, Increases, payments, representations, warranties, covenants and
indemnities had been made under this Agreement, (ii) all references in any of
the other Transaction Documents to the Original Class A Certificate Purchase
Agreement shall mean and be a reference to the Original Class A Certificate
Purchase Agreement as the same is amended and restated hereby, and (iii) each
reference to the "Purchase", "Class A Invested Amount", "Increase" and "Class
A Certificates" in the Original Class A Certificate Purchase Agreement, or in
any other Transaction Document, shall mean and be a reference to the Purchase,
Invested Amount, Increase and Certificate hereunder (as the case may be). It
is expressly understood and agreed that the execution and delivery of this
Agreement is not intended to be, and shall not be construed as, a novation of
the Original Class A Certificate Purchase Agreement, any of the other
Transaction Documents, or any of the transactions evidenced thereby.
SECTION 8.17. ROLE OF CREDIT LYONNAIS NEW YORK BRANCH.
Notwithstanding anything herein or elsewhere to the contrary, Credit Lyonnais
New York Branch is executing and delivering this Agreement solely in its
capacity as a Liquidity Provider under the Original Class A Certificate
Purchase Agreement; and after the occurrence of the Effective Restatement
Date, Credit Lyonnais New York Branch will cease to be a Liquidity Provider
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Certificate Purchase Agreement to be duly executed by their
respective officers thereunto duly authorized as of the date first above
written.
NINE WEST FUNDING CORPORATION,
as Seller
By /s/ Robert C. Galvin
------------------------------
Name: Robert C. Galvin
Title: Executive Vice President
Chief Financial Officer & Treasurer
Address: Nine West Plaza
1129 Westchester Avenue
White Plains, NY 10604
Attn: Chief Financial Officer
Telecopy: (914) 640-4282
CORPORATE RECEIVABLES CORPORATION,
as Purchaser
By: Citicorp North America, Inc.,
as Attorney-in-Fact
By /s/ Kathy Simmons
------------------------------
Name: Kathy Simmons
Title: Vice President
Address: 450 Mamaroneck Avenue
Harrison, NY 10528
Attn: President
Telecopy: (914) 899-7015
CITICORP NORTH AMERICA, INC.,
as Program Agent
By /s/ Kathy Simmons
-------------------------------
Name: Kathy Simmons
Title: Vice President
Address: 450 Mamaroneck Avenue
Harrison, NY 10528
Attn: Corporate Asset Funding
Department
Telecopy: (914) 899-7015
LIQUIDITY PROVIDERS:
Liquidity Provider
Commitment: CITIBANK, N.A.,
$67,000,000.00 as a Liquidity Provider
By /s/ Kathy S. Simmons
---------------------------
Name: Kathy S. Simmons
Title: Attorney-in-fact
Address: 450 Mamaroneck
Avenue
Harrison, NY 10528
Attn: Corporate Asset
Funding Department
Telecopy: (914) 899-7015
Liquidity Provider
Commitment: CREDIT AGRICOLE INDOSUEZ,
$30,000,000.00
as a Liquidity Provider
By /s/ Dean Balice
---------------------------
Name: Dean Balice
Title: Senior Vice President
Branch Manager
By /s/ David Bouhl
---------------------------
Name: David Bouhl, F.V.P.
Title: Head of Corporate Banking
Chicago
Address: 55 E. Monroe St.
Suite 4700
Chicago, IL 60603
Attn: Kathleen Martens
Telecopy: (312) 372-3455
Liquidity Provider
Commitment: CREDIT COMMUNAL DE BELGIQUE,
$10,000,000.00 NEW YORK BRANCH,
as a Liquidity Provider
By /s/ Jan E. van Panhuys
---------------------------
Name: Jan E. van Panhuys
Title: General Manager
By /s/ Caroline Junius
---------------------------
Name: Caroline Junius
Title: Vice President
Address: 405 Lexington Ave.
54th Floor
New York, NY 10074
Attn: Caroline Van Bogaert
Telecopy: (212) 972-6523
Liquidity Provider
Commitment: NORDDEUTSCHE LANDESBANK
$25,000,000.00 GIROZENTRALE, NEW YORK
BRANCH,
as a Liquidity Provider
By /s/ Irene A. Burczynski
---------------------------
Name: Irene A. Burczynski
Title: Vice President
By /s/ Stephen K. Hunter
---------------------------
Name: Stephen K. Hunter
Title: SVP
Address: 1270 Avenue of the
Americas
14th Floor
New York, NY 10020
Attn: Josef Haas
Telecopy: (212) 332-8660
CREDIT LYONNAIS NEW YORK
BRANCH, solely in its capacity
as a withdrawing liquidity
provider
By /s/ David C. Fink
---------------------------
Name: David C. Fink
Title: First Vice President
Address: 1301 Avenue of the
Americas
New York, NY 10019
Attn: Structured Finance
Department
Telecopy: (212) 459-3258
Acknowledged and Accepted:
THE BANK OF NEW YORK,
not in its individual capacity,
but solely as Trustee of the Nine
West Trade Receivables Master Trust
By: /s/ Cheryl L. Laser
----------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
Address: 101 Barclay Street
New York, NY 10286
Attn: Asset Backed Group
Telecopy: (212) 815-5915
NINE WEST GROUP INC.,
as Servicer
By /s/ Robert C. Galvin
------------------------------
Name: Robert C. Galvin
Title: Executive Vice President
Chief Financial Officer & Treasurer
Address: Nine West Plaza
1129 Westchester Avenue
White Plains, NY 10604
Attn: Chief Financial Officer
Telecopy: (914) 640 - 4282
October 19, 1998
Mr. Robert C. Galvin
44 Holmes Road
Ridgefield, CT 06877
Dear Bob:
This will confirm the terms and conditions of employment between you and
Nine West Group Inc. (the "Company"). It is agreed as follows:
1. TERM.
The Company shall employ you for a period from October 20, 1998, and
will end as of October 20, 2003. Thereafter, your employment with the Company
will continue, and this agreement will be automatically renewed, for
successive two (2)-year terms unless either party to this agreement advises
the other in writing, at least six (6) months prior to the expiration of the
initial period or any renewal term, that such party does not wish to renew.
Your employment may be terminated by the Company prior to the expiration of
the term of this agreement for Cause, as defined below, in which event no
further payments shall be made to you following such termination except for
amounts due and owing as of such date. As used in this agreement, the term
"Cause" shall mean: (a) your engaging in conduct that constitutes willful
misconduct or gross negligence in regard to this agreement; or (b) your
engaging in any conduct materially detrimental to the business, goodwill or
reputation of the Company; or (c) your conviction of a crime involving moral
turpitude; or (d) your violating any material provision of this agreement.
2. DUTIES.
(a) You shall render services to the Company as Executive Vice
President, Chief Financial Officer and Treasurer. Your services shall be
rendered in accordance with such rules and instructions as the Company shall
establish from time to time. You shall also perform such other executive and
administrative duties as may be assigned to you from time to time by the
Chairman of the Board of Directors, Chief Executive Officer, President, and/or
the Board of Directors of the Company.
(b) In the event that your duties, position or title undergo
changes in the course of your employment with the Company in ways not
expressly provided for in this agreement, such changes shall not constitute a
rescission of this agreement, or of any other terms hereof, and the agreement
shall remain in full force and effect as to all terms not affected by such
changes; provided, however, that any such new duties, position or title shall
be consistent with your current role, responsibilities and executive status.
In the event that such new duties, position, or title are inconsistent with
your current role, responsibilities and executive status or you are terminated
by the Company or the Board of Directors without cause, then you shall be
paid your salary and target bonuses for the remaining term of this agreement
in a lump sum upon such event.
3. COMPENSATION.
(a) SALARY. Your salary will be $450,000 per annum, with such
salary increased annually, by an amount at least equal to the Cost-of-Living
Factor multiplied by your then current salary; provided, however, you shall be
entitled to a salary increase by an amount not less than 5% per year. The
Cost-of-Living Factor shall be a fraction (i) the numerator of which will be
the Cost-of-Living Index at September 1 of the 12-month period immediately
preceding such 12-month period. The Cost-of-Living Index for purposes of this
calculation will be the Consumer Price Index for all Urban Consumers, New York
- - Northern New Jersey - Long Island, NY-NJ-CT (1982-84 = 100), published by
the Bureau of Labor Statistics, or if such Index shall cease to be published,
then the Cost-of-Living Index shall be such fair equivalent index as the
Company and you select.
(b) BONUS. You shall be entitled to an annual bonus in accordance
with the Company's applicable executive bonus program, and shall participate
at a target level of at least 75% of base salary.
(c) CAR ALLOWANCE. You shall receive a car allowance of $15,000 per
annum payable in accordance with the Company's usual practice for such an
allowance.
(d) VACATION. You shall receive four (4) weeks of paid vacation
each year during the term hereof. At your election, unused vacation time for
any year may be either paid in such year or carried over to the next
successive year.
4. BENEFITS AND EXPENSES.
You shall be eligible to participate in such deferred compensation
plans, retirement plans, stock option plan, medical and dental programs and
other fringe benefits as the Company provides to other executive employees.
We will pay or reimburse all reasonable business expenses incurred
by you with respect to work performed by you outside or inside the United
States on our behalf.
5. NONRENEWAL PAYMENT.
(a) NONRENEWAL BY EMPLOYEE. If this agreement expires pursuant to
Section 1 hereof because you elect not to renew this agreement as of October
20, 2003, then, except as provided otherwise in this Section 5, in
consideration of your covenant not to compete set forth in Section 6 of this
agreement, the Company will pay you a noncompetition payment equal to
your then current annual salary and last year's bonus plus full benefits equal
to that at the time of notice. The noncompetition payment shall be payable in
12 equal monthly installments on the last day of each month beginning with the
month immediately following nonrenewal of this agreement, and you shall not be
required to seek or accept other employment while receiving such payment,
provided, however, that the Company may, at any time, elect to release you
from your covenant not to compete at your request, and the Company will
thereupon be relieved of any further obligation to make the noncompetition
payment provided in this Section 5(a).
(b) NONRENEWAL BY THE COMPANY. If this agreement expires pursuant
to Section 1 hereof because the Company elects not to renew this agreement as
of October 20, 2003, then, except as provided otherwise in this Section 5, in
consideration of your covenant not to compete set forth in Section 6 of this
agreement, the Company will pay you a noncompetition payment equal to your
then current annual salary. The noncompetition payment shall be payable in 12
equal monthly installments on the last day of each month beginning with the
month immediately following nonrenewal of this agreement, and you shall not be
required to seek or accept other employment while receiving such payment.
Upon your request, the Company also will continue to provide health and dental
insurance coverage after such termination of employment, similar to that
provided to its executive employees, in accordance with the requirements of
the Consolidated Omnibus Budget Reconciliation Act of 1985. Notwithstanding
the foregoing, you may elect to be released from your covenant not to compete,
and if you accept employment with a competitor of the Company at any time when
noncompetition payments are being made under this Section 5(b), the Company's
obligation with respect to any further noncompetition, health and dental
insurance payments shall cease.
(c) FURTHER EXCEPTIONS. No noncompetition payments shall be made
under this Section 5 when any disability or death payments are payable by the
Company pursuant to any other agreement or arrangement, or if this agreement
is terminated by the Company at any time for Cause.
6. NONCOMPETITION.
(a) You acknowledge and recognize (i) the highly competitive nature
of the business of the Company and its affiliates, (ii) the importance to the
Company of the Confidential Material (as defined in Section 7 hereof) to which
you will have access, (iii) the importance to the Company of the knowledge and
experience possessed by it relating to sources of supply of footwear and
accessories in Brazil, and its relationships with such sources of supply,
developed by it or its predecessors over many years, and (iv) the position of
responsibility which you will hold with the Company. Accordingly, you agree
that for a period of one (1) year following nonrenewal of this agreement under
the circumstances described in Section 5(a) or 5(b) of this agreement or
following the cessation of your employment with the Company under any other
circumstances, you will not, directly or indirectly, (i) engage in the
business activities engaged in by the Company on the date hereof and during
your employment, such business activities being manufacturing, selling,
producing, marketing, distributing, designing, line building and otherwise
dealing in footwear and accessories, of the types in which the Company does
business as of the date of such cessation of employment, and produced in
Brazil, whether such other engagement is as an officer, director, employee,
proprietor, consultant, independent contractor, partner, advisor, agent or
investor (other than as a passive investor in less than 5% of the outstanding
capital stock of a publicly traded corporation); (ii) assist other persons or
businesses in engaging in any business activities prohibited under clause (i);
or (iii) induce any employees of the Company or its affiliates to engage in
any such activities or to terminate their employment.
(b) It is expressly understood and agreed that, although you and the
Company consider the restrictions contained in this Section 6 to be
reasonable, if a final judicial determination is made by a court having
jurisdiction that the time or territory or any other restriction contained in
this Section 6 is an unreasonable or otherwise unenforceable restriction
against you, it is the intention of the parties that the provisions of this
Section 6 shall not be rendered void, but such court shall reduce the
duration, area or matter of such provision and, in its reduced form, such
provision shall then be enforceable and shall be enforced.
(c) As used in Section 6(a), the term "Company" shall be deemed to
include the Company and any individual, person or entity controlling,
controlled by or under common control with the Company, and any respective
successors of any such individual, person or entity.
(d) The non-competition provisions of this Section 6 shall not apply
if the Company terminates your employment for any reason, except if the
Company terminates your employment pursuant to Section 1(b) and/or 1(d) of
this agreement. If termination of employment is pursuant to Section 1(b)
and/or 1(d) of this agreement, the Company agrees to provide written notice to
you stating which of such subparagraphs has been violated and the actions you
have taken resulting in such violation.
7. DEATH AND DISABILITY.
If your employment terminates before the expiration date because of
death or disability, the Company shall pay you or your duly appointed personal
representatives, as the case may be, (i) an amount equal to your monthly
salary during each of the twelve (12) months following your death or
disability, but in no event beyond the expiration date, and (ii) an amount
equal to your prior year's bonus. Disability is any physical injury, or any
illness, or a physical or psychological condition, which shall render you
incapable of performing the services required of you under this agreement for
a period of six (6) consecutive months.
8. CONFIDENTIALITY.
You acknowledge that, during the course of your employment by the
Company, you will have access to valuable confidential information, know-how,
lists of customers and prospects, cost lists, merchandising data, inventions,
designs, manufacturing methods and techniques and other information relevant
to the activities and business of the Company and its affiliates
("Confidential Material"). You agree that such Confidential Material shall be
and remain the Company's property, free of any rights on your part with
respect thereto, and that you shall keep it confidential at all times during,
and following the cessation of, your employment with the Company. You agree
to deliver to the Company all computer files and tapes, books, records and
documents (whether maintained in paper, electronic or any other medium)
relating to or bearing upon any such Confidential Material, upon the cessation
of your employment, and you agree not to retain any copies or extracts
thereof.
9. INJUNCTIVE RELIEF.
The parties recognize and agree that the covenants set forth in
Sections 6 and 7 are independent covenants and may be enforced regardless of
any claim regarding the balance of the agreement or any other claim relating
to the agreement. These covenants shall be enforceable by a court of equity
through the granting of a temporary restraining order, preliminary injunction
and/or permanent injunction. In the event of a breach of Section 6 or 7 of
this agreement, you consent to the entry of an injunction, and you shall pay
any reasonable fees and expenses incurred by the Company in enforcing such
Sections. Such equitable enforcement shall be in addition to and shall not
prejudice the right of the Company to an appropriate monetary award.
10. REPRESENTATION AND WARRANTY.
You hereby represent and warrant to the Company that your entering
into this agreement will not result in the breach of, or constitute a
violation of, any agreement, order or decree by which you are bound and that
you are not subject to any agreement, restriction or covenant, whether written
or oral, which restricts your ability to enter into this agreement or to
perform your duties as set forth herein.
11. MISCELLANEOUS.
(a) This agreement shall be governed by the laws of the State of
New York (excluding its choice of law rules).
(b) All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, or if transmitted via telecopier with transmission
confirmed, with a copy mailed by certified mail, return receipt requested,
addressed to the addresses first set forth above or to such other addresses as
shall be furnished in writing by either party in like manner. Any such notice
or communication shall be deemed to have been given as of the date delivered
in person or transmission by telecopier is confirmed.
(c) This agreement may not be assigned by you. This agreement
shall be binding upon, and inure to the benefit of, the parties hereto, their
heirs, legal representatives, successors and permitted assigns.
(d) This agreement supersedes all prior agreements and
understandings between us and may not be modified or terminated orally. No
modifications, termination, or attempted waiver shall be valid unless set
forth in a writing signed by the party against whom the same is sought to be
enforced.
(e) The invalidity or unenforceability of any provision hereof
shall not in any way affect the validity or enforceability of any other
provision.
Please sign where indicated below, whereupon this letter will
constitute a binding agreement between us as of the date first above written.
Very truly yours, Accepted and agreed to as of
this 19 day of October, 1998.
Nine West Group Inc.
By: /s/ Vincent Camuto /s/ Robert C. Galvin
--------------------- ------------------------
Vincent Camuto Robert C. Galvin
Chief Executive Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
NINE WEST GROUP INC. CONDENSED CONSOLIDATED BALANCE SHEET AS OF OCTOBER
31, 1998 AND THE CONDENSED CONSOLIDATED STATEMENT OF INCOME AND CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THIRTY-NINE WEEKS THEN ENDED
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-30-1999
<PERIOD-END> OCT-31-1998
<CASH> 16,330
<SECURITIES> 0
<RECEIVABLES> 157,400
<ALLOWANCES> (52,651)
<INVENTORY> 502,456
<CURRENT-ASSETS> 680,918
<PP&E> 262,198
<DEPRECIATION> (86,920)
<TOTAL-ASSETS> 1,272,698
<CURRENT-LIABILITIES> 181,295
<BONDS> 558,669
0
0
<COMMON> 359
<OTHER-SE> 466,430
<TOTAL-LIABILITY-AND-EQUITY> 1,272,698
<SALES> 1,461,960
<TOTAL-REVENUES> 1,461,960
<CGS> 848,001
<TOTAL-COSTS> 848,001
<OTHER-EXPENSES> 497,002
<LOSS-PROVISION> 1,898
<INTEREST-EXPENSE> 41,628
<INCOME-PRETAX> 73,431
<INCOME-TAX> 28,638
<INCOME-CONTINUING> 44,793
<DISCONTINUED> 0
<EXTRAORDINARY> 2,923
<CHANGES> 0
<NET-INCOME> 47,716
<EPS-PRIMARY> 1.34
<EPS-DILUTED> 1.34
</TABLE>
