-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Kx2TpI+FpBfFBdx+TCglU95Afs4Hv3g1Hfg9C2P+Qd+aNxa/C4KgsYvw3OinaM05 XFe2IFigDB1NxsgPIregrg== 0000887124-98-000021.txt : 19981216 0000887124-98-000021.hdr.sgml : 19981216 ACCESSION NUMBER: 0000887124-98-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19981031 FILED AS OF DATE: 19981215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NINE WEST GROUP INC /DE CENTRAL INDEX KEY: 0000887124 STANDARD INDUSTRIAL CLASSIFICATION: FOOTWEAR, (NO RUBBER) [3140] IRS NUMBER: 061093855 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11161 FILM NUMBER: 98769877 BUSINESS ADDRESS: STREET 1: NINE WEST PLAZA STREET 2: 1129 WESTCHESTER AVE CITY: WHITE PLAINS STATE: NY ZIP: 10604 BUSINESS PHONE: 3145798812 MAIL ADDRESS: STREET 1: NINE WEST PLAZA STREET 2: 1129 WESTCHESTER AVENUE CITY: WHITE PLAINS STATE: NY ZIP: 10604 10-Q 1 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 NINE WEST GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share data) (Unaudited) 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
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. CONDENSED CONSOLIDATING STATEMENTS OF INCOME 13 WEEKS ENDED OCTOBER 31, 1998 (In thousands) 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 ======== ======== ======= ========= ========
CONDENSED CONSOLIDATING STATEMENTS OF INCOME 13 WEEKS ENDED NOVEMBER 1, 1997 (In thousands) 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 ======== ======== ======= ========= ========
CONDENSED CONSOLIDATING STATEMENTS OF INCOME 39 WEEKS ENDED OCTOBER 31, 1998 (In thousands) 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 ======== ========== ======== ========= ========
CONDENSED CONSOLIDATING STATEMENTS OF INCOME 39 WEEKS ENDED NOVEMBER 1, 1997 (In thousands) 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 ======== ========== ======= ========= ========
CONDENSED CONSOLIDATING BALANCE SHEETS OCTOBER 31, 1998 (In thousands) 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 ========== ======== ======== ========= ==========
CONDENSED CONSOLIDATING BALANCE SHEETS JANUARY 31, 1998 (In thousands) 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 ========== ======== ======== ========= ==========
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS 39 WEEKS ENDED OCTOBER 31, 1998 (In thousands) 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 ========= ========= ======== ======== =========
CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS 39 WEEKS ENDED NOVEMBER 1, 1997 (In thousands) 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 ========= ======== ======== ======== =========
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. EX-4.7.1 2 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 EX-4.8.1 3 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 EX-10.25 4 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 EX-10.26 5 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 EX-10.27 6 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 EX-27 7
5 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. 1,000 9-MOS JAN-30-1999 OCT-31-1998 16,330 0 157,400 (52,651) 502,456 680,918 262,198 (86,920) 1,272,698 181,295 558,669 0 0 359 466,430 1,272,698 1,461,960 1,461,960 848,001 848,001 497,002 1,898 41,628 73,431 28,638 44,793 0 2,923 0 47,716 1.34 1.34
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