-----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, UnPDYD7P+/JxLpmJw2k+2T3EF1YPiZLMiWGu/e/FfsfSCKvl/wgw6GD45sCHtXjw fzv6O7XmEApJXVHgi9kVdQ== 0000887124-96-000005.txt : 19960925 0000887124-96-000005.hdr.sgml : 19960925 ACCESSION NUMBER: 0000887124-96-000005 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19960924 SROS: NYSE 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: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-12545 FILM NUMBER: 96633562 BUSINESS ADDRESS: STREET 1: 9 W BROAD ST CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 3145798812 MAIL ADDRESS: STREET 1: 11933 WESTLINE INDUSTRIAL DRIVE STREET 2: 11933 WESTLINE INDUSTRIAL DRIVE CITY: ST LOUIS STATE: MO ZIP: 63146 S-3 1 As filed with the Securities and Exchange Commission on September 23, 1996 Registration No.333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------------ FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 ------------------------------------ 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 No.) 9 West Broad Street Stamford, Connecticut 06902 (203) 324-7567 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Copy to: ROBERT C. GALVIN JOEL K. BEDOL Executive Vice President, Senior Vice President Chief Financial Officer and Treasurer and General Counsel Nine West Group Inc. Nine West Group Inc. 9 West Broad Street 9 West Broad Street Stamford, Connecticut 06902 Stamford, Connecticut 06902 (203)328-4373 (203)328-4386 (Name, address, including zip code, and telephone number, including area code, of agent for service) Approximate date of commencement of proposed sale of the securities to the public: From time to time after this Registration Statement becomes effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [ X ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE Title of Amount Proposed Maximum Proposed Maximum Amount of Securities to to be Offering Price Aggregate Registration be Registered Registered Per Security Offering Price Fee (1) - ------------- ---------- ---------------- ---------------- ------------ 5-1/2% Convertible Subordinated Notes Due 2003 $74,045,000 100% $74,045,000 $25,532.76 Common Stock, 1,218,619 $.01 par value shares (2) -- $74,045,000 -- (1) Calculated pursuant to Rule 457 (i) of the Securities Act of 1933, as amended. (2) Based on a conversion price of $60.76 per share, but deemed to include any additional shares of Common Stock that may be issuable upon conversion of the Notes as a result of the antidilution provisions thereof. Pursuant to Rule 457(i), no registration fee is required for these shares. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFER TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION;DATED SEPTEMBER 23,1996 NINE WEST GROUP INC. $74,045,000 5-1/2% Convertible Subordinated Notes Due 2003 The 5-1/2% Convertible Subordinated Notes Due 2003 (the "Notes") of Nine West Group Inc., a Delaware corporation (the "Company"), and the shares of the Company's common stock, par value $.01 per share (the "Common Stock," together with the Notes, the "Securities"), issuable upon conversion of the Notes, may be offered for sale from time to time for the account of certain holders of the Securities (the "Selling Holders") as described under "Selling Holders." The Selling Holders may, from time to time, sell the Securities offered hereby to or through one or more underwriters, directly to other purchasers or through agents in ordinary brokerage transactions, in negotiated transactions or otherwise, at market prices prevailing at the time of sale, at prices related to then prevailing market prices or at negotiated prices. See "Plan of Distribution." The Notes mature on July 15, 2003, unless previously redeemed. Interest on the Notes is payable semi-annually on January 15 and July 15 of each year, commencing January 15, 1997. Holders ("Holders") of the Notes are entitled, at any time after 60 days following the latest date of original issuance through July 15, 2003, subject to prior redemption, to convert any Notes or portions thereof into Common Stock at a conversion price of $60.76 per share, subject to certain adjustments. The Company may, at its option, pay an amount in cash equal to the Market Price (as defined herein) of the shares of Common Stock into which such Notes are convertible in lieu of delivery of such shares. See "Description of the Notes -- Conversion of Notes." The Notes have been designated for trading in the Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") market. The Common Stock is quoted on the New York Stock Exchange ("NYSE") under the symbol "NIN." On September 20, 1996, the last reported sale price of the Common Stock on the NYSE was $54-7/8 per share. The Notes are redeemable, in whole or in part, at the option of the Company, at any time on or after July 16, 1999, at the declining redemption prices set forth herein, plus accrued interest. In the event of a Change of Control (as defined herein), each Holder of Notes may require the Company to repurchase such Holder's Notes in whole or in part at a redemption price of 101% of the principal amount thereof plus accrued interest. See "Description of the Notes -- Optional Redemption by the Company and --Change of Control." The Notes represent unsecured obligations of the Company and will be subordinated in right of payment to all existing and future Senior Indebtedness (as defined herein) of the Company. In addition, because a substantial portion of the Company's operations is conducted through subsidiaries, claims of holders of indebtedness and other creditors of such subsidiaries have priority with respect to the assets and earnings of such subsidiaries over the claims of creditors of the Company, including holders of the Notes. The Notes were originally issued on June 26, 1996 and July 9, 1996 in transactions exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"). The Company will not receive any of the proceeds from the sale of any of the Notes or the Common Stock issuable upon conversion thereof offered by the Selling Holders. See "Risk Factors" on page 8 for a discussion of certain factors that should be considered by prospective purchasers of the Securities offered hereby. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE ------------------------------------- The date of this Prospectus is , 1996. ------ AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). These reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and Suite 1300, Seven World Trade Center, New York, New York 10048. Copies of such material also can be obtained from the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission also maintains a World Wide Web Site that contains reports, proxy statements and other information regarding registrants, such as the Company, that file electronically with the Commission. The address of the site is http://www.sec.gov. Such reports, proxy statements and other information also can be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which exchange the Common Stock is listed. The Company has filed with the Commission a Registration Statement on Form S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Securities offered hereby. This Prospectus omits certain information contained in the Registration Statement, including exhibits thereto, in accordance with the rules and regulations of the Commission. For further information with respect to the Company and the Securities, reference is made to the Registration Statement and exhibits thereto, copies of which may be inspected at the offices of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 or obtained from the Commission at the same address at prescribed rates. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission are hereby incorporated by reference into this Prospectus and made a part hereof: (i) The Company's Annual Report on Form 10-K, as amended by Form 10-K/A No. 1, for the fiscal year ended February 3, 1996; (ii) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended May 4, 1996 and August 3, 1996, respectively; and (iii) The description of the Company's Common Stock set forth in the Company's Registration Statement on Form 8-A dated May 6, 1992, as amended (File No. 1-11161). All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Securities shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. Any statement contained herein, or in a document incorporated herein by reference, shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained in any subsequently filed document incorporated herein by reference, which statement is also incorporated herein by reference, is inconsistent with such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. Copies of all documents incorporated by reference into this Prospectus, other than exhibits to such documents (unless the exhibits are specifically incorporated by reference into such documents), will be provided without charge to each person to whom this Prospectus is delivered, upon oral or written request by such person to Investor Relations, Nine West Group Inc., 11933 Westline Industrial Drive, St. Louis, Missouri 63146, telephone (314) 579-8812. No person has been authorized in connection with this offering to give any information or to make any representation not contained in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by the Company, the Selling Holders or any other person. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities other than those to which it relates, nor does it constitute an offer to sell or a solicitation of an offer to purchase by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation. Neither the delivery of this Prospectus nor any sale made hereunder shall under any circumstances create any implication that the information contained herein is correct as of any time subsequent to the date of such information. PROSPECTUS SUMMARY The following summary does not purport to be complete and is qualified in its entirety by the more detailed information and consolidated financial statements and related notes appearing elsewhere or incorporated by reference in this Prospectus. In addition to the other information in this Prospectus, the factors set forth under "RISK FACTORS" below should be considered carefully in evaluating an investment in the Securities offered hereby. All information in this Prospectus reflects the Company's acquisition (the "Acquisition") of substantially all of the footwear business, and the assumption of certain liabilities, of The United States Shoe Corporation ("U.S. Shoe") effected on May 23, 1995. Effective June 27, 1995, the Company's fiscal year-end was changed from December 31 to the Saturday closest to January 31 of the following year. The Company Nine West Group Inc. (together with its subsidiaries, the "Company") is a leading designer, developer and marketer of quality, fashionable women's footwear and accessories. The Company markets a full collection of casual, career and dress footwear and accessories under multiple brand names, each of which is targeted to a distinct segment of the women's footwear and accessories markets, from "fashion" to "comfort" styles and from "moderate" to "bridge" price points. In addition to its flagship Nine West label, the Company's nationally recognized brands include Easy Spirit, Enzo Angiolini, Calico, Bandolino, Selby, Evan Picone (under license), 9 & Co., Amalfi, Westies and Pappagallo. The Company's Jervin private label division also arranges for the purchase of footwear by major retailers and other wholesalers for sale under the customer's own labels. The Company believes its primary strengths are: (i) its widely-recognized brand names; (ii) the high quality, value and styling of its products; (iii) its ability to respond quickly to changing fashion trends; (iv) its established sourcing relationships with efficient Brazilian and other manufacturers; (v) the broad distribution of its products through both wholesale and retail channels; and (vi) its ability to provide timely and reliable delivery to its customers. The Company believes it is one of the few established branded footwear companies offering complete lines of well-known women's leather footwear in a wide variety of colors, styles, sizes and retail price points, and that, as a result, it is able to capitalize on what the Company believes is a trend among major wholesale accounts to consolidate footwear purchasing from among a narrow group of vendors. In addition, the Company believes that the sale of footwear and accessories through its retail stores increases consumers' awareness of the Company's brands. Over the last three years, the Company's revenues have grown from $461.6 million for the year ended December 31, 1992 to $1,255.2 million for the fiscal year ended February 3, 1996 ("Fiscal 1995"). Over the same period, operating income increased from $58.6 million to $147.7 million, (excluding (i) the $34.9 million non-recurring increase in cost of goods sold, attributable to the fair value of inventory over FIFO cost, recorded as a result of the Acquisition and (ii) business restructuring and integration expenses and charges of $51.9 million associated with the integration of the operations acquired in the Acquisition into the Company's pre-Acquisition operations. Approximately 55% of the Company's net revenues in Fiscal 1995 was generated from wholesale sales of both brand name and private label footwear and accessories to more than 7,000 department, specialty and independent retail stores in more than 16,000 locations. The balance of Fiscal 1995 net revenues was generated from the Company's proprietary network of 918 retail stores operating under several different concepts, each targeted to a specific customer base. On May 23, 1995, the Company consummated the Acquisition for a purchase price of $560 million in cash, plus warrants to purchase 3,700,000 shares of Common Stock at an exercise price of $35.50 per share (the "Warrants"). On June 5, 1996, the Company and U.S. Shoe consummated a settlement (the "Settlement") of a post-closing balance sheet dispute relating to the Acquisition. Pursuant to the Settlement, U.S. Shoe was obligated to pay to the Company the amount of $25.0 million, and the Company and U.S. Shoe agreed that the Company would repurchase the Warrants for a price of $67.5 million (the "Warrant Repurchase"). Consequently, the Company made a net payment of $42.5 million to U.S. Shoe, which was financed by borrowings under the Company's secured credit facility in effect on the date of the Warrant Repurchase. On August 2, 1996, the Company entered into an amended and restated secured credit facility (as so amended and restated, the "Credit Facility"). The number of domestic retail stores operated by the Company has grown from 112 domestic stores on June 30, 1989 to 918 domestic retail stores (including 425 stores acquired in the Acquisition) as of September 20, 1996. In addition to the 83 non-acquired new stores that have opened in Fiscal 1996 to date, the Company anticipates that it will open approximately 83 additional domestic retail stores during the remainder of Fiscal 1996 across the various store concepts. In addition, the Company plans to continue its international retail and wholesale expansion plans. As of September 20, 1996, the Company had 52 international retail locations in operation in Australia, Hong Kong, Taiwan, Singapore, Thailand, Malaysia and Canada. It is anticipated that the total number of international retail locations will exceed 70 by the end of Fiscal 1996. The Company's international wholesaling and licensing is expected to continue to expand in tandem with its retail expansion in Japan, the Middle East, Latin America, Europe and additional countries in the Far East. The Company's principal executive offices are located at 9 West Broad Street, Stamford, Connecticut 06902, and the Company's telephone number is (203) 324-7567. THE OFFERING Issuer........... Nine West Group Inc. (the "Company"). Securities Offered.......... $74,045,000 of 5-1/2% Convertible Subordinated Notes Due 2003 issued under an indenture (the "Indenture"), dated as of June 26, 1996, between the Company and Chemical Bank, as trustee (the"Trustee"). Interest Payment Dates............. January 15 and July 15 of each year, commencing January 15, 1997. Maturity.......... July 15, 2003 Conversion........ Convertible into Common Stock at $60.76 per share, subject to adjustment as set forth herein at any time after 60 days following the latest date of original issuance of the Notes. The Company may, at its option, pay an amount in cash equal to the Market Price (as defined herein) of the shares of Common Stock into which such Notes are convertible in lieu of delivery of such shares. See "Description of the Notes -- Conversion of Notes." Redemption........ The Notes are redeemable, in whole or in part, at the option of the Company, at any time on or after July 16, 1999, at the declining redemption prices set forth herein, plus accrued interest. See "Description of the Notes -- Optional Redemption by the Company." Change of Control........ In the event of a Change of Control (as defined herein), Holders of the Notes have the right to require that the Company repurchase the Notes in whole or in part at a redemption price of 101% of the principal amount thereof, plus accrued interest. See "Description of the Notes -- Change of Control." Ranking........... The Notes constitute general unsecured obligations of the Company and are subordinated in right of payment to all existing and future Senior Indebtedness (as defined herein) of the Company. As of August 31, 1996, the Company had approximately $395 million of Senior Indebtedness outstanding. In addition, because a substantial portion of the Company's operations is conducted through subsidiaries, claims of holders of indebtedness and other creditors of such subsidiaries will have priority with respect to the assets and earnings of such subsidiaries over the claims of creditors of the Company, including Holders of the Notes. As of August 31, 1996, the aggregate liabilities of such subsidiaries were approximately $65 million. The Indenture does not limit the amount of additional indebtedness (including, without limitation, Senior Indebtedness) that the Company can create, incur, assume or guarantee, nor does the Indenture limit the amount of indebtedness (including, without limitation, Senior Indebtedness) that any subsidiary can create, incur, assume or guarantee. See "Description of the Notes- Subordination." Use of Proceeds... The Company will not receive any of the proceeds from the sale of any of the Notes or the Common Stock issuable upon conversion thereof. Trading........... The Notes have been designated for trading in the PORTAL (Private Offerings, Resales and Trading through Automated Linkages) market. The Common Stock is quoted on the NYSE under the symbol "NIN." RISK FACTORS In addition to the other information contained in this Prospectus, prospective investors should carefully consider the following risk factors in evaluating the Company and its business before purchasing the Notes offered hereby. Substantial Competition and Changing Fashion Trends Competition is intense in the women's footwear business. The Company must remain competitive in the areas of style, quality, price, comfort, brand loyalty and customer service. The location and atmosphere of retail stores are an additional competitive factor in the Company's retail division. The Company's competitors include numerous manufacturers, importers and distributors, some of which may have certain resources not available to the Company. The Company competes with distributors that import footwear, domestic companies that have foreign manufacturing relationships and companies that produce footwear domestically. In its retail division, the Company's primary competition is comprised of large national chains, department stores, specialty footwear stores and other outlet stores. Any failure by the Company to identify and respond to emerging fashion trends could adversely affect consumer acceptance of the Company's brand names and product lines, which in turn could adversely affect the Company's financial condition and results of operations. The Company attempts to minimize the risk of changing fashion trends and product acceptance by offering a wide assortment of dress, career and casual shoes during particular selling seasons, approximately one-half of which are in classic styles that the Company believes are less vulnerable to fashion trend changes. Factors Related to the Acquisition Integration. Although the Company is in the process of integrating the operations and assets acquired in the Acquisition into the Company's pre- Acquisition operations, this process is likely to continue for some time, and will require the deployment of significant management and other resources of the Company. The success of such integration is subject to various factors, including (i) the Company's ability to continue to implement such integration without unforeseen difficulty, (ii) external events affecting business in general and the footwear industry in particular over which the Company has no control and (iii) changes in the Company's plans which may occur in a wide variety of circumstances. There can be no assurance as to when such integration will be completed, that the Company will successfully integrate the operations and assets acquired in the Acquisition with its own, that it will achieve the anticipated cost savings as a result of such integration or that the costs of such integration will not exceed anticipated amounts. Acquisition Indebtedness. In connection with the Acquisition and the Warrant Repurchase, the Company incurred a significant amount of indebtedness. As of August 31, 1996, the Company had approximately $395 million of indebtedness (representing Senior Indebtedness) outstanding under the Credit Facility, and its stockholders' equity was approximately $325 million. The Company's indebtedness under the Credit Facility bears interest at variable rates, causing the Company to be sensitive to changes in interest rates. The Company has entered into interest rate hedge agreements in the notional principal amount of $300 million to reduce the impact on interest expense from fluctuating interest rates on variable rate debt. As of August 31, 1996, the weighted average interest rate on outstanding indebtedness under the Credit Facility was approximately 6.09%. The repayment of the principal of and interest on the Company's indebtedness under the Credit Facility could have certain consequences to the Company, including the following: (i) a substantial portion of the Company's cash flow from operations will not be available for other purposes; and (ii) the Company's ability to obtain additional financing in the future for working capital, capital expenditures or acquisitions may be limited. Expansion of Business A significant part of the Company's strategy is to expand its retailing concepts and to continue its international retail and wholesale expansion plans. The Company intends to accomplish such expansion by opening new stores and may include additional acquisitions. The types of stores opened by the Company and the results generated by such stores depend on various factors, including, among others, general economic and business conditions affecting consumer spending, the performance of the Company's wholesale and retail operations, the acceptance by consumers of the Company's retail concepts, the ability of the Company to manage such expansion, hire and train personnel, the availability of desirable locations, the negotiation of acceptable lease terms for new locations and the ability of the Company to find acceptable partners for its international stores. Impact of Brazilian and Other Foreign Operations Approximately 60% of the Company's footwear products are manufactured by more than 25 independently owned footwear manufacturers in Brazil. The Company is the dominant and, in many cases, the exclusive customer for these manufacturers' production. The Company believes that such Brazilian manufacturing relationships provide a significant competitive advantage to the Company and are a major contributor to the Company's success. Thus, the Company's future results of operations will partly depend on maintaining its close working relationships with its principal manufacturers, both directly and through the organization of Bentley Services Inc., its independent buying agent (the "Buying Agent"). Neither the Buying Agent nor any of its principals is affiliated with the Company. The Company has entered into a five-year contract with the Buying Agent, effective January 1, 1992, subject to extension for an additional five-year period at the Company's option, which provides that the Buying Agent, its owners, employees, directors and affiliates will not act as a buying agent for, or sell leather footwear manufactured in Brazil to, other importers, distributors or retailers for resale in the United States, Canada or the United Kingdom. The Company does not maintain supply contracts with any of its manufacturers. Historically, instability in Brazil's political and economic environment has not had a material adverse effect on the Company's financial condition or results of operations. The Company cannot predict, however, the effect that future changes in economic or political conditions in Brazil could have on the economics of doing business with its Brazilian manufacturers. Although the Company believes that it could find alternative manufacturing sources for those products which it currently sources in Brazil, the establishment of new manufacturing relationships would involve various uncertainties, and the loss of a substantial portion of its Brazilian manufacturing capacity before the alternative souring relationships are fully developed could have a material adverse effect on the Company's financial condition or results of operations. However, as a result of the Acquisition, the Company now has manufacturing operations in the United States and additional souring relationships in other countries to manufacture its products. The Company's footwear is also manufactured by third parties located in China and other countries in the Far East, and in Italy, Spain, Korea, Mexico and Uruguay. The Company's accessories are manufactured by third-party manufacturers in the Far East. The Company's business is subject to other risks of doing business abroad, such as fluctuations in exchange rates, the imposition of additional regulations relating to imports, including quotas, duties or taxes and other charges on imports, and other risks relating to changes in local government administrations and policies and resulting changes in business customs and practices. In order to minimize the risk of exchange rate fluctuations, the Company purchases products from Brazilian manufacturers in United States dollars and otherwise engages in foreign currency hedging transactions. The Company cannot predict whether additional United States or foreign customs quotas, duties, taxes or other charges or restrictions will be imposed upon the importation of its non- domestically produced products in the future or what effect such actions could have on its financial condition or results of operations. Subordination of Notes The indebtedness evidenced by the Notes is subordinate to the prior payment in full of all Senior Indebtedness (as defined herein). As of August 31, 1996, the Company had approximately $395 million of Senior Indebtedness outstanding. In addition, because a substantial portion of the Company's operations is conducted through subsidiaries, claims of holders of indebtedness and of other creditors of such subsidiaries will have priority with respect to the assets and earnings of such subsidiaries over the claims of creditors of the Company, including holders of the Notes. As of August 31, 1996, the aggregate liabilities of such subsidiaries were approximately $65 million. The Indenture does not limit the amount of additional indebtedness, including Senior Indebtedness or pari passu indebtedness, that the Company or any of its subsidiaries can create, incur, assume or guarantee. During the continuance of any default (beyond any applicable grace period) in the payment of principal, premium, interest or any other payment due on the Senior Indebtedness, no payment of principal or interest on the Notes may be made by the Company. In addition, upon any distribution of assets of the Company upon any dissolution, winding up, liquidation or reorganization, the payment of the principal and interest on the Notes is subordinated to the extent provided in the Indenture to the prior payment in full of all Senior Indebtedness and is structurally subordinated to claims of creditors of each subsidiary of the Company. By reason of this subordination, in the event of the Company's dissolution, holders of Senior Indebtedness may receive more, ratably, and Holders of the Notes may receive less, ratably, than the other creditors of the Company. The Company's cash flow and ability to service debt, including the Notes, are substantially dependent upon the earnings of its subsidiaries and the distribution of those earnings to, or upon payments by those subsidiaries to, the Company. The ability of the Company's subsidiaries to make such distributions or payments may be subject to contractual or statutory restrictions. See "Description of the Notes Subordination." Repurchase of Notes at the Option of Holders Upon a Change of Control; Availability of Funds In the event of a Change of Control (as defined herein), each Holder of Notes will have the right to require that the Company repurchase the Notes in whole or in part at a redemption price of 101% of the principal amount thereof, plus accrued interest to the date of purchase. If a Change of Control were to occur, there can be no assurance that the Company would have sufficient funds to pay such redemption price for all Notes tendered by the holders thereof. See "Subordination of Notes" above. The Company's ability to pay such redemption price is, and may in the future be, limited by the terms of the Credit Facility or other agreements relating to indebtedness that constitutes Senior Indebtedness. Securities Trading; Possible Volatility of Prices The Notes have been designated for trading in the PORTAL market, and the Common Stock is quoted on the NYSE. There can be no assurance that an active trading market for the Notes will develop or be sustained. There can be no assurance as to the liquidity of investments in the Notes or as to the price Holders of the Notes may realize upon the sale of the Notes. These prices are determined in the marketplace and may be influenced by many factors, including the liquidity of the market for the Notes and Common Stock, the market price of the Common Stock, interest rates, investor perception of the Company and general economic and market conditions. USE OF PROCEEDS The Company will not receive any proceeds from the sale of the Notes or the Common Stock issuable upon conversion thereof by the Selling Holders. RATIO OF EARNINGS TO FIXED CHARGES Quarter Ended Year Ended ----------------- ---------------------------------------------------------------- August 3 July 29 February 3 December 31 December 31 December 31 December 31 1996 1995 1996 1994 1993 1992 1991 Ratio of Earnings to Fixed Charges 3.08 2.73 1.62 8.92 8.03 5.11 3.81 For the purpose of computing the ratio of earnings to fixed charges, earnings consists of earnings before income taxes and fixed charges. Fixed charges consists of interest expense plus the portion of rental expense under operating leases that has been deemed by the Company to be representative of the interest factor (approximately one third of rental expense).
SELLING HOLDERS The Notes were initially issued and sold pursuant to a Purchase Agreement, dated as of June 20, 1996, between the Company, and Bears Stearns & Co., Inc. and Morgan Stanley & Co. Incorporated (together, the "Initial Purchasers"). The Notes were acquired from the Initial Purchasers by the Selling Holders in compliance with Rule 144A, Regulation D or Regulation S under the Securities Act, or in other permitted resale transactions from the Initial Purchasers or holders who acquired such Notes from the Initial Purchasers or their successors in further permitted resale transactions exempt from registration under the Securities Act. The Company agreed to indemnify and hold the Initial Purchasers harmless against certain liabilities under the Securities Act that may arise in connection with the sale of the Notes by the Initial Purchasers. Except as otherwise indicated, the table below sets forth certain information with respect to the Securities as of September 20, 1996. The term "Selling Holders" includes the beneficial owners of such Securities listed below. Other than as a result of the ownership of the Securities indicated below, none of the Selling Holders has had any material relationship with the Company or any of its affiliates within the past three years. Aggregate Principal Amount Number of Shares of of Notes Owned and Common Stock That Name of Selling Holder That May Be Sold May Be Sold - ---------------------- ---------------- ----------- Saif Corporation $2,500,000 41,145 Castle Convertible Fund, Inc. $500,000 8,229 Lincoln National Convertible Securities Fund $3,000,000 49,374 Lincoln National Insurance Co. $6,350,000 104,509 Winton Trust Convertible Fund $750,000 12,343 United National Insurance Co. $100,000 1,645 Palladin Partners, L.P.O. $100,000 1,645 Colonial Penn Life Insurance Co. $300,000 4,937 Gershon Partners, L.P. $350,000 5,760 Pacific Horizon Capital Income Fund $3,500,000 57,603 Bank of America Convertible Securities Fund $350,000 5,760 ICI American Holdings Inc. $385,000 6,336 Zeneca Holdings Inc. $365,000 6,007 Nalco Chemical Co. $150,000 2,468 Alpine Associates, L.P. $7,000,000 115,207 TCW Convertible Value Fund $1,340,000 22,053 General Motors Salaried Employees Convertible Fund $3,320,000 54,641 State of Michigan Employees Retirement Fund $1,235,000 20,325 TCW Convertible Securities Fund $2,005,000 32,998 Cincinnati Bell Telephone Convertible Value Fund $375,000 6,171 Massachusetts Mutual Life Insurance Company $350,000 5,760 North Dakota State Workers Compensation Fund $510,000 8,393 TCW/DW Income & Growth Fund $255,000 4,196 Medical Malpractice Insurance Association $80,000 1,316 TCW Convertible Strategy Fund $650,000 10,697 North Dakota State Land Dept. $250,000 4,114 Ameritech Pension Plan $2,000,000 32,916 Morgan Stanley & Co., Inc. $300,000 4,937 AIM Management Inc. $1,550,000 25,510 Van Kampen American Capital Harbor Fund $2,500,000 41,145 Societe Generale Securities Corp. $2,500,000 41,145 Allstate Insurance Company $5,000,000 82,290 Lipco Partners, L.P. $12,650,000 208,196 Orrington Investments L.P. $500,000 8,229 Boston Harbor Trust Co., N.A. $200,000 3,291 Baptist Hospital of Miami Foundation $10,000 164 Baptist Hospital of Miami $105,000 1,728 San Diego County Convertible Fund $1,485,000 24,440 Occidental College $125,000 2,057 San Diego City Retirement Fund $410,000 6,747 Dunham & Assoc. Fund 2 $50,000 822 Dunham & Assoc. Convertible Bond AA Fund $45,000 740 Dunham & Assoc. Convertible Arbitrage Fund $75,000 1,234 Ernest Wuliger Trust $85,000 1,398 Kraft Family Trust $20,000 329 Boston Museum of Fine Arts $45,000 740 Engineers Joint Pension Fund $200,000 3,291 Wake Forest University $320,000 5,266 N-A Income & Growth Fund $1,200,000 19,749 NB Convertible Arbitrage Partners, L.P. $3,600,000 59,249 Grace Brothers, Ltd. $3,000,000 49,374 The preceding table has been prepared based on information furnished to the Company by the Depositary Trust Company New York, New York ("DTC") and by or on behalf of the Selling Holders. In view of the fact that Selling Holders may offer all or a portion of the Notes or shares of Common Stock held by them pursuant to this offering, and because this offering is not being underwritten on a firm commitment basis, no estimate can be given as to the amount of Notes or the number of shares of Common Stock that will be held by the Selling Holders after completion of this offering. Information concerning the Selling Holders may change from time to time and any such changed information that the Company becomes aware of will be set forth in supplements to this Prospectus if and when necessary. In addition, the per share conversion price, and the number of shares issuable upon conversion of the Notes, is subject to adjustment under certain circumstances. Accordingly, the aggregate principal amount of Notes and the number of shares of Common Stock issuable upon conversion thereof offered hereby may increase or decrease. As of the date of this Prospectus, the aggregate principal amount of Notes outstanding is $185,680,000. DESCRIPTION OF THE NOTES The Notes were issued under the Indenture, a copy of which is being filed with the Commission as an exhibit to the Registration Statement. The following summaries of certain provisions of the Notes and the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and all the provisions of the Notes and the Indenture, including the definitions therein of certain terms which are not otherwise defined in this Prospectus and those terms made a part of the Indenture by reference to the Trust Indenture Act. Wherever particular provisions or defined terms of the Indenture (or of the form of Notes which is a part thereof) are referred to, such provisions or defined terms are incorporated herein by reference in their entirety. As used in this "Description of the Notes" section, the "Company" refers to Nine West Group Inc. and does not, unless the context otherwise indicates, include its subsidiaries. General The Notes represent general unsecured subordinated obligations of the Company and are convertible into Common Stock as described below under the subheading "Conversion of Notes." The Notes are limited to $185,680,000 aggregate principal amount, have been issued in fully registered form only in denominations of $1,000 in principal amount or any multiple thereof and mature on July 15, 2003, unless earlier redeemed at the option of the Company or at the option of the Holder upon a Change of Control. The Indenture does not contain any financial covenants or any restrictions on the payment of dividends, the repurchase of securities of the Company or the incurrence of debt by the Company or any of its subsidiaries. The Notes bear interest from the date of original issue at the annual rate set forth on the cover page hereof, payable semi-annually on January 15 and July 15, commencing on January 15, 1997, to Holders of record at the close of business on the preceding December 15 and June 15, respectively. Interest will be computed on the basis of a 360-day year composed of twelve 30-day months. Unless other arrangements are made, interest is to be paid by check mailed to Holders entitled thereto; provided that, at the option of any Holder of Notes with an aggregate principal amount equal to or in excess of $5,000,000, interest on such Holder's Notes shall be paid by wire transfer in immediately available funds. Principal will be payable, and the Notes may be presented for conversion, registration of transfer and exchange, without service charge, at the office of the Trustee in New York, New York. Form, Denomination and Registration The Notes have been issued in fully registered form only, without coupons, in denominations of $1,000 in principal amount and integral multiples thereof. Global Notes; Book-Entry Form. Notes offered in reliance on Rule 144A will be evidenced by a global note (hereinafter referred to as the "Restricted Global Note") and Notes offered in reliance on Regulation S will be evidenced by a global note (hereinafter referred to as the "Regulation S Global Note" and together with the Restricted Global Note, the "Global Notes"). The Global Notes will be deposited with, or on behalf of, DTC and registered in the name of Cede & Co. ("Cede") as DTC's nominee. Except as set forth below, the Global Notes may be transferred, in whole or in part, only to another nominee of DTC or to a successor of DTC or its nominee. The Holders of Notes may hold their interests in the Global Notes directly through DTC if such Holder is a participant in DTC, or indirectly through organizations which are participants in DTC (the "Participants"). Transfers between Participants will be effected in the ordinary way in accordance with DTC rules and will be settled in same-day funds. The laws of some states require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer beneficial interests in the Global Notes to such persons may be limited. The Holders of Notes who are not Participants may beneficially own interests in the Global Notes held by DTC only through Participants or certain banks, brokers, dealers, trust companies and other parties that clear through or maintain a custodial relationship with a Participant, either directly or indirectly ("Indirect Participants"). So long as Cede, as the nominee of DTC, is the registered owner of the Global Notes, Cede for all purposes will be considered the sole holder of the Global Notes. Payment of interest on and the redemption price (upon redemption at the option of the Company or at the option of the Holder upon a Change of Control) of the Global Notes will be made to Cede, the nominee for DTC, as the registered owner of the Global Notes, by wire transfer of immediately available funds. Neither the Company, the Trustee nor any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. With respect to any payment of interest on and the redemption price (upon redemption at the option of the Company or at the option of the Holder upon a Change of Control) of the Global Notes, DTC's practice is to credit Participants' accounts on the payment date therefor with payments in amounts proportionate to their respective beneficial interest in the Notes represented by the Global Notes as shown on the records of DTC, unless DTC has reason to believe that it will not receive payment on such payment date. Payments by Participants to owners of beneficial interests in Notes represented by the Global Notes held through such participants will be the responsibility of such Participants, as is now the case with securities held for the accounts of customers registered in "street name." Because DTC can only act on behalf of the Participants, who in turn act on behalf of Indirect Participants and certain banks, the ability of a person having a beneficial interest in Notes represented by the Global Notes to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate evidencing such interest. Neither the Company nor the Trustee (or any registrar, paying agent or conversion agent under the Indenture) will have any responsibility for the performance by DTC or its Participants or Indirect Participants of their respective obligations under the rules and procedures governing their operations. If DTC is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by the Company within 90 days, the Company will cause Notes to be issued in definitive form in exchange for the Global Notes. Certificated Notes. Notes sold to investors that are not QIBs or purchasers who purchase Notes offered in reliance on Regulation S will be issued in definitive registered form and may not be represented by the Global Notes. In addition, QIBs or purchasers who purchase Notes in reliance on Regulation S may request that their Notes be issued in definitive registered form. Finally, certified Notes may be issued in exchange for Notes represented by the Global Notes if no successor depositary is appointed by the Company as set forth above under the paragraph entitled "Global Notes; Book-Entry Form." Conversion of Notes The Holders of Notes are entitled, at any time after 60 days following the latest date of original issuance thereof through the close of business on July 15, 2003, subject to prior redemption, to convert any Notes or portions thereof (in denominations of $1,000 in principal amount or multiples thereof) into Common Stock at the conversion price set forth on the cover page of this Prospectus, subject to adjustment and to the Company's cash conversion option as described below; provided that in the case of Notes called for redemption, conversion rights will expire immediately prior to the close of business on the date fixed for redemption, unless the Company defaults in payment of the redemption price. A Note (or portion thereof) in respect of which a Holder is exercising its option to require redemption upon a Change of Control may be converted only if such Holder withdraws its election to exercise such redemption option in accordance with the terms of the Indenture. In lieu of delivering shares of Common Stock (or other securities into which the Notes are then convertible) upon conversion of Notes, the Company may pay to the Holder converting such Notes an amount in cash equal to the Market Price of the shares of Common Stock (or other securities) into which such Notes are then convertible, plus any property or assets into which such Notes are then convertible. "Market Price" means the average of the closing prices of the Common Stock (or other securities into which the Notes are then convertible) for the ten trading day period (appropriately adjusted to take into account the occurrence during such period of certain events that would result in an adjustment of the conversion price) commencing on the first trading day after delivery of notice that the Company has elected to pay cash in lieu of delivering Common Stock. Any cash paid in lieu of Common Stock will generally result in taxable gain or loss to the Holder converting such Notes. Except as described below, no adjustment will be made on conversion of any Notes for interest accrued thereon or for dividends paid on any Common Stock issued. Holders of the Notes at the close of business on a record date will be entitled to receive the interest payable on such Note on the corresponding interest payment date. However, Notes surrendered for conversion after the close of business on a record date and before the opening of business on the corresponding interest payment date must be accompanied by funds equal to the interest payable on such succeeding interest payment date on the principal amount so converted (unless such Note is subject to redemption on a redemption date between such record date and the corresponding interest payment date). The interest payment with respect to a Note called for redemption on a date during the period from the close of business on or after any record date to the opening of business on the business day following the corresponding payment date will be payable on the corresponding interest payment date to the registered Holder at the close of business on that record date (notwithstanding the conversion of such Note before the corresponding interest payment date) and a Holder of Notes who elects to convert need not include funds equal to the interest paid. The Company is not required to issue fractional shares of Common Stock upon conversion of Notes and, in lieu thereof, will pay a cash adjustment based upon the closing price of the Common Stock on the last business day prior to the date of conversion. The conversion price is subject to adjustment (under formulae set forth in the Indenture) upon the occurrence of certain events, including: (i) the issuance of Common Stock as a dividend or distribution on the outstanding Common Stock, (ii) the issuance to all holders of Common Stock of certain rights or warrants to purchase Common Stock at less than the current market price, (iii) certain subdivisions, combinations and reclassifications of Common Stock, (iv) distributions to all holders of Common Stock of capital stock of the Company (other than Common Stock) or evidences of indebtedness of the Company or assets (including securities, but excluding those dividends, rights, warrants and distributions referred to above and dividends and distributions in connection with the liquidation, dissolution or winding up of the Company and dividends and distributions paid exclusively in cash), (v) distributions consisting exclusively of cash (excluding any cash portion of distributions referred to in clause (iv) or in connection with a consolidation, merger or sale of assets of the Company as referred to in clause (ii) in the second paragraph below) to all holders of Common Stock in an aggregate amount that, together with (x) all other such all-cash distributions made within the preceding 12 months in respect of which no adjustments has been made and (y) any cash and the fair market value of other consideration payable in respect of any tender offers by the Company or any of its subsidiaries for Common Stock concluded within the preceding 12 months in respect of which no adjustment has been made, exceeds 20% of the Company's market capitalization (being the product of the then current market price of the Common Stock times the number of shares of Common Stock then outstanding) on the record date for such distribution and (vi) the purchase of Common Stock pursuant to a tender offer made by the Company or any of its subsidiaries which involves an aggregate consideration that, together with (x) any cash and the fair market value of any other consideration payable in any other tender offer by the Company or any of its subsidiaries for Common Stock expiring within the 12 months preceding such tender offer in respect of which no adjustment has been made and (y) the aggregate amount of any such all-cash distributions referred to in clause (v) above to all holders of Common Stock within the 12 months preceding the expiration of such tender offer in respect of which no adjustments have been made, exceeds 20% of the Company's market capitalization on the expiration of such tender offer. No adjustment of the conversion price will be made for shares issued pursuant to a plan for reinvestment of dividends or interest. Except as stated above, the conversion price will not be adjusted for the issuance of Common Stock or any securities convertible into or exchangeable for Common Stock or carrying the right to purchase any of the foregoing. No adjustment in the conversion price will be required unless such adjustment would require a change of a least 1% in the conversion price then in effect; provided that any adjustment that would otherwise be required to be made shall be carried forward and taken into account in any subsequent adjustment. In the case of (i) any reclassification or change of the Common Stock (other than changes in par value or from par value to no par value or resulting from a subdivision or a combination) or (ii) a consolidation or merger involving the Company or a sale or conveyance to another corporation of the property and assets of the Company as an entirety or substantially as an entirety, in each case as a result of which holders of Common Stock shall be entitled to receive stock, other securities, other property or assets (including cash) with respect to or in exchange for such Common Stock, the Holders of the Notes then outstanding will be entitled thereafter to convert such Notes into the kind and amount of shares of stock, other securities or other property or assets which they would have owned or been entitled to receive upon such reclassification, change, consolidation, merger, sale or conveyance had such Notes been converted into Common Stock immediately prior to such reclassification, change, consolidation, merger, sale or conveyance assuming that a Holder of Notes would not have exercised any rights of election as to the stock, other securities or other property or assets receivable in connection therewith. In the event of a taxable distribution to holders of Common Stock (or other transaction) which results in any adjustment of the conversion price, the Holders of Notes may, in certain circumstances, be deemed to have received a distribution subject to the United States income tax as a dividend; in certain other circumstances, the absence of such an adjustment may result in a taxable dividend to the holders of Common Stock. The Company from time to time may, to the extent permitted by law, reduce the conversion price by any amount for any period of at least 20 days, in which case the Company shall give at least 15 days' notice of such decrease, if the Board of Directors has made a determination that such decrease would be in the best interests of the Company, which determination shall be conclusive. The Company may, at its option, make such reductions in the conversion price, in addition to those set forth above, as the Company deems advisable to avoid or diminish any income tax to its stockholders resulting from any dividend or distribution of stock (or rights to acquire stock) or from any event treated as such for United States federal income tax purposes. Subordination The payment of principal of, premium, if any, and interest on the Notes is, to the extent set forth in the Indenture, subordinated in right of payment to the prior payment in full of all Senior Indebtedness. Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding related to the Company or its property, in an assignment for the benefit of creditors or any marshalling of the Company's assets and liabilities, the holders of all Senior Indebtedness will first be entitled to receive payment in full of all amounts due or to come due thereon before the Holders of the Notes will be entitled to receive any payment in respect of the principal of, premium, if any, or interest on the Notes (except that Holders of Notes may receive securities that are subordinated at least to the same extent as the Notes to Senior Indebtedness and any securities issued in exchange for Senior Indebtedness). The Company also may not make any payment of principal, premium, if any, or interest on the Notes (except in such subordinated securities) and may not repurchase, redeem or otherwise retire any Notes if (a) a default in the payment of the principal of, premium, if any, or interest on Senior Indebtedness occurs and is continuing beyond any applicable period of grace or (b) any other default occurs and is continuing with respect to Senior Indebtedness that permits holders of the Senior Indebtedness as to which such default relates to accelerate its maturity and the Trustee receives a notice of such default (a "Payment Blockage Notice") from the representative or representatives of holders of at least a majority in principal amount of Senior Indebtedness then outstanding. Payments on the Notes may and shall be resumed (i) in the case of a payment default, upon the date on which such default is cured or waived, or (ii) in the case of a non-payment default, 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of any Senior Indebtedness has been accelerated. No new period of payment blockage may be commenced within 360 days after the receipt by the Trustee of any prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been cured or waived for a period of not less than 180 days. "Senior Indebtedness" with respect to the Notes means the principal of, premium, if any, and interest on, and any fees, costs, expenses and any other amounts (including indemnity payments) related to the following, whether outstanding on the date of the Indenture or thereafter incurred or created: (a) indebtedness, matured or unmatured, whether or not contingent, of the Company for money borrowed evidenced by notes or other written obligations, (b) any interest rate contract, interest rate swap agreement or other similar agreement or arrangement designed to protect the Company or any of its subsidiaries against fluctuations in interest rates, (c) indebtedness, matured or unmatured, whether or not contingent, of the Company evidenced by notes, debentures, bonds or similar instruments or letters of credit (or reimbursement agreements in respect thereof), (d) obligations of the Company as lessee under capitalized leases, (e) indebtedness of others of any of the kinds described in the preceding clauses (a) through (d) assumed or guaranteed by the Company and (f) renewals, extensions, modifications, amendments and refundings of, and indebtedness and obligations of a successor person issued in exchange for or in replacement of, indebtedness or obligations of the kinds described in the preceding clauses (a) through (f) unless the agreement pursuant to which any of such indebtedness described in clauses (a) through (f) is created, issued, assumed or guaranteed expressly provides that such indebtedness is not senior or superior in right of payment to the Notes; provided, however, that the following shall not constitute Senior Indebtedness: (i) any indebtedness or obligation of the Company in respect of the Notes; (ii) any indebtedness of the Company to any of its subsidiaries or other affiliates; (iii) any indebtedness that is subordinated or junior in any respect to any other indebtedness of the Company other than Senior Indebtedness; and (iv) any indebtedness incurred for the purchase of goods or materials in the ordinary course of business. In the event that the Trustee (or paying agent if other than the Trustee) or any Holder receives any payment of principal or interest with respect to the Notes at a time when such payment is prohibited under the Indenture, such payment shall be held in trust for the benefit of, and shall be paid over and delivered to, the holders of Senior Indebtedness or their representative as their respective interests may appear. After all Senior Indebtedness is paid in full and until the Notes are paid in full, Holders shall be subrogated (equally and ratably with all other Indebtedness pari passu with the Notes) to the rights of holders of Senior Indebtedness to receive distributions applicable to Senior Indebtedness to the extent that distributions otherwise payable to the Holders have been applied to the payment of Senior Indebtedness. As of August 31, 1996, the Company had approximately $395 million in principal amount of indebtedness that would be considered outstanding Senior Indebtedness under the Credit Facility. Any additional borrowing under the Credit Facility would constitute Senior Indebtedness and would rank prior in right of payment to the Notes, notwithstanding that it is incurred subsequent to the issuance of the Notes. In addition, the Company expects from time to time to incur indebtedness constituting Senior Indebtedness other than debt under the Credit Facility. The Indenture does not prohibit or limit the incurrence of any Senior Indebtedness or pari passu indebtedness. In addition, because a substantial portion of the Company's operations is conducted through subsidiaries, claims of holders of indebtedness and other creditors of such subsidiaries will have priority with respect to the assets and earnings of such subsidiaries over the claims of creditors of the Company, including Holders of the Notes. As of August 31, 1996, the aggregate liabilities of such subsidiaries were approximately $65 million. The Indenture does not limit the amount of indebtedness that the Company or any of its subsidiaries can create, incur, assume or guarantee. Because of these subordination provisions, in the event of a liquidation or insolvency of the Company or any of its subsidiaries, Holders of Notes may recover less, ratably, than the holders of Senior Indebtedness. Optional Redemption by the Company The Notes are not redeemable at the option of the Company prior to July 16, 1999. At any time on or after that date, the Notes may be redeemed at the Company's option on at least 30 but not more than 60 days' notice, in whole at any time or in part from time to time, at the following prices (expressed in percentages of the principal amount), together with accrued interest to the date fixed for redemption, if redeemed during the 12-month period beginning: Date Redemption Price - ---- ---------------- July 16, 1999 102.75% July 15, 2000 101.83% July 15, 2001 100.92% and 100% on or after July 15, 2002 If fewer than all the Notes are to be redeemed, the Trustee will select the Notes to be redeemed in principal amounts of $1,000 or integral multiples thereof by lot or, in its discretion, on a pro rata basis. If any Note is to be redeemed in part only, a new Note or Notes in principal amount equal to the unredeemed principal portion thereof will be issued. If a portion of a Holder's Notes is selected for partial redemption and such Holder converts a portion of such Notes, such converted portion shall be deemed to be taken from the portion selected for redemption. No sinking fund is provided for the Notes. Change of Control Upon the occurrence of a Change of Control, each Holder of Notes shall have the right to require that the Company repurchase such Holder's Notes in whole or in part in integral multiples of $1,000, at a purchase price in cash in an amount equal to 101% of the principal amount thereof, together with accrued and unpaid interest to the date of purchase, pursuant to an offer (the "Change of Control Offer") made in accordance with the procedures described below and the other provisions in the Indenture. A "Change of Control" means an event or series of events in which (i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) acquires "beneficial ownership" (as determined in accordance with Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the total Voting Stock of the Company at an Acquisition Price (each term as defined below) less than the conversion price then in effect with respect to the Notes and (ii) the holders of the Common Stock receive consideration which is not all or substantially all common stock that is (or upon consummation of or immediately following such event or events will be) listed on a United States national securities exchange or approved for quotation on the NASDAQ National Market or any similar United States system of automated dissemination of quotations of securities' prices; provided, however, that any such person or group shall not be deemed to be the beneficial owner of, or to beneficially own, any Voting Stock tendered in a tender offer until such tendered Voting Stock is accepted for purchase under the tender offer. "Voting Stock" means stock of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of a corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). "Acquisition Price" means the weighted average price paid by the person or group in acquiring the Voting Stock. Within 30 days following any Change of Control, the Company shall send by first-class mail, postage prepaid, to the Trustee and to each Holder of Notes, at such Holder's address appearing in the security register, a notice stating, among other things, that a Change of Control has occurred, the purchase price, the purchase date, which shall be a business day no earlier than 30 days nor later than 60 days from the date such notice is mailed, and certain other procedures that a Holder of Notes must follow to accept a Change of Control Offer or to withdraw such acceptance. The Company will comply, to the extent applicable, with the requirements of Rule 13e-4 under the Exchange Act and other securities laws or regulations in connection with the repurchase of the Notes as described above. The occurrence of certain of the events that would constitute a Change of Control may constitute a default under the Credit Facility. Future indebtedness of the Company may contain prohibitions of certain events which would constitute a Change of Control or require the Company to offer to redeem such indebtedness upon a Change of Control. Moreover, the exercise by the Holders of Notes of their right to require the Company to purchase the Notes could cause a default under such indebtedness, even if the Change of Control itself does not, due to the financial effect of such purchase on the Company. Finally, the Company's ability to pay cash to Holders of Notes upon a purchase may be limited by the Company's then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required purchases. Furthermore, the Change of Control provisions may in certain circumstances make more difficult or discourage a takeover of the Company and the removal of the incumbent management. Merger, Consolidation and Sale of Assets The Company shall not consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to any person unless: (i) either the Company is the resulting, surviving or transferee person (the "Successor Company") or the Successor Company is a person organized and existing under the laws of the United States or any State thereof or the District of Columbia, and the Successor Company (if not the Company) expressly assumes by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Company under the Indenture and the Notes, including the conversion rights described above under "-- Conversion of Notes," (ii) immediately after giving effect to such transaction no Event of Default has occurred and is continuing and (iii) the Company delivers to the Trustee an Officers' Certificate and an opinion of counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture. Events of Default and Remedies An Event of Default is defined in the Indenture as being: default in payment of the principal of or premium, if any, on the Notes when due at maturity, upon redemption or otherwise, including failure by the Company to purchase the Notes when required as described under "--Change of Control" (whether or not such payment shall be prohibited by the subordination provisions of the Indenture); default for 30 days in payment of any installment of interest on the Notes (whether or not such payment shall be prohibited by the subordination provisions of the Indenture); default by the Company for 90 days after notice in the observance or performance of any other covenants in the Indenture; or certain events involving bankruptcy, insolvency or reorganization of the Company. The Indenture provides that the Trustee may withhold notice to the Holders of Notes of any default (except in payment of principal, premium, if any, or interest with respect to the Notes) if the Trustee considers it in the interest of the Holders of Notes to do so. The Indenture provides that if any Event of Default shall have occurred and be continuing, the Trustee or the Holders of not less than 25% in principal amount of the Notes then outstanding may declare the principal of and premium, if any, on the Notes to be due and payable immediately, but if the Company shall cure all defaults (except the nonpayment of interest on, premium, if any, and principal of any Notes which shall have become due by acceleration) and certain other conditions are met, such declaration may be canceled and past defaults may be waived by the Holders of a majority in principal amount of Notes then outstanding. The Holders of a majority in principal amount of the Notes then outstanding shall have the right to direct the time, method and place of conducting any proceedings for any remedy available to the Trustee, subject to certain limitations specified in the Indenture. The Indenture provides that, subject to the duty of the Trustee following an Event of Default to act with the required standard of care, the Trustee will not be under an obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders, unless the Trustee receives satisfactory indemnity against any associated loss, liability or expense. Satisfaction and Discharge; Defeasance The Indenture will cease to be of further effect as to all outstanding Notes (except as to (i) rights of holders of Notes to receive payments of principal of, premium, if any, and interest on, the Notes, (ii) rights of holders of Notes to convert to Common Stock, (iii) the Company's right of optional redemption, (iv) rights of registration of transfer and exchange, (v) substitution of apparently mutilated, defaced, destroyed, lost or stolen Notes, (vi) rights, obligations and immunities of the Trustee under the Indenture and (vii) rights of the holders of Notes as beneficiaries of the Indenture with respect to the property so deposited with the Trustee payable to all or any of them), if (A) the Company will have paid or caused to be paid the principal of, premium, if any, and interest on the Notes as and when the same will have become due and payable or (B) all outstanding Notes (except lost, stolen or destroyed Notes which have been replaced or paid) have been delivered to the Trustee for cancellation or (C) (x) the Notes not previously delivered to the Trustee for cancellation will have become due and payable or are by their terms to become due and payable within one year or are to be called for redemption under arrangements satisfactory to the Trustee upon delivery of notice and (y) the Company will have irrevocably deposited with the Trustee, as trust funds, cash, in an amount sufficient to pay principal of and interest on the outstanding Notes, to maturity or redemption, as the case may be. Such trust may only be established if such deposit will not result in a breach or violation of, or constitute a default under, any agreement or instrument pursuant to which the Company is a party or by which it is bound and the Company has delivered to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions related to such defeasance have been complied with. The Indenture will also cease to be in effect (except as described in clauses (i) through (vii) in the immediately preceding paragraph) and the indebtedness on all outstanding Notes will be discharged on the 123rd day after the irrevocable deposit by the Company with the Trustee, in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of Notes, of cash, U.S. Government Obligations (as defined in the Indenture) or a combination thereof, in an amount sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay the principal of, premium, if any, and interest on the Notes then outstanding in accordance with the terms of the Indenture and the Notes ("legal defeasance"). Such legal defeasance may only be effected if (i) such deposit will not result in a breach or violation of, or constitute a default under, any agreement or instrument to which the Company is a party or by which it is bound, (ii) the Company has delivered to the Trustee an opinion of counsel stating that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, based thereon, the holders of the Notes will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge by the Company and will be subject to federal income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred, (iii) the Company has delivered to the Trustee an opinion of counsel to the effect that after the 123rd day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally and (iv) the Company has delivered to the Trustee an opinion of counsel stating that all conditions related to the defeasance have been complied with. The Company may also be released from its obligations under the covenants described above under "Change of Control" and "Merger, Consolidation and Sale of Assets" with respect to the Notes outstanding on the 123rd day after the irrevocable deposit by the Company with the Trustee, in trust, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of Notes, of cash, U.S. Government Obligations or a combination thereof, in an amount sufficient in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay the principal of, premium, if any, and interest on the Notes then outstanding in accordance with the terms of the Indenture and the Notes ("covenant defeasance"). Such covenant defeasance may only be effected if (i) such deposit will not result in a breach or violation of, or constitute a default under, any agreement or instrument to which the Company is a party or by which it is bound, (ii) the Company has delivered to the Trustee an opinion of counsel to the effect that the Holders of Notes will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and covenant defeasance by the Company and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit and covenant defeasance had not occurred, (iii) the Company has delivered to the Trustee an opinion of counsel to the effect that after the 123rd day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally and (iv) the Company has delivered to the Trustee an Officers' Certificate and an opinion of counsel stating that all conditions related to the covenant defeasance have been complied with. Following such covenant defeasance, the Company will no longer be required to comply with the obligations described above under "Merger, Consolidation and Sale of Assets" and will have no obligation to repurchase the Notes pursuant to the provisions described under "Change of Control." Notwithstanding any satisfaction and discharge or defeasance of the Indenture, the obligations of the Company described above under "Conversion of Notes" will survive to the extent provided in the Indenture until the Notes cease to be outstanding. Modifications of the Indenture The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in principal amount of the Notes at the time outstanding, to modify the Indenture or any supplemental indenture or the rights of the Holders of Notes, except that no such modification shall (i) extend the fixed maturity of any Note, reduce the rate or extend the time of payment of interest thereon, reduce the principal amount thereof or premium, if any, thereon, reduce any amount payable upon redemption thereof, change the obligation of the Company to make redemption of any Note upon the happening of a Change of Control, impair or affect the right of a Holder to institute suit for the payment thereof, change the currency in which the Notes are payable, modify the subordination provisions of the Indenture in a manner adverse to the Holders of Notes or impair the right to convert the Notes into Common Stock subject to the terms set forth in the Indenture, without the consent of the Holder of each Note so affected or (ii) reduce the aforesaid percentage of Notes, without the consent of the Holders of all of the Notes then outstanding. Concerning the Trustee Chemical Bank, the Trustee under the Indenture, has been appointed by the Company as the paying agent, conversion agent, registrar and custodian with regard to the Notes. The Trustee and/or its affiliates may in the future provide banking and other services to the Company in the ordinary course of their respective businesses. DESCRIPTION OF CAPITAL STOCK The authorized capital stock of the Company consists of 100,000,000 shares of Common Stock and 25,000,000 shares of preferred stock, $.01 par value per share (the "Preferred Stock"). None of the Preferred Stock is outstanding. The following description of the capital stock of the Company and certain provisions of the Company's Restated Certificate of Incorporation (the "Certificate of Incorporation") and the Second Amended and Restated By-laws (the "By-laws") is a summary and is qualified in its entirety by the provisions of the Certificate of Incorporation and By-laws, each of which are incorporated by reference as exhibits to the Company's Annual Report on Form 10-K for the 53 Weeks Ended February 3, 1996. Common Stock Holders of Common Stock are entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of directors, and the holders of such shares will possess all of the voting power. As a result, the holders of Common Stock entitled to exercise more than 50% of the voting rights in an election of directors can elect all of the directors to be elected if they choose to do so. The Certificate of Incorporation does not provide for cumulative voting for the election of directors. The holders of Common Stock will be entitled to such dividends as may be declared from time to time by the Board of Directors from funds legally available therefor, and will be entitled to receive, pro rata, all assets of the Company available for distribution to such holders upon liquidation. No shares of Common Stock have any preemptive, redemption or conversion rights, or the benefits of any sinking fund. The Common Stock is listed on the NYSE. Preferred Stock Preferred Stock may be issued from time to time in one or more series and the Board of Directors, without further approval of the stockholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemption rights and terms, liquidation preferences, sinking funds and any other rights, preferences, privileges and restrictions applicable to each such series of Preferred Stock. The issuance of Preferred Stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, adversely affect the voting power of the holders of Common Stock and, under certain circumstances, make it more difficult for a third party to gain control of the Company, discourage bids for the Common Stock at a premium or otherwise adversely affect the market price of Common Stock. Certain Certificate of Incorporation, By-law and Statutory Provisions Directors' Liability. The General Corporation Law of Delaware (the "Delaware Law") provides that a corporation may limit the liability of each director to the corporation or its stockholders for monetary damages except for liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (iii) in respect of certain unlawful dividend payments or stock redemptions or repurchases and (iv) for any transaction from which the director derives an improper personal benefit. The Certificate of Incorporation provides for the elimination and limitation of the personal liability of directors of the Company for monetary damages to the fullest extent permitted by Delaware Law. In addition, the Certificate of Incorporation provides that if the Delaware Law is amended to authorize the further elimination or limitation of the liability of a director, then the liability of the directors shall be eliminated or limited to the fullest extent permitted by the Delaware Law, as so amended. The effect of this provision is to eliminate the rights of the Company and its stockholders (through stockholders' derivative suits on behalf of the Company) to recover monetary damages against a director for breach of the fiduciary duty of care as a director (including breaches resulting from negligent or grossly negligent behavior) except in the situations described in clauses (i) through (iv) above. This provision does not limit or eliminate the rights of the Company or any stockholder to seek non-monetary relief such as an injunction or rescission in the event of a breach of a director's duty of care. The Certificate of Incorporation also provides that the Company shall, to the full extent permitted by Delaware Law, as amended from time to time, indemnify and advance expenses to each of its currently acting and former directors, officers, employees and agents. Classified Board of Directors. The Certificate of Incorporation provides for the Board of Directors to be divided into three classes of directors serving staggered three-year terms. As nearly as practical, each class shall consist of one-third of the Board of Directors constituting the entire Board of Directors. As a result, approximately one-third of the Board of Directors will be elected each year. The stockholders may not amend or repeal this provision except upon the affirmative vote of holders of not less than 80% of the outstanding shares of capital stock of the Company entitled to vote thereon. Holders of a majority of the outstanding shares of capital stock of the Company entitled to vote with respect to election of directors may remove directors only for cause. Vacancies on the Board of Directors may be filled only by the remaining directors and not by the stockholders, provided that such vacancies are not caused by the removal of directors by the stockholders. Stockholder Meetings. The Certificate of Incorporation provides that any action required or permitted to be taken by the stockholders of the Company may be effected only at an annual or special meeting of stockholders and prohibits stockholder action by written consent in lieu of a meeting. The By-laws provide that special meetings of stockholders may be called only by the chairman or the chief executive officer of the Company and must be called by either of such officer at the request in writing of a majority of the Board of Directors. Stockholders are not permitted to call a special meeting of stockholders, to require that the chairman or the chief executive officer call such a special meeting, or to require that the Board of Directors requests the calling of a special meeting of stockholders. Advance Notice Provisions. The By-laws establish an advance notice procedure for stockholders to make nominations of candidates for election as directors, or to bring other business before an annual meeting of stockholders of the Company. The By-laws provide that only persons who are nominated by, or at the direction of, the chairman, the chief executive officer or the Board of Directors, or by a stockholder who has given timely written notice to the Secretary of the Company prior to the meeting at which directors are to be elected, will be eligible for election as directors of the Company. The By-laws also provide that at an annual meeting only such business may be conducted as has been brought before the meeting by, or at the direction of, the chairman, the chief executive officer or the Board of Directors or by a stockholder who has given timely written notice to the Secretary of the Company of such stockholder's intention to bring such business before such meeting. Generally, for notice of stockholder nominations to be made at an annual meeting to be timely under the By-laws, such notice must be received by the Company not less than 70 days nor more than 90 days prior to the first anniversary of the previous year's annual meeting (or, in the case of a special meeting at which directors are to be elected, not earlier than the 90th day before such meeting and not later than the later of (x) the 70th day prior to such meeting and (y) the 10th day after public announcement of the date of such meeting is first made). Under the By-laws, a stockholder's notice must also contain certain information specified in the By-laws. Section 203 of Delaware Law. The Company is subject to the "business combination" provisions of the Delaware Law. In general, Section 203 of the Delaware Law prohibits a publicly-held Delaware corporation from engaging in a "business combination" with an "interested stockholder" for a period of three years after the date of the transaction in which the person became an "interested stockholder," unless (a) prior to such date the board of directors of the corporation approved either the "business combination" or the transaction which resulted in the stockholder becoming an "interested stockholder," (b) upon consummation of the transaction which resulted in the stockholder becoming an "interested stockholder," the "interested stockholder" owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or (c) on or subsequent to such date the "business combination" is approved by the board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66-2/3% of the outstanding voting stock which is not owned by the "interested stockholder." A "business combination" includes mergers, stock or asset sales and other transactions resulting in a financial benefit to the "interested stockholders." An "interested stockholder" is a person who, together with affiliates and associates, owns (or within three years, did own) 15% or more of the corporation's voting stock. The Board of Directors has taken action to exempt each of Messrs. Fisher and Camuto, and Mr. Wayne Weaver (a former principal stockholder), from the application of the Section 203 of the Delaware law. Certain provisions described above may have the effect of delaying stockholder actions with respect to certain business combinations and the election of new members to the Board of Directors. As such, the provisions could have the effect of discouraging open market purchases of Common Stock because they may be considered disadvantageous by a stockholder who desires to participate in a business combination or elect a new director. PLAN OF DISTRIBUTION The Securities covered hereby may be offered and sold from time to time by the Selling Holders. The Selling Holders will act independently of the Company in making decisions with respect to the timing, manner and size of each sale. Such sales may be made in the over-the-counter market or otherwise, at market prices prevailing at the time of the sale, at prices related to the then prevailing market prices or in negotiated transactions, including, without limitation, pursuant to an underwritten offering or pursuant to one or more of the following methods: (a) purchases by a broker-dealer as principal and resale by such broker-dealer for its account pursuant to this Prospectus; (b) ordinary brokerage transactions and transactions in which a broker solicits purchasers; and (c) block trades in which a broker-dealer so engaged will attempt to sell the shares as agent but may take a position and resell a portion of the block as principal to facilitate the transaction. The Company has been advised that, as of the date hereof, the Selling Holders have made no arrangement with any broker for the offering or sale of the Notes or the shares of Common Stock issuable upon conversion thereof. Underwriters, brokers, dealers or agents may participate in such transactions as agents and may, in such capacity, receive brokerage commissions from the Selling Holders or purchasers of such Notes or shares of Common Stock. Such underwriters, brokers, dealers or agents may also purchase the Notes or shares of Common Stock issuable upon conversion thereof and resell such securities for their own account. The Selling Holders and such underwriters, brokers, dealers or agents may be considered "underwriters" as that term is defined by the Securities Act, although the Selling Holders disclaim such status. Any commissions, discounts or profits received by such underwriters, brokers, dealers or agents in connection with the foregoing transactions may be deemed to be underwriting discounts and commissions under the Securities Act. To comply with the securities laws of certain jurisdictions, if applicable, the Notes and Common Stock issuable upon conversion thereof may be offered or sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain jurisdictions, the Notes and Common Stock issuable upon conversion thereof may not be offered or sold unless they have been registered or qualified for sale in such jurisdictions or unless an exemption from registration or qualification is available and is complied with. Under applicable rules and regulations under the Exchange Act, any person engaged in a distribution of the Notes or the shares of Common Stock issuable upon conversion thereof may be limited in its ability to engage in market activities with respect to such Notes or the shares of Common Stock issuable upon conversion thereof. In addition and without limiting the foregoing, each Selling Holder will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Rules 10b- 2, 10b-5, 10b-6 and 10b-7, which provisions may limit the timing of purchases and sales of any of the Notes and shares of Common Stock issuable upon conversion thereof by the Selling Holders. All of the foregoing may affect the marketability of the Notes and shares of Common Stock issuable upon conversion thereof. The Company may suspend the use of this Prospectus, and any supplements hereto, in certain circumstances due to pending corporate developments, public filings with the Commission or similar events. The Company is obligated, in the event of such suspension, to use its reasonable efforts to ensure that the use of the Prospectus may be resumed as soon as possible. The Company has agreed to pay substantially all of the expenses incident to the registration, offering and sale of the Notes or the shares of Common Stock issuable upon conversion thereof to the public other than commissions and discounts of agents, dealers or underwriters. Such expenses (excluding such commissions and discounts) are estimated to be approximately $38,033. The Company has also agreed to indemnify the Selling Holders against certain liabilities, including certain liabilities under the Securities Act. LEGAL MATTERS The validity of the Securities offered hereby will be passed upon for the Company by Joseph R. Manghisi, Associate General Counsel of the Company. EXPERTS The consolidated financial statements and financial statements schedules of the Company as of February 3, 1996 and December 31, 1994 and for the years ended February 3, 1996, December 31, 1994 and December 31, 1993 incorporated by reference in the Registration Statement have been audited by Deloitte & Touche LLP, independent auditors, as stated in their reports, and have been incorporated by reference herein in reliance upon the reports of such firm given upon their authority as experts in auditing and accounting. PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution The following table sets forth the expenses payable by the Company in connection with the sale and distribution of the Securities registered hereby. Any sales commissions or underwriting discount incurred in connection with the sale of Securities registered hereby are payable by the Selling Holders. SEC registration fee .............................. $25,532.76 Accounting fees and expenses* ..................... 2,500.00 Legal fees and expenses* .......................... 5,000.00 Miscellaneous expenses* ........................... 5,000.00 ---------- Total.............................................. $38,032.76 ========== *Estimated Item 15. Indemnification of Directors and Officers The Company's Restated Certificate of Incorporation provides that the Company shall indemnify and advance expenses to its currently acting and its former directors, officers, employees or agents to the fullest extent permitted by the Delaware General Corporation Law (the "Delaware Law"), as amended from time to time. Section 145 of the Delaware Law provides that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. A similar standard of care is applicable in the case of derivative actions, except that Delaware law restricts indemnification to expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of such an action or suit and then, where such person is adjudged to be liable to the corporation, only if and to the extent that the Court of Chancery of the State of Delaware or the court in which such action was brought determines that he is fairly and reasonably entitled to such indemnity, and then only for such expenses as the court shall deem proper. The Delaware Law also permits a Delaware corporation to limit each director's liability to the Company or its stockholders for monetary damages except (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware Law providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemption, or (iv) for any transaction from which a director derived an improper personal benefit. The Restated Certificate of Incorporation provides for the limitation of the personal liability of the directors of the Company for monetary damages to the fullest extent permitted by the Delaware Law, as amended from time to time. The effect of this provision is to eliminate the personal liability of directors for monetary damages for actions involving a breach of their fiduciary duty of care, including any such actions involving gross negligence. The Company has agreed to indemnify the Selling Holders, any "underwriter" (as defined in the Securities Act) and any person who controls (within the meaning of the Securities Act) the Selling Holders or any underwriter against certain liabilities and expenses arising out of or based upon the information set forth or incorporated by reference in the Prospectus included in the Registration Statement, and the Registration Statement of which the Prospectus is a part, including liabilities under the Securities Act. For information concerning the Company's undertaking to submit to adjudication the issue of indemnification for violation of the securities laws, see Item 17 hereof. The Company maintains insurance, at its expense, to protect any director or officer of the Company against certain expenses, liabilities or losses. Item 16. Exhibits See Exhibit Index. Item 17. Undertakings (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment hereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that paragraphs (i) and (ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. EXHIBIT INDEX Exhibit No. Description Page - ----------- ----------- ---- *1 Purchase Agreement, dated as of June 26, 1996, among the Company and the Initial Purchasers named therein 4.1 Indenture, dated as of June 26, 1996, between the Company and Chemical Bank, as trustee thereunder, filed as Exhibit 4.5 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended August 3, 1996 ("Second Quarter Form 10-Q"), and incorporated herein by reference 4.2 Note Resale Registration Rights Agreement, dated as of June 26, 1996, among the Company and the Initial Purchasers named therein, filed as Exhibit 4.6 to the Second Quarter Form 10-Q, and incorporated herein by reference 4.3 Form of Definitive 5-1/2% Convertible Subordinated Notes of the Company due 2003, filed as Exhibit 4.2 to the Second Quarter Form 10-Q, and incorporated herein by reference 4.4 Form of Restricted Global 5-1/2% Convertible Subordinated Note of the Company due 2003, filed as Exhibit 4.3 to the Second Quarter Form 10-Q, and incorporated herein by reference 4.5 Form of Regulation S Global 5-1/2% Convertible Subordinated Note of the Company due 2003, filed as Exhibit 4.4 to the Second Quarter Form 10-Q, and incorporated herein by reference *5 Opinion of Counsel *12 Calculation of Ratio of Earnings to Fixed Charges *23.1 Consent of Deloitte & Touche LLP 23.2 Consent of Counsel (included in Exhibit 5) 24 Power of Attorney (included on signature page hereof) *25 Statement of Eligibility of Trustee * Filed herewith. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Stamford, State of Connecticut, on September 23, 1996. NINE WEST GROUP INC. By /s/ Robert C. Galvin ---------------------------- Robert C. Galvin Executive Vice President, Chief Financial Officer and Treasurer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears below constitutes and appoints Noel E. Hord, Robert C. Galvin, Jeffrey K. Howald and Joel K. Bedol, and each of them, as his true and lawful attorneys- in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to the within Registration Statement on Form S-3, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and grants unto said attorneys-in- fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might and could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, of any of them, or their or his substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date --------- ----- ---- /s/ Jerome Fisher Chairman of the Board and September 23, 1996 - ----------------------------- Director (Principal Jerome Fisher Executive Officer) /s/ Vincent Camuto Chief Executive Officer and September 23, 1996 - ----------------------------- Director (Principal Vincent Camuto Executive Officer) /s/ Robert C. Galvin Executive Vice President, September 23, 1996 - ----------------------------- Chief Financial Officer and Robert C. Galvin Treasurer (Principal Financial Officer and Principal Accounting Officer) /s/ C. Gerald Goldsmith Director September 23, 1996 - ----------------------------- C. Gerald Goldsmith /s/ Salvatore M. Salibello Director September 23, 1996 - ----------------------------- Salvatore M. Salibello /s/ Henry W. Pascarella Director September 23, 1996 - ----------------------------- Henry W. Pascarella EX-1 2 $175,000,000 5-1/2% Convertible Subordinated Notes due 2003 NINE WEST GROUP INC. PURCHASE AGREEMENT ------------------ June 20, 1996 BEAR, STEARNS & CO. INC. MORGAN STANLEY & CO. INCORPORATED as the Initial Purchasers named in Schedule I hereto c/o Bear, Stearns & Co. Inc. 245 Park Avenue New York, NY 10167 Dear Sirs: Nine West Group Inc., a Delaware corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell to the several Initial Purchasers named in Schedule I hereto (the "Initial Purchasers") an aggregate of $175,000,000 principal amount of its 5-1/2% Convertible Subordinated Notes due 2003 (the "Firm Notes"). In addition, the Company proposes to grant to the Initial Purchasers an option, for the sole purpose of covering over-allotments in connection with the sale of the Firm Notes, to purchase up to an additional $26,250,000 principal amount of Notes (the "Optional Notes") as provided in Section 2 below. The Firm Notes and any Optional Notes purchased by the Initial Purchasers are referred to herein as the "Notes". The Notes are to be issued pursuant to an indenture to be dated as of June 26, 1996 (the "Indenture") between the Company and Chemical Bank, as trustee (the "Trustee"), and will be convertible into shares of the Company's common stock, par value $.01 per share (the "Common Stock"), subject to the Company's option to convert such Notes into cash as described in the Indenture, on the terms set forth therein. The holders of the Notes will be entitled to certain registration rights provided under a Note Resale Registration Rights Agreement to be dated as of June 26, 1996 (the "Registration Rights Agreement") between the Company and the Initial Purchasers. The Company has prepared a preliminary offering circular dated June 14, 1996 (the "Preliminary Offering Circular") and a final offering circular dated June 20, 1996 (as supplemented from time to time with the written consent of the Company and Bear, Stearns & Co. Inc. (the "Representative") (the "Offering Circular") with respect to the offering of the Notes contemplated by this Agreement (the "Offering"). The terms "Preliminary Offering Circular" and "Offering Circular" as used herein shall include all documents incorporated by reference therein. The Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and are being sold in reliance on exemptions from or in transactions not subject to the registration requirements of the Securities Act, including sales (i) made in the United States to "qualified institutional buyers" as defined in, and in reliance on, Rule 144A under the Securities Act ("Rule 144A") or to institutional "accredited investors" as defined in Rule 501(a)(1),(2), (3) and (7) of Regulation D under the Securities Act ("Regulation D") and (ii) made outside the United States in reliance on Regulation S under the Securities Act ("Regulation S"). 1. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, the Initial Purchasers that: (a) The Offering Circular, as of the date hereof, and as of the Closing Date (as hereinafter defined) and as of the Additional Closing Date (as hereinafter defined) , if any, is and will be accurate in all material respects, does not and will not contain an untrue statement of a material fact and does not and will not omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. No representation and warranty is made in this Section 1(a), however, with respect to any information contained in or omitted from the Offering Circular or any amendment thereof or supplement thereto in reliance upon and in conformity with information furnished in writing to the Company by either Initial Purchaser expressly for use in connection with the preparation of the Offering Circular or any amendment thereof or supplement thereto, as the case may be. (b) Deloitte & Touche LLP, who have certified certain of the financial statements and supporting schedules included or incorporated by reference in the Offering Circular, are independent public accountants as required by the Securities Act and the rules and regulations promulgated thereunder (the "Regulations"). (c) The financial statements, including the notes thereto, and supporting schedules, included or incorporated by reference in the Offering Circular present fairly the consolidated financial position of the Company and its subsidiaries as of the dates indicated and the consolidated results of operations and changes in financial position of the Company and its subsidiaries for the periods specified; except as otherwise stated in the Offering Circular, such financial statements have been prepared in conformity with generally accepted accounting principles applied on a consistent basis; and the supporting schedules included or incorporated by reference in the Offering Circular present fairly the information required to be stated therein. The pro forma financial statements and other pro forma financial information included in the Offering Circular have been prepared in all material respects in accordance with the rules and regulations of the Securities and Exchange Commission (the "Commission") with respect to pro forma financial statements, have been properly compiled on the pro forma bases described therein, and, in the opinion of the Company, the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein. (d) Other than Nine West Footwear Corporation, Nine West Manufacturing Corporation and Nine West Funding Corporation, each a Delaware corporation (each, a "Significant Subsidiary" and together, the "Significant Subsidiaries"), the Company does not own or control, directly or indirectly, any corporation, association or other entity that would constitute a "significant subsidiary" within the meaning of Rule 1-02(w) under Regulation S-X of the Securities Act. (e) Subsequent to the respective dates as of which information is given in the Offering Circular, except as set forth in the Offering Circular, there has been no material adverse change in the business, prospects, properties, operations, condition (financial or otherwise) or results of operations of the Company and its subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, and since the date of the latest balance sheet presented in the Offering Circular, neither the Company nor any of the Significant Subsidiaries has incurred or undertaken any liabilities or obligations, direct or contingent, that are material to the Company and its subsidiaries taken as a whole, except for liabilities or obligations that are disclosed in the Offering Circular. (f) Each of the Company and the Significant Subsidiaries (i) has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, (ii) is duly qualified and in good standing as a foreign corporation in each jurisdiction in which the character or location of its properties (owned, leased or licensed) or the nature or conduct of its business makes such qualification necessary, except for those failures to be so qualified or in good standing that will not in the aggregate have a material adverse effect on the Company and its subsidiaries taken as a whole, and (iii) has all requisite power and authority, and all necessary consents, approvals, authorizations, orders, registrations, qualifications, licenses and permits of and from all public, regulatory or governmental agencies and bodies, to own, lease and operate its properties and conduct its business as now being conducted and as described in the Offering Circular, except where the failure to obtain any of the foregoing will not in the aggregate have a material adverse effect on the Company and its subsidiaries taken as a whole. (g) The Company has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement, the Indenture, the Notes and the Registration Rights Agreement (collectively, the "Transaction Agreements"), and to consummate the transactions contemplated hereby and thereby, including (without limitation) (i) the issuance, sale and delivery of the Notes hereunder and (ii) the filing of any Registration Statement under and as defined in the Registration Rights Agreement. (h) The execution, delivery, and performance of this Agreement and the other Transaction Agreements and the consummation of the transactions contemplated hereby and thereby do not and will not (i) conflict with or result in a breach of any of the terms and provisions of, or constitute a default (or an event which with notice or lapse of time, or both, would constitute a default) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Significant Subsidiaries (other than as disclosed in the Offering Circular) pursuant to, any agreement, instrument, franchise, license or permit to which the Company or any of the Significant Subsidiaries is a party or by which any of such corporations or their respective properties or assets is bound, except for such conflicts, breaches or defaults or liens, charges or encumbrances that would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries, taken as a whole, (ii) violate or conflict with any provision of the certificate of incorporation or by-laws of the Company or any of the Significant Subsidiaries or any judgment, decree, order, statute, rule or regulation of any court or any public, governmental or regulatory agency or body having jurisdiction over the Company or any of the Significant Subsidiaries or any of their respective properties or assets, except for such violations or conflicts that would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries, taken as a whole, or (iii) require any consent, approval, authorization, order, registration, filing, qualification, license or permit of or with any court or any public, governmental or regulatory agency or body having jurisdiction over the Company or any of the Significant Subsidiaries or any of their respective properties or assets, except (in the case of clause (iii) above) as disclosed in the Offering Circular and except for any such consents, approvals, authorizations, orders, registrations, filings, qualifications, licenses and permits as have been made or obtained in as may be required under state securities or Blue Sky laws or the securities laws of any jurisdiction outside the United States in connection with the purchase and distribution of the Notes by the Initial Purchasers, and except where the failure to obtain or make any such consents, approvals, authorizations, orders, registrations, filings, qualifications, licenses and permits would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries, taken as a whole. (i) This Agreement and the transactions contemplated hereby have been duly and validly authorized by the Company. This Agreement has been duly and validly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforcement may be subject to or limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, or general equitable principles (whether considered in a proceeding in equity or at law), and except as the enforceability thereof may be limited by considerations of public policy. (j) The Indenture has been duly and validly authorized by the Company and, when executed and delivered by the Company and the Trustee, will have been duly and validly executed and delivered and will constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforcement may be subject to or limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, or general equitable principles (whether considered in a proceeding in equity or at law). The Indenture conforms in all material respects to the description thereof contained in the Offering Circular. (k) The Notes have been duly and validly authorized by the Company and, when authenticated by the Trustee and issued, sold and delivered in accordance with this Agreement and the Indenture, will have been duly and validly executed, authenticated, issued and delivered and will constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture, except as such enforcement may be subject to or limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, or general equitable principles (whether considered in a proceeding in equity or at law). The Notes conform in all material respects to the description thereof contained in the Offering Circular. (l) The Registration Rights Agreement and the transactions contemplated therein have been duly and validly authorized by the Company. The Registration Rights Agreement, when executed and delivered by the Company and the Initial Purchasers, will have been duly and validly executed and delivered by the Company and will constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforcement may be subject to or limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, or general equitable principles (whether considered in a proceeding in equity or at law), and except as the enforceability thereof may be limited by considerations of public policy. The Registration Rights Agreement conforms in all material respects to the description thereof contained in the Offering Circular. (m) Except as described in the Offering Circular, there is no litigation or governmental proceeding to which the Company or any Significant Subsidiary is a party or to which any property of the Company or any Significant Subsidiary is subject or which is pending or, to the knowledge of the Company, contemplated against the Company or any Significant Subsidiary that could reasonably be expected to result in any material adverse change or any development involving a material adverse change in the business, prospects, properties, operations, condition (financial or otherwise) or results of operations of the Company and its subsidiaries taken as a whole. (n) Each of the Company and the Significant Subsidiaries is conducting its business in compliance with all applicable local, state, federal and foreign laws, rules and regulations in the jurisdictions in which it is conducting business, except to the extent that such failure to comply would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries, taken as a whole. (o) The Company had, at May 4, 1996, an authorized and outstanding capitalization as set forth in the Offering Circular. All of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and nonassessable and were not issued in violation of or subject to any preemptive rights. Except as otherwise disclosed in the Offering Circular, all of the outstanding shares of capital stock of each Significant Subsidiary have been duly and validly authorized and issued, are fully paid and nonassessable, were not issued in violation of or subject to any preemptive rights and all such shares owned by the Company are owned, directly or indirectly, free and clear of any lien, claim, encumbrance, security interest, restriction on transfer, shareholders' agreement, voting trust or other preferential arrangement or defect of title whatsoever. The capital stock of the Company conforms to the descriptions thereof contained in the Offering Circular. (p) No event has occurred nor has any circumstance arisen which, had the Notes been issued on the date hereof, would constitute a default or Event of Default (as such terms are defined in the Indenture). (q) The Company has not taken and will not take, directly or indirectly, any action designed to cause or result in, or which constitutes or that might reasonably be expected to constitute, the stabilization or manipulation of the price of the Notes to facilitate the sale or resale of the Notes. (r)(i) None of the Company, any of its affiliates (as defined in Rule 501(b) under the Securities Act) nor any person acting on behalf of any such person (excluding the Initial Purchasers and their respective affiliates, as to which no representation is made) has engaged in any directed selling efforts (as such term is defined in Regulation S) in the United States with respect to the Notes, and (ii) each of the Company, its affiliates and each person acting on behalf of any of them (other than the Initial Purchasers and their respective affiliates, as to which no representation made) has complied with the offering restrictions requirement of Regulation S. (s) None of the Company, any of its affiliates nor any person acting on behalf of any of them (excluding the Initial Purchasers and their respective affiliates, as to which no representation is made) has sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of any security (as such term is defined in the Securities Act) that is or may be integrated with the sale of the Notes in a manner that would require registration under the Securities Act. (t) The Notes are eligible for resale pursuant to Rule 144A and, when issued, will not be of the same class as any securities listed on a national securities exchange registered under section 6 of the Exchange Act (as hereinafter defined) or quoted in a U.S. automated inter-dealer quotation system. (u) The Company is subject to section 13 or 15(d) of the Exchange Act and is in compliance in all material respects with the provisions of such section. (v) Subject to: (i) compliance by the Initial Purchasers with the procedures set forth in Section 3 hereof, (ii) the accuracy of the representations and warranties of the Initial Purchasers in Section 3 hereof, (iii) the accuracy of the representations and warranties made in accordance with this Agreement and the Offering Circular by purchasers to whom the Initial Purchasers initially resell Notes, and (iv) receipt by the purchasers to whom the Initial Purchasers initially resell Notes of a copy of the Offering Circular prior to such sale, it is not necessary, in connection with the offer, sale and delivery of the Notes to the Initial Purchasers in the manner contemplated by this Agreement and the Offering Circular, to register the Notes under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended. (w) The shares of Common Stock issuable upon conversion of the Notes have been duly authorized and, when issued in accordance with the terms of the Notes and the Indenture, will be validly issued, fully paid and nonassessable and will conform in all material respects to the description thereof contained in the Offering Circular. The shares of Common Stock issuable on conversion of the Notes at the initial conversion price set forth in the Indenture have been reserved for issuance and no further approval or authority of the stockholders or the Board of Directors of the Company will be required for such issuance of Common Stock. (x) The Company is not, and upon consummation of the transactions contemplated hereby will not be, subject to registration as an "investment company" under the Investment Company Act of 1940, as amended. 2. Purchase, Sale and Delivery of the Notes. (a) On the basis of the representations, warranties, covenants and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell to the Initial Purchasers, and the Initial Purchasers, severally and not jointly, agree to purchase from the Company, the principal amount of the Firm Notes set forth opposite their respective names in Schedule I hereto at a purchase price equal to 100% of such principal amount, plus accrued interest, if any, less a selling concession of 1.425% of such principal amount. Payment of the purchase price for, and delivery of, the Firm Notes will be made at the offices of Latham & Watkins, 885 Third Avenue, New York, New York at 10:00 a.m. (New York City time) on June 26, 1996, unless postponed in accordance with Section 9 hereof, or such other time and date as may be mutually agreed in writing between you and the Company (the time and date of such payment and delivery being herein called the "Closing Date"). (b) In addition, on the basis of the representations, warranties, covenants and agreements herein contained, but subject to the terms and conditions herein set forth, the Company hereby grants to the Initial Purchasers the option to purchase, severally and not jointly, up to U.S. $26,250,000 in principal amount of Optional Notes, for the sole purpose of covering over- allotments in the sale of Firm Notes by the Initial Purchasers, at the same purchase price to be paid by the Initial Purchasers to the Company for the Firm Notes as set forth in Section 2(a). This option may be exercised at any time, in whole or in part, on or before the 30th day following the date of the Offering Circular, by written notice by the Representative on behalf of the Initial Purchasers to the Company. Such notice shall set forth the aggregate principal amount of Optional Notes to be purchased pursuant to the option and the date and time, as reasonably determined by the Representative, when the Optional Notes are to be delivered (such date and time being herein sometimes referred to as the "Additional Closing Date"); provided that the Additional Closing Date shall not be earlier than (x) the Closing Date or (y) the second full business day after the date on which the option shall have been exercised, nor later than the eighth full business day after the date on which the option shall have been exercised (unless such date and time are postponed in accordance with Section 9 hereof). The principal amount of the Optional Notes to be sold to each Initial Purchaser shall be that principal amount which bears the same ratio to the aggregate principal amount of Optional Notes being purchased as the principal amount of Firm Notes set forth opposite the name of such Initial Purchaser in Schedule I hereto (or such number increased as set forth in Section 9 hereof) bears to the aggregate principal amount of Firm Notes, subject to such adjustments to eliminate fractional amounts as the Representative in its sole discretion may make. (c) At or prior to the Closing Date and the Additional Closing Date (if any) hereunder, the Company shall execute and deliver for authentication the Notes to be purchased and sold on such date and shall deposit such Notes (except for those purchased by "accredited investors" which shall be in definitive form) with the Depositary Trust Company ("DTC") for the account or accounts of participants in DTC (including Euroclear and CEDEL, as the case may be) purchasing beneficial interests in therein. Against delivery of the Notes to DTC for the respective accounts of the Initial Purchasers, the Initial Purchasers shall pay or cause to be paid to the Company the purchase price for such Notes in same day funds, payable to the order of the Company. Certificates evidencing the Notes shall be registered in the name of Cede & Co. as nominee for DTC or such other name or names and in such authorized denominations as you may request in writing at least two full business days prior to the Closing Date or the Additional Closing Date, as the case may be. The Company will permit you to inspect such certificates at the offices of the Representative at least one full business day prior to the Closing Date and the Additional Closing Date (if any). (d) At the Closing Date and the Additional Closing Date (if any), the Company hereby agrees to pay to the Initial Purchasers a combined management and underwriting commission for their services rendered in connection with the transactions contemplated herein in an amount equal to 0.95% of the aggregate principal amount of the Notes sold by the Company to the Initial Purchasers on such date. The Initial Purchasers shall have the right to deduct from the purchase price payable to the Company on the Closing Date and the Additional Closing Date (if any), as applicable, such combined management and underwriting commission and any selling concession and referred to in Section 2(a). 3. Subsequent Offers and Resales of the Notes. The Initial Purchasers and the Company hereby establish and agree to observe the following procedures in connection with the offer and sale of the Notes: (a) Each Initial Purchaser has advised the Company and the Representative that it proposes to offer the Notes for resale upon the terms and conditions set forth in this Agreement and the Offering Circular. The Notes have not been and will not be registered under the Securities Act. Each Initial Purchaser agrees that it will not take, and acknowledges that the Company has not taken, any action that would constitute a public offering of the Notes in any jurisdiction and further agrees that, with respect to the offer or sale of any Notes or the delivery or distribution of any Offering Circular, it will comply with applicable laws and regulations in such jurisdictions or to which it is otherwise subject. (b) Each Initial Purchaser represents and warrants that (i) it is a "qualified institutional buyer" within the meaning of Rule 144A or an "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and (ii) that neither it nor any of its affiliates nor any person acting on behalf of any such person has engaged in any general solicitation or general advertising, as such terms are defined in Rule 502(c) under the Securities Act, in connection with the offer or sale of the Notes. (c) In connection with sales outside the United States, each Initial Purchaser agrees that it will not offer, sell or deliver Notes (i) as part of the distribution thereof at any time or (ii) otherwise until 40 days after completion of the distribution, as determined by Bear Stearns, to or for the account or benefit of U.S. persons (as defined in Regulation S). Each Initial Purchaser confirms that neither it nor its affiliates nor any person acting on behalf of any such person has engaged in any "directed selling efforts" (as such term is defined in Regulation S) with respect to the Notes and that it and each such other person has complied with the offering restrictions requirement of Regulation S with respect to the Notes. (d) Each of the Initial Purchasers acknowledges and agrees that it has not and will not offer, sell or deliver the Notes in the United States or to or for the account of any U.S. Person other than (i) distributors (as defined in Regulation S), (ii) institutional buyers that are reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A) and (iii) investors that are reasonably believed to be "accredited investors" (as defined in Rule 501(a) (1), (2), (3) or (7) under the Securities Act and execute and deliver a letter in the form of Annex A to the Offering Circular. (e) Each of the Initial Purchasers has advised the Company and the Representative that, prior to the confirmation of sale of any Notes, it will have sent to each dealer, distributor or person receiving a selling concession fee or other remuneration that purchases any Notes from it during the restricted period a confirmation or notice substantially to the following effect: "The Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be offered and sold within the United States or to, or for the account or benefit of U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the completion of the distribution of the Notes, as determined by Bear Stearns & Co. Inc., except in accordance with Regulation S or Rule 144A under the Securities Act." (f) Each Initial Purchaser represents, warrants and agrees that (i) it has not offered or sold and prior to the expiration of six months from the Closing Date will not offer or sell Notes to persons in the United Kingdom, other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (whether as principal or agent) for the purposes of their businesses or otherwise in circumstances which will not result in an offer to the public within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has complied and will comply with all applicable provisions of the Public Offers of Securities Regulations and the Financial Services Act of 1986 with respect to anything done by it in relation to the Notes in, from, or otherwise involving the United Kingdom, and (iii) it has only issued or passed on and will only issue or pass on, to any person in the United Kingdom any documents received by it in connection with the issue of the Notes if the person is of a kind described in Article 11(c) of the Financial Services Act of 1986 (Investment Advertisements) (Exemptions) Order 1988 or is a person whom the documents may lawfully be issued or passed on. Each Initial Purchaser further agrees that it will not offer or sell any Notes directly or indirectly in Japan or to any resident of Japan except (A) pursuant to an exemption from the registration requirements of the Securities and Exchange Law of Japan and (B) in compliance with any applicable requirements of Japanese law. Each Initial Purchaser further agrees that it will not offer or sell any Notes directly or indirectly in any province of Canada except in compliance with all requirements of applicable securities laws. 4. Covenants of the Company. The Company covenants and agrees with the Initial Purchasers that: (a) If at any time prior to the Closing Date or the Additional Closing Date (if any) any event shall have occurred as a result of which the Offering Circular as then amended or supplemented would in the reasonable judgment of the Initial Purchasers or the Company include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the Company will notify the Representative promptly and prepare and deliver to the Representative on behalf of the Initial Purchasers an amendment or supplement (in form and substance satisfactory to you) which will correct such statement or omission. (b) The Company will promptly deliver to the Initial Purchasers such number of copies of the Offering Circular and all amendments of and supplements thereto as the Initial Purchaser may reasonably request. (c) The Company will endeavor in good faith, in cooperation with the Representative, to qualify the Notes for offering and sale under the securities and legal investment laws relating to the offering or sale of the Notes of such jurisdictions as you may designate and to maintain such qualification in effect for so long as required for the distribution thereof; except that in no event shall the Company be obligated in connection therewith to qualify as a foreign corporation or to execute a general consent to service of process. (d) The Company will apply the proceeds from the sale of the Notes as set forth under "Use of Proceeds" in the Offering Circular. (e) The Company will use its best efforts to cause the Notes to be designated Private Offerings, Resales and Trading through Automated Linkage ("PORTAL") market securities in accordance with the rules and regulations of the National Association of Securities Dealers, Inc., relating to trading in the PORTAL market. (f) During the period of 90 days from the date of the Offering Circular, the Company will not, without the prior written consent of the Representative, offer, issue, sell, contract to sell, grant any option for the sale of, or otherwise dispose of, directly or indirectly, any shares of Common Stock or any rights to acquire Common Stock, other than the Notes and other than Common Stock or options issued or granted pursuant to existing stock option and other compensation plans. The Company will obtain the undertaking of each of its executive officers and directors not to engage in any of the aforementioned transactions on their own behalf, other than with respect to shares of Common Stock acquired pursuant to, or pursuant to the exercise of options granted pursuant to, existing stock option and other compensation plans. (g) So long as any of the Notes are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act, the Company will provide to any holder of the Notes or to any prospective purchaser of the Notes designated by any holder, upon request of such holder or prospective purchaser, information required to be provided by Rule 144A(d)(4) of the Securities Act if at the time of such request, the Company is not subject to the reporting requirements under Section 13 or 15(d) of the Exchange Act. (h) None of the Company, its subsidiaries or affiliates or any person acting on their behalf (other than the Initial Purchasers and their respective affiliates, as to which no representation is made) will solicit any offer to buy or offer or sell the Notes by means of any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act. (i) None of the Company, its subsidiaries or affiliates or any person acting on their behalf (other than the Initial Purchasers and their respective affiliates, as to which no representation is made) will offer, sell or solicit offers to buy or otherwise negotiate in respect of any security (as defined in the Securities Act) which will be integrated with the sale of the Notes in a manner that would require the registration of the Notes under the Securities Act. (j) The Company shall take all reasonable action necessary to enable Standard & Poor's Corporation ("S&P") to provide its credit rating of the Notes. (k) During the period from the Closing Date until three years after the Closing Date, the Company and its subsidiaries will not, and will not permit any of their "affiliates" (as defined in Rule 144 under the Securities Act) to, resell any of the Notes that have been reacquired by them, except for Notes purchased by the Company and its subsidiaries or any of their affiliates and resold in a transaction registered under the Securities Act. (l) None of the Company, its subsidiaries or affiliates or any person acting on their behalf (other than the Initial Purchasers and their respective affiliates, as to which no representation is made) will engage in any directed selling efforts (as that term is defined in Regulation S) with respect to the Notes sold pursuant to Regulation S, and the Company and their affiliates and each person acting on their behalf (other than the Initial Purchasers and their respective affiliates, as to which no representation is made) will comply with the offering restrictions of Regulation S with respect to those Notes sold pursuant thereto. (m) The Company will cooperate with the Initial Purchasers in arranging for the Notes to be accepted for clearance and settlement through Euroclear, CEDEL and The Depository Trust Company. (n) Each of the Notes will bear, to the extent applicable, the legend contained in "Transfer Restrictions" in the Offering Circular for the time period and upon the other terms stated therein, except after the Notes are resold pursuant to a registration statement effective under the Securities Act. 5. Payment of Expenses. Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company hereby agrees to pay all costs and expenses incident to the performance of the obligations of the Company hereunder, including those in connection with (i) preparing, printing, duplicating, filing and distributing the Offering Circular and any amendments or supplements thereto (including, without limitation, fees and expenses of the Company's accountants and counsel), and all other documents related to the offering of the Notes (including those supplied to the Initial Purchasers in quantities provided for herein), in each case excluding any fees of Counsel to the Initial Purchasers (as defined below), (ii) the issuance, transfer and delivery of the Notes to the Initial Purchasers, including any transfer or other taxes payable thereon, (iii) the qualification of the Notes under state or foreign legal investment, securities or Blue Sky laws, including the costs of printing and mailing a preliminary and final "Blue Sky Survey" and the fees of Counsel for the Initial Purchasers and such counsel's disbursements in relation thereto, (iv) the cost of printing the Notes, (v) the cost and charges of any transfer agent, registrar, Trustee (or successor trustee) or fiscal paying agent and conversion agent and (vii) the costs and charges of DTC, Euroclear and CEDEL. 6. Conditions of Initial Purchasers' Obligations. The obligations of the Initial Purchasers to purchase and pay for the Firm Notes and the Optional Notes, as provided herein, shall be subject to the accuracy in all material respects of the representations and warranties of the Company herein contained, as of the date hereof and as of the Closing Date (for purposes of this Section 6 "Closing Date" shall refer to the Closing Date and the Additional Closing Date, if different), to the absence from any certificates, opinions, written statements or letters furnished to you or to Latham & Watkins ("Counsel for the Initial Purchasers") pursuant to this Section 6 of any material misstatement or omission, to the performance by the Company of its obligations hereunder, and to the following additional conditions: (a) At the Closing Date you shall have received the opinions of Simpson Thacher & Bartlett, counsel for the Company, dated the Closing Date, addressed to the Initial Purchasers and in form and substance reasonably satisfactory to Counsel for the Initial Purchasers, to the effect that: (i) The Company has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State of Delaware and has full corporate power and authority to own, lease and operate its properties and conduct its business as described in the Offering Circular. (ii) The Indenture has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery thereof by the Trustee, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms except as such enforcement may be subject to or limited by the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (iii) The Notes have been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Trustee and upon payment and delivery in accordance with this Agreement, will constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits of the Indenture, except as such enforcement may be subject to or limited by the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (iv) The Registration Rights Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery by the Initial Purchasers, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforcement may be subject to or limited by the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing, and except as the enforceability thereof may be limited by considerations of public policy. (v) This Agreement has been duly authorized, executed and delivered by the Company. (vi) The statements made in the Offering Circular under the caption "Description of Notes," insofar as they purport to constitute summaries of certain terms of documents referred to therein, constitute accurate summaries of the terms of such documents in all material respects. (vii) The issue and sale of the Notes by the Company and the compliance by the Company with all of the provisions of this Agreement and the Registration Rights Agreement will not breach or result in a default under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument filed or incorporated by reference as an exhibit to the Company's Annual Report on Form 10-K for the Fiscal Year ended February 3, 1996 (the 1995 Form 10-K"), nor will such action violate the Certificate of Incorporation or By-laws of the Company or any federal or New York statute or the Delaware General Corporation Law or any rule or regulation that has been issued pursuant to any federal or New York statute or the Delaware General Corporation Law or any order known to us issued pursuant to any federal or New York statute or the Delaware General Corporation Law by any court or governmental agency or body or court having jurisdiction over the Company or any of its subsidiaries or any of their properties. (viii) No consent, approval, authorization, order, registration or qualification of or with any federal or New York governmental agency or body or any Delaware governmental agency or body acting pursuant to the Delaware General Corporation Law or, to our knowledge, any federal or New York court or any Delaware court acting pursuant to the Delaware General Corporation Law is required for the issue and sale of the Notes by the Company and the compliance by the Company with all of the provisions of this Agreement and the Registration Rights Agreement, except for the registration under the Securities Act of the Notes, and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws or the securities laws of any jurisdiction outside the United States in connection with the purchase and distribution of the Notes by the Initial Purchasers. (ix) The statements made in the Offering Circular under the heading "Certain Tax Considerations", insofar as they purport to constitute summaries of matters of United States federal tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects. (x) No registration of the Notes or the shares of Common Stock issuable upon conversion of the Notes in accordance with the Indenture under the Securities Act, and no qualification of the Indenture under the Trust Indenture Act of 1939, as amended, is required for the offer and sale of the Notes by the Company to the Initial Purchasers or the initial reoffer and resale of the Notes by the Initial Purchasers solely in the manner contemplated by the Offering Circular, this Agreement and the Indenture. (xi) All outstanding shares of the Company's Common Stock, including the shares issuable upon conversion of the Notes, have been duly authorized, and all outstanding shares of the Company's Common Stock have been and, when issued and delivered upon conversion of the Notes in accordance with the terms and provisions of the Notes and the Indenture (assuming payment for and delivery of the Notes in accordance with this Agreement), the shares of Common Stock issuable upon such conversion will be, validly issued, fully paid and nonassessable. The shares of Common Stock issuable upon conversion of the Notes at the initial conversion price set forth therein and in the Indenture have been reserved for issuance and no further approval or authority of the stockholders or the Board of Directors of the Company will be required for such issuance of Common Stock. (xii) There are no preemptive rights under federal or New York law or under the Delaware General Corporation Law to subscribe for or purchase shares of the Company's Common Stock. There are no preemptive or other rights to subscribe for or to purchase any shares of the Company's Common Stock pursuant to the Company's Certificate of Incorporation or By-laws or any agreement or other instrument filed or incorporated by reference as an exhibit to the 1995 Form 10-K. (xiii) No holders of securities of the Company have rights which have not been satisfied or waived to the registration of shares of capital stock or other securities of the Company because of the filing of the Shelf Registration Statement or the New Notes Registration Statement (as such terms are defined in the Offering Circular) by the Company or the respective offerings contemplated thereby under any agreement described or specifically referred to in the Offering Circular or filed as an Exhibit to the 1995 Form 10-K. (xiv) Except as disclosed in the Offering Circular and any document incorporated by reference therein, except for stock options outstanding pursuant to the Company's existing and proposed stock option plans, there are no outstanding options, warrants or other rights calling for the issuance of, and no commitments or obligations to issue, any shares of capital stock of the Company or any security convertible into or exchangeable for capital stock of the Company under any agreement described or specifically referred to in the Offering Circular or filed as an Exhibit to the 1995 Form 10-K. (xv) In addition, such opinion shall also contain a statement that such counsel has participated in conferences with certain officers and employees of the Company and with representatives of the independent public accountants for the Company and such counsel has no reason to believe that the Offering Circular contains an untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no belief or opinion with respect to the financial statements and schedules and other financial data included or incorporated by reference therein). In addition, at the Closing Date you shall have received the opinion of Joel K. Bedol, the Company's general counsel, dated the Closing Date, addressed to the Initial Purchasers and in form and substance reasonably satisfactory to Counsel for the Initial Purchasers, to the effect that: (i) Each of the Significant Subsidiaries has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the state of Delaware and has full corporate power and authority to own, lease and operate its properties and conduct its business as described in the Offering Circular. (ii) In addition, such opinion shall also contain a statement that such counsel has participated in conferences with certain officers and employees of the Company and with representatives of the independent public accountants for the Company and such counsel has no reason to believe that the Offering Circular contains an untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (it being understood that such counsel need express no belief or opinion with respect to the financial statements and schedules and other financial data included or incorporated by reference therein). In rendering such opinion, such counsel may rely (x) as to matters involving the application of laws other than the laws of the United States and jurisdictions in which they are admitted, to the extent such counsel deems proper and to the extent specified in such opinion, if at all, upon an opinion or opinions (in form and substance reasonably satisfactory to Counsel for the Initial Purchasers) of other counsel reasonably acceptable to Counsel for the Initial Purchasers, familiar with the applicable laws; (y) as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Company and certificates or other written statements of officers of departments of various jurisdictions having custody of documents respecting the corporate existence or good standing of the Company and its subsidiaries, provided that copies of any such statements or certificates shall be delivered to Counsel for the Initial Purchasers. The opinion of such counsel for the Company shall state that the opinion of any such other counsel is in form satisfactory to such counsel and, in their opinion, you and they are justified in relying thereon. (b) All proceedings taken in connection with the sale of the Notes as herein contemplated shall be reasonably satisfactory in form and substance to you and to Counsel for the Initial Purchasers, and the Initial Purchasers shall have received from said Counsel for the Initial Purchasers a favorable opinion, dated as of the Closing Date with respect to the issuance and sale of the Notes, the Offering Circular and such other related matters as you may reasonably require, and the Company shall have furnished to Counsel for the Initial Purchasers such documents as they reasonably request for the purpose of enabling them to pass upon such matters. (c) At the Closing Date you shall have received a certificate of the Chief Executive Officer and Chief Financial Officer of the Company, dated the Closing Date, to the effect that (i) as of the date hereof and as of the Closing Date, the representations and warranties of the Company set forth in Section 1 hereof are accurate in all material respects, (ii) as of the Closing Date, the obligations of the Company to be performed hereunder on or prior thereto have been duly performed in all material respects and (iii) subsequent to the respective dates as of which information is given in the Offering Circular, the Company and its subsidiaries have not sustained any material loss or interference with their respective businesses or properties from fire, flood, hurricane, accident or other calamity, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding, and there has not been any material adverse change, or any development involving a material adverse change, in the business, prospects, properties, operations, condition (financial or otherwise), or results of operations of the Company and its subsidiaries taken as a whole, except in each case as disclosed in the Offering Circular. (d) At the time this Agreement is executed and at the Closing Date, you shall have received a letter, from Deloitte & Touche LLP, independent accountants for the Company, dated, respectively, as of the date of this Agreement and as of the Closing Date addressed to the Initial Purchasers in form and substance reasonably satisfactory to the Initial Purchasers. (e) Prior to the Closing Date, the Company shall have furnished to the Initial Purchasers such further information, certificates and documents as the Initial Purchasers may reasonably request. (f) You shall have received from each person who is a director or executive officer (as defined in the proxy rules of the Securities and Exchange Commission) of the Company an agreement to the effect that during the period of 90 days from the date of the Offering Circular, such person will not, directly or indirectly, without the prior written consent of the Representative, offer, sell, contract to sell, grant any option to for the sale of, or otherwise dispose of, directly or indirectly, any shares of capital stock or any rights to acquire Common Stock, other than shares of Common Stock acquired pursuant to, or pursuant to the exercise of options granted pursuant to, existing stock option and other compensation plans. (g) At the Closing Date, the Notes shall have been approved for quotation in the PORTAL market. If any of the conditions specified in this Section 6 shall not have been fulfilled in all material respects when and as required by this Agreement, or if any of the certificates, opinions, written statements or letters furnished to you or to Counsel for the Initial Purchasers pursuant to this Section 6 shall not be in all material respects reasonably satisfactory in form and substance to the Representative and to Counsel for the Initial Purchasers, all obligations of the Initial Purchasers hereunder may be canceled by you at, or at any time prior to, the Closing Date and the obligations of the Initial Purchasers to purchase the Optional Notes may be canceled by you at, or at any time prior to, the Additional Closing Date. Notice of such cancellation shall be given to the Company in writing, or by telephone, telex or telegraph, confirmed in writing. 7. Indemnification. (a) The Company agrees to indemnify and hold harmless each Initial Purchaser and each person, if any, who controls any Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), against any and all losses, liabilities, claims, damages and expenses whatsoever as incurred (including but not limited to attorneys' fees and any and all expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Offering Circular or any related Preliminary Offering Circular or any amendment or supplement thereto or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the Company will not be liable in any such case to the extent but only to the extent that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Initial Purchaser through the Representative expressly for use therein, and provided further, that the foregoing indemnity with respect to any untrue statement contained in or omission from a Preliminary Offering Circular shall not inure to the benefit of any Initial Purchaser (or any person controlling such Initial Purchaser) from whom the person asserting any such loss, liability, claim, damage or expense purchased any of the Notes if a copy of the Offering Circular (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Initial Purchaser to such person at or prior to the written confirmation of the sale of such Notes to such person, and if the Offering Circular (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability. This indemnity agreement will be in addition to any liability which the Company may otherwise have including under this Agreement. (b) Each Initial Purchaser severally, and not jointly, agrees to indemnify and hold harmless the Company, each of the directors of the Company, each of the officers of the Company, and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, against any losses, liabilities, claims, damages and expenses whatsoever as incurred (including but not limited to attorneys' fees and any and all expenses whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), jointly or severally, to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Offering Circular, or any related Preliminary Offering Circular, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that any such loss, liability, claim, damage or expense arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Initial Purchaser through the Representative expressly for use therein; provided, however, that in no case shall any Initial Purchaser be liable or responsible for any amount in excess of the underwriting discount applicable to the Notes purchased by such Initial Purchaser hereunder. This indemnity will be in addition to any liability which any Initial Purchaser may otherwise have including under this Agreement. The Company acknowledges that the statements set forth in the last paragraph of the cover page and under the caption "Plan of Distribution" in the Offering Circular constitute the only information furnished in writing by or on behalf of any Initial Purchaser through Bear Stearns expressly for use in the Offering Circular or in any amendment thereof or supplement thereto, as the case may be. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify each party against whom indemnification is to be sought in writing of the commencement thereof (but the failure so to notify an indemnifying party shall not relieve it from any liability which it may have otherwise than under this Section 7). In case any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and to the extent it may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party. Notwithstanding the foregoing, the indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless (i) the employment of such counsel shall have been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnifying parties shall not have employed counsel to have charge of the defense of such action within a reasonable time after notice of commencement of the action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to one or all of the indemnifying parties (in which case the indemnifying parties shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events such fees and expenses shall be borne by the indemnifying parties. In no event shall the indemnifying party be liable for the fees and expenses of more than one counsel in connection with any one such action or separate but similar related actions in the same jurisdiction arising out of the same general allegations or circumstances. Anything in this subsection to the contrary notwithstanding, an indemnifying party shall not be liable for any settlement of any claim or action effected without its written consent; provided, however, that such consent was not unreasonably withheld. 8. Contribution. In order to provide for contribution in circumstances in which the indemnification provided for in Section 7 hereof is for any reason held to be unavailable from any indemnifying party, or to any indemnified party, or is insufficient to hold harmless a party indemnified thereunder, the Company and the Initial Purchasers shall contribute to the aggregate losses, claims, damages, liabilities and expenses of the nature contemplated by such indemnification provision (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted, but after deducting in the case of losses, claims, damages, liabilities and expenses suffered by the Company any contribution received by the Company from persons, other than the Initial Purchasers, who may also be liable for contribution, including persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, officers and directors of the Company) as incurred to which the Company and one or more of the Initial Purchasers may be subject, in such proportions as is appropriate to reflect the relative benefits received by the Company and the Initial Purchasers from the offering of the Notes or, if such allocation is not permitted by applicable law or indemnification is not available as a result of the indemnifying party not having received notice as provided in Section 7 hereof, in such proportion as is appropriate to reflect not only the relative benefits referred to above but also the relative fault of the Company and the Initial Purchasers in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Initial Purchasers shall be deemed to be in the same proportion as (x) the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Company and (y) the underwriting discounts and commissions received by the Initial Purchasers respectively. The relative fault of the Company and of the Initial Purchasers shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Initial Purchasers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 8, (i) in no case shall any Initial Purchaser be liable or responsible for any amount in excess of the underwriting discount applicable to the Notes purchased by such Initial Purchaser hereunder, (ii) no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation and (iii) no Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Note purchased by it and sold in the Offering were offered to subsequent purchasers exceeds the amount of any damages that such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. For purposes of this Section 8, each person, if any, who controls an Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall have the same rights to contribution as such Initial Purchaser, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, each officer and each director of the Company shall have the same rights to contribution as the Company, subject in each case to clauses (i) and (ii) of this Section 8. Any party entitled to contribution will, promptly after receipt of notice of commencement of any action, suit or proceeding against such party in respect of which a claim for contribution may be made against another party or parties, notify each party or parties from whom contribution may be sought, but the omission to so notify such party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may have under this Section 8 or otherwise. No party shall be liable for contribution with respect to any action or claim settled without its consent; provided, however, that such consent was not unreasonably withheld. 9. Default by an Initial Purchaser. If one of the Initial Purchasers shall fail at the Closing Date to purchase the Notes which it is obligated to purchase under this Agreement (the "Defaulted Notes"), the non-defaulting Initial Purchaser shall have the right, within 24 hours thereafter, to make arrangements for it to purchase all, but not less than all, of the Defaulted Notes in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the non-defaulting Initial Purchaser shall not have completed such arrangements within such 24-hour period, then this Agreement shall terminate without liability on the part of the non-defaulting Initial Purchaser. No action taken pursuant to this Section shall relieve any defaulting Initial Purchaser from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement, either the non-defaulting Initial Purchaser or the Company shall have the right to postpone the Closing Date for a period not exceeding seven days in order to effect any required changes in the Offering Circular or in any other documents or arrangements. 10. Survival of Representations and Agreements. All representations and warranties, covenants and agreements of the Initial Purchasers and the Company contained in this Agreement, including the agreements contained in Section 5, the indemnity agreements contained in Section 7 and the contribution agreements contained in Section 8, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of any Initial Purchasers or any agent, representative or controlling person thereof or by or on behalf of the Company, any of its officers and directors or any controlling person thereof, and shall survive delivery of and payment for the Notes to and by the Initial Purchasers. The representations contained in Section 1 and the agreements contained in Sections 5, 7, 8 and 11(d) hereof shall survive the termination of this Agreement, including termination pursuant to Section 9 or 11 hereof. 11. Termination. (a) The Representative shall have the right to terminate this Agreement at any time prior to the Closing Date or the obligations of the Initial Purchasers to purchase the Optional Notes at any time prior to the Additional Closing Date, as the case may be, if (A) any domestic or international event or act or occurrence has materially disrupted, or in the Representative's reasonable opinion will in the immediate future materially disrupt, the United States or international securities markets; or (B) if trading on the New York Stock Exchange shall have been suspended, or materially limited; or (C) if a banking moratorium has been declared by any United States federal or New York State authority or if any new restriction materially adversely affecting the distribution of the Firm Notes or the Optional Notes, as the case may be, shall have become effective; or (D) if any downgrading in the rating of the Company's debt securities by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Securities Act); or (E)(i) if the United States becomes engaged in hostilities or there is an escalation of hostilities involving the United States or there is a declaration of a national emergency or war by the United States or (ii) if there shall have been such change in political, financial or economic conditions if the effect of any such event in (i) or (ii) in Bear Stearns' reasonable judgment makes it impracticable or inadvisable to proceed with the offering, sale and delivery of the Firm Notes or the Optional Notes, as the case may be, on the terms contemplated by the Offering Circular. (b) Any notice of termination pursuant to this Section 11 shall be by telephone, telex, or telegraph, confirmed in writing by letter. (c) If this Agreement shall be terminated pursuant to any of the provisions hereof (otherwise than pursuant to Section 9 or 11(a) hereof), or if the sale of the Notes provided for herein is not consummated because any condition to the obligations of the Initial Purchasers set forth herein is not satisfied or because of any refusal, inability or failure on the part of the Company to perform any agreement herein or comply with any provision hereof, the Company will, subject to demand by you, reimburse the Initial Purchasers for all out-of-pocket expenses (including the fees and expenses of their counsel), incurred by the Initial Purchasers in connection herewith. 12. Notice. All communications hereunder, except as may be otherwise specifically provided herein, shall be in writing and , if sent to any Initial Purchaser, shall be mailed, delivered, or telexed or telegraphed and confirmed in writing, to it c/o Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167, Attention: Steven H. Tishman; if sent to the Company, shall be mailed, delivered, or telegraphed and confirmed in writing to the Company, 9 West Broad Street, Stamford, Connecticut 06902, Attention: Joel K. Bedol. 13. Parties. This Agreement shall insure solely to the benefit of, and shall be binding upon, the Initial Purchasers and the Company and the controlling persons, directors, officers, employees and agents referred to in Section 7 and 8, and their respective successors and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained. The term "successors and assigns" shall not include a purchaser, in its capacity as such, of Notes from any of the Initial Purchasers. 14. Governing Law. This Agreement shall be governed by the laws of the State of New York. If the foregoing correctly sets forth the understanding between you and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us. Very truly yours, NINE WEST GROUP INC. By: --------------------------------- Name: Robert C. Galvin Title: Exec. Vice President & Chief Financial Officer Accepted as of the date first above written BEAR, STEARNS & CO. INC. By: --------------------------- Name: Stephen Parish Title: Managing Director MORGAN STANLEY & CO. INCORPORATED By: --------------------------- Name: Title: SCHEDULE I Principal Amount of Firm Name of Initial Purchaser Notes to be Purchased - ------------------------- ------------------------- Bear, Stearns & Co. Inc. ........................... $87,500,000 Morgan Stanley & Co. Incorporated .................. $87,500,000 Total ..................... $175,000,000 EX-5 3 EXHIBIT 5 September 23, 1996 Nine West Group Inc. 9 West Broad Street Stamford, CT 06902 Re: REGISTRATION STATEMENT ON FORM S-3 Ladies and Gentlemen: I am Associate General Counsel of Nine West Group Inc., a Delaware corporation (the "Company"), and am rendering this opinion in connection with the filing of a Registration Statement on Form S-3 (the "Registration Statement") by the Company with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), relating to the registration by the Company of up to (i) $185,680,000 principal amount of its 5-1/2% Convertible Subordinated Notes due 2003 (the "Notes") and (ii) 3,055,958 (or such other number as may be issuable upon conversion of the Notes as a result of the antidilution provisions thereof) shares of common stock, par value $0.01 per share, of the Company (the "Common Stock" and, together with the Notes, the "Securities") issuable upon conversion of the Notes, in each case, to be sold by the holders of the Securities (the "Selling Holders"). The Notes were originally issued under an Indenture, dated as of June 26, 1996 (the "Indenture"), by and between the Company and Chemical Bank, as trustee (the "Trustee"). I have examined an executed copy of (i) the Registration Statement and all exhibits thereto, (ii) the Indenture, and (iii) the Notes. I have also examined such corporate records of the Company, including the Company's Restated Certificate of Incorporation, Second Amended and Restated By-Laws, certain resolutions adopted by the Board of Directors of the Company, and of the Pricing Committee appointed by the Board of Directors, relating to the issuance of the Securities, certificates received from state officials and statements I have received from officers and representatives of the Company. In delivering this opinion, I have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to me as originals, the conformity to originals of all documents submitted to me as certified, photostatic or conformed copies, the authenticity of originals of all such latter documents, and the correctness of statements submitted to me by officers and representatives of the Company, and by public officials. Based upon and subject to the limitations, qualifications, exceptions and assumptions set forth herein, I am of the opinion that: 1. The Notes have been duly authorized by requisite corporate action on the part of the Company and constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms and are entitled to the benefits (and are subject to all of the limitations) provided for by the Indenture, except that enforcement may be subject to or limited by (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights and remedies generally and (ii) general principles of equity (regardless of whether such enforcement may be sought in a proceeding in equity or at law). Nine West Group Inc. September 23, 1996 Page 2 2. The shares of Common Stock initially issuable upon conversion of the Notes have been duly authorized by the Company and, when issued and delivered upon such conversion in accordance with the terms and provisions of the Notes and the Indenture, will be validly issued, fully paid and nonassessable. I am a member of the Bar of the State of New York. I express no opinion herein concerning any law other than the General Corporation Law of the State of Delaware. I hereby consent to the sole use of this opinion as an exhibit to the Registration Statement and to the use of my name under the heading "Legal Matters" in the Prospectus included therein. In giving this consent, I do not thereby admit that I am included in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission. This opinion is not to be used, circulated, quoted, referred to or relied upon by any other person or for any other purpose without my prior written consent. Very truly yours, Joseph R. Manghisi Associate General Counsel EX-12 4 EXHIBIT 12 NINE WEST GROUP INC. AND SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges (in thousands) 26 Weeks Ended Year Ended ----------------- ---------------------------------------------- Aug. 3 July 29 Feb. 3 Dec. 31 Dec. 31 Dec. 31 Dec. 31 1996 1995 1996 1994 1993 1992 1991 -------- ------- ------- -------- ------- ------- ------- Earnings: - --------- Income before provision for income taxes per statement of income........ $ 68,364 $28,599(A) $33,634(B) $106,809 $79,453 $52,415 $37,234 Add: Portion of rents representative of the interest factor........... 12,914 7,790 23,233 11,139 7,985 5,750 4,172 Interest on indebtedness.. 19,281 8,575 29,761 2,343 3,323 7,014 9,081 Amortization of debt expense and premium....... 673 170 1,054 - - - - -------- ------- ------- -------- ------- ------- ------- Income as adjusted........ $101,232 $45,134(A) $87,682(B) $120,291 $90,761 $65,179 $50,487 ======== ======= ======= ======== ======= ======= ======= Fixed Charges: - -------------- Portion of rents representative of the interest factor........... $ 12,914 $ 7,790 $23,233 $ 11,139 $ 7,985 $ 5,750 $ 4,172 Interest on indebtedness.. 19,281 8,575 29,761 2,343 3,323 7,014 9,081 Amortization of debt expense and premium....... 673 170 1,054 - - - - -------- ------- ------- -------- ------- ------- ------- Fixed charges............. $ 32,868 $16,535 $54,048 $ 13,482 $11,308 $12,764 $13,253 ======== ======= ======= ======== ======= ======= ======= Ratio of earnings to fixed charges............. 3.08 2.73(A) 1.62(B) 8.92 8.03 5.11 3.81 ======== ======= ======= ======== ======= ======= ======= (A) Includes the impact of a $23.6 million non-recurring increase in cost of goods sold, attributable to the fair value of inventory over FIFO cost (a "Cost of Goods Sold Adjustment"), recorded as a result of the Company's acquisition of the footwear business (the "Footwear Group") of The United States Shoe Corporation. (B) Includes the impact of: (1) a $34.9 million Cost of Goods Sold Adjustment; and (2) $51.9 million in business restructuring and integration expenses and charges associated with the integration of the Footwear Group into the Company.
EX-23 5 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Nine West Group Inc. on Form S-3 of our report dated March 22, 1996, appearing in the Annual Report on Form 10-K of Nine West Group Inc. for the fifty-three weeks ended February 3, 1996 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. Deloitte & Touche LLP Stamford, Connecticut September 20, 1996 EX-25 6 EXHIBIT 25 --------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ---------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ----------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) --------------------------------------------- THE CHASE MANHATTAN BANK (Exact name of trustee as specified in its charter) New York 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 Park Avenue New York, New York 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) ----------------------------------- Nine West Group Inc. (Exact name of obligor as specified in its charter) Delaware 06-1093855 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 9 West Broad Street Stamford, Connecticut 06902 (Address of principal executive offices) (Zip Code) ----------------------------------- 5 1/2% Convertible Subordinated Notes due 2003 (Title of the indenture securities) ---------------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551. Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Articles of Association of the Trustee as now in effect, including the Organization Certificate and the Certificates of Amendment dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982, February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank.) 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-06249, which is incorporated by reference). 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33- 50010, which is incorporated by reference. On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank.) 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. (On July 14, 1996, in connection with the merger of Chemical Bank and The Chase Manhattan Bank (National Association), Chemical Bank, the surviving corporation, was renamed The Chase Manhattan Bank.) 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, The Chase Manhattan Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 20th day of September, 1996. THE CHASE MANHATTAN BANK By /s/ John Generale -------------------------- John Generale Vice President Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF Chemical Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 1996, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS in Millions Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin........................... $ 4,167 Interest-bearing balances................... 5,094 Securities: Held to maturity securities........................ 3,367 Available for sale securities...................... 27,786 Federal Funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's: Federal funds sold.......................... 7,204 Securities purchased under agreements to resell...................................... 136 Loans and lease financing receivables: Loans and leases, net of unearned income $67,215 Less: Allowance for loan and lease losses 1,768 Less: Allocated transfer risk reserve....... 75 ------ Loans and leases, net of unearned income, allowance, and reserve...................... 65,372 Trading Assets..................................... 28,610 Premises and fixed assets (including capitalized leases)..................................... 1,326 Other real estate owned............................ 26 Investments in unconsolidated subsidiaries and associated companies........................ 68 Customer's liability to this bank on acceptances outstanding................................. 995 Intangible assets.................................. 309 Other assets....................................... 6,993 -------- TOTAL ASSETS....................................... $151,453 ======== LIABILITIES Deposits In domestic offices............................. $46,917 Noninterest-bearing............................. $16,711 Interest-bearing................................ 30,206 ------- In foreign offices, Edge and Agreement subsid- iaries, and IBF's............................... 31,577 Noninterest-bearing............................. $ 2,197 Interest-bearing................................ 29,380 ------- Federal funds purchased and securities sold under agree- ments to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBF's Federal funds purchased................... 12,155 Securities sold under agreements to repurchase.. 8,536 Demand notes issued to the U.S. Treasury............... 1,000 Trading liabilities.................................... 20,914 Other Borrowed money: With a remaining maturity of one year or less... 10,018 With a remaining maturity of more than one year. 192 Mortgage indebtedness and obligations under capitalized leases.......................................... 12 Bank's liability on acceptances executed and outstanding 1,001 Subordinated notes and debentures...................... 3,411 Other liabilities...................................... 8,091 TOTAL LIABILITIES...................................... 143,824 ------- EQUITY CAPITAL Common stock........................................... 620 Surplus................................................ 4,664 Undivided profits and capital reserves................. 2,970 Net unrealized holding gains (Losses) on available-for-sale securities....................... (633) Cumulative foreign currency translation adjustments.... 8 TOTAL EQUITY CAPITAL................................... 7,629 -------- TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK AND EQUITY CAPITAL........................ $151,453 ======== I, Joseph L. Sclafani, S.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WALTER V. SHIPLEY ) EDWARD D. MILLER )DIRECTORS THOMAS G. LABRECQUE ) -----END PRIVACY-ENHANCED MESSAGE-----