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Sample Business ContractsHome: Sample Business Contracts:
EXECUTION COPY
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CLASS A NOTE PURCHASE AGREEMENT
Dated as of July 15, 1999
among
ZALE FUNDING TRUST,
Issuer,
ZALE DELAWARE, INC.,
Seller,
JEWELERS NATIONAL BANK,
Servicer,
THE CLASS A PURCHASERS PARTIES HERETO,
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
Administrative Agent and Agent,
and
THE OTHER AGENTS PARTIES HERETO
------------------------------
Relating to
Zale Funding Trust
Class A Floating Rate Asset Backed Variable Funding Notes
Series 1999-A
------------------------------
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<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS........................................................2
1.1 Definitions................................................2
1.2 Other Definitional Provisions.............................11
ARTICLE 2 AMOUNT AND TERMS OF COMMITMENTS....................................11
2.1 Purchases.................................................11
2.2 Reductions and Extensions of Commitments..................14
2.3 Interest, Fees, Expenses, Payments, Etc...................16
2.4 Requirements of Law.......................................20
2.5 Taxes.....................................................21
2.6 Indemnification...........................................23
ARTICLE 3 CONDITIONS PRECEDENT...............................................25
3.1 Condition to Initial Purchase.............................25
3.2 Condition to Additional Purchases.........................29
ARTICLE 4 REPRESENTATIONS AND WARRANTIES.....................................30
4.1 Representations and Warranties of Z Del...................30
4.2 Representations and Warranties of JNB.....................32
4.3 Representations and Warranties of the Issuer..............34
4.4 Representations and Warranties of the Class A Purchasers..36
ARTICLE 5 COVENANTS..........................................................36
5.1 Covenants of Z Del........................................37
ARTICLE 6 MUTUAL COVENANTS REGARDING CONFIDENTIALITY.........................40
6.1 Covenants of the Zale Parties.............................40
6.2 Covenants of Class A Purchasers...........................40
ARTICLE 7 THE AGENTS........................................................41
7.1 Appointment...............................................41
7.2 Delegation of Duties......................................41
7.3 Exculpatory Provisions....................................42
7.4 Reliance by Agents........................................42
7.5 Notices...................................................43
7.6 Non-Reliance on Agents and Other Class A Purchasers.......43
7.7 Indemnification...........................................44
7.8 Agents in their Individual Capacity.......................44
7.9 Successor Agents..........................................44
(i)
<PAGE> 3
ARTICLE 8 SECURITIES LAWS; TRANSFERS........................................45
8.1 Transfers of Class A Notes............................45
8.2 Tax Characterization..................................50
ARTICLE 9 MISCELLANEOUS.....................................................50
9.1 Amendments and Waivers................................50
9.2 Notices...............................................51
9.3 No Waiver; Cumulative Remedies........................53
9.4 Successors and Assigns................................53
9.5 Successors to Servicer................................53
9.6 Counterparts..........................................54
9.7 Severability..........................................54
9.8 Integration...........................................54
9.9 Governing Law.........................................54
9.10 Jurisdiction; Consent to Service of Process...........54
9.11 Termination...........................................55
9.12 Limited Recourse; No Proceedings......................55
9.13 Survival of Representations and Warranties............56
9.14 Waiver of Jury Trial..................................56
(ii)
<PAGE> 4
LIST OF EXHIBITS
EXHIBIT A Form of Investment Letter
EXHIBIT B Form of Transfer Supplement
EXHIBIT C Form of Joinder Supplement
(iii)
<PAGE> 5
CLASS A NOTE PURCHASE AGREEMENT, dated as of July 15, 1999, by
and among ZALE FUNDING TRUST, a Delaware business trust (together with its
successors and assigns, the "Issuer"), ZALE DELAWARE, INC., a Delaware
corporation ("Z Del"), individually and as Seller (as defined in the Indenture
referred to below), JEWELERS NATIONAL BANK, a national banking association
("JNB"), as Servicer (as defined in the Indenture referred to below), the CLASS
A PURCHASERS (as hereinafter defined) from time to time parties hereto, the
AGENTS for the Purchaser Groups from time to time parties hereto (each such
party, together with their respective successors in such capacity, an "Agent"),
and CREDIT SUISSE FIRST BOSTON, a Swiss banking corporation acting through its
New York Branch ("CSFB"), as administrative agent for the Class A Purchasers
(together with its successors in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Issuer, the Seller and the Servicer are parties
to a certain Purchase and Servicing Agreement, dated as of July 15, 1999 (as the
same may from time to time be amended or otherwise modified, the "Purchase and
Servicing Agreement"), pursuant to which, among other things, the Seller has
sold, assigned, transferred and conveyed, and has agreed to sell, assign,
transfer and convey, certain Receivables (as defined therein) to the Issuer, and
the Servicer has agreed to service such Receivables;
WHEREAS, the Issuer and The Bank of New York, as trustee
(together with its successors in such capacity, the "Indenture Trustee") are
parties to a certain Indenture, dated as of July 15, 1999 (as the same may from
time to time be amended or otherwise modified, the "Base Indenture"), providing
a receivables financing facility in connection with the Purchase and Servicing
Agreement and the other Transaction Documents (as defined in the Indenture);
WHEREAS, the Issuer proposes to issue its Class A Floating
Rate Asset Backed Variable Funding Notes, Series 1999-A (the "Class A Notes")
pursuant to the Indenture and a supplement thereto, dated as of July 15, 1999
(as the same may from time to time be amended or, otherwise modified, the
"Supplement" and the Base Indenture, as supplemented by the Supplement, the
"Indenture");
WHEREAS, the Issuer also proposes to issue its Class B Asset
Backed Notes, Series 1999-A (the "Class B Notes") pursuant to the Indenture,
which Class B Notes are subordinate to the Class A Notes and initially will be
retained by the Issuer;
WHEREAS, the Class A Purchasers are willing to purchase the
Class A Notes on the Closing Date and from time to time thereafter to purchase
Class A Note Principal Balance Increases (as defined in the Supplement) on the
terms and conditions provided for herein;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and adequacy
of which are hereby expressly acknowledged, the parties hereto agree as follows:
<PAGE> 6
ARTICLE 1 DEFINITIONS
1.1 Definitions. All capitalized terms used herein as defined terms
and not defined herein shall have the meanings given to them in the Indenture.
Each capitalized term defined herein shall relate only to the Series 1999-A and
to no other Series issued pursuant to the Indenture.
"Adjusted Commitment" shall mean on any date of determination, with
respect to a Liquidity Purchaser for a CP Conduit, such Liquidity Purchaser's
Commitment minus the aggregate outstanding principal amount of its Support
Advances to such CP Conduit.
"Adjusted Eurodollar Rate" shall mean, for any Interest Accrual
Period or portion thereof, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100th of 1%) equivalent to the rate determined pursuant to the
following formula:
Adjusted Eurodollar Rate = LIBOR Rate
-----------------------------
1-LIBOR Reserve Percentage
on the first day of such Interest Accrual Period.
"Administrative Agent" has the meaning specified in the preamble to
this Agreement.
"Affected Party" shall mean, with respect to any CP Conduit, any
Support Party of such CP Conduit.
"Agreement" shall mean this Class A Note Purchase Agreement, as
amended, supplemented or otherwise modified from time to time.
"Alternative Rate" shall mean, for any Interest Accrual Period, an
interest rate per annum equal to the lesser of (i) 0.50% per annum above the
Adjusted Eurodollar Rate for such Interest Accrual Period, and (ii) the daily
average Prime Rate in effect during such Interest Accrual Period.
"Assignee" and "Assignment" have the respective meanings specified
in subsection 8.1(e) of this Agreement.
"Agent" has the meaning specified in the preamble to this Agreement.
"Class A Agent" has the meaning specified in Section 7.1 of this
Agreement.
"Class A Interest Rate" has the meaning specified in subsection
2.3(a) of this Agreement.
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<PAGE> 7
"Class A Mandatory Partial Amortization Amount" shall mean, (a)
with respect to a Partial Commitment Expiration Date other than the Step-Down
Date, (i) the aggregate Percentage Interest held by Class A Purchasers having
Commitments which expire on such date, times (ii) the Class A Invested Amount on
such date and (b) with respect to the Step-Down Date, the excess, if any, of (i)
the aggregate Percentage Interests of Class A Purchasers in the Initial
Purchaser Group times the Class A Invested Amount, over (ii) the aggregate
Commitments of Class A Purchasers in the Initial Purchaser Group(after giving
effect to reductions thereof on the Step-Down Date pursuant to subsection
2.2(b)).
"Class A Monthly Interest" shall mean, for any Interest Accrual
Period, the sum of (i) interest on the Class A Principal Balance for such
Interest Accrual Period computed pursuant to subsections 2.3(a) or 2.3(b), as
applicable, of this Agreement, plus or minus (as the case may be) (ii) any
Estimated Interest Adjustment for the immediately preceding Interest Accrual
Period.
"Class A Notes" has the meaning specified in the recitals to this
Agreement.
"Class A Owners" shall mean the Class A Purchasers that are
owners of record of the Class A Notes or, with respect to any Class A Note held
by an Agent hereunder as nominee on behalf of Class A Purchasers in a Purchaser
Group, the Class A Purchasers that are owners of the Class A Noteholders'
Interest represented by such Class A Note as reflected on the books of such
Agent in accordance with this Agreement.
"Class A Principal Balance" shall mean, on any date of
determination, an amount equal to (i) the Class A Initial Invested Amount, plus
(ii) the aggregate amount of Class A Note Principal Balance Increases made on or
prior to such date, minus (iii) the aggregate amount of principal payments made
to the Class A Owners prior to such date.
"Class A Program Commitment Fee" shall mean, with respect to a
Purchaser Group, the ongoing program fees payable to Class A Purchasers in such
Purchaser Group in respect of the unutilized portion of the aggregate
Commitments of such Class A Purchasers, in the amounts and on the dates set
forth in the Supplemental Fee Letter for such Purchaser Group.
"Class A Program Utilization Fee Rate" shall mean, with respect
to a Purchaser Group, the applicable rate or rates identified as the "Class A
Program Utilization Fee Rate" in the Supplemental Fee Letter for such Purchaser
Group.
"Class A Purchase Limit" shall mean, for any day, the lesser of
(i) $350,000,000 and (ii) the Total Commitment on such day.
"Class A Purchasers" shall mean, collectively, the CP Conduits,
the Liquidity Purchasers and the Committed Purchasers.
"Class B Notes" has the meaning specified in the recitals to this
Agreement.
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<PAGE> 8
"Closing Date" shall mean July 15, 1999.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commercial Paper Notes" shall mean, with respect to a CP
Conduit, the short-term promissory notes issued by such CP Conduit which are
allocated by such CP Conduit as its funding for its purchasing or maintaining
its Percentage Interest of the Class A Principal Balance hereunder.
"Commercial Paper Rate" shall mean, with respect to a CP Conduit,
the rate identified as its "Commercial Paper Rate" in the Supplemental Fee
Letter to which such CP Conduit or its agent is a party.
"Commitment" shall mean, for any Committed Purchaser or Liquidity
Purchaser, the maximum amount of such Class A Purchaser's commitment to purchase
a portion of the Class A Noteholders' Interest, as set forth in the Joinder
Supplement or the Transfer Supplement by which such Committed Purchaser became a
party to this Agreement or assumed the Commitment (or a portion thereof) of
another Class A Purchaser, as such amount may be adjusted from time to time
pursuant to Section 2.2 of this Agreement or pursuant to Transfer Supplement(s)
executed by such Class A Purchaser and its Assignee(s) and delivered pursuant to
Section 8.1 of this Agreement. In the event that a Class A Purchaser is both a
Committed Purchaser and a Liquidity Purchaser, or is a Liquidity Purchaser which
maintains a portion of its Commitment hereunder in relation to more than one CP
Conduit, such Class A Purchaser shall be deemed to hold separate Commitments
hereunder in each such capacity.
"Commitment Expiration Date" shall mean July 13, 2000, as such
date may be extended from time to time in accordance with subsection 2.2(d)
hereof.
"Committed Purchaser" shall mean any Class A Purchaser which is
designated as a Committed Purchaser in the Joinder Supplement or the Transfer
Supplement pursuant to which it became a party to this Agreement, and any
Assignee of such Class A Purchaser to the extent of the portion of such
Commitment assumed by such Assignee pursuant to its respective Transfer
Supplement.
"Covered Portion" shall mean the portion of the Class A Principal
Balance equal to the Class A Invested Amount.
"CP Conduit" shall mean any Class A Purchaser which is designated
as a CP Conduit in the Joinder Supplement or the Transfer Supplement pursuant to
which it became a party to this Agreement.
"CSFB" has the meaning specified in the preamble to this
Agreement.
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<PAGE> 9
"Dissenting Purchaser" has the meaning specified in subsection
2.2(d) of this Agreement.
"Downgraded Purchaser" has the meaning specified in subsection
8.1(j) of this Agreement.
"Election Period" has the meaning specified in subsection 2.2(d)
of this Agreement.
"Estimated Interest Adjustment" has the meaning specified in
subsection 2.3(k) of this Agreement.
"Excluded Taxes" has the meaning specified in subsection 2.5(a)
of this Agreement.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Increase Notice" shall mean a notice delivered by the Issuer to
the Administrative Agent and each Agent pursuant to Section 7.04 of the
Supplement requesting a Class A Note Principal Balance Increase.
"Indemnitee" has the meaning specified in subsection 2.6(a) of
this Agreement.
"Indenture Trustee" has the meaning specified in the recitals to
this Agreement.
"Initial Purchaser Group" shall mean the Purchaser Group which
includes the initial CP Conduit which is a party to this Agreement.
"Investing Office" shall mean initially, the office of any Class
A Purchaser (if any) designated as such, in the Joinder Supplement or the
Transfer Supplement by which it became a party to this Agreement, and
thereafter, such other office of such Class A Purchaser or such Assignee as may
be designated in writing to the applicable Agent, the Administrative Agent, the
Issuer, the Servicer and the Indenture Trustee by such Class A Purchaser or
Assignee.
"Investment Letter" has the meaning specified in subsection
8.1(a) of this Agreement.
"JCC" shall mean Jewelers Credit Corporation, a Delaware
corporation which is a subsidiary of Z Del.
"JNB" has the meaning specified in the preamble to this
Agreement.
"LIBOR Rate" shall mean, with respect to any Interest Accrual
Period or portion thereof, the rate per annum shown on page 3750 of the Dow
Jones & Company Telerate screen or
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<PAGE> 10
any successor page as the composite offered rate for London interbank deposits
for a period equal to such Interest Accrual Period (or portion) thereof, as
shown under the heading "USD" as of 11:00 a.m., London time, two London Business
Days prior to the first day of such Interest Accrual Period; provided that in
the event no such rate is shown, the LIBOR Rate shall be the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of one percent) based on
the rates at which Dollar deposits for a period equal to such Interest Accrual
Period (or portion thereof) are displayed on page "LIBOR" of the Reuters Monitor
Money Rates Service or such other page as may replace the LIBOR page on that
service for the purpose of displaying London interbank offered rates of major
banks as of 11:00 a.m., London time, two London Business Days prior to the first
day of such Interest Accrual Period (it being understood that if at least two
such rates appear on such page, the rate will be the arithmetic mean of such
displayed rates); provided further that in the event fewer than two such rates
are displayed, or if no such rate is relevant, the LIBOR Rate shall be the rate
per annum equal to the average of the rates at which deposits in Dollars are
offered by the Reference Banks at approximately 11:00 a.m., London time, two
London Business Days prior to the first day of such Interest Accrual Period to
prime banks in the London interbank market for a period equal to such Interest
Accrual Period (or portion thereof), it being understood that if at least two
such quotations are provided, the rate shall be the arithmetic mean of such
provided rates; provided further that if fewer than two such rates are provided,
the rate shall be the arithmetic mean of the rates quoted by major banks in New
York City, selected by the Administrative Agent, at approximately 11:00 a.m.,
New York City time, on the first day of such Interest Accrual Period to leading
European banks for Dollar deposits for a period equal to such Interest Accrual
Period (or portion thereof); provided further that if the LIBOR Rate is not
established for any such Interest Accrual Period as otherwise provided above,
the LIBOR Rate for such Interest Accrual Period shall equal the LIBOR Rate for
the immediately preceding Interest Accrual Period.
"LIBOR Reserve Percentage" shall mean, with respect to any
Interest Accrual Period or portion thereof, a percentage (expressed as a
decimal) equal to the weighted average of the percentages in effect during such
Interest Accrual Period, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor thereto) for determining the maximum reserve
requirements applicable to "Eurocurrency liabilities" pursuant to Regulation D
or any other applicable regulation of the Federal Reserve Board (or any
successor thereto) which prescribes reserve requirements applicable to
"Eurocurrency liabilities" as currently defined in Regulation D.
"Liquidity Percentage" shall mean, for a Liquidity Purchaser for
a CP Conduit, such Liquidity Purchaser's Adjusted Commitment with respect to
such CP Conduit as a percentage of the aggregate Adjusted Commitments of all
Liquidity Purchasers for such CP Conduit.
"Liquidity Purchaser" shall mean, with respect to a CP Conduit,
each Class A Purchaser identified as a Liquidity Purchaser for such CP Conduit
in the Joinder Supplement or the Transfer Supplement pursuant to which such CP
Conduit became a party hereto, and any Assignee of such Class A Purchaser to the
extent such Assignee has assumed, pursuant to a Transfer Supplement, the
Commitment of such Class A Purchaser. In the event that a Liquidity Purchaser
acquires a portion of the Class A Principal Balance from its related CP Conduit
by Assignment, such
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<PAGE> 11
Liquidity Purchaser shall thereupon become a Committed Purchaser holding a
Commitment as such in an amount equal to the Class A Principal Balance so
acquired and cease to be a Liquidity Purchaser in respect of such Commitment.
"Maximum Purchase Amount" shall mean, for any CP Conduit, the
aggregate Commitments of its Liquidity Purchasers.
"Nonextending Class A Purchaser" shall mean, after its respective
Commitment Expiration Date, each Committed Purchaser or Liquidity Purchaser
which has declined to extend such Commitment Expiration Date in accordance with
subsection 2.2(d) hereof, to the extent not replaced pursuant to subsection
2.2(e).
"Note Rate Determination Date" shall mean, for any Interest
Accrual Period, the third Business Day prior to the Payment Date which follows
the end of such Interest Accrual Period.
"Partial Commitment Expiration Date" shall mean the date of the
occurrence of a Partial Expiration Event.
"Partial Expiration Event" has the meaning specified in
subsection 2.2(d) of this Agreement and shall include the occurrence of the
Step-Down Date.
"Participant" has the meaning specified in subsection 8.1(d) of
this Agreement.
"Participation" has the meaning specified in subsection 8.1(d) of
the Agreement.
"Percentage Interest" shall mean, for a Class A Purchaser on any
day, the percentage equivalent of (a) the sum of (i) the portion of the Class A
Initial Invested Amount (if any) purchased by such Class A Purchaser, plus (ii)
the aggregate portion of Class A Note Principal Balance Increases (if any)
purchased by such Class A Purchaser prior to such day pursuant to Section 7.04
of the Supplement, plus (iii) any portion of the Class A Principal Balance
acquired by such Class A Purchaser as an Assignee from another Class A Purchaser
pursuant to a Transfer Supplement executed and delivered pursuant to Section 8.1
of this Agreement, minus (iv) the aggregate amount of principal payments made to
such Class A Purchaser prior to such day, minus (v) any portion of the Class A
Principal Balance assigned by such Class A Purchaser to an Assignee pursuant to
a Transfer Supplement executed and delivered pursuant to Section 8.1 of this
Agreement, divided by (b) the aggregate Class A Principal Balance on such day.
"Person" shall mean an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.
"Prime Rate" shall mean, for any day, the higher of (i) the base
commercial lending rate per annum announced from time to time by CSFB in New
York in effect on such day, or (ii) the
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<PAGE> 12
interest rate per annum quoted by CSFB at approximately 11:00 a.m., New York
City time, on such day, to dealers in the New York Federal funds market for the
overnight offering of Dollars by CSFB plus one-half of one percent (0.50%). (The
Prime Rate is not intended to represent the lowest rate charged by CSFB for
extensions of credit.)
"Purchase and Servicing Agreement" has the meaning specified in
the recitals to this Agreement.
"Purchase Date" shall mean the Closing Date and each Increase
Date.
"Purchase Termination Date" shall mean, for a Class A Purchaser,
the first to occur of (i) in the case of a Committed Purchaser or Liquidity
Purchaser, the Commitment Expiration Date for such Class A Purchaser or, in the
case of a CP Conduit, the latest Commitment Expiration Date for any of its
Liquidity Purchasers, or (ii) the Early Amortization Commencement Date.
"Purchaser Group" shall mean each group of Class A Purchasers
consisting of (i) a CP Conduit, (ii) the Liquidity Purchasers with respect to
such CP Conduit, and (iii) any Committed Purchasers which are assignees of such
CP Conduit or any such Liquidity Providers.
"Purchaser Percentage" shall mean, with respect to a Committed
Purchaser or CP Conduit, its Commitment or Maximum Purchase Amount, as the case
may be, as a percentage of the Total Commitment.
"Reference Banks" shall mean CSFB, and Bank One Texas, N.A.
"Regulatory Change" shall mean, as to each Class A Purchaser, any
change occurring after the date of the execution and delivery of this Agreement
or, if later, the date of the execution and delivery of the Transfer Supplement
by which it became party to this Agreement; in the case of a Participant, any
change occurring after the date on which its Participation became effective, or
in the case of an Affected Party, any change occurring after the date it became
such an Affected Party, in any (or the adoption after such date of any new):
(1) United States Federal or state law or foreign law applicable
to such Class A Purchaser, Affected Party or Participant; or
(2) regulation, interpretation, directive, guideline or request
(whether or not having the force of law) applicable to such Class A Purchaser,
Affected Party or Participant of any court or other judicial authority or any
Governmental Authority charged with the interpretation or administration of any
law referred to in clause (i) or of any fiscal, monetary or other Governmental
Authority or central bank having jurisdiction over such Class A Purchaser,
Affected Party or Participant.
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<PAGE> 13
"Related Documents" shall mean, collectively, this Agreement
(including all effective Supplemental Fee Letters and Transfer Supplements), the
Base Indenture, the Supplement, the Purchase and Servicing Agreement, the Trust
Agreement, the Series 1999-A Notes and the Transaction Documents.
"Replacement Purchaser" has the meaning specified in subsection
8.1(l).
"Required Class A Owners" shall mean, at any time, Class A Owners
having more than two-thirds of the aggregate Percentage Interests of all Class A
Owners.
"Required Class A Purchasers" shall mean, at any time, Committed
Purchasers and Liquidity Purchasers having Commitments aggregating more than
two-thirds of the Total Commitment.
"Requirement of Law" shall mean, as to any Person, any law,
treaty, rule or regulation, or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such Person or to which
such Person is subject, whether federal, state or local (including usury laws,
the Federal Truth in Lending Act and Regulation Z and Regulation B of the Board
of Governors of the Federal Reserve System).
"Risk Portion" shall mean the portion of the Class A Principal
Balance equal to the excess thereof over Class A Invested Amount.
"Risk Rate" shall mean, for any day, a rate per annum equal to
the sum of (i) the Prime Rate in effect for such day, plus (ii) 2.00%.
"Step-Down Date" shall mean the first to occur of (i) October 15,
1999, or (ii) the date on which the Issuer shall have issued any additional
Series of Notes pursuant to the Base Indenture.
"Supplement" has the meaning specified in the recitals to this
Agreement.
"Supplemental Fee Letter" shall mean, with respect to each
Purchaser Group, the letter agreement, designated therein as a Supplemental Fee
Letter with respect to such Purchaser Group and then in effect, between the
Issuer and the Agent for such Purchaser Group, as such letter agreement may be
amended or otherwise modified from time to time.
"Support Advances" shall mean, with respect to a Liquidity
Purchaser and its related CP Conduit, any participation held by such Liquidity
Purchaser in such CP Conduit's Percentage Interest in the Class A Principal
Balance which was purchased from such CP Conduit pursuant to a Support Facility
and any loans or other advances made by such Liquidity Purchaser to such CP
Conduit pursuant to a Support Facility to fund such CP Conduit's making or
maintaining its purchases hereunder (but excluding any such loans or advances
made to fund such CP Conduit's obligations to
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<PAGE> 14
pay interest, fees or other similar amounts relating to the funding of its
making or maintaining its purchases hereunder).
"Support Facility" shall mean any liquidity or credit support
agreement with a CP Conduit which relates to this Agreement (including any
agreement to purchase an assignment of or participation in Class A Notes).
"Support Party" shall mean any other bank, insurance company or
other financial institution extending or having a commitment to extend funds to
or for the account of a CP Conduit (including by agreement to purchase an
assignment of or participation in Class A Notes) under a Support Facility. Each
Liquidity Purchaser for a CP Conduit which is a CP Conduit shall be deemed to be
a Support Party for such CP Conduit.
"Taxes" has the meaning specified in subsection 2.5(a) of this
Agreement.
"Termination Event" shall mean the occurrence of an Early
Amortization Event, a Series 1999-A Early Amortization Event or a Servicer
Default, or the occurrence of an event or condition which would be an Early
Amortization Event, a Series 1999-A Early Amortization Event or a Servicer
Default but for a waiver of or failure to declare or determine such event by the
Noteholders or the Trustee; provided, however, that the occurrence of an event
or circumstance which constitutes or would constitute an Early Termination Event
solely under clause (iv) of Section 10.01 of the Indenture with respect to a
Series other than Series 1999-A shall not constitute a Termination Event.
"Total Commitment" shall mean, on any date of determination, the
aggregate Commitments of the Committed Purchasers and the Liquidity Purchasers.
"Transfer" has the meaning specified in subsection 8.1(c) of this
Agreement.
"Transferee" has the meaning specified in subsection 8.1(c) of
this Agreement.
"Transfer Supplement" has the meaning specified in subsection
8.1(e) of this Agreement.
"Trust" has the meaning specified in the recitals to this
Agreement.
"written" or "in writing" (and other variations thereof) shall
mean any form of written communication or a communication by means of telex,
telecopier device, telegraph or cable.
"Z Del" has the meaning specified in the preamble to this
Agreement.
"Zale" shall mean Zale Corporation, a Delaware corporation.
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<PAGE> 15
"Zale Party" shall have the meaning specified in Section 5.1 of
this Agreement.
1.2 Other Definitional Provisions.
(2) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto.
(3) The words "hereof", "herein", and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; and Section,
subsection and Exhibit references are to this Agreement, unless otherwise
specified. The words "including" and "include" shall be deemed to be followed by
the words "without limitation".
ARTICLE 2 AMOUNT AND TERMS OF COMMITMENTS
2.1 Purchases.
(a) On and subject to the terms and conditions of this Agreement,
(i) each CP Conduit may purchase Class A Notes on the Closing Date representing
a Class A Principal Balance equal to its Purchaser Percentage of the Class A
Initial Invested Amount and (ii) each Liquidity Purchaser for each Purchaser
Group, severally, agrees to purchase, to the extent not purchased by the CP
Conduit in its Purchaser Group, its Liquidity Percentage of the Class A Initial
Invested Amount, in either case for a purchase price equal to the portion of the
Class A Initial Invested Amount so purchased.
(b) On and subject to the terms and conditions of this Agreement
and prior to its Purchase Termination Date, (i) each CP Conduit may purchase its
Purchaser Percentage of any Class A Note Principal Balance Increase offered for
purchase pursuant to Section 7.04 of the Supplement, and (ii) each Committed
Purchaser (if any), severally, agrees to purchase its Purchaser Percentage of
the Class A Note Principal Balance Increase so offered for purchase, in each
case for a purchase price equal to the Class A Note Principal Balance Increase
so purchased.
(c) The purchase of the Class A Initial Invested Amount hereunder
shall be made on prior notice from the Issuer to the Administrative Agent and
each Agent received not later than 4:00 p.m., New York City time, on the
Business Day preceding the Closing Date. Each purchase of any Class A Note
Principal Balance Increase hereunder on the applicable Increase Date shall be in
accordance with the provisions of Section 7.04 of the Supplement. Each Increase
Notice shall be irrevocable. Each Agent shall promptly forward a copy of each
Increase Notice received by it to each Class A Purchaser in its Purchaser Group.
(d) Each CP Conduit shall notify the Agent for its Purchaser
Group by 10:00 a.m., New York City time, on the applicable Purchase Date whether
it has elected to make the purchase
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offered to it pursuant to subsection 2.1(a) or 2.1(b), as applicable, of this
Agreement. In the event that a CP Conduit shall not have timely provided such
notice, such CP Conduit shall be deemed to have elected not to make such
purchase. Such Agent shall notify each Liquidity Purchaser for such CP Conduit
on or prior to 11:00 a.m., New York City time, on the applicable Purchase Date
if such CP Conduit has not elected to purchase its entire Purchaser Percentage
of the Class A Initial Invested Amount or the Class A Note Principal Balance
Increase, as the case may be, which notice shall specify (i) the identity of
such CP Conduit, (ii) the portion of the Class A Initial Invested Amount or the
Class A Note Principal Balance Increase, as the case may be, which such CP
Conduit has not elected to purchase as provided above, and (iii) the respective
Liquidity Percentages of such Liquidity Purchasers on such Purchase Date (as
determined by such Agent in good faith; for purposes of such determination, such
Agent shall be entitled to rely conclusively on the most recent information
provided by such CP Conduit or its agent or by the agent for its Support
Parties). Subject to receiving such notice and to the satisfaction of the
applicable conditions set forth in Article 3 hereof, each of such CP Conduit's
Liquidity Purchasers shall make a purchase of Class A Notes on the applicable
Purchase Date in an amount equal to its Liquidity Percentage of the portion of
the Class A Initial Invested Amount or the Class A Note Principal Balance
Increase, as the case may be, which such CP Conduit has not elected to purchase,
for a purchase price equal to the Class A Initial Invested Amount or the Class A
Note Principal Balance Increase, as the case may be, so purchased.
(e) Each Class A Purchaser's purchase price payable pursuant to
subsection 2.1(a), 2.1(b) or 2.1(d) of this Agreement shall be made available to
the Agent for its Purchaser Group, subject to the fulfillment of the applicable
conditions set forth in Article 3 hereof, at or prior to 2:00 p.m., New York
City time, on the applicable Purchase Date, by deposit of immediately available
funds to an account of such Agent specified in subsection 9.2(b) of this
Agreement. Such Agent shall promptly notify the Issuer in the event that any
Class A Purchaser either fails to make such funds available to such Agent before
such time or notifies such Agent that it will not make such funds available to
such Agent before such time. Subject to (i) such Agent's receipt of such funds
and (ii) the fulfillment of the applicable conditions set forth in Article 3
hereof, as determined by such Agent, such Agent will not later than 4:00 p.m.,
New York City time, on such Purchase Date make such funds available, in the same
type of funds received, by wire transfer thereof to the account of Issuer in the
United States specified in the applicable Increase Notice or, in the case of the
purchase on the Closing Date, specified in writing by the Issuer to such Agent
not later than the Business Day prior to the Closing Date.
(f) In the event that notwithstanding the fulfillment of the
applicable conditions set forth in Article 3 hereof with respect to a purchase,
a CP Conduit elected to make a purchase on a Purchase Date but failed to make
its purchase price available to the Agent for its Purchaser Group when required
by subsection 2.1(e) of this Agreement, such CP Conduit shall be deemed to have
rescinded its election to make such purchase, and neither the Issuer, the Seller
nor any other party shall have any claim against such CP Conduit by reason for
its failure to timely make such purchase. In any such case, such Agent shall
give notice of such failure not later than 2:30 p.m., New York City time, on the
Purchase Date to each Liquidity Purchaser for such CP Conduit and to the Issuer,
which notice shall specify (i) the identity of such CP Conduit, (ii) the amount
of the purchase which
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it had elected but failed to make and (iii) the respective Liquidity Percentages
of such Liquidity Purchasers on such Purchase Date (as determined by such Agent
in good faith; for purposes of such determination, such Agent shall be entitled
to rely conclusively on the most recent information provided by such CP Conduit
or its agent or by the agent for its Support Parties). Subject to receiving such
notice, each of such CP Conduit's Liquidity Purchasers shall purchase a portion
of the Class A Principal Balance in an amount equal to its Liquidity Percentage
of the amount described in clause (ii) above at or before 4:00 p.m., New York
City time, on such Purchase Date and otherwise in accordance with subsection
2.1(d) of this Agreement. Subject to such Agent's receipt of such funds, such
Agent will not later than 5:00 p.m., New York City time, on such Purchase Date
make such funds available, in the same type of funds received, by wire transfer
thereof to the account of the Issuer described in subsection 2.1(e) of this
Agreement, which payment shall be deemed to be timely for purposes of subsection
7.04(c) of the Supplement.
(g) The Agent for each Purchaser Group shall notify the Issuer,
the Servicer, the Indenture Trustee and each Class A Purchaser in its Purchaser
Group on the Closing Date (in the case of the purchase of the Class A Initial
Invested Amount) or not later than the Business Day following the applicable
Increase Date (in the case of any purchases of Class A Note Principal Balance
Increases) of the identity of each Class A Purchaser in such Purchaser Group
which purchased any portion of the Class A Initial Invested Amount or any Class
A Note Principal Balance Increase on such Purchase Date, whether such Class A
Purchaser was a CP Conduit, a Committed Purchaser or a Liquidity Purchaser and
the portion of the Class A Initial Invested Amount or Class A Note Principal
Balance Increase purchased by such Class A Purchaser.
(h) In no event shall a Committed Purchaser be required on any
date to purchase a Class A Note Principal Balance Increase which would result in
its Percentage Interest of the Class A Principal Balance, determined after
giving effect to such purchase, exceeding its Commitment, and in no event shall
a Liquidity Purchaser be required on any date to purchase a Class A Note
Principal Balance Increase which would result in its Percentage Interest of the
Class A Principal Balance, determined after giving effect to such purchase,
exceeding its Adjusted Commitment. In no event may any Class A Note Principal
Balance Increase be offered for purchase hereunder or under Section 7.04 of the
Supplement, nor shall any Class A Purchaser be obligated to purchase any Class A
Note Principal Balance Increase, to the extent that, after giving effect to such
Class A Note Principal Balance Increase, the Class A Principal Balance would
exceed the lesser of the Total Commitment or the Class A Purchase Limit.
(i) The Class A Purchasers in each Purchaser Group hereby direct
that the Class A Notes be registered in the name of the Agent for such Purchaser
Group, as nominee on behalf of the Class A Purchasers in such Purchaser Group
from time to time hereunder.
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<PAGE> 18
2.2 Reductions and Extensions of Commitments.
(a) At any time the Issuer may, upon at least five Business Days'
prior written notice to the Agent, reduce the Total Commitment. Each partial
reduction shall be in an aggregate amount of $5,000,000 or integral multiples of
$1,000,000 in excess thereof (or such other amount requested by the Issuer to
which the Agent consents). Reductions of the aggregate Commitments pursuant to
this subsection 2.2(a) of this Agreement shall be allocated (i) to the
Commitment of each Committed Purchaser and the Maximum Purchase Amount of each
CP Conduit, pro rata based on the Purchaser Percentage represented by such
Commitment or Maximum Purchase Amount, and (ii) to the aggregate Commitments of
Liquidity Purchasers for each CP Conduit pro rata based on their respective
Liquidity Percentages.
(b) On the Step-Down Date, the aggregate Commitments of all
Liquidity Purchasers and Committed Purchasers in the Initial Purchaser Group
shall automatically be reduced to the extent they exceed $150,000,000. Any such
reduction will be allocated (i) to the Commitment of each Committed Purchaser
(if any) in such Purchaser Group and to the Maximum Purchase Amount of the CP
Conduit in such Purchaser Group, pro rata based on the Purchaser Percentage
represented by such Commitment or Maximum Purchase Amount, and (ii) to the
aggregate Commitments of Liquidity Purchasers in the Initial Purchaser Group pro
rata based on their respective Liquidity Percentages.
(c) On the Purchase Termination Date for a Committed Purchaser or
Liquidity Purchaser, the Commitment of such Class A Purchaser shall be
automatically reduced to zero.
(d) So long as no Termination Event has occurred and is
continuing, no more than 120 and no less than 90 days prior to the applicable
Commitment Expiration Date, the Seller may request, through the Administrative
Agent, that each Committed Purchaser and Liquidity Purchaser extend its
Commitment Expiration Date for a 364-day period as herein provided, which
decision will be made by each Committed Purchaser and Liquidity Purchaser in its
sole discretion. Upon receipt of any such request, the Administrative Agent
shall promptly notify each Agent thereof, which shall notify each Committed
Purchaser and Liquidity Purchaser in its Purchaser Group thereof. At least 30
but not more than 60 days prior to the applicable Commitment Expiration Date
(the "Election Period"), each Committed Purchaser and Liquidity Purchaser shall
notify the Agent for its Purchaser Group of its willingness or refusal to so
extend its Commitment Expiration Date, and such Agent shall notify the Seller
and the Administrative Agent of such willingness or refusal by the Committed
Purchasers and Liquidity Purchasers not later than the Business Day following
the last day of the Election Period. No Liquidity Purchaser may consent to an
extension of its Commitment Expiration Date without the consent of each CP
Conduit, if any, for which it acts as a Liquidity Purchaser. Any Committed
Purchaser or Liquidity Purchaser which notifies the applicable Agent of its
refusal to extend or which does not expressly notify such Agent that it is
willing to extend its Commitment Expiration Date during the applicable Election
Period shall be deemed to be (x) a Nonextending Class A Purchaser after the
Commitment Expiration Date then in effect (such occurrence, unless such
Nonextending Class A Purchaser is replaced pursuant to subsection 2.2(e) of this
Agreement, a
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<PAGE> 19
"Partial Expiration Event") and (y) a "Dissenting Purchaser" from the date of
its refusal notice or the end of the applicable Election Period. If (i) one or
more Committed Purchasers or Liquidity Purchasers have agreed to extend the
Commitment Expiration Date, and (ii) at the end of the applicable Election
Period, no Termination Event shall have occurred, the Commitment Expiration Date
then in effect for each such Committed Purchaser and Liquidity Purchaser shall
be extended to the date which is 364 days following the first day of the
Election Period or, if such day is not a Business Day, the next preceding
Business Day; provided that if not all Committed Purchasers and Liquidity
Purchasers have agreed to such extension, the Seller may elect, by notice to the
Administrative Agent, the Issuer and each Agent delivered not later than five
Business Days prior to the end of the Election Period, not to have such
extension become effective.
(e) Within two Business Days following the end of an Election
Period, the Agent for each Purchaser Group shall notify each other Class A
Purchaser in such Purchaser Group, the Administrative Agent, the Issuer, the
Seller and the Servicer of the identity of any Dissenting Purchaser and the
amount of its Commitment. Such Agent, the Seller and, if the Dissenting
Purchaser is a Liquidity Purchaser, the affected CP Conduit may (but shall not
be required to) request one or more other Class A Purchasers in such Purchaser
Group, with the consent of the Agent (which shall not be unreasonably withheld)
and, if the Dissenting Purchaser is a Liquidity Purchaser, the affected CP
Conduit in its sole discretion, or seek another financial institution reasonably
acceptable to such Agent and, if the Dissenting Purchaser is a Liquidity
Purchaser acceptable to the affected CP Conduit in its sole discretion, to
acquire all or a portion of the Commitment of the Dissenting Purchaser and all
amounts payable to it hereunder and under the Indenture in accordance with
Section 8.1 of this Agreement. Each Dissenting Purchaser hereby agrees to assign
all or a portion of its Commitment and the amounts payable to it hereunder and
under the Indenture to a replacement investor identified by the Agent for its
Purchaser Group in accordance with the preceding sentence, subject to ratable
payment of such Dissenting Purchaser's Percentage Interest of the Class A
Principal Balance, together with all accrued and unpaid interest thereon, and a
ratable portion of all fees and other amounts due to it hereunder.
(f) The Class A Purchasers in the Initial Purchaser Group and the
Agent therefor shall become parties to this Agreement by entering into Joinder
Supplements with the Issuer and the Administrative Agent, substantially in the
form of Exhibit C. The Total Commitment may be increased by the Issuer, at the
direction of the Seller, from time to time, to an amount not exceeding
$350,000,000, minus (unless the Administrative Agent otherwise consents) the
aggregate amount of the reductions of the Total Commitment pursuant to
subsection 2.2(a), by (i) with respect to a Purchaser Group, the increase of the
Commitment of one or more Liquidity Purchasers in such Purchaser Group or the
addition of one or more Liquidity Purchasers in such Purchaser Group, with the
consent of the CP Conduit and each affected Liquidity Purchaser in such
Purchaser Group, or (ii) by the addition of one or more Purchaser Groups with
the consent of the Administrative Agent (which consent shall not be unreasonably
withheld), each consisting of a CP Conduit and one or more Liquidity Purchasers;
provided, however, that no such increase shall become effective unless (A) such
increasing or new Liquidity Purchaser and, if applicable, such CP Conduit shall
have entered into an appropriate amendment or supplement to this Agreement (or
its Assignment) reflecting such
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<PAGE> 20
increased or new Commitment or, in the case of a CP Conduit, its Maximum
Purchase Amount, (B) after giving effect to such increase and to any concurrent
increase in the Class B Invested Amount pursuant to the Supplement, the Class B
Invested Amount shall equal at least the Class B Enhancement Percentage times
the sum of the Total Commitment plus the Class B Invested Amount, and (C) such
conditions, if any, as the Administrative Agent shall have reasonably required
in connection with such increase or addition shall have been satisfied.
2.3 Interest, Fees, Expenses, Payments, Etc.
(a) Except as otherwise provided in subsection 2.3(b) of this
Agreement, each CP Conduit's Percentage Interest of the Covered Portion of the
Class A Principal Balance shall bear interest for each Interest Accrual Period
at a rate per annum equal to the sum of such CP Conduit's Commercial Paper Rate
plus the applicable Class A Program Utilization Fee Rate. Each CP Conduit's
commercial paper tranches will be selected by such CP Conduit or its
administrator, after consultation with the Seller, to the extent reasonably
practicable. Each Committed Purchaser's Percentage Interest and each Liquidity
Purchaser's Percentage Interest of the Covered Portion of the Class A Principal
Balance shall bear interest for each Interest Accrual Period at a rate per annum
equal to the sum of the Alternative Rate plus the applicable Class A Program
Utilization Fee Rate. Each Class A Purchaser's Percentage Interest of the Risk
Portion of the Class A Principal Balance shall bear interest for each Interest
Accrual Period at a rate per annum equal to the sum of the Risk Rate from time
to time in effect plus the applicable Class A Program Utilization Fee Rate. The
"Class A Interest Rate" for each Interest Accrual Period shall equal the dollar
weighted average (based on the respective applicable portions of the Class A
Principal Balance) of the interest rates for such Interest Accrual Period
determined as provided in this subsection 2.3(a) and in subsection 2.3(b) of
this Agreement.
(b) If and to the extent that, and only for so long as, a CP
Conduit at any time determines for any reason whatsoever that it is unable to
raise or is precluded or prohibited from raising, or that it is not advisable to
raise, funds through the issuance of Commercial Paper Notes in the commercial
paper market of the United States to finance its purchase or maintenance of its
Percentage Interest of the Covered Portion of the Class A Principal Balance or
any portion thereof (which determination may be based on any allocation method
employed in good faith by such CP Conduit), including by reason of market
conditions or by reason of insufficient availability under any of its Support
Facilities or the downgrading of any of its Support Parties, upon notice from
such CP Conduit to the Agent for its Purchaser Group and the Issuer, such
portion of such CP Conduit's Percentage Interest of the Class A Principal
Balance shall bear interest at a rate per annum equal to the sum of the
Alternative Rate plus the applicable Class A Program Utilization Fee Rate,
rather than as otherwise determined pursuant to subsection 2.3(a) of this
Agreement.
(c) The Class A Notes and interest thereon shall be paid as
provided in the Indenture, and each Agent shall allocate to the Class A Owners
in its Purchaser Group each payment in respect of the Class A Notes received by
such Agent in its capacity as Class A Noteholder as provided herein. Except as
otherwise provided in the Indenture, payments in reduction of the portion
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of the Class A Principal Balance evidenced by a Class A Note shall be allocated
and applied to Class A Owners of such Class A Note pro rata based on their
respective Percentage Interests of the Class A Principal Balance, or in any such
case in such other proportions as each affected Class A Purchaser may agree upon
in writing from time to time with such Agent and the Issuer; provided that from
and after the occurrence of a Partial Expiration Event until the earlier to
occur of (i) the Purchase Termination Date for all Class A Purchasers and (ii)
the date on which (A) the aggregate amount of payments in reduction of the Class
A Principal Balance made after the related Partial Commitment Expiration Date
equals (B) the related Class A Mandatory Partial Amortization Amount, payments
on a Class A Note in reduction of the portion of the Class A Principal Balance
evidenced by such Class A Note shall be allocated and applied to Nonextending
Class A Owners of such Class A Note pro rata based on their respective
Percentage Interests of the Class A Principal Balance; provided that in the case
of the Step-Down Date, the related Class A Mandatory Partial Amortization Amount
shall be allocated and applied to Class A Purchasers in the Initial Purchaser
Group pro rata based, for each such Class A Purchaser, on the amount by which
its Percentage Interest of the Class A Invested Amount exceeds its Commitment or
Maximum Purchase Amount (as applicable), after giving effect to the reduction
thereof on the Step-Down Date pursuant to subsection 2.2(b) hereof. Payments of
interest in respect of the portion of the Class A Principal Balance evidenced by
a Class A Note shall be allocated and applied to Class A Owners of such Class A
Note pro rata based upon the respective amounts of interest owed to them,
determined as provided above in this Section 2.3.
(d) The Seller agrees to pay to each Agent for the account of
Class A Purchasers in its Purchaser Group the Class A Program Commitment Fee and
other amounts set forth in the Supplemental Fee Letter for such Purchaser Group
at the times specified therein. Each Class A Purchaser in a Purchaser Group
shall be entitled to receive the share of the Class A Program Commitment Fee as
may be agreed upon from time to time between such Class A Purchaser and the
Agent for such Purchaser Group.
(e) The Seller agrees to pay on demand (i) to the Administrative
Agent and the initial Class A Purchasers all reasonable costs and expenses in
connection with the preparation, execution, delivery and initial syndication of
this Agreement and each related Support Facility, and the other documents to be
delivered hereunder or in connection herewith, (ii) to the Administrative Agent
and each Agent and Class A Purchaser all reasonable costs and expenses in
connection with the administration (including any requested amendments, waivers
or consents of any of the Related Documents) of this Agreement and the Related
Documents and Support Facilities, including in each case the reasonable fees and
out-of-pocket expenses of counsel with respect thereto, and (iii) to the
Administrative Agent and each Agent and Class A Purchaser, on demand, all
reasonable costs and expenses (including reasonable fees and expenses of
counsel), if any, in connection with the enforcement of any of the Related
Documents, and the other documents delivered thereunder or in connection
therewith.
(f) The Seller agrees to pay on demand any and all stamp,
transfer and other taxes (other than Taxes covered by Section 2.5 hereof) and
governmental fees payable in connection with
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the execution, delivery, filing and recording of any of the Related Documents
and each related Support Facility or the other documents and agreements to be
delivered hereunder and thereunder or otherwise in connection with the issuance
of Series 1999-A Notes, and agrees to save each Class A Purchaser and Agent and
the Administrative Agent harmless from and against any liabilities with respect
to or resulting from any delay in paying or any omission to pay such taxes and
fees.
(g) Any fees or other amounts payable hereunder (without regard
to any limitations set forth herein on the sources from which such amount may be
paid) which are not paid on the due date thereof (including interest payable
pursuant to this clause (g)) and Carryover Class A Interest shall accrue
interest (after as well as before judgment) at the Risk Rate from time to time
in effect from and including the due date thereof to but excluding the date such
amount is actually paid.
(h) Unless otherwise specified in an applicable Supplemental Fee
Letter, interest calculated by reference to the Commercial Paper Rate or the
Adjusted Eurodollar Rate shall be calculated on the basis of a 360-day year for
the actual days elapsed. Interest calculated by reference to the Prime Rate
shall be calculated on the basis of a 365- or 366-day year, as applicable, for
the actual days elapsed. Periodic fees or other periodic amounts payable
hereunder shall be calculated, unless otherwise specified in the Supplemental
Fee Letter, on the basis of a 360-day year and for the actual days elapsed.
(i) All payments to be made hereunder or under the Indenture,
whether on account of principal, interest, fees or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 2:00 p.m., New York
City time, on the due date thereof to the Administrative Agent or the applicable
Agent, as the case maybe, at its account specified in subsection 9.2(b) hereof,
in United States dollars and in immediately available funds. Payments received
by such Agent after 2:00 p.m., New York City time, shall be deemed to have been
made on the next Business Day. Notwithstanding anything herein to the contrary,
if any payment due hereunder becomes due and payable on a day other than a
Business Day, the payment date thereof shall be extended to the next succeeding
Business Day and interest shall accrue thereon at the applicable rate during
such extension. To the extent that (i) the Issuer, the Indenture Trustee, the
Seller or the Servicer makes a payment to the Administrative Agent or an Agent
or Class A Purchaser or (ii) the Administrative Agent or an Agent or Class A
Purchaser receives or is deemed to have received any payment or proceeds for
application to an obligation, which payment or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy or insolvency law, state or Federal law, common law, or for equitable
cause, then, to the extent such payment or proceeds are set aside, the
obligation or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not been
received or deemed received by the Administrative Agent or such Agent or Class A
Purchaser, as the case may be.
(j) At or before 4:00 p.m., New York City time, on each Note Rate
Determination Date, each CP Conduit shall notify the Agent for its Purchaser
Group of (i) its Commercial Paper Rate, if applicable, in effect for the related
Interest Accrual Period, and (ii) if
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applicable, the date on which the Alternative Rate became applicable to its
Percentage Interest of the Class A Principal Balance or a portion thereof
pursuant to subsection 2.3(b) of this Agreement. Such notification may be based
on such CP Conduit's good faith estimate of the Commercial Paper Rate if the
actual rate is not then known to such CP Conduit, and in such case, such CP
Conduit shall notify such Agent at or before 4:00 p.m., New York City time, on
the following Note Rate Determination Date of the amount of any variation
between interest payable to such CP Conduit for the applicable Interest Accrual
Period based on such estimate and interest which should have been payable to
such CP Conduit for such Interest Accrual Period based on its final
determination of the applicable Commercial Paper Rate. The amount of any
shortfall in interest based on such variation shall be included in the portion
of Class A Monthly Interest payable to such CP Conduit for the following
Interest Accrual Period, and the amount of any overpayment of interest to such
CP Conduit based on such variation shall be credited, dollar for dollar, against
the portion of Class A Monthly Interest otherwise payable to such CP Conduit for
the following Interest Accrual Period. Each determination by a CP Conduit of its
applicable Commercial Paper Rate pursuant to this Agreement shall be conclusive
and binding on the Class A Purchasers, each Agent, the Issuer, the Seller, the
Servicer and the Indenture Trustee in the absence of manifest error.
(k) On each Note Rate Determination Date, (i) the Agent for each
Purchaser Group shall notify the Servicer, with respect to such Purchaser Group,
of the applicable Commercial Paper Rates and the Class A Program Utilization Fee
Rate for the related Interest Accrual Period, and, if applicable, the dates on
which the Alternative Rate was applicable to the Percentage Interest of the
Class A Principal Balance owed to any member of its Purchaser Group, and (ii)
the Administrative Agent shall notify the Servicer of the Alternative Rate and
the Risk Rate, if applicable, for the related Interest Accrual Period. For such
purposes, the Agents may rely conclusively on notices from CP Conduits as to the
interest rate or rates from time to time applicable to their respective
Percentage Interest of the Class A Principal Balance. Such notification from an
Agent may be based on such CP Conduit's estimate of the Commercial Paper Rate as
provided to such Agent pursuant to subsection 2.3(j) hereof, if the actual rate
and amount is not then known to such Agent. In any such case, such Agent shall
notify the Servicer and the Indenture Trustee on or before the following Note
Rate Determination Date of the amount of any variation between the estimated
amount of interest payable on Class A Notes accrued at the Commercial Paper Rate
and the actual amount thereof for the preceding Interest Accrual Period. The
amount of any shortfall in interest based on such variation shall be a positive
"Estimated Interest Adjustment" for such Interest Accrual Period, and the amount
of any overpayment of interest based on such variation shall be a negative
"Estimated Interest Adjustment" for such Interest Accrual Period. Any positive
Estimated Interest Adjustment for an Interest Accrual Period shall be deemed not
due on the Payment Date for such Interest Accrual Period, but shall be due on
the next following Payment Date. An Estimated Interest Adjustment shall not bear
interest, unless not paid when due as provided in the preceding sentence. Each
determination of the Commercial Paper Rate, the Alternative Rate, the Risk Rate
and the Class A Program Utilization Fee Rate by the Administrative Agent or an
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Class A Purchasers, the Issuer, the Servicer and the Indenture
Trustee in the absence of manifest error.
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2.4 Requirements of Law.
(a) In the event that any Class A Purchaser shall have reasonably
determined that any Regulatory Change shall:
(i) subject such Class A Purchaser to any tax of any kind
whatsoever with respect to this Agreement, its Commitment or its beneficial
interest in the Class A Notes, or change the basis of taxation of payments in
respect thereof(except for Taxes covered by Section 2.5 hereof and taxes
included in the definition of Excluded Taxes in subsection 2.5(a) hereof); or
(ii) impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, such Class A
Purchaser;
and the result of any of the foregoing is to increase the cost to such Class A
Purchaser, by an amount which such Class A Purchaser deems to be material, of
maintaining its Commitment or its interest in the Class A Notes or to reduce any
amount receivable in respect thereof, then, in any such case, after submission
by such Class A Purchaser to the Agent for its Purchaser Group of a written
request therefor and the submission by such Agent to the Issuer and the Servicer
of such written request therefor, the Issuer shall pay to such Agent for the
account of such Class A Purchaser any additional amounts necessary to compensate
such Class A Purchaser for such increased cost or reduced amount receivable, to
the extent not already reflected in the applicable interest rate, together with
interest on any such unpaid amount from the Payment Date following receipt by
the Issuer of such request for compensation under this subsection 2.4(a) of this
Agreement, if such request is received by the Issuer at least five Business Days
prior to the Determination Date related to such Payment Date, and otherwise from
the following Payment Date, until payment in full thereof (after as well as
before judgment) at the Prime Rate in effect from time to time.
(b) In the event that any Class A Purchaser shall have determined
that any Regulatory Change regarding capital adequacy has the effect of reducing
the rate of return on such Class A Purchaser's capital or on the capital of any
Person controlling such Class A Purchaser as a consequence of its obligations
hereunder or its maintenance of its Commitment or its interest in the Class A
Notes to a level below that which such Class A Purchaser or such Person could
have achieved but for such Regulatory Change (taking into consideration such
Class A Purchaser's or such Person's policies with respect to capital adequacy)
by an amount deemed by such Class A Purchaser or such Person to be material,
then, from time to time, after submission by such Class A Purchaser to the Agent
for its Purchaser Group of a written request therefor and submission by such
Agent to the Issuer and the Servicer of such written request therefor, the
Issuer shall pay to such Agent for the account of such Class A Purchaser such
additional amount or amounts as will compensate such Class A Purchaser or such
Person, as applicable, for such reduction, together with interest on any such
unpaid amount from the Payment Date following receipt by the Issuer of such
request for compensation under this subsection 2.4(b), if such request is
received by the Issuer at least five
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Business Days prior to the Determination Date related to such Payment Date, and
otherwise from the following Payment Date, until payment in full thereof (after
as well as before judgment) at the Prime Rate in effect from time to time.
Nothing in this subsection 2.4(b) shall be deemed to require the Issuer to pay
any amount to a Class A Purchaser to the extent such Class A Purchaser has been
compensated therefor under another provision of this Agreement or to the extent
such amount is already reflected in the applicable interest rate.
(c) Each Class A Purchaser agrees that it shall use its
reasonable efforts to reduce or eliminate any claim for compensation pursuant to
subsections 2.4(a) and 2.4(b) of this Agreement, including but not limited to
designating a different Investing Office for its Class A Notes (or any interest
therein) if such designation will avoid the need for, or reduce the amount of,
any increased amounts referred to in subsection 2.4(a) or 2.4(b) hereof and will
not, in the opinion of such Class A Purchaser, be unlawful or otherwise
disadvantageous to such Class A Purchaser or inconsistent with its policies or
result in any unreimbursed cost or expense to such Class A Purchaser or in an
increase in the aggregate amount payable under subsections 2.4(a) and 2.4(b)
hereof.
(d) Each Class A Purchaser claiming increased amounts described
in subsection 2.4(a) or 2.4(b) of this Agreement will furnish to the Agent for
its Purchaser Group (together with its request for compensation) a certificate
prepared in good faith setting forth the basis and the calculation of the amount
(in reasonable detail) of each request by such Class A Purchaser for any such
increased amounts referred to in subsection 2.4(a) or 2.4(b) hereof. Any such
certificate shall be conclusive absent manifest error, and such Agent shall
deliver a copy thereof to the Issuer and the Servicer. Failure on the part of
any Class A Purchaser to demand compensation for any amount pursuant to
subsection 2.4(a) or 2.4(b) hereof with respect to any period shall not
constitute a waiver of such Class A Purchaser's right to demand compensation
with respect to such period ; provided, however, that notwithstanding the
foregoing provisions of this Section 2.4, a Class A Purchaser shall not be
compensated for any such amount relating to any period ending, and of which such
Class A Purchaser has had knowledge, more than six months prior to the date that
such Class A Purchaser notifies the Issuer in writing thereof or for any amounts
resulting from a change by any Class A Purchaser of its Investing Office (other
than changes required by law).
2.5 Taxes.
(a) All payments made to the Class A Purchasers, the Agents or
the Administrative Agent under this Agreement and the Indenture (including all
amounts payable with respect to the Class A Notes) shall, to the extent allowed
by law, be made free and clear of, and without deduction or withholding for or
on account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority
(collectively, "Taxes"), excluding (i) income taxes (including branch profit
taxes, minimum taxes and taxes computed under alternative methods, at least one
of which is based on or measured by net income), franchise taxes (imposed in
lieu of income taxes), or any other taxes based on or measured by the net income
of such Class A Purchaser or Agent or the Administrative Agent (as the case may
be) or the gross receipts
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or income of such Class A Purchaser or Agent or the Administrative Agent (as the
case may be); (ii) any Taxes that would not have been imposed but for the
failure of such Class A Purchaser or Agent or the Administrative Agent, as
applicable, to provide and keep current (to the extent legally able) any
certification or other documentation required to qualify for an exemption from,
or reduced rate of, any such Taxes or required by this Agreement to be furnished
by such Class A Purchaser or Agent or the Administrative Agent, as applicable;
and (iii) any Taxes imposed as a result of a change by any Class A Purchaser of
the Investing Office (other than changes mandated by this Agreement, including
subsection 2.4(c) hereof, or required by law) (all such excluded taxes being
hereinafter called "Excluded Taxes"). If any Taxes, other than Excluded Taxes,
are required to be withheld from any amounts payable to a Class A Purchaser or
Agent or the Administrative Agent hereunder or under the Indenture, then after
submission by any Class A Purchaser to the Agent for its Purchaser Group (in the
case of an amount payable to a Class A Purchaser) and by any Agent or the
Administrative Agent to the Issuer and the Servicer of a written request
therefor, the amounts so payable to such Class A Purchaser or Agent or the
Administrative Agent, as applicable, shall be increased, and the Issuer shall
pay to the applicable Agent for the account of such Class A Purchaser or for its
own account or to the Administrative Agent, as applicable, the amount of such
increase to the extent necessary to yield to such Class A Purchaser or Agent or
the Administrative Agent, as applicable (after payment of all such Taxes)
interest or any such other amounts payable hereunder or thereunder at the rates
or in the amounts specified in this Agreement and the Indenture; provided,
however, that the amounts so payable to such Class A Purchaser or Agent or the
Administrative Agent shall not be increased pursuant to this subsection 2.5(a)
if such requirement to withhold results from the failure of such Person to
comply with subsection 2.5(c) hereof. Whenever any Taxes are payable on or with
respect to amounts distributed to a Class A Purchaser or Agent or the
Administrative Agent, as promptly as possible thereafter the Servicer shall send
to the Agent, on behalf of such Class A Purchaser, or to such Agent or the
Administrative Agent, as applicable, a certified copy of an original official
receipt showing payment thereof. If the Issuer fails to pay any Taxes when due
to the appropriate taxing authority or fails to remit to the Agent, on behalf of
itself or such Class A Purchaser, or to such Agent or the Administrative Agent,
as applicable, the required receipts or other required documentary evidence, the
Issuer shall pay to such Agent on behalf of such Class A Purchaser or to such
Agent or the Administrative Agent for its own account, as applicable, any
incremental taxes, interest or penalties that may become payable by such Class A
Purchaser or Agent or the Administrative Agent, as applicable, as a result of
any such failure.
(b) A Class A Purchaser claiming increased amounts under
subsection 2.5(a) hereof for Taxes paid or payable by such Class A Purchaser
will furnish to the applicable Agent a certificate prepared in good faith
setting forth the basis and amount of each request by such Class A Purchaser for
such Taxes, and such Agent shall deliver a copy thereof to the Issuer and the
Servicer. An Agent or the Administrative Agent claiming increased amounts under
subsection 2.5(a) hereof for its own account for Taxes paid or payable by such
Agent or the Administrative Agent , as applicable, will furnish to the Issuer
and the Servicer a certificate prepared in good faith setting forth the basis
and amount of each request by the Agent or the Administrative Agent for such
Taxes. Any such certificate of a Class A Purchaser or Agent or the
Administrative Agent shall be conclusive absent manifest error. Failure on the
part of any Class A Purchaser or Agent or the Administrative
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Agent to demand additional amounts pursuant to subsection 2.5(a) of this
Agreement with respect to any period shall not constitute a waiver of the right
of such Class A Purchaser or Agent or the Administrative Agent, as the case may
be, to demand compensation with respect to such period. All such amounts shall
be due and payable to such Agent on behalf of such Class A Purchaser or to such
Agent or the Administrative Agent for its own account, as the case may be, on
the Payment Date following receipt by the Issuer of such certificate, if such
certificate is received by the Issuer at least five Business Days prior to the
Determination Date related to such Payment Date and otherwise shall be due and
payable on the following Payment Date (or, if earlier, on the Series 1999-A
Termination Date).
(c) Each Class A Purchaser and each Participant holding an
interest in Class A Notes agrees that prior to the date on which the first
interest or fee payment hereunder is due thereto, it will deliver to the Issuer,
the Servicer, the Indenture Trustee, the applicable Agent and the Administrative
Agent (i) if such Class A Purchaser or Participant is not incorporated under the
laws of the United States or any State thereof, two duly completed copies of the
U.S. Internal Revenue Service Form 4224 or successor applicable forms required
to evidence that the Class A Purchaser's or Participant's income from this
Agreement or the Class A Notes is "effectively connected" with the conduct of a
trade or business in the United States, and (ii) a duly completed U.S. Internal
Revenue Service Form W-9 or successor applicable or required forms. Each Class A
Purchaser or Participant holding an interest in Class A Notes also agrees to
deliver to the Issuer, the Servicer, the Indenture Trustee, the applicable Agent
and the Administrative Agent two further copies of such Form 4224 and Form W-9,
or such successor applicable forms or other manner of certification, as the case
may be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it hereunder, and such extensions or renewals thereof as
may reasonably be requested by the Servicer, an Agent or the Administrative
Agent, unless in any such case, solely as a result of a change in treaty, law or
regulation occurring prior to the date on which any such delivery would
otherwise be required, the Class A Purchaser is no longer eligible to deliver
the then-applicable form set forth above and so advises the Servicer and the
applicable Agent and the Administrative Agent. Each Class A Purchaser certifies,
represents and warrants as of the Closing Date, each Assignee and each
Participant (in either case other than a Support Party) shall certify, represent
and warrant as a condition of acquiring its Assignment or Participation as of
the effective date of the Transfer Supplement to which it is a party or of such
Participation, as the case may be, and each Support Party shall certify,
represent and warrant as of the effective date of its becoming a Support Party,
that (x) in the case of Form 4224 (if applicable), its income from this
Agreement or the Class A Notes is effectively connected with a United States
trade or business and (y) it is entitled to an exemption from United States
backup withholding tax. Further, each Class A Purchaser and each Participant
acquiring an interest in a Class A Note covenants that for so long as it shall
own Class A Notes or such Participation, such Class A Notes or Participation
shall be held in such manner that the income therefrom shall be effectively
connected with the conduct of a United States trade or business.
2.6 Indemnification.
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(a) The Seller agrees to indemnify and hold harmless the
Administrative Agent and each Agent and Class A Purchaser and any director,
officer, employee or agent thereof (each such Person being an "Indemnitee") from
and against any and all claims, damages, losses, liabilities, costs or expenses
(including reasonable fees and expenses of counsel) whatsoever (including claims
under federal or state securities laws, but excluding claims for repayment of
principal of or interest on, or other amounts due in respect of, the Class A
Notes or amounts payable by the Issuer under Section 2.4 or 2.5 hereto, which
the Indemnitee may incur (or which may be claimed against the Indemnitee) by
reason of or in connection with (i) the execution and delivery or assignment of,
or payment under, this Agreement or any Related Document or the Class A Notes,
(ii) the offer and sale by or on behalf of the Issuer, the Seller or any of
their affiliates of the Series 1999-A Notes or (iii) the other transactions
contemplated hereby, including the matters and circumstances described in any of
clauses (i) through (xii) of subsection 8.01(b) of the Purchase and Servicing
Agreement, except (A) to the extent that any such claim, damage, loss,
liability, cost or expense shall be caused by the willful misconduct or gross
negligence of the Indemnitee in performing its obligations under this Agreement,
(B) to the extent that any such claim, damage, loss, liability, cost or expense
relates to Taxes, and (C) to the extent limited by the last paragraph of
subsection 8.01(b) of the Purchase and Servicing Agreement. Subject to the
limitations set forth above, but without limiting the generality of the
foregoing, the Seller agrees to indemnify and hold harmless the Administrative
Agent and each Agent from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including at any
time following the payment of the obligations under this Agreement, including
the Class A Principal Balance) be imposed on, incurred by or asserted against
the Administrative Agent and such Agent in any way relating to or arising out of
this Agreement, or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted by the
Administrative Agent or any Agent under or in connection with any of the
foregoing; provided that the Seller shall not be liable under this sentence for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of the
Administrative Agent or any Agent resulting from its own gross negligence or
willful misconduct. Promptly after receipt by the Administrative Agent or an
Agent or Class A Purchaser of notice of the commencement of any action, the
Administrative Agent or such Agent or Class A Purchaser, as the case may be,
will, if a claim in respect thereof is to be made under this subsection 2.6(a),
notify the Seller in writing of the commencement thereof; provided, however, the
omission to so notify the Seller will not relieve the Seller from any liability
which it may have to the Administrative Agent or such Agent or Class A Purchaser
under this subsection 2.6(a) except to the extent the Seller was actually
prejudiced by the failure to give such notices promptly.
(b) JNB and any Successor Servicer, by accepting its appointment
pursuant to the Purchase and Servicing Agreement, (i) shall agree to be bound by
the terms, covenants and conditions contained herein applicable to the Servicer
and to be subject to the duties and obligations of the Servicer hereunder, (ii)
as of the date of its acceptance, shall be deemed to have made with respect to
itself the representations and warranties made by the Servicer in subsections
4.1(a) through 4.1(e) hereof (in the case of subsection 4.1(a) with appropriate
factual changes) and (iii) shall agree on a recourse basis to indemnify and hold
harmless any Indemnitee from and against any and all claims,
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damages, losses, liabilities, costs or expenses (including the fees and expenses
of counsel) whatsoever which such Indemnitee may incur (or which may be claimed
against such Indemnitee) (i) by reason of the negligence or willful misconduct
of such Servicer in exercising its powers and carrying out its obligations under
this Agreement, the Purchase and Servicing Agreement or any Related Document or
(ii) by reason of or in connection with any of the matters and circumstances
described in any of clauses (i) through (vi) of subsection 8.01(c) of the
Purchase and Servicing Agreement, subject in the case of this clause (ii) to the
limitations set forth in the last paragraph of subsection 8.01(c) of the
Purchase and Servicing Agreement.
(c) In the event that for any reason, (i) the basis for
calculation of interest on any CP Conduit's Percentage Interest of the Class A
Principal Balance shall change from the Commercial Paper Rate to the Alternative
Rate, (ii) any CP Conduit receives any repayment of its share of the Class A
Principal Balance, and the date of such change or of such repayment is not the
maturity date for all Commercial Paper Notes allocated by such CP Conduit to
funding its purchase or maintenance of the affected portion of its Percentage
Interest of the Class A Principal Balance, or (iii) any Class A Purchaser
receives any repayment of its share of the Class A Principal Balance on a date
other than a Payment Date or upon fewer than two Business Days' prior (or, with
respect to amounts listed at the Alternative Rate based on the Adjusted
Eurodollar Rate, two Business Days') written notice, then in any such case the
Issuer agrees to indemnify each affected Class A Purchaser against, and to
promptly pay on demand directly to such Class A Purchaser the amount equal to
any loss or reasonable out-of-pocket expense suffered by such Class A Purchaser
as a result of such change or such repayment, including, in the case of a CP
Conduit, any loss, cost or expense suffered by such CP Conduit by reason of its
issuance of Commercial Paper Notes or its incurrence of other obligations
reasonably allocated by such CP Conduit to its funding or the maintenance of its
funding of its share of the Class A Principal Balance, or, in the case of any
Class A Purchaser, redeploying funds prepaid or repaid, in amounts which
correspond to its share of the Class A Principal Balance. A statement setting
forth in reasonable detail the calculations of any additional amounts payable
pursuant to this Section submitted by a Class A Purchaser or Agent or by the
Administrative Agent, as the case may be, to the Issuer and the Servicer and
shall be conclusive absent manifest error.
ARTICLE 3 CONDITIONS PRECEDENT
3.1 Condition to Initial Purchase. The following shall be
conditions precedent to the initial purchase by the Class A Purchasers of the
Class A Notes:
(a) the representations and warranties of the Issuer, Z Del and
JNB set forth or referred to in Sections 4.1, 4.2 and 4.3, respectively, hereof
shall be true and correct in all material respects on the Closing Date as though
made on and as of the Closing Date, and no event which of itself or with the
giving of notice or lapse of time, or both, would constitute a Termination Event
shall have occurred and be continuing on the Closing Date;
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(b) the Receivables Purchase Agreement, dated as of July 15,
1999, between JNB and JCC shall have been duly executed and delivered by all
parties thereto and shall be in form and substance satisfactory to the Class A
Purchasers;
(c) the Receivables Purchase Agreement, dated as of July 15,
1999, between JCC and Z Del shall have been duly executed and delivered by all
parties thereto and shall be in form and substance satisfactory to the Class A
Purchasers;
(d) the Purchase and Servicing Agreement shall have been duly
executed and delivered by all parties thereto and shall be in form and substance
satisfactory to the Class A Purchasers;
(e) the Base Indenture and Supplement shall have been duly
executed and delivered by all parties thereto and shall be in form and substance
satisfactory to the Class A Purchasers;
(f) the Supplemental Fee Letter for each Purchaser Group shall
have been executed and delivered by the Issuer to the Agent for such Group;
(g) the Class A Notes and the Class B Notes shall have been duly
issued in accordance with the Indenture, and the Class B Initial Invested Amount
shall equal at least the Class B Enhancement Percentage times the Initial
Invested Amount;
(h) there shall be no Originator other than JNB;
(i) Zale shall have executed and delivered to the Administrative
Agent, for the benefit of each Indemnitee, an agreement, in form and substance
satisfactory to the Class A Purchasers, the Administrative Agent and each Agent,
providing for indemnification of each Indemnitee on terms and conditions
substantially as set forth in subsection 2.6(a) hereof;
(j) the Seller shall have paid all fees payable on the Closing
Date to the Administrative Agent (for its own account or for the account of the
initial Class A Purchasers) described in the initial Supplemental Fee Letter and
all reasonable and appropriately invoiced costs and expenses of the
Administrative Agent and the initial Agent and Class A-1 Purchasers payable by
the Seller, to the extent provided herein, in connection with the transactions
contemplated hereby; and
(k) the Administrative Agent on behalf of the Class A Purchasers
shall have received on the Closing Date the following items, each of which shall
be in form and substance satisfactory to the Agent:
(i) an Officer's Certificate of Z Del confirming the
satisfaction of the conditions set forth in clauses (a) through (g), inclusive,
above;
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(ii) an Officer's Certificate of JNB confirming the satisfaction
of the conditions set forth in clauses (a) (as to representations and warranties
of JNB only), and (b) through (g), inclusive, above;
(iii) a certificate, in form and substance satisfactory to the
Class A Purchasers, of JCC confirming the satisfaction of the conditions set
forth in clauses (b) and (c) above and to the effect that the Administrative
Agent and each Agent and Class A Purchaser may rely on the representations and
warranties of JCC made in the Receivables Purchase Agreement described in clause
(c) above;
(iv) a copy of the Trust Agreement, in form and substance
satisfactory to the Class A Purchasers, certified as a true and complete copy
thereof by an authorized officer of Z Del;
(v) a copy of (A) the certificate of incorporation and by-laws
of, and an incumbency certificate with respect to its officers executing any of
the Related Documents on the Closing Date on behalf of Z Del, certified by its
authorized officer, and (B) resolutions of the Board of Directors (or an
authorized committee thereof) of Z Del with respect to the Related Documents to
which it is party, certified by its authorized officer;
(vi) a copy of (A) the certificate of incorporation and by-laws
of, and an incumbency certificate with respect to its officers executing any of
the Related Documents on the Closing Date on behalf of JCC, certified by its
authorized officer, and (B) resolutions of the Board of Directors (or an
authorized committee thereof) of JCC with respect to the Related Documents to
which it is party, certified by its authorized officer;
(vii) a copy of (A) the articles of association and by-laws of,
and an incumbency certificate with respect to its officers executing any of the
Related Documents on the Closing Date on behalf of JNB, certified by its
authorized officer, and (B) resolutions of the Board of Directors (or an
authorized committee thereof) of JNB with respect to the Related Documents to
which it is party, certified by its authorized officer;
(viii) a copy of (A) the certificate of incorporation and by-laws
of, and an incumbency certificate with respect to its officers executing any of
the Related Documents on the Closing Date on behalf of Zale, certified by its
authorized officer, and (B) resolutions of the Board of Directors (or an
authorized committee thereof) of Zale with respect to the Related Documents to
which it is party, certified by its authorized officer;
(ix) "long form" certificates issued on a recent date by the
Secretary of State of Delaware evidencing the legal existence and good standing
of Z Del, JCC and Zale as corporations under the laws of the State of Delaware;
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(x) certificates issued on a recent date by the appropriate
officer in (A) in the case of Z Del, Arizona, California, Florida, Louisiana,
Pennsylvania, Texas and Virginia, and (B) in the case of JCC, Texas, evidencing
the qualification of such Zale Parties to transact business as a foreign
corporation therein and the good standing of such Zale Parties therein;
(xi) a certificate issued on a recent date from the Comptroller
of the Currency of the United States evidencing the existence and good standing
of JNB;
(xii) the favorable written opinions of counsel for Z Del, JNB,
JCC and Zale addressed to the Administrative Agent and each Agent and Class A
Purchaser, or accompanied by a letter providing that the Administrative Agent
and each Agent and Class A Purchaser may rely on such opinions as if they were
addressed to them, and dated the Closing Date, covering general corporate
matters, the due execution and delivery of, and the enforceability of, each of
the Related Documents to which Z Del, JNB, JCC or Zale (individually or in any
other capacity) is party, sale/security interest matters, banking regulation,
tax matters and such other matters as the Administrative Agent may request;
(xiii) evidence of the due execution and delivery by the Owner
Trustee, on behalf of the Trust, and the Indenture Trustee of the Related
Documents to which it is party;
(xiv) an executed copy of each Receivables Purchase Agreement
described in clause (b) or (c) above, the Purchase and Servicing Agreement, the
Base Indenture and the Supplement;
(xv) a signed copy of a letter of Arthur Andersen LLP, in form
and substance satisfactory to the Administrative Agent;
(xvi) a certificate of the Owner Trustee as to the establishment
of certain accounts as provided in the Trust Agreement;
(xvii) the duly executed Class A Note(s) registered in the name
of each Agent as nominee on behalf of the Class A Owners in its Purchaser Group;
(xviii) evidence satisfactory to the Administrative Agent that
financing statements duly executed by JNB, JCC, Z Del and the Issuer or other,
similar instruments or documents, as may be necessary or, in the opinion of the
Administrative Agent or any Agent or Class A Purchaser, desirable under the
Uniform Commercial Code of all appropriate jurisdictions or any comparable law
to perfect the transfers (including grants of security interests) under the
Related Documents have been delivered and, if appropriate, have been duly filed
or recorded and that all filing fees, taxes or other amounts required to be paid
in connection therewith have been paid;
(xix) certified copies of requests for information or copies (or
a similar search report certified by a party acceptable to the Administrative
Agent), dated a date reasonably
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near to the Closing Date, listing all effective financing statements which name
JNB, JCC, Z Del or the Issuer (under its present name and any previous name) as
debtor and which are filed in the jurisdictions in which the statements referred
to in clause (xviii) above were or are to be filed, together with copies of such
financing statements (none of which, other than financing statements naming the
party under the Related Documents to which transfers (including grants of
security interests) thereunder purport to have been made) shall cover any of the
property purported to be conveyed thereunder;
(xx) evidence satisfactory to each Class A Purchaser that the
Class A Notes are rated at least "Aa2" and "AA" by Moody's and S&P,
respectively;
(xxi) evidence satisfactory to each initial CP Conduit that
its purchase of Class A Notes and Class A Note Principal Balance Increases
hereunder will not result in a reduction or withdrawal of the rating of its
Commercial Paper Notes by Moody's, S&P or any other nationally recognized rating
agency;
(xxii) evidence satisfactory to each Class A Purchaser that,
giving effect to the issuance of the Class A Notes and the purchase hereunder of
the Class A Initial Invested Amount, all of the Issuer's Series 1994-1 Notes
shall have been redeemed in full; and
(xxiii) such additional documents, instruments, certificates
or letters as the Administrative Agent or any Agent or Class A Purchaser may
reasonably request.
3.2 Condition to Additional Purchases. The following shall be
conditions precedent to each purchase hereunder by any Class A Purchasers of the
Class A Notes on the Closing Date and of each Class A Note Principal Balance
Increase thereafter:
(a) Except in the case of the initial purchase on the Closing
Date, each Agent shall have received a properly completed Increase Notice not
later than 5:00 p.m. on the fourth Business Day prior to such Increase Date;
(b) (i) No Termination Event, and no event that, after the giving
of notice or the lapse of time, would constitute a Termination Event, shall have
occurred and be continuing, (ii) as of such Purchase Date and after giving
effect to the distributions to be made on such date pursuant to the Supplement,
no unreimbursed Investor Charge-Offs shall remain outstanding, and (iii) except
in the case of the purchase on the Closing Date, the amount of funds then
available for distribution to the Administrative Agent, the Agents or the Class
A Purchasers pursuant to the Supplement shall equal or exceed the aggregate sum
of all interest, fees, expenses and all other amounts due and payable to the
Administrative Agent, the Agents and the Class A Purchasers hereunder (including
any amounts owed to the Administrative Agent, the Agents or the Class A
Purchasers under subsections 2.3, 2.4, 2.5 or 2.6 of this Agreement, but
excluding the Class A Principal Balance);
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(c) On the Purchase Date and after giving effect to the purchases
on such date of the Initial Invested Amount or of the Class A Note Principal
Balance Increase, if any, to be purchased on such date, as applicable, all
representations and warranties of Z Del or JNB (individually or in any other
capacity) or the Issuer contained herein or otherwise made in writing pursuant
to any of the provisions hereof shall be true and correct in all material
respects with the same force and effect as though such representations and
warranties had been made on and as of such date (unless such representations and
warranties specifically relate to an earlier date);
(d) After giving effect to the purchases on such date of the
Initial Invested Amount or of the Class A Note Principal Balance Increase to be
purchased on such date, (i) the Class A Invested Amount shall not exceed the
Class A Purchase Limit, and (ii) the Class A Note Principal Balance Increase on
such date plus the amount of any related increase in the Class B Invested Amount
shall not exceed an amount equal to the excess of the aggregate amount of
Principal Receivables in the Trust over the Required Minimum Principal Balance;
(e) After giving effect to the purchases on such date of the
Initial Invested Amount or of the Class A Note Principal Balance Increase to be
purchased on such date and any related increase in the Class B Invested Amount,
the Class B Invested Amount shall at least equal the Class B Enhancement
Percentage times the aggregate Invested Amount;
(f) The Initial Investor Interest (in the case of the Closing
Date) or the amount of the Class A Note Principal Balance Increase (in the case
of an Increase Date) to be purchased on such Purchase Date shall equal a minimum
amount of $5,000,000 and be shall be in an integral multiple of $1,000,000;
(g) Such Purchase Date shall not occur during a Partial
Amortization Period;
(h) Each CP Conduit's Support Facilities shall be in full force
and effect; and
(i) In the case of each Increase Date, the Seller shall have
delivered to the Administrative Agent and each Agent an Officer's Certificate
dated such Increase Date certifying (i) that the conditions described in clauses
(a) through (g) above have been satisfied and (ii) that based on the facts known
to the officer signing such Officer's Certificate at such time, in the
reasonable belief of the Seller, the purchases of the additional Invested Amount
to be purchased on such Increase Date will not cause an Early Amortization Event
or Series 1999-A Early Amortization Event or an event that, after the giving of
notice or the lapse of time, would constitute an Early Amortization Event or
Series 1999-A Early Amortization Event to occur.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Z Del. Z Del represents and
warrants to the Class A Purchasers, the Agents and the Administrative Agent that
the representations and warranties of Z Del (individually or as Seller) set
forth in the Purchase and Servicing Agreement, the
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Indenture and the other Related Documents are true and correct as of the date
hereof. Z Del further represents and warrants to, and agrees with, each Class A
Purchaser and Agent and the Administrative Agent that, as of the date hereof:
(a) Z Del is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, with full power and
authority under such laws to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted and to
execute, deliver and perform its obligations under this Agreement and the
Related Documents to which it is a party.
(b) Z Del has the power and authority to execute, deliver and
perform this Agreement and the Related Documents to which it is a party and all
the transactions contemplated hereby and thereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement
and such Related Documents. When executed and delivered, each of this Agreement
and each Related Document to which Z Del is a party will constitute the legal,
valid and binding agreement of Z Del, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium and other laws of general applicability
relating to or affecting creditors' rights generally and the rights of creditors
from time to time in effect. The enforceability of Z Del's obligations under
such agreements is also subject to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law,
and indemnification sought in respect of securities laws violations may be
limited by public policy.
(c) No consent, license, approval or authorization of, or
registration with, any governmental authority, bureau or agency is required to
be obtained in connection with the execution, delivery or performance of each of
this Agreement or any Related Documents that has not been duly obtained and
which is not and will not be in full force and effect on the Closing Date,
except such that may be required by the blue sky laws of any state and except
those which the failure to obtain individually or in the aggregate, would not
have a material adverse effect on the Issuer or Z Del or the transactions
contemplated by, or the ability of the Issuer or Z Del to perform its respective
obligations under, this Agreement or the Related Documents.
(d) The execution, delivery and performance of each of this
Agreement and the Related Documents do not violate any provision of any existing
law or regulation applicable to Z Del, any order or decree of any court to which
Z Del is subject, its charter or by-laws or any mortgage, indenture, contract or
other agreement to which Z Del is a party or by which it or any significant
portion of Z Del's properties is bound (other than violations of such laws,
regulations, orders, decrees, mortgages, indentures, contracts and other
agreements which do not affect the legality, validity or enforceability of any
of such agreements or the Receivables and which, individually or in the
aggregate, would not have a material adverse effect on the Issuer or Z Del or
the transactions contemplated by, or the ability of the Issuer or Z Del to
perform its respective obligations under, this Agreement or the Related
Documents).
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(e) There is no litigation or administrative proceeding before
any court, tribunal or governmental body presently pending or, to the knowledge
of Z Del, threatened against Z Del with respect to this Agreement and the
Related Documents, the transactions contemplated hereby or thereby or the
issuance of the Series 1999-A Notes, and there is no such litigation or
proceeding against Z Del or any significant portion of Z Del properties, in each
case which would have a material adverse effect on the Issuer or Z Del or the
transactions contemplated by, or the ability of the Issuer or Z Del to perform
its respective obligations under, this Agreement or the Related Documents.
(f) Z Del has delivered to the Administrative Agent complete and
correct copies of (i) the audited balance sheet of Z Del as at July 31, 1998,
and the related audited statements of income, shareholders' equity and cash
flows for the fiscal year then ended, accompanied by the report thereon of
Arthur Andersen LLP, and (ii) the unaudited balance sheet of Z Del as at April
30, 1999, and the related unaudited statements of income, shareholders' equity
and cash flows for the fiscal quarter then ended. Such financial statements
fairly present in all material respects the financial condition of Z Del as at
such date and the results of the operations of Z Del for the period ended on
such dates, all in accordance with United States generally accepted accounting
principles, consistently applied, and since July 31, 1998 there has been no
material adverse change in any such condition or operations.
(g) Except as may have been consented to in writing by the
Administrative Agent or as provided in Section 6.1, such Agent or Class A
Purchaser, the identity of the Administrative Agent or any Agent or Class A
Purchaser as purchaser of the Class A Noteholders' Interest under this Agreement
or as an agent therefor has not been disclosed to any Person (other than any
director, officer, employee, representative or counsel of a party hereto and
each Rating Agency).
(h) The Indenture is not required to be qualified under the Trust
Indenture Act of 1939, and the Issuer is not required to be registered under the
Investment Company Act.
(i) The aggregate amount of the Receivables in the Accounts as of
July 12, 1999 was $587,515,901.79, consisting of $573,697,044.56 of Principal
Receivables and $13,818,857.23 of Finance Charge Receivables.
(j) On the Closing Date and after giving effect to the purchase
of the Class A Noteholders' Interest and the issuance of the Series 1999-A
Notes, no Early Amortization Event, Series 1999-A Early Amortization Event or
Servicer Default has occurred and is continuing, and no event, act or omission
has occurred and is continuing which, with the lapse of time, the giving of
notice or both, would constitute such an Early Amortization Event, Series 1999-A
Early Amortization Event or Servicer Default.
4.2 Representations and Warranties of JNB. JNB represents and
warrants to the Class A Purchasers, the Agents and the Administrative Agent that
the representations and warranties of JNB (individually or as Servicer or an
Originator) set forth in the Purchase and Servicing Agreement and the other
Related Documents are true and correct as of the date hereof. JNB further
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represents and warrants to, and agrees with, each Class A Purchaser and Agent
and the Administrative Agent that, as of the date hereof:
(a) JNB is a national banking association validly existing and in
good standing under the laws of the United States, with full power and authority
under such laws to own its properties and conduct its business as such
properties are presently owned and such business is presently conducted and to
execute, deliver and perform its obligations under this Agreement and the
Related Documents to which it is a party. JNB is subject to the supervision of
the Office of the Comptroller of the Currency.
(b) JNB has the power and authority to execute, deliver and
perform this Agreement and the Related Documents to which it is a party and all
the transactions contemplated hereby and thereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement
and such Related Documents. When executed and delivered, each of this Agreement
and each such Related Document will constitute the legal, valid and binding
agreement of JNB, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium and other laws of general applicability relating to or
affecting creditors' rights generally and the rights of creditors of national
banking associations from time to time in effect. The enforceability of JNB's
obligations under such agreements is also subject to general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law, and indemnification sought in respect of securities laws
violations may be limited by public policy.
(c) No consent, license, approval or authorization of, or
registration with, any governmental authority, bureau or agency is required to
be obtained in connection with the execution, delivery or performance of each of
this Agreement or any Related Documents that has not been duly obtained and
which is not and will not be in full force and effect on the Closing Date,
except such that may be required by the blue sky laws of any state and except
those which the failure to obtain individually or in the aggregate, would not
have a material adverse effect on JNB or the transactions contemplated by, or
JNB's ability to perform its obligations under, this Agreement or the Related
Documents.
(d) The execution, delivery and performance of each of this
Agreement and the Related Documents do not violate any provision of any existing
law or regulation applicable to JNB, any order or decree of any court to which
JNB is subject, its charter or by-laws or any mortgage, indenture, contract or
other agreement to which JNB is a party or by which it or any significant
portion of JNB's properties is bound (other than violations of such laws,
regulations, orders, decrees, mortgages, indentures, contracts and other
agreements which do not affect the legality, validity or enforceability of any
of such agreements or the Receivables and which, individually or in the
aggregate, would not have a material adverse effect on JNB or the transactions
contemplated by, or JNB's ability to perform its obligations under, this
Agreement or the Related Documents).
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<PAGE> 38
(e) There is no litigation or administrative proceeding before
any court, tribunal or governmental body presently pending or, to the knowledge
of JNB, threatened against JNB with respect to this Agreement and the Related
Documents, the transactions contemplated hereby or thereby or the issuance of
the Series 1999-A Notes, and there is no such litigation or proceeding against
JNB or any significant portion of JNB properties, in each case which would have
a material adverse effect on JNB or the transactions contemplated by, or the
ability of JNB to perform its respective obligations under, this Agreement or
the Related Documents.
(f) JNB has delivered to the Agent complete and correct copies of
the publicly available portions of (i) JNB's Consolidated Reports of Condition
and Income for the year ended December 31, 1998 and (ii) JNB's Consolidated
Reports of Condition and Income for the quarter ended March 31, 1999, and since
December 31, 1998 there has been no material adverse change in its condition or
operations as reflected in such Consolidated Reports of Condition and Income for
the year then ended.
(g) Except as may have been consented to in writing by the
Administrative Agent or as provided in Section 6.1, such Agent or Class A
Purchaser, the identity of the Administrative Agent or any Agent or Class A
Purchaser as purchaser of the Class A Noteholders' Interest under this Agreement
or as an agent therefor has not been disclosed by or on behalf of JNB to any
Person (other than any director, officer, employee, representative or counsel of
a party hereto and each Rating Agency).
(h) The aggregate amount of the Receivables in the Accounts as of
July 12, 1999 was $587,515,901.79, consisting of $573.697.044.56 of Principal
Receivables and $13,818,857.23 of Finance Charge Receivables.
(i) On the Closing Date and after giving effect to the purchase
of the Class A Noteholders' Interest and the issuance of the Series 1999-A
Notes, no Servicer Default has occurred and is continuing, and no event, act or
omission has occurred and is continuing which, with the lapse of time, the
giving of notice or both, would constitute such a Servicer Default.
4.3 Representations and Warranties of the Issuer. The Issuer
represents and warrants to the Class A Purchasers, the Agents and the
Administrative Agent that the representations and warranties of the Issuer set
forth in the Purchase and Servicing Agreement, the Indenture and the other
Related Documents are true and correct as of the date hereof. The Issuer further
represents and warrants to, and agrees with, each Class A Purchaser and Agent
and the Administrative Agent that, as of the date hereof:
(a) The Issuer is a business trust duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full
power and authority under such laws to own its properties and conduct its
business as such properties are presently owned and such business is presently
conducted and to execute, deliver and perform its obligations under this
Agreement and the Related Documents to which it is a party.
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<PAGE> 39
(b) The Issuer has the power and authority to execute, deliver
and perform this Agreement and the Related Documents to which it is a party and
all the transactions contemplated hereby and thereby and has taken all necessary
trust action to authorize the execution, delivery and performance of this
Agreement and such Related Documents. When executed and delivered, each of this
Agreement and each Related Document to which the Issuer is a party will
constitute the legal, valid and binding agreement of the Issuer, enforceable in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium and other laws of
general applicability relating to or affecting creditors' rights generally and
the rights of creditors from time to time in effect. The enforceability of the
Issuer's obligations under such agreements is also subject to general principles
of equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law, and indemnification sought in respect of
securities laws violations may be limited by public policy.
(c) No consent, license, approval or authorization of, or
registration with, any governmental authority, bureau or agency is required to
be obtained in connection with the execution, delivery or performance of each of
this Agreement or any Related Documents that has not been duly obtained and
which is not and will not be in full force and effect on the Closing Date,
except such that may be required by the blue sky laws of any state and except
those which the failure to obtain individually or in the aggregate, would not
have a material adverse effect on the Issuer or Z Del or the transactions
contemplated by, or Issuer's ability to perform its obligations under, this
Agreement or the Related Documents.
(d) The execution, delivery and performance of each of this
Agreement and the Related Documents do not violate any provision of any existing
law or regulation applicable to the Issuer, any order or decree of any court to
which the Issuer is subject, its governing instrument or any mortgage,
indenture, contract or other agreement to which the Issuer is a party or by
which it or any significant portion of the Issuer's properties is bound (other
than violations of such laws, regulations, orders, decrees, mortgages,
indentures, contracts and other agreements which do not affect the legality,
validity or enforceability of any of such agreements or the Receivables and
which, individually or in the aggregate, would not have a material adverse
effect on the Issuer or the transactions contemplated by, or the Issuer' |
