Note Purchase Agreement - Zale Funding Trust, Zale Delaware Inc., Jewelers National Bank and Credit Suisse First Boston
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
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Relating to
Zale Funding Trust
Class A Floating Rate Asset Backed Variable Funding Notes
Series 1999-A
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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)
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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)
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LIST OF EXHIBITS
EXHIBIT A Form of Investment Letter
EXHIBIT B Form of Transfer Supplement
EXHIBIT C Form of Joinder Supplement
(iii)
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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:
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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
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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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"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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"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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"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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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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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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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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"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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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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"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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<PAGE> 24
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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(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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(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's
ability to perform its respective obligations under, this Agreement or the
Related Documents.)
(e) There is no litigation or administrative proceeding before
any court, tribunal or governmental body presently pending or, to the knowledge
of the Issuer, threatened against the Issuer 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 the Issuer or any significant portion of the Issuer
properties, in each case which would have a material adverse effect on the
Issuer or the transactions contemplated by, or the ability of the Issuer to
perform its obligations under, this Agreement or the Related Documents.
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(f) 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 the Issuer to
any Person (other than any director, officer, employee, representative or
counsel of a party hereto and each Rating Agency).
(g) 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.
(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 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.
4.4 Representations and Warranties of the Class A Purchasers.
Each of the Class A Purchasers severally (each with respect to itself only)
represents and warrants to, and agrees with, the Issuer that:
(a) Such Class A Purchaser is duly authorized to enter into and
perform this Agreement and its respective Investment Letter and has duly
executed and delivered this Agreement and such Investment Letter;
(b) This Agreement constitutes the valid and binding obligation
of such Class A Purchaser, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, receivership and other laws relating to,
or affecting generally, the enforcement of creditors' rights and remedies as the
same may be applied in the event of the bankruptcy, insolvency, reorganization,
receivership or liquidation or a similar event of such Class A Purchaser or a
moratorium applicable to such Class A Purchaser and to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity); and
(c) No registration with, consent or approval of or other action
by any federal, state, or other governmental authority or regulatory body having
jurisdiction over such Class A Purchaser is required in connection with the
execution, delivery or performance by such Class A Purchaser of this Agreement.
ARTICLE 5 COVENANTS
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5.1 Covenants of Z Del. Z Del, JNB and the Servicer, on behalf of
the Issuer (each, individually or in its capacity as Seller, Servicer or an
Originator, as applicable, a "Zale Party"), severally covenants and agrees, in
each case as to itself individually or in such respective capacities, through
the Purchase Termination Date for all Class A Purchasers and thereafter so long
as any amount of the Class A Principal Balance shall remain outstanding or any
monetary obligation arising hereunder shall remain unpaid, unless the Required
Class A Owners and the Required Class A Purchasers shall otherwise consent in
writing, that:
(a) Each Zale Party shall perform in all material respects each
of the respective agreements, warranties and indemnities applicable to it and
comply in all material respects with each of the respective terms and provisions
applicable to it under the other Related Documents to which it is party, which
agreements, warranties and indemnities are hereby incorporated by reference into
this Agreement as if set forth herein in full; and each Zale Party shall take
all reasonable actions to enforce the obligations of each of the other parties
to each Receivables Purchase Agreement (as defined in the Trust Agreement) to
which it is a party which are contained therein;
(b) The Seller and the Servicer (in its capacity as such and on
behalf of the Issuer), shall furnish to the Administrative Agent and each Agent
a copy of each material written opinion, certificate, report, statement, notice
or other communication (other than investment instructions) relating to the
Investor Notes which is furnished by or on behalf of such Zale Party to
Noteholders, to any Rating Agency or to the Indenture Trustee and furnish to the
Administrative Agent and each Agent after receipt thereof, a copy of each
material written notice, demand or other communication relating to the Investor
Notes, this Agreement, the Indenture or the Purchase and Servicing Agreement
received by the Issuer, the Seller or the Servicer from the Indenture Trustee,
any Rating Agency or 10% or more of the Investor Noteholders (to the extent such
notice, demand or communication relates to the Accounts, the Receivables, any
Servicer Default, any Early Amortization Event or any Series 1999-A Early
Amortization Event); and (ii) such other information, documents records or
reports respecting the Accounts, the Receivables, the Issuer, the Seller, any
Originator or the Servicer as the Administrative Agent or any such Agent may
from time to time reasonably request;
(c) (i) The Seller shall furnish to the Administrative Agent and
each Agent copies of each of the financial statements, reports and certificates
required by Section 5.01(a) of the Purchase and Servicing Agreement, on or
before the date such financial statements, reports or certificates are due under
the Purchase and Servicing Agreement, (ii) JNB or the Servicer, as applicable,
shall furnish to the Administrative Agent and each Agent copies of each of the
financial statements, reports and certificates required by Section 5.01(i),
6.03(b), 6.03(c) or 6.03(d) of the Purchase and Servicing Agreement or, if
requested by the Administrative Agent or any Agent, Section 6.03(a) of the
Purchase and Servicing Agreement, on or before the date such financial
statements, reports or certificates are due under such Related Documents, and
(iii) the Servicer, on behalf of the Issuer, shall furnish to the Administrative
Agent and each Agent copies of each of the
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financial statements, reports and certificates required by Section 8.01(d) of
the Base Indenture, on or before the date such financial statements, reports or
certificates are due under the Base Indenture;
(d) The Servicer shall promptly furnish to the Administrative and
each Agent a copy, addressed to the Administrative and each Agent, of each
opinion of counsel delivered to the Indenture Trustee pursuant to clause (iii)
of Section 2.05 of the Purchase and Servicing Agreement;
(e) JNB shall furnish to the Administrative and each Agent
promptly when publicly available, the publicly available portions of its annual
and quarterly Consolidated Reports of Condition and Income;
(f) Each Zale Party shall furnish to the Administrative and each
Agent promptly after known to such Zale Party, information with respect to any
action, suit or proceeding involving such Zale Party or any of its Affiliates by
or before any court or any Governmental Authority which, if adversely
determined, would be reasonably likely to result in a material and adverse
effect on any Zale Party or Zale or the transactions contemplated by, or any
Zale Party's ability to perform its obligations under, this Agreement or the
Related Documents;
(g) Each Zale Party shall furnish to the Administrative Agent and
each Agent promptly upon request therefor any information or documents which
under the terms of the Indenture or the Purchase and Servicing Agreement it is
required to deliver upon request of the Indenture Trustee or any Noteholder or
group of Noteholders;
(h) The Servicer shall furnish to the Administrative and each
Agent a certificate concurrently with its delivery of its annual certificate
pursuant to Section 6.03(d) of the Purchase and Servicing Agreement stating that
no Termination Event or event or condition which with the passage of time or the
giving of notice, or both, would constitute a Termination Event has occurred or,
if such a Termination Event, event or condition has occurred, identifying the
same in reasonable detail;
(i) The Seller and the Servicer shall at any time from time to
time during regular business hours, on reasonable notice to the Seller or the
Servicer, as the case may be, and subject to the confidentiality requirements
set forth in Section 6.2, permit the Administrative Agent or any Agent, or its
respective agents or representatives to exercise the inspection and other rights
granted to the Issuer or the Indenture Trustee pursuant to Section 5.01(d) of
the Purchase and Servicing Agreement;
(j) The Issuer shall at any time from time to time during regular
business hours, on reasonable notice to the Issuer, and subject to the
confidentiality requirements set forth in Section 6.2, permit the Administrative
Agent or any Agent, or its respective agents or representatives to exercise the
inspection and other rights granted to the Indenture Trustee pursuant to Section
8.01(i) of the Base Indenture;
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(k) Except for New Issuances in accordance with Section 2.22 of
the Indenture and modifications to Supplements with respect to Series other than
Series 1999-A and except for terminations, amendments, waiver and modifications
of Related Document, no Zale Party shall take any action which, under the terms
of the Related Documents, requires the consent or approval of the Indenture
Trustee, the Majority Noteholders or other group of Noteholders or the
satisfaction of the Rating Agency Condition (or any similar condition), unless
such action has been consented to or approved, as the case may be, by the
Required Class A Owners and the Required Class A Purchasers;
(l) Neither the Seller nor the Issuer shall reduce or withdraw
any Discount Percentage (i) if the Early Amortization Commencement Date has
occurred or (ii) unless it shall have delivered to the Administrative Agent and
each Agent an Officer's Certificate of the Servicer stating that the Servicer
reasonably believes that such reduction or withdrawal will not (i) result in the
occurrence of an Early Amortization Event or Series 1999-A Early Amortization
Event or (ii) cause the Portfolio Yield to be less than the Base Rate. Neither
the Seller nor the Issuer shall designate, increase or withdraw the Discount
Percentage without the prior written consent of the Required Class A Owners and
the Required Class A Purchasers if, as a result thereof, the Discount Percentage
would be less than 6% or greater than 8%.
(m) Neither the Seller nor the Issuer shall designate, change or
withdraw a Premium Percentage without the prior written consent of all Class A
Purchasers.;
(n) Any determination to be made by a Zale Party pursuant to any
Related Document that a matter does not adversely or materially adversely affect
(within the meaning of such Related Document) the interests of Noteholders shall
not be made unless such matter does not adversely or materially adversely affect
the interests of the Class A Purchasers or Class A Owners;
(o) The Servicer shall not exercise its optional right to
purchase the Receivables pursuant to subsection 6.10(c) of the Purchase and
Servicing Agreement and the Issuer shall not exercise its optional right to
repay all Class A Notes pursuant to Section 7.01 of the Supplement, unless the
Class A Purchasers, the Administrative Agent and each Agent have been paid, or
will be paid upon such purchase or in connection with such optional repayment,
the Class A Principal Balance, all interest thereon and all other amounts owing
hereunder in full;
(p) Each Zale Party shall use reasonable efforts to cooperate
with each Agent in its effort to syndicate the Commitments of its Purchaser
Group;
(q) The Servicer shall furnish to the Administrative Agent and
each Agent, promptly after the occurrence of any Termination Event, a
certificate of an appropriate officer of the Servicer setting forth the
circumstances of such Termination Event and any action taken or proposed to be
taken by the Servicer or any other Zale Party with respect thereto;
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(r) Each Zale Party shall make all payments, deposits or
transfers and give all instructions to transfer required to be made or given by
it pursuant to this Agreement or Related Documents as provided herein or
therein; and
(s) No Zale Party shall terminate (except in accordance with the
terms thereof), amend, waive or otherwise modify any Related Document unless (i)
in the case of amendments and modifications of the Base Indenture pursuant to
the first sentence of Section 13.01 thereof which, as evidenced by an Officer's
Certificate of the Issuer delivered to the Administrative Agent and each Agent,
do not adversely affect in any material respect the interests of the
Administrative Agent or any Agent or Class A Purchaser hereunder or under any
Related Document, all of the applicable provisions of Section 13.01 of the Base
Indenture have been complied with, (ii) in the case of an amendment or
modification to or waiver under a Related Document other than the Base
Indenture, the Supplement and the Purchase and Servicing Agreement, such
amendment, modification or waiver will not have a material adverse effect on any
Class A Purchaser or Agent or the Administrative Agent or such Zale Party shall
have received the prior written consent thereto by the Required Class A
Purchasers and the Required Class A Owners, and (iii) in the case of any other
amendment, waiver or modification, such Zale Party shall have received the prior
written consent thereto by the Required Class A Purchasers and the Required
Class A Owners.
ARTICLE 6 MUTUAL COVENANTS REGARDING CONFIDENTIALITY
6.1 Covenants of the Zale Parties. Each Zale Party, severally and
with respect to itself only, covenants and agrees to hold in confidence, and not
disclose to any Person, the terms of any fees payable in connection with this
Agreement or the identity of any CP Conduit which is an agent, a purchaser or
beneficial owner of Class A Notes under this Agreement, except as the
Administrative Agent or such Agent or Class A Purchaser, as the case may be, may
have consented to in writing prior to any proposed disclosure (which consent, in
the case of disclosure of the terms of this Agreement (other than fees) and the
identity of any CP Conduit, shall not be unreasonably withheld in connection
with a proposed Assignment or amendment to include a new Purchaser Group) and
except it may disclose such information (i) to its officers, directors,
employees, agents, counsel, accountants, auditors, advisors or representatives
or (ii) to the extent it should be (A) required by law, rule or regulation or in
connection with any legal or regulatory proceeding or (B) requested by any
Governmental Authority to disclose such information; provided, that, in the case
of clause (ii)(A), such Zale Party will use all reasonable efforts to maintain
confidentiality and will (unless otherwise prohibited by law) notify the
affected Administrative Agent, Agent or Class A Purchaser of its intention to
make any such disclosure prior to making such disclosure.
6.2 Covenants of Class A Purchasers. The Administrative Agent and
each Agent and Class A Purchaser, severally and with respect to itself only,
covenants and agrees that any nonpublic information obtained by it pursuant to
this Agreement shall be held in confidence (it being understood that documents
provided to the Administrative Agent or any Agent or Class A Purchaser hereunder
may in all cases be distributed to the Administrative Agent or to any Agent or
Class A
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Purchaser) except that the Administrative Agent or such Agent or Class A
Purchaser may disclose such information (i) to its officers, directors,
employees, agents, counsel, accountants, auditors, advisors or representatives,
(ii) to the extent such information has become available to the public other
than as a result of a disclosure by or through the Administrative Agent or such
Agent or Class A Purchaser, (iii) to the extent such information was available
to the Agent or such Class A Purchaser on a nonconfidential basis prior to its
disclosure to the Administrative Agent or any Agent or Class A Purchaser
hereunder, (iv) with the consent of the affected Zale Party, (v) to the extent
permitted by Section 8.1 of this Agreement, (vi) in the case of any Class A
Purchaser that is a CP Conduit, to placement agents and providers of liquidity
and credit support who agree to hold such information in confidence or to rating
agencies, or (vii) to the extent the Agent or such Class A Purchaser should be
(A) required by law, rule or regulation or in connection with any legal or
regulatory proceeding or (B) requested by any Governmental Authority to disclose
such information; provided, that in the case of clause (vii)(A), the
Administrative Agent or such Agent or Class A Purchaser, as the case may be,
will use all reasonable efforts to maintain confidentiality and will (unless
otherwise prohibited by law) notify the affected Zale Party of its intention to
make any such disclosure prior to making any such disclosure.
ARTICLE 7 THE AGENTS
7.1 Appointment. Each Class A Purchaser hereby irrevocably
designates and appoints the Administrative Agent as the agent of such Class A
Purchaser under this Agreement, and each such Class A Purchaser irrevocably
authorizes the Administrative Agent, as the agent for such Class A Purchaser, to
take such action on its behalf under the provisions of the Related Documents and
to exercise such powers and perform such duties thereunder as are expressly
delegated to the Administrative Agent by the terms of the Related Documents,
together with such other powers as are reasonably incidental thereto. Each Class
A Purchaser in each Purchaser Group hereby irrevocably designates and appoints
the Agent for such Purchaser Group as the agent of such Class A Purchaser under
this Agreement, and each such Class A Purchaser irrevocably authorizes such
Agent, as the agent for such Class A Purchaser, to take such action on its
behalf under the provisions of the Related Documents and to exercise such powers
and perform such duties thereunder as are expressly delegated to such Agent by
the terms of the Related Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, neither the Administrative Agent nor any Agent (the
Administrative Agent and each Agent being referred to in this Article as a
"Class A Agent") shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Class A
Purchaser, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against any Class A Agent.
7.2 Delegation of Duties. Each Class A Agent may execute any
of its duties under any of the Related Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Class A Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
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7.3 Exculpatory Provisions. Neither any Class A Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (a) liable to any of the Class A Purchasers for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
any of the other Related Documents (except for its or such Person's own gross
negligence or willful misconduct) or (b) responsible in any manner to any of the
Class A Purchasers for any recitals, statements, representations or warranties
made by any Zale Party or the Indenture Trustee or any officer thereof contained
in any of the other Related Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by a Class A Agent
under or in connection with, any of the other Related Documents or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any of the other Related Documents or for any failure of any
Zale Party or the Indenture Trustee to perform its obligations thereunder. No
Class A Agent shall be under any obligation to any Class A Purchaser to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, any of the other Related Documents,
or to inspect the properties, books or records of any Zale Party or the
Indenture Trustee.
7.4 Reliance by Agents. Each Class A Agent shall be entitled to
rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, written statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including counsel to the Agent), independent accountants and
other experts selected by such Class A Agent. Each Class A Agent shall be fully
justified in failing or refusing to take any action under any of the Related
Documents unless it shall first receive such advice or concurrence of the
Required Class A Owners and the Required Class A Purchasers as it deems
appropriate or it shall first be indemnified to its satisfaction by (i) in the
case of the Administrative Agent, the Class A Purchasers or by the Committed
Purchasers or (ii) in the case of an Agent, the Class A Purchasers or by the
Committed Purchasers in its Purchaser Group, against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under any of the Related Documents in
accordance with a request of the Required Class A Owners and the Required Class
A Purchasers (or their Agents), and such request and any action taken or failure
to act pursuant thereto shall be binding upon all present and future Class A
Purchasers. Each Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any of the Related Documents in accordance with a
request of (i) Class A Owners in its Purchaser Group having Percentage Interests
aggregating greater than 50% of the aggregate Percentage Interests of all Class
A Owners in such Purchaser Group, and (ii) Committed Purchasers and Liquidity
Purchasers in its Purchaser Group having Commitments aggregating greater than
50% of the aggregate Commitments of all Committed Purchasers and Liquidity
Purchasers in such Purchaser Group, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all present and future
Class A Purchasers in such Purchaser Group.
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7.5 Notices. No Class A Agent shall be deemed to have knowledge
or notice of the occurrence of any breach of this Agreement or the occurrence of
any Termination Event unless such Class A Agent has received notice from the
Issuer, the Servicer, the Indenture Trustee or any Class A Purchaser, referring
to this Agreement and describing such event. In the event that the
Administrative Agent receives such a notice, it shall promptly give notice
thereof to each Agent, and in the event any Agent receives such a notice, it
shall promptly give notice thereof to the Class A Purchasers in its Purchaser
Group. The Administrative Agent shall take such action with respect to such
event as shall be reasonably directed by the Required Class A Owners and the
Required Class A Purchasers, and each Agent shall take such action with respect
to such event as shall be reasonably directed by (i) Class A Owners in its
Purchaser Group having Percentage Interests aggregating greater than 50% of the
aggregate Percentage Interests of all Class A Owners in such Purchaser Group,
and (ii) Committed Purchasers and Liquidity Purchasers in its Purchaser Group
having Commitments aggregating greater than 50% of the aggregate Commitments of
all Committed Purchasers and Liquidity Purchasers in such Purchaser Group;
provided that unless and until such Class A Agent shall have received such
directions, such Class A Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such event as it
shall deem advisable in the best interests of the Class A Purchasers or of the
Class A Purchasers in its Purchaser Group, as applicable.
7.6 Non-Reliance on Agents and Other Class A Purchasers. Each
Class A Purchaser expressly acknowledges that no Class A Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by any Class A Agent
hereafter taken, including any review of the affairs of any Zale Party or the
Indenture Trustee shall be deemed to constitute any representation or warranty
by any Class A Agent to any Class A Purchaser. Each Class A Purchaser represents
to each Class A Agent that it has, independently and without reliance upon any
Class A Agent or any other Class A Purchaser, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of each Zale Party, the Accounts, the Receivables
and the Indenture Trustee and made its own decision to purchase its interest in
the Class A Notes hereunder and enter into this Agreement. Each Class A
Purchaser also represents that it will, independently and without reliance upon
any Class A Agent or any other Class A Purchaser, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis, appraisals and decisions in taking or not taking action under any
of the Related Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of each Zale Party, the Accounts, the Receivables
and the Indenture Trustee. Except, in the case of a Class A Agent, for notices,
reports and other documents received by such Class A Agent under Section 5
hereof, no Class A Agent shall have any duty or responsibility to provide any
Class A Purchaser with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of each Zale Party, the Accounts, the Receivables or the
Indenture Trustee which may come into the possession of such Class A Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
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7.7 Indemnification. (i) The Committed Purchasers and the
Liquidity Purchasers agree to indemnify the Administrative Agent in its capacity
as such (without limiting the obligation (if any) of any Zale Party to reimburse
the Administrative Agent for any such amounts), ratably according to their
respective Commitments (or, if the Commitments have terminated, Percentage
Interests), and (ii) the Committed Purchasers and the Liquidity Purchasers in
each Purchaser Group agree to indemnify the Agent for such Purchaser Group in
its capacity as such (without limiting the obligation (if any) of any Zale Party
to reimburse such Agent for any such amounts), ratably according to their
respective Commitments (or, if the Commitments have terminated, Percentage
Interests), in each case 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
such Class A 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 Agent under or in
connection with any of the foregoing; provided that no Class A Purchaser shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of a Class A Agent resulting from its own gross negligence or
willful misconduct. The agreements in this subsection shall survive the payment
of the obligations under this Agreement, including the Class A Principal
Balance.
7.8 Agents in their Individual Capacity. Each Class A Agent and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with any Zale Party as though such Class A Agent were not
an agent hereunder. In addition, the Class A Purchasers acknowledges that one or
more Persons which are Class A Agents may act (i) as administrator, sponsor or
agent for one or more CP Conduits and in such capacity acts and may continue to
act on behalf of each such CP Conduit in connection with its business, and (ii)
as the agent for certain financial institutions under the liquidity and credit
enhancement agreements relating to this Agreement to which any one or more CP
Conduits is party and in various other capacities relating to the business of
any such CP Conduit under various agreements. Any such Person, in its capacity
as Class A Agent, shall not, by virtue of its acting in any such other
capacities, be deemed to have duties or responsibilities hereunder or be held to
a standard of care in connection with the performance of its duties as a Class A
Agent other than as expressly provided in this Agreement. Any Person which is a
Class A Agent may act as a Class A Agent without regard to and without
additional duties or liabilities arising from its role as such administrator or
agent or arising from its acting in any such other capacity.
7.9 Successor Agents. The Administrative Agent may resign as
Administrative Agent upon ten days' notice to the Class A Purchasers, each
Agent, the Indenture Trustee, the Issuer and the Servicer with such resignation
becoming effective upon a successor agent succeeding to the rights, powers and
duties of the Agent pursuant to this Section 7.9. If the Administrative Agent
shall resign as Administrative Agent under this Agreement, then the Required
Class A Purchasers and the Required Class A Owners shall appoint from among the
Committed Purchasers a successor
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administrative agent. Any Agent may resign as Agent upon ten days' notice to the
Class A Purchasers in its Purchaser Group, the Administrative Agent and each
other Agent, the Indenture Trustee, the Issuer and the Servicer with such
resignation becoming effective upon a successor agent succeeding to the rights,
powers and duties of the Agent pursuant to this Section 7.9. If an Agent shall
resign as Agent under this Agreement, then (i) Class A Owners in its Purchaser
Group having Percentage Interests aggregating greater than 50% of the aggregate
Percentage Interests of all Class A Owners in such Purchaser Group, and (ii)
Committed Purchasers and Liquidity Purchasers in its Purchaser Group having
Commitments aggregating greater than 50% of the aggregate Commitments of all
Committed Purchasers and Liquidity Purchasers in such Purchaser Group shall
appoint from among the Committed Purchasers in such Purchaser Group a successor
agent for such Purchaser Group. Any successor administrative agent or agent
shall succeed to the rights, powers and duties of resigning Class A Agent, and
the term "Administrative Agent" or "Agent," as applicable, shall mean such
successor administrative agent or agent effective upon its appointment, and the
former Class A Agent's rights, powers and duties as Class A Agent shall be
terminated, without any other or further act or deed on the part of such former
Class A Agent or any of the parties to this Agreement. After the retiring Class
A Agent's resignation as Class A Agent, the provisions of this Section 7 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
ARTICLE 8 SECURITIES LAWS; TRANSFERS
8.1 Transfers of Class A Notes.
(a) Each Class A Purchaser shall execute and deliver to the
Issuer on the Closing Date an Investment Letter substantially in the form
attached hereto as Exhibit A (an "Investment Letter"). Each Class A Owner agrees
that the beneficial interest in the Class A Notes purchased by it will be
acquired for investment only and not with a view to any public distribution
thereof, and that such Class A Owner will not offer to sell or otherwise dispose
of any Class A Note acquired by it (or any interest therein) in violation of any
of the requirements of the Securities Act or any applicable state or other
securities laws. Each Class A Owner acknowledges that it has no right to require
the Issuer to register, under the Securities Act of 1933, as amended, or any
other securities law, the Class A Notes (or the beneficial interest therein)
acquired by it pursuant to this Agreement or any Transfer Supplement. Each Class
A Owner hereby confirms and agrees that in connection with any transfer or
syndication by it of an interest in the Class A Notes, such Class A Owner has
not engaged and will not engage in a general solicitation or general advertising
including advertisements, articles, notices or other communications published in
any newspaper, magazine or similar media or broadcast over radio or television,
or any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(b) Each initial purchaser of a Class A Note or any interest
therein and any Assignee thereof or Participant therein shall certify to the
Issuer, the Servicer, the Indenture Trustee, the Administrative Agent and the
Agent for its Purchaser Group that it is either (A)(i) a citizen or resident of
the United States, (ii) a corporation or other entity organized in or under the
laws of the
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United States or any political subdivision thereof which, if such entity is a
tax-exempt entity, recognizes that payments with respect to the Class A Notes
may constitute unrelated business taxable income or (iii) a person not described
in (i) or (ii) whose income from the Class A Notes is and will be effectively
connected with the conduct of a trade or business within the United States
(within the meaning of the Code) and whose ownership of any interest in a Class
A Note will not result in any withholding obligation with respect to any
payments with respect to the Class A Notes by any Person (other than
withholding, if any, under Section 1446 of the Code) and who will furnish to the
Issuer, the Servicer, the Indenture Trustee, the Administrative Agent, the Agent
for its Purchaser Group, and to the Class A Owner making the Transfer a properly
executed U.S. Internal Revenue Service Form 4224 (and to agree (to the extent
legally able) to provide a new Form 4224 upon the expiration or obsolescence of
any previously delivered form and comparable statements in accordance with
applicable United States laws) or (B) an estate or trust the income of which is
includible in gross income for United States federal income tax purposes.
(c) Any sale, transfer, assignment, participation, pledge,
hypothecation or other disposition (a "Transfer") of a Class A Note or any
interest therein may be made only in accordance with this Section 8.1. Any
Transfer of an interest in a Class A Note, a Commitment or any Purchaser
Percentage by a Committed Purchaser or Liquidity Purchaser shall be in respect
of, at least $5,000,000 in the aggregate, which may be composed of (A) Class A
Principal Balance or (B) to the extent in excess of the Class A Principal
Balance subject to such Transfer, Commitment hereunder. Any Transfer of an
interest in a Class A Note otherwise permitted by this Section 8.1 will be
permitted only if it consists of a pro rata percentage interest in all payments
made with respect to the Class A Purchaser's beneficial interest in such Class A
Note. No Class A Note or any interest therein may be Transferred by Assignment
or Participation to any Person (each, a "Transferee") unless prior to the
transfer the Transferee shall have executed and delivered to the Agent and the
Issuer an Investment Letter.
Each Zale Party authorizes each Class A Purchaser to disclose to
any Transferee and Support Party and any prospective Transferee or Support Party
any and all confidential information in the Class A Purchaser's possession
concerning this Agreement or the Related Documents or concerning the Accounts,
the Receivables or such Zale Party which has been delivered to any Class A Agent
or such Class A Purchaser pursuant to this Agreement or the Related Documents
(including information obtained pursuant to rights of inspection granted
hereunder) or which has been delivered to such Class A Purchaser by or on behalf
of any Zale Party in connection with such Class A Purchaser's credit evaluation
of the Accounts, the Receivables or any Zale Party prior to becoming a party to,
or purchasing an interest in this Agreement or the Class A Notes; provided that
prior to any such disclosure, such Transferee or Support Party or prospective
Transferee or Support Party shall have agreed to be bound by the provisions of
Section 6.2 hereof.
(d) Each Class A Purchaser may, in accordance with applicable
law, at any time grant participations in all or part of its Commitment or its
interest in the Class A Notes, including the payments due to it under this
Agreement and the Related Documents (each, a "Participation"), to any Person
(each, a "Participant"); provided, however, that no Participation shall be
granted to any Person
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unless and until the Agent for such Class A Purchaser's Purchaser Group shall
have consented thereto and the conditions to Transfer specified in this
Agreement, including in subsection 8.1(c) hereof, shall have been satisfied and
that such Participation consists of a pro rata percentage interest in all
payments made with respect to such Class A Purchaser's beneficial interest (if
any) in the Class A Notes. In connection with any such Participation, each Agent
for a Purchaser Group shall maintain a register of each Participant of members
of its Purchaser Group and the amount of each related Participation. Each Class
A Purchaser hereby acknowledges and agrees that (A) any such Participation will
not alter or affect such Class A Purchaser's direct obligations hereunder, and
(B) neither the Indenture Trustee, the Issuer nor the Servicer shall have any
obligation to have any communication or relationship with any Participant. Each
Class A Purchaser and each Participant shall comply with the provisions of
subsection 2.5(c) of this Agreement. No Participant shall be entitled to
Transfer all or any portion of its Participation, without the prior written
consent of the Agent for its Purchaser Group. Each Participant shall be entitled
to receive additional amounts and indemnification pursuant to Sections 2.4, 2.5
and 2.6 hereof as if such Participant were a Class A Purchaser and such Sections
applied to its Participation; provided, in the case of Section 2.5, that such
Participant has complied with the provisions of subsection 2.5(c) hereof as if
it were a Class A Purchaser; and provided further that unless such Participant
has been consented to by the Seller, such Participant shall be entitled to
receive additional amounts pursuant to Sections 2.4 or 2.5 only to the extent
that its transferor Class A Purchaser would have been entitled to such receive
such additional amounts in the absence of such Participation. Each Class A
Purchaser shall give the Agent for its Purchaser Group notice of the
consummation of any sale by it of a Participation.
(e) Each Class A Purchaser may, with the consent of the Agent for
its Purchaser Group and the consent of the Seller (which consents shall not be
unreasonably withheld) and in accordance with applicable law, sell or assign
(each, an "Assignment"), to any Person (each, an "Assignee") all or any part of
its Commitment (if any) or its interest in the Class A Notes and its rights and
obligations under this Agreement and the Related Documents pursuant to an
agreement substantially in the form attached hereto as Exhibit B hereto (a
"Transfer Supplement"), executed by such Assignee and the Class A Purchaser and
delivered to the Agent for its Purchaser Group for its acceptance and consent;
provided, however, that (i) no such assignment or sale shall be effective unless
and until the conditions to Transfer specified in this Agreement, including in
subsection 8.1(c) hereof, shall have been satisfied, (ii) no assignment or sale
by a Liquidity Purchaser shall be effective without the consent of the CP
Conduit in its Purchaser Group, (iii) no assignment or sale which results in the
addition of a new Purchaser Group shall be effective without the consent of the
Administrative Agent, and (iv) in no event shall the consent of an Agent be
required in the case of an assignment by a CP Conduit of its interest in the
Class A Notes and its rights and obligations under this Agreement and the
Related Documents to any one or more of its Liquidity Purchasers in its
Purchaser Group. From and after the effective date determined pursuant to such
Transfer Supplement, (x) the Assignee thereunder shall be a party hereto and, to
the extent provided in such Transfer Supplement, have the rights and obligations
of a Class A Purchaser hereunder as set forth therein and (y) the transferor
Class A Purchaser shall, to the extent provided in such Transfer Supplement, be
released from its Commitment and other obligations under this Agreement;
provided, however, that after giving effect to each such Assignment, the
obligations released by any such
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Class A Purchaser shall have been assumed by an Assignee or Assignees. Such
Transfer Supplement shall be deemed to amend this Agreement to the extent, and
only to the extent, necessary to reflect the addition of such Assignee and the
resulting adjustment of Percentage Interests, Purchaser Percentages or Liquidity
Percentages arising from the Assignment. Upon its receipt and acceptance of a
duly executed Transfer Supplement, the Agent for the applicable Purchaser Group
(or, in the case of an Assignment by which a new Purchaser Group is added to
this Agreement, the Administrative Agent) shall on the effective date determined
pursuant thereto give notice of such acceptance to the Issuer, the Servicer and
the Indenture Trustee.
Upon instruction to register a transfer of a Class A Purchaser's
beneficial interest in the Class A Notes (or portion thereof) and surrender for
registration of transfer of such Class A Purchaser's Class A Note(s) (if
applicable) and delivery to the Issuer and the Indenture Trustee of an
Investment Letter, executed by the registered owner (and the beneficial owner if
it is a Person other than the registered owner), and receipt by the Indenture
Trustee of a copy of the duly executed related Transfer Supplement and such
other documents as may be required under this Agreement, such beneficial
interest in the Class A Notes (or portion thereof) shall be transferred in the
records of the Indenture Trustee and the applicable Agent and, if requested by
the Assignee, new Class A Notes shall be issued to the Assignee and, if
applicable, the transferor Class A Purchaser in amounts reflecting such Transfer
as provided in the Indenture. To the extent of any conflict between the
provisions of this Section 8.1 and any provisions of Section 2.14 of the Base
Indenture applicable to Transfers of Class A Notes (or interests therein), the
provisions of this Section 8.1 shall control. Successive registrations of
Transfers as aforesaid may be made from time to time as desired, and each such
registration of a transfer to a new registered owner shall be noted on the Note
Register.
(f) Each Class A Purchaser may pledge its interest in the Class A
Notes to any Federal Reserve Bank as collateral in accordance with applicable
law.
(g) Any Class A Purchaser shall have the option to change its
Investing Office, provided that such Class A Purchaser shall have prior to such
change in office complied with the provisions of subsection 2.5(c) hereof and
provided further that such Class A Purchaser shall not be entitled to any
amounts otherwise payable under Section 2.4 or 2.5 hereof resulting solely from
such change in office unless such change in office was mandated by applicable
law or by such Class A Purchaser's compliance with the provisions of this
Agreement.
(h) Each Affected Party shall be entitled to receive additional
payments and indemnification pursuant to Sections 2.4, 2.5 and 2.6 hereof as
though it were a Class A Purchaser and such Section applied to its interest in
or commitment to acquire an interest in the Class A Notes; provided that such
Affected Party shall not be entitled to additional payments pursuant to (i)
Section 2.4 by reason of Regulatory Changes which occurred prior to the date it
became an Affected Party or (ii) Section 2.5 attributable to its failure to
satisfy the requirements of subsection 2.5(c) as if it were a Class A Purchaser,
and provided further, that unless such Affected Party has been consented to by
the Seller, such Affected Party shall be entitled to receive additional amounts
pursuant to
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Sections 2.4 or 2.5 only to the extent that its related CP Conduit would have
been entitled to receive such amounts in the absence of the commitment and
Support Advances from such Affected Party.
(i) Each Affected Party claiming increased amounts described in
Sections 2.4 or 2.5 hereof shall furnish, through its related CP Conduit, to the
Issuer, the Servicer, the Indenture Trustee and the Agent for the applicable
Purchaser Group a certificate setting forth the basis and amount of each request
by such Affected Party for any such amounts referred to in Sections 2.4 or 2.5,
such certificate to be conclusive with respect to the factual information set
forth therein absent manifest error.
(j) In the event that a Liquidity Purchaser is a Downgraded
Purchaser, the related CP Conduit shall have the right to replace such Liquidity
Purchaser with a replacement Liquidity Purchaser consented to by the Seller
(which consent shall not be unreasonably withheld), which replacement Purchaser
shall succeed to the rights of such Liquidity Purchaser under this Agreement in
respect of its Commitment as a Liquidity Purchaser, and such Liquidity Purchaser
shall assign such Commitment and its interest in the Class A Notes to such
replacement Liquidity Purchaser in accordance with the provisions of this
Section 8.1; provided, that (A) such Liquidity Purchaser shall not be replaced
hereunder with a new investor until such Liquidity Purchaser has been paid in
full its Percentage Interest of the Class A Principal Balance and all accrued
and unpaid interest thereon by such new investor and all other amounts
(including all amounts owing under Sections 2.4 and 2.5 of this Agreement) owed
to it and to all Participants with respect to such Liquidity Purchaser pursuant
to this Agreement, and (ii) if the Liquidity Purchaser to be replaced is a Class
A Agent, a replacement agent shall have been appointed in accordance with
Section 7.9 hereof, and the Class A Agent to be replaced shall have been paid
all amounts owing to it as agent pursuant to this Agreement. For purposes of
this subsection, a Liquidity Purchaser shall be a "Downgraded Purchaser" if and
so long as the credit rating assigned to its short-term obligations by Moody's
or Standard & Poor's on the date on which it became a party to this Agreement
shall have been reduced or withdrawn, or as may be otherwise agreed among the
Issuer, such Liquidity Purchaser and the CP Conduit in its Purchaser Group.
(k) The Commitment of each Liquidity Purchaser in respect of its
related CP Conduit shall not relate to any Assignee of such CP Conduit. Upon any
Assignment by a CP Conduit of its Percentage Interest in the Class A Principal
Balance to a Person which is not one of its Liquidity Purchasers, the Commitment
of each of its related Liquidity Purchasers shall be reduced by an amount equal
to the assigned Percentage Interest times such Commitment. Without the prior
consent of the Administrative Agent and the Seller, a CP Conduit may not enter
into an Assignment with any Assignee other than (i) one or more of its Liquidity
Purchasers, or (ii) one or more other Persons which, after giving effect to such
Assignment and any concurrent Assignments, will be Committed Purchasers which
have, or CP Conduits having Liquidity Purchasers which have, aggregate new
Commitments equal to the aggregate reductions of Commitments pursuant to the
preceding sentence.
(l) In the event that a Class A Purchaser (or a Participant or
Support Party for such Class A Purchaser) is entitled to receive additional
payments pursuant to Section 2.4 or 2.5
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hereof, the Issuer shall have the right to seek a replacement purchaser not so
affected and which is reasonably acceptable to the Agent for such Purchaser
Group (a "Replacement Purchaser") to replace such affected Class A Purchaser. No
replacement of a Class A Purchaser shall be effected pursuant to this subsection
8.1(l) if, after giving effect thereto, any amounts shall be owing to the
replaced Class A Purchaser hereunder. Each affected Class A Purchaser hereby
agrees to take all actions reasonably necessary to permit a Replacement
Purchaser to succeed to its rights and obligations hereunder.
Notwithstanding the foregoing or the provisions of subsection
8.1(j), (i) if the Class A Purchaser being replaced pursuant to this subsection
is a Liquidity Purchaser, the Replacement Purchaser shall be acceptable to the
CP Conduit in its Purchaser Group in it sole discretion and (ii) if the Class A
Purchaser being replaced is a CP Conduit, the Replacement Purchaser shall be
acceptable to each Committed Purchaser and Liquidity Purchaser in its Purchaser
Group and to the Administrative Agent in their sole discretion, and in either
such case it shall be a condition of such replacement that such Replacement
Purchaser enter into substitute Support Facilities for those to which the Class
A Purchaser being replaced is a party on terms mutually acceptable to the
parties thereto. In addition, if the Class A Purchaser to be replaced is an
Agent or the Administrative Agent or is a CP Conduit which is administered or
sponsored by an Agent or the Administrative Agent, it shall be a condition of
such replacement that a replacement Agent or Administrative Agent shall have
been appointed in accordance with Section 7.9, and the Agent or Administrative
Agent to be replaced shall have been paid all amounts owing to it as Agent or
Administrative Agent, as applicable pursuant to this Agreement.
8.2 Tax Characterization. It is the intention of the parties
hereto that the Class A Notes be treated for tax purposes as indebtedness, and
the parties hereto agree to so treat the Class A Notes (to the extent permitted
by law).
ARTICLE 9 MISCELLANEOUS
9.1 Amendments and Waivers. This Agreement may not be amended,
supplemented or modified nor may any provision hereof be waived except in
accordance with the provisions of this Section 9.1. With the written consent of
the Required Class A Owners and the Required Class A Purchasers, the
Administrative Agent, each Agent, the Issuer, the Seller and the Servicer may,
from time to time, enter into written amendments, supplements, waivers or
modifications hereto for the purpose of adding any provisions to this Agreement
or changing in any manner the rights of any party hereto or waiving, on such
terms and conditions as may be specified in such instrument, any of the
requirements of this Agreement; provided, however, that no such amendment,
supplement, waiver or modification shall (i) reduce the amount or extend the
maturity of any Class A Note or reduce the rate or extend the time of payment of
interest thereon, or reduce or alter the timing of any other amount payable to
any Class A Purchaser hereunder or under the Indenture, in each case without the
consent of the Class A Purchaser affected thereby, (ii) amend, modify or waive
any provision of this Section 9.1, or, if such amendment would have a material
adverse effect on the Class A Purchasers, the definition of "Class A Invested
Amount" or "Class A
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Principal Balance", or reduce the percentage specified in the definition of
Required Class A Owners or Required Class A Purchasers, in each case without the
written consent of all Class A Purchasers or (iii) amend, modify or waive any
provision of Section 7 of this Agreement without the written consent of each
Agent affected by such amendment, modification or wavier. Any waiver of any
provision of this Agreement shall be limited to the provisions specifically set
forth therein for the period of time set forth therein and shall not be
construed to be a waiver of any other provision of this Agreement.
An Agent may cast any vote or give any consent or direction under
the Indenture or other Related Documentation on behalf of the Class A
Noteholders in its Purchaser Group if it has been directed to do so by Class A
Owners in such Purchaser Group having Percentage Interests aggregating greater
than 50% of the aggregate Percentage Interests of all Class A Owners in such
Purchaser Group.
9.2 Notices.
(a) All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy), and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or, in the case of mail or telecopy
notice, when received, addressed as follows or, with respect to an Agent or
Class A Purchaser, as set forth in its respective Joinder Supplement or Transfer
Supplement, or to such other address as may be hereafter notified by the
respective parties hereto:
Issuer: c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
with separate copies to:
General Counsel and Secretary
Treasurer, Finance Department
Zale Corporation
901 West Walnut Hill Lane
Irving, Texas 75038
Telephone: (972) 580-4576
Telecopy: (972) 580-5238
Z Del or Seller: 901 West Walnut Hill Lane
Irving, Texas 75038
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<PAGE> 56
Attention: General Counsel and Secretary
Treasurer, Finance Department
Telephone: (972) 580-4576
Telecopy: (972) 580-5238
JNB or Servicer: 2035 West 4th Street
Tempe, Arizona 85281
Attention: President
Telephone: (972) 580-4965
Telecopy: (972) 580-4673
with separate copies to:
General Counsel and Secretary
Treasurer, Finance Department
Zale Corporation
901 West Walnut Hill Lane
Irving, Texas 75038
Telephone: (972) 580-4576
Telecopy: (972) 580-5238
Indenture Trustee: 101 Barclay Street, 12th Floor
12th Floor, East
New York, New York 10286
Attention: Corporate Trust Administration
Telephone: (212) 815-8195
Telecopy: (212) 815-5544
Administrative Credit Suisse First Boston, New York Branch
Agent: Eleven Madison Avenue
New York, New York 10010
Attention: Asset Finance Department
Telephone: (212) 325-9105
Telefax: (212) 325-6677
(b) All payments to be made to the Administrative Agent or any
Agent or Class A Purchaser hereunder shall be made in United States dollars and
in immediately available funds not later than 2:00 p.m., New York City time, on
the date payment is due, and, unless otherwise specifically provided herein,
shall be made to the Agent, for the account of one or more of the Class A
Purchasers or for its own account, as the case may be. Unless otherwise directed
by the Administrative Agent, all payments to it shall be made by federal wire to
The Bank of New York (BONY), ABA #021-000-018, for credit to Credit Suisse First
Boston CS Remittance/Loan Clearing Account, Account #8900329262, reference Zale
Funding Trust Series 1999-A, with telephone notice (including federal wire
number) to the Asset Finance Department of CSFB (212-325-9213). Unless
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<PAGE> 57
otherwise directed by an Agent or Class A Purchaser, all payments to it shall be
made by federal wire to the account specified in the Joinder Supplement or the
Transfer Supplement by which it became a party hereto (provided, in the case of
an account specified in a Transfer Supplement, that the Agent, the Seller, the
Servicer or the Indenture Trustee, as the case may be, shall have received
notice thereof).
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Agent or
Class A Purchaser, any right, remedy, power or privilege under any of the
Related Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under any of the
Related Documents preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided in the Related Documents are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
9.4 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Issuer, the Seller, the Servicer, the
Administrative Agent, the Agents, the Class A Purchasers, any Assignee and their
respective successors and permitted assigns, and, to the extent provided herein,
to each Indemnitee, Participant and Support Party and their respective
successors and assigns; provided that, except as provided in Section 9.5, the
Issuer, the Seller and the Servicer may not assign or transfer any of their
respective rights or obligations under this Agreement without the prior written
consent of the Required Class A Owners and the Required Class A Purchasers;
provided, further, that (i) in connection with any such assignment the assignee
shall expressly agree in writing to assume all the obligations of the Issuer,
the Seller or the Servicer, as applicable, hereunder and (ii) no such assignment
made without the prior written consent of the Required Class A Owners and the
Required Class A Purchasers shall relieve the Issuer, the Seller or the
Servicer, as applicable, of any of its obligations hereunder and provided
further that no assignment permitted hereunder shall relieve the Issuer, the
Seller or the Servicer, as applicable, from any obligations arising hereunder
prior to such assignment (including obligations with respect to breaches of
representations and warranties made herein).
9.5 Successors to Servicer. In the event that a transfer of
servicing occurs under Section 6.10 of the Purchase and Servicing Agreement, (i)
from and after the effective date of such transfer, the Successor Servicer shall
be the successor in all respects to the Servicer and shall be responsible for
the performance of all functions to be performed by the Servicer from and after
such date, except as provided in the Purchase and Servicing Agreement, and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof, and all references in
this Agreement to the Servicer shall be deemed to refer to the Successor
Servicer, and (ii) as of the date of such transfer, the Successor Servicer shall
be deemed to have made with respect to itself the representations and warranties
made in Section 4.2 hereof (in the case of subsection 4.2(a) with appropriate
factual changes); provided, however, that the references to the Servicer
contained in Section 5.1 of this Agreement shall be deemed to refer to the
Servicer with respect to responsibilities, duties and liabilities arising out of
an act or acts, or omission,
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<PAGE> 58
or an event or events giving rise to such responsibilities, duties and
liabilities and occurring during such time that the Servicer was Servicer under
this Agreement and shall be deemed to refer to the Successor Servicer with
respect to responsibilities, duties and liabilities arising out of an act or
acts, or omission, or an event or events giving rise to such responsibilities,
duties and liabilities and occurring during such time that the Successor
Servicer acts as Servicer under this Agreement; provided, however, to the extent
that an obligation to indemnify Indemnitees under Section 2.6 hereof arises as a
result of any act or failure to act of any Successor Servicer in the performance
of servicing obligations under the Purchase and Servicing Agreement, such
indemnification obligation shall be of the Successor Servicer and not its
predecessor. Upon the transfer of servicing to a Successor Servicer, such
Successor Servicer shall furnish to the Administrative Agent and each Agent
copies of its audited annual financial statements for each of the three
preceding fiscal years or if the Indenture Trustee or any other banking
institution becomes the Successor Servicer, such Successor Servicer shall
provide, in lieu of the audited financial statements required in the immediately
preceding clause, complete and correct copies of the publicly available portions
of its Consolidated Reports of Condition and Income as submitted to the FDIC for
the two most recent year end periods.
9.6 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.
9.7 Severability. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction.
9.8 Integration. This Agreement and the Supplemental Fee Letter
represent the agreement of the Issuer, Z Del (individually and as Seller), JNB
(as Servicer), the Issuer, the Administrative Agent, the Agents and the Class A
Purchasers with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Class A Purchasers, the
Agents or the Administrative Agent relative to subject matter hereof not
expressly set forth or referred to herein or therein or in the Related
Documents.
9.9 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ITS CONFLICTS OF LAW PROVISIONS.
9.10 Jurisdiction; Consent to Service of Process. Each of the
Issuer, Z Del and JNB hereby irrevocably and unconditionally (i) submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America for the Southern District
of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement, or for recognition or
enforcement of any judgment arising out of or relating to this Agreement; (ii)
agrees that all claims in respect of any such action or
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<PAGE> 59
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, federal court; (iii) agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law;
(iv) consents that any such action or proceeding may be brought in such courts
and waives any objection it may now or hereafter have to the laying of venue of
any such action or proceeding in any such court and any objection it may now or
hereafter have that such action or proceeding was brought in an inconvenient
court, and agrees not to plead or claim the same; (v) consents to service of
process in the manner provided for notices in Section 9.2 of this Agreement
(provided that, nothing in this Indenture shall affect the right of any such
party to serve process in any other manner permitted by law); and (vi) waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any such action or proceeding any special, exemplary, punitive or
consequential damages.
9.11 Termination. This Agreement shall remain in full force and
effect until the earlier to occur of (a) payment in full of the Class A
Principal Balance and all other amounts payable to the Class A Purchasers, the
Agents and the Administrative Agent hereunder and the termination of all
Commitments and (b) the Series 1999-A Termination Date; provided, that the
provisions of Sections 2.4, 2.5, 2.6, 6.1, 6.2, 7.7, 8.2, 9.10, 9.12 and 9.14
shall survive termination of this Agreement and any amounts payable to the
Administrative Agent, the Agents, Class A Purchasers or any Affected Party
thereunder shall remain payable thereto.
9.12 Limited Recourse; No Proceedings.
(a) The obligations of the Issuer under this Agreement or any
other agreement, instrument, document or certificate executed and delivered or
issued by the Issuer in connection herewith are solely the corporate obligations
of the Issuer. Except as expressly provided for in Sections 7.03, 7.08 or
8.04(b) of the Trust Agreement, no recourse shall be had for the payment of any
fee or any other obligations or claim arising out of or based upon this
Agreement or any other agreement, instrument, document or certificate executed
and delivered or issued by the Issuer in connection herewith against any holder
of a Trust Certificate, employee, officer, director, incorporator, agent or
trustee of the Issuer or any Affiliate of the Issuer.
(b) It is expressly understood and agreed by the parties hereto
that (i) this Agreement is executed and delivered by Wilmington Trust Company,
not individually or personally but solely as the Owner Trustee of the Issuer
under the Trust Agreement, in the exercise of the powers and authority conferred
and vested in it, (ii) each of the representations, undertakings and agreements
herein made on the part of the Issuer is made and intended not as personal
representations, undertakings and agreements by Wilmington Trust Company but is
made and intended for the purpose of binding only the Issuer, (iii) nothing
herein contained shall be construed as creating any liability on Wilmington
Trust Company, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through or
under the such parties and (iv) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any
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<PAGE> 60
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Issuer under this Indenture or the other Transaction Documents.
(c) The Administrative Agent and each Agent and Class A Purchaser
covenants and agrees that it shall not institute against, or join any other
Person in instituting against, the Issuer any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
(d) Each of the Issuer, Z Del (individually and as Seller), JNB
(as Servicer), the Administrative Agent, each Agent and each Class A Purchaser
hereby agrees that it shall not institute or join against any CP Conduit any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceeding under any federal or state bankruptcy or similar law, for
one year and a day after the latest maturing commercial paper note, medium term
note or other debt security issued by such CP Conduit is paid.
9.13 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement, the purchase of the Class A Notes
hereunder and the termination of this Agreement.
9.14 Waiver of Jury Trial. EACH OF THE ISSUER, Z DEL
(INDIVIDUALLY AND AS SELLER), JNB (INDIVIDUALLY AND AS SERVICER), THE
ADMINISTRATIVE AGENT, THE AGENTS AND THE CLASS A PURCHASERS HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT, THE CLASS A NOTEHOLDERS' INTEREST OR ANY OTHER
DOCUMENTS AND INSTRUMENTS EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF
THE ISSUER, Z DEL (INDIVIDUALLY AND AS SELLER), JNB (INDIVIDUALLY AND AS
SERVICER), THE ADMINISTRATIVE AGENT, THE AGENTS AND THE CLASS A PURCHASERS. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE CLASS A PURCHASERS PURCHASING AN
INTEREST IN THE CLASS A NOTEHOLDERS' INTEREST DESCRIBED HEREIN AND THE
ADMINISTRATIVE AGENT AND EACH AGENT AGREEING TO ACT AS SUCH HEREUNDER.
[Remainder of page intentionally left blank.]
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<PAGE> 61
IN WITNESS WHEREOF, the parties hereto have caused this Class A
Note Purchase Agreement to be duly executed by their respective officers as of
the day and year first above written.
ZALE FUNDING TRUST
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee under the Amended and Restated Trust
Agreement dated as of July 15, 1999
By: /s/ JAMES P. LAWLER
---------------------------------------
Name:
Title:
ZALE DELAWARE, INC., individually and as
Seller
By: /s/ STEPHEN C. MASSANELLI
---------------------------------------
Name:
Title:
JEWELERS NATIONAL BANK, as Servicer
By: /s/ SUE E. GOVE
---------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON, NEW YORK BRANCH,
as Administrative Agent
By: /s/ THOMAS MEIER
---------------------------------------
Name:
Title:
By: /s/ ELIZABETH WHALEN
---------------------------------------
Name:
Title:
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<PAGE> 62
EXHIBIT A
FORM OF INVESTMENT LETTER
[Date]
Zale Funding Trust
c/o Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
[Name and address of applicable Agent]
Re Zale Funding Trust
[Floating Rate] Asset Backed [Variable Funding] Notes, Series 1999-A
Ladies and Gentlemen:
This letter (the "Investment Letter") is delivered by the
undersigned (the "Purchaser") pursuant to subsection 8.1(a) of the Class A Note
Purchase Agreement dated as of July 15, 1999 (as in effect, the "Note Purchase
Agreement"), among Zale Funding Trust, Zale Delaware, Inc., Jewelers National
Bank, the Class A Purchasers and the Agents parties thereto and Credit Suisse
First Boston, New York Branch, as Administrative Agent. Capitalized terms used
herein without definition shall have the meanings set forth in the Note Purchase
Agreement. The Purchaser represents to and agrees with the Issuer as follows:
(a) The Purchaser is authorized [to enter into the Note Purchase
Agreement and to perform its obligations thereunder and to consummate the
transactions contemplated thereby] [to purchase a participation in
obligations under the Note Purchase Agreement].
(b) The Purchaser has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of its
investment in the Class A Notes and is able to bear the economic risk of
such investment. The Purchaser has been afforded the opportunity to ask
such questions as it deems necessary to make an investment decision, and
has received all information it has requested in connection with making
such investment decision. The Purchaser has, independently and without
reliance upon the Agent or any other Class A Purchaser, and based on such
documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Accounts, the
Receivables, the Issuer, the Seller, the Servicer and the Indenture Trustee
and made its own decision to purchase its interest in the Class A Notes,
and will, independently and without reliance upon
<PAGE> 63
the Administrative Agent, any Agent or any other Class A Purchaser, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis, appraisals and decisions in taking
or not taking action under the Note Purchase Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
the Accounts, the Receivables, the Issuer, the Seller, the Servicer and the
Indenture Trustee.
(c) The Purchaser is an "accredited investor", as defined in Rule
501, promulgated by the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), or is a sophisticated institutional investor. The Purchaser
understands that the offering and sale of the Class A Notes has not been
and will not be registered under the Securities Act and has not and will
not be registered or qualified under any applicable "Blue Sky" law, and
that the offering and sale of the Class A Notes has not been reviewed by,
passed on or submitted to any federal or state agency or commission,
securities exchange or other regulatory body.
(d) The Purchaser is acquiring an interest in Class A Notes without
a view to any distribution, resale or other transfer thereof except, with
respect to any Class A Purchaser Interest or any interest or participation
therein, as contemplated in the following sentence. The Purchaser will not
resell or otherwise transfer any interest or participation in the Class A
Purchaser Interest, except in accordance with Section 8.1 of the Note
Purchase Agreement and (i) in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended, and applicable
state securities or "blue sky" laws; (ii) to the Issuer or any affiliate of
the Issuer; or (iii) to a person who the Purchaser reasonably believes is a
qualified institutional buyer (within the meaning thereof in Rule 144A
under the Securities Act) that is aware that the resale or other transfer
is being made in reliance upon Rule 144A. In connection therewith, the
Purchaser hereby agrees that it will not resell or otherwise transfer the
Class A Notes or any interest therein unless the purchaser thereof provides
to the addressee hereof a letter substantially in the form hereof.
(e) This Investment Letter has been duly executed and delivered and
constitutes the legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles
affecting the enforcement of creditors' rights generally and general
principles of equity.
Very truly yours,
[NAME OF PURCHASER]
By:___________________________
Name:
Title:
A-2
<PAGE> 64
EXHIBIT B
FORM OF TRANSFER SUPPLEMENT
TRANSFER SUPPLEMENT, dated as of the date set forth in Item 1 of
Schedule I hereto, among the Transferor Class A Purchaser set forth in Item 2 of
Schedule I hereto (the "Transferor Class A Purchaser"), the Purchasing Class A
Purchaser set forth in Item 3 of Schedule I hereto (the "Purchasing Class A
Purchaser"), and the Agent set forth in Item 4 of Schedule I hereto (in such
capacity, the "Agent") for the Purchaser Group set forth in Item 5 of Schedule I
hereto.
W I T N E S S E T H:
WHEREAS, this Supplement is being executed and delivered in
accordance with subsection 8.1(e) of the Class A Note Purchase Agreement, dated
as of July 15, 1999, among Zale Funding Trust, Zale Delaware, Inc., Jewelers
National Bank, the Class A Purchasers and the Agents parties thereto and Credit
Suisse First Boston, New York Branch, as Administrative Agent (as from time to
time amended, supplemented or otherwise modified in accordance with the terms
thereof, the "Note Purchase Agreement"; unless otherwise defined herein, terms
defined in the Note Purchase Agreement are used herein as therein defined);
WHEREAS, the Purchasing Class A Purchaser (if it is not already a
Class A Purchaser party to the Note Purchase Agreement) wishes to become a Class
A Purchaser party to the Note Purchase Agreement and the Purchasing Class A
Purchaser wishes to acquire and assume from the Transferor Class A Purchaser,
certain of the rights, obligations and commitments under the Note Purchase
Agreement; and
WHEREAS, the Transferor Class A Purchaser wishes to sell and
assign to the Purchasing Class A Purchaser, certain of its rights, obligations
and commitments under the Note Purchase Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
(a) Upon receipt by the Agent of five counterparts of this
Supplement, to each of which is attached a fully completed Schedule I and
Schedule II, each of which has been executed by the Transferor Class A
Purchaser, the Purchasing Class A Purchaser and the Agent, the Agent will
transmit to the Servicer, the Issuer, the Indenture Trustee, the Transferor
Class A Purchaser and the Purchasing Class A Purchaser a Transfer Effective
Notice, substantially in the form of Schedule III to this Supplement (a
"Transfer Effective Notice"). Such Transfer Effective Notice shall be executed
by the Agent and shall set forth, inter alia, the date on which the transfer
effected by this Supplement shall become effective (the "Transfer Effective
Date"). From and after the Transfer Effective Date the Purchasing Class A
Purchaser shall be a Class A Purchaser party to the Note Purchase Agreement for
all purposes thereof as a CP Conduit or Committed Purchaser and, if applicable,
a Liquidity Purchaser, as specified on Schedule II to this Supplement.
<PAGE> 65
(b) At or before 12:00 Noon, local time of the Transferor Class A
Purchaser, on the Transfer Effective Date, the Purchasing Class A Purchaser
shall pay to the Transferor Class A Purchaser, in immediately available funds,
an amount equal to the purchase price, as agreed between the Transferor Class A
Purchaser and such Purchasing Class A Purchaser (the "Purchase Price"), of the
portion set forth on Schedule II hereto being purchased by such Purchasing Class
A Purchaser of the outstanding Class A Invested Amount under the Class A Note
owned by the Transferor Class A Purchaser (such Purchasing Class A Purchaser's
"Purchaser Percentage") and other amounts owing to the Transferor Class A
Purchaser under the Note Purchase Agreement or otherwise in respect of the Class
A Notes. Effective upon receipt by the Transferor Class A Purchaser of the
Purchase Price from the Purchasing Class A Purchaser, the Transferor Class A
Purchaser hereby irrevocably sells, assigns and transfers to the Purchasing
Class A Purchaser, without recourse, representation or warranty, and the
Purchasing Class A Purchaser hereby irrevocably purchases, takes and assumes
from the Transferor Class A Purchaser, the Purchasing Class A Purchaser's
Purchaser Percentage of (i) the presently outstanding Class A Invested Amount
under the Class A Notes owned by the Transferor Class A Purchaser and other
amounts owing to the Transferor Class A Purchaser in respect of the Class A
Notes, together with all instruments, documents and collateral security
pertaining thereto, and (ii) the Purchasing Class A Purchaser's Purchaser
Percentage of (A) if the Transferor Class A Purchaser is a CP Conduit, the
Purchaser Percentage of the Transferor Class A Purchaser and the other rights
and duties of the Transferor Class A Purchaser under the Note Purchase
Agreement, or (B) if the Transferor Class A Purchaser is a Committed Purchaser,
the Commitment Percentage, the Liquidity Percentage, if applicable, and the
Commitment of the Transferor Class A Purchaser and other rights, duties and
obligations of the Transferor Class A Purchaser under the Note Purchase
Agreement. This Supplement is intended by the parties hereto to effect a
purchase by the Purchasing Class A Purchaser and sale by the Transferor Class A
Purchaser of interests in the Class A Notes, and it is not to be construed as a
loan or a commitment to make a loan by the Purchasing Class A Purchaser to the
Transferor Class A Purchaser. The Transferor Class A Purchaser hereby confirms
that the amount of the Class A Invested Amount is $ _____ and its Percentage
Interest thereof is ___%, which equals $___ as of _______, 199_. Upon and after
the Transfer Effective Date (until further modified in accordance with the Note
Purchase Agreement), the Purchaser Percentage or Commitment Percentage, as
applicable of the Transferor Class A Purchaser and the Purchasing Class A
Purchaser and the Commitment and the Liquidity Percentage, if applicable, if
any, of the Transferor Class A Purchaser and the Purchasing Class A Purchaser
shall be as set forth in Schedule II to this Supplement.
(c) The Transferor Class A Purchaser has made arrangements with
the Purchasing Class A Purchaser with respect to (i) the portion, if any, to be
paid, and the date or dates for payment, by the Transferor Class A Purchaser to
the Purchasing Class A Purchaser of any fees heretofore received by the
Transferor Class A Purchaser pursuant to the Note Purchase Agreement prior to
the Transfer Effective Date and (ii) the portion, if any, to be paid, and the
date or dates for payment, by the Purchasing Class A Purchaser to the Transferor
Class A Purchaser of fees or interest received by the Purchasing Class A
Purchaser pursuant to the Note Purchase Agreement or otherwise in respect of the
Class A Notes from and after the Transfer Effective Date.
(d) (i) All principal payments that would otherwise be payable
from and after the Transfer Effective Date to or for the account of the
Transferor Class A Purchaser in respect of the
<PAGE> 66
Class A Notes shall, instead, be payable to or for the account of the Transferor
Class A Purchaser and the Purchasing Class A Purchaser, as the case may be, in
accordance with their respective interests as reflected in this Supplement.
(ii) All interest, fees and other amounts that would otherwise
accrue for the account of the Transferor Class A Purchaser from and after the
Transfer Effective Date pursuant to the Note Purchase Agreement or in respect of
the Class A Notes shall, instead, accrue for the account of, and be payable to
or for the account of, the Transferor Class A Purchaser and the Purchasing Class
A Purchaser, as the case may be, in accordance with their respective interests
as reflected in this Supplement. In the event that any amount of interest, fees
or other amounts accruing prior to the Transfer Effective Date was included in
the Purchase Price paid by the Purchasing Class A Purchaser, the Transferor
Class A Purchaser and the Purchasing Class A Purchaser will make appropriate
arrangements for payment by the Transferor Class A Purchaser to the Purchasing
Class A Purchaser of such amount upon receipt thereof from the Agent.
(e) Concurrently with the execution and delivery hereof, the
Purchasing Class A Purchaser will deliver to the Agent and the Issuer an
executed Investment Letter in the form of Exhibit A to the Note Purchase
Agreement and the forms, if any, required by subsection 2.5(c) of the Note
Purchase Agreement.
(f) Each of the parties to this Supplement agrees and
acknowledges that (i) at any time and from time to time upon the written request
of any other party, it will execute and deliver such further documents and do
such further acts and things as such other party may reasonably request in order
to effect the purposes of this Supplement, and (ii) the Agent shall apply each
payment made to it under the Note Purchase Agreement, whether in its individual
capacity or as Agent, in accordance with the provisions of the Note Purchase
Agreement, as appropriate.
(g) By executing and delivering this Supplement, the Transferor
Class A Purchaser and the Purchasing Class A Purchaser confirm to and agree with
each other, the Agent and the Class A Purchasers as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned hereby free and clear of any adverse claim, the
Transferor Class A Purchaser makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Note Purchase Agreement or the Related
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Note Purchase Agreement or any other instrument or
document furnished pursuant thereto; (ii) the Transferor Class A Purchaser makes
no representation or warranty and assumes no responsibility with respect to the
Trust, the financial condition of the Receivables, the Accounts, the Issuer, Z
Del, JNB or the Indenture Trustee, or the performance or observance by the
Issuer, Z Del, JNB or the Indenture Trustee of any of their respective
obligations under the Note Purchase Agreement or any Related Document or any
other instrument or document furnished pursuant hereto; (iii) each Purchasing
Class A Purchaser confirms that it has received a copy of such documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Supplement; (iv) each Purchasing Class A Purchaser
will, independently and without reliance upon the Administrative Agent, any
Agent (as defined in the Note Purchase Agreement) the Transferor Class A
Purchaser or any other Class A Purchaser and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit
<PAGE> 67
decisions in taking or not taking action under the Note Purchase Agreement or
the Related Documents; (v) the Purchasing Class A Purchaser appoints and
authorizes the Agent and the Administrative Agent to take such action as agent
on its behalf and to exercise such powers under the Note Purchase Agreement and
the Related Documents as are delegated to the Agent or the Administrative Agent,
as the case may be, by the terms thereof, together with such powers as are
reasonably incidental thereto, all in accordance with Section 7 of the Note
Purchase Agreement; and (vi) each Purchasing Class A Purchaser agrees (for the
benefit of the Transferor Class A Purchaser, the Administrative Agent, the
Agents (as defined in the Note Purchase Agreement), the Class A Purchasers, the
Indenture Trustee, the Servicer, the Seller and the Issuer) that it will perform
in accordance with their terms all of the obligations which by the terms of the
Note Purchase Agreement are required to be performed by it as a Class A
Purchaser.
(h) Schedule II hereto sets forth the revised Purchaser
Percentage or the revised Commitment Percentage, the revised Liquidity
Percentage, if applicable, and Commitment of the Transferor Class A Purchaser,
as applicable, the Purchaser Percentage or the Commitment Percentage, the
Liquidity Percentage, if applicable, Commitment and Commitment Expiration Date
of the Purchasing Class A Purchaser, as applicable, and the initial Investing
Office of the Purchasing Class A Purchaser, as well as administrative
information with respect to the Purchasing Class A Purchaser.
(i) THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplement to be executed by their respective duly authorized officers on
Schedule I hereto as of the date set forth in Item 1 of Schedule I hereto.
<PAGE> 68
SCHEDULE I TO
TRANSFER SUPPLEMENT
COMPLETION OF INFORMATION AND
SIGNATURES FOR TRANSFER SUPPLEMENT
Re: Class A Note Purchase Agreement, dated as of July 15, 1999,
among Zale Funding Trust, Zale Delaware, Inc., Jewelers National
Bank, the Class A Purchasers and the Agents parties thereto and
Credit Suisse First Boston, New York Branch, as Administrative
Agent
Item 1: Date of Transfer Supplement:
Item 2: Transferor Class A Purchaser:
Item 3: Purchasing Class A Purchaser:
Item 4: Name of Agent:
Item 5: Name of Purchaser Group:
Item 6: Signatures of Parties to Agreement:
-------------------------------
as Transferor Class A Purchaser
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
<PAGE> 69
-------------------------------
as Purchasing Class A Purchaser
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
CONSENTED TO AND ACCEPTED BY:
[NAME OF AGENT], as Agent
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
[If applicable:]
CREDIT SUISSE FIRST BOSTON,
NEW YORK BRANCH, as Administrative Agent
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
<PAGE> 70
SCHEDULE II TO
TRANSFER SUPPLEMENT
LIST OF INVESTING OFFICES, ADDRESSES
FOR NOTICES, ASSIGNED INTERESTS AND
PURCHASE AND COMMITMENT PERCENTAGES
[Transferor Class A Purchaser]
A. Type of Purchaser: [CP Conduit/Liquidity/Committed]
B. Purchaser Percentage:
Transferor Class A Purchaser Purchaser Percentage
Prior to Sale: %
-----
Purchaser Percentage Sold: %
-----
Purchaser Percentage Retained: %
-----
C. Commitment (not applicable to CP Conduit)
Transferor Class A Purchaser Commitment
Prior to Sale: $
--------
Commitment Sold: $
--------
Commitment Retained: $
--------
Related CP Conduit (applicable to Liquidity Purchaser)
------------
D. Related Liquidity Purchasers (applicable to CP Conduit)
Liquidity Purchasers, Commitments and Liquidity Percentages
prior to Sale:
$ %
------------------------- ------------ -----
$ %
------------------------- ------------ -----
$ %
------------------------- ------------ -----
E. Class A Principal Balance:
Transferor Class A Purchaser
Class A Principal Balance Prior to Sale: $
--------
<PAGE> 71
Class A Principal Balance Sold: $
--------
Class A Principal Balance Retained: $
--------
[Purchasing Class A Purchaser]
A. Type of Purchaser: [CP Conduit/Liquidity/Committed]
B. Purchaser Percentage:
Transferee Class A Purchaser Purchaser Percentage
After Sale: %
------
C. Commitment (not applicable to CP Conduit)
Transferee Class A Purchaser Commitment
After Sale: $
--------
Related CP Conduit (applicable to Liquidity Purchaser):
-------------
D. Related Liquidity Purchasers (applicable to CP Conduit)
Liquidity Purchasers, Commitments and Liquidity Percentages after Sale:
------------------------- $ %
------------ -----
------------------------- $ %
------------ -----
------------------------- $ %
------------ -----
E. Class A Principal Balance:
Transferee Class A Purchaser
Class A Principal Balance After Sale: $
--------
Address for Notices:
Investing Office:
<PAGE> 72
SCHEDULE III TO
TRANSFER SUPPLEMENT
Form of
Transfer Effective Notice
To: [Name and address of Issuer,
Servicer, Indenture Trustee, Administrative
Agent, Transferor Class A Purchaser and
Purchasing Class A Purchaser]
The undersigned, as Agent under the Class A Note Purchase
Agreement, dated as of July 15, 1999, among Zale Funding Trust, Zale Delaware,
Inc., Jewelers National Bank, the Class A Purchasers and the Agents parties
thereto and Credit Suisse First Boston, New York Branch, as Administrative
Agent, acknowledges receipt of five executed counterparts of a completed
Transfer Supplement. [Note: attach copies of Schedules I and II from such
Agreement.] Terms defined in such Supplement are used herein as therein defined
Pursuant to such Supplement, you are advised that the Transfer
Effective Date will be _______________, ____.
Very truly yours,
[NAME OF AGENT], as Agent
By:
-----------------------
Name:
Title:
By:
-----------------------
Name:
Title: