Exhibit 4.1
Series 2001-1 Supplement dated as of March 1, 2001, to the Master Pooling
and Servicing Agreement dated as of August 21, 1997, among Saks Credit
Corporation, as Transferor, Saks Incorporated, as Servicer, and Xxxxx Fargo Bank
Minnesota, National Association, as Trustee
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SAKS CREDIT CORPORATION,
as Transferor
and
SAKS INCORPORATED,
as Servicer
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
on behalf of the Certificateholders
______________________________
SERIES 2001-1 SUPPLEMENT
Dated as of March 1, 2001
to
MASTER POOLING AND SERVICING AGREEMENT
Dated as of August 21, 1997
______________________________
$261,500,000
SAKS CREDIT CARD MASTER TRUST
Series 2001-1
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TABLE OF CONTENTS
Page
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PRELIMINARY STATEMENTS
SECTION 1. Designation................................................................ 1
SECTION 2. Definitions................................................................ 2
SECTION 3. Minimum Transferor Interest Percentage..................................... 16
SECTION 4. Reassignment and Transfer Terms............................................ 16
SECTION 5. Delivery and Payment for the Certificates.................................. 16
SECTION 6. Form of Delivery of the Series 2001-1 Certificates......................... 17
SECTION 7. Servicing Compensation..................................................... 17
SECTION 8. Increase in the Senior Class Investor Amount............................... 17
SECTION 9. Procedure for Pre-Funding Increases in the Senior
Class Investor Amount.................................................... 18
SECTION 10. Article IV of the Agreement................................................ 19
ARTICLE IV
RIGHTS OF SERIES 2001-1 CERTIFICATEHOLDERS ANDALLOCATION AND
APPLICATION OF COLLECTIONS
Section 4.2 Establishment of Series Accounts...........................................20
Section 4.2.1 Collections and Allocations................................................21
Section 4.3 Determination of Monthly Principal.........................................22
Section 4.4 Application of Collections of Finance Charge Receivables...................23
Section 4.5 Application of Collections of Principal Receivables........................28
Section 4.6 Defaulted Amounts; Senior Class Investor Charge Offs.......................30
Section 4.7 Shared Principal Collections...............................................32
Section 4.8 Shared Excess Finance Charge Collections...................................33
Section 4.9 Applications of Spread Account Funds; Release of Funds
From Spread Account......................................................33
SECTION 9. Article V of the Agreement.................................................34
i
ARTICLE V
DISTRIBUTIONS AND REPORTS TOCERTIFICATEHOLDERS
Section 5.1 Distributions..............................................................34
Section 5.2 Reports and Notices to Series 2001-1 Certificateholders....................35
SECTION 10. Pay Out Events.............................................................36
SECTION 11. Consent to Issuance of Additional Series...................................38
SECTION 12. [Reserved].................................................................38
SECTION 13. Increase or Reduction of Discount Percentage...............................39
SECTION 14. Access to Information......................................................39
SECTION 15. Series 2001-1 Investor Exchange............................................39
SECTION 16. Certificate Defeasance.....................................................40
SECTION 17. Transfers of Series 2001-1 Certificates; Legends...........................40
SECTION 18. Ratification of Master Pooling and Servicing Agreement.....................45
SECTION 19. Counterparts...............................................................45
SECTION 20. Governing Law..............................................................45
SECTION 21. Subordination of Certain Termination Payments..............................46
SECTION 22. Opinions of Counsel........................................................46
SECTION 23. No Third-Party Beneficiaries...............................................46
Exhibit A-1 Form of Senior Class Certificate
Exhibit A-2 Form of Subordinate Class Certificate
Exhibit B Form of Monthly Payment Instructions
Exhibit C Form of Monthly Certificateholder's Statement
Exhibit D Transfer Certification
ii
SERIES 2001-1 SUPPLEMENT, dated as of March 1, 2001 (this "Series
------
Supplement"), by and among SAKS CREDIT CORPORATION, a Delaware corporation, as
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Transferor (the "Transferor"), SAKS INCORPORATED, a Tennessee corporation, as
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Servicer (the "Servicer"), and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
--------
(f/k/a Norwest Bank Minnesota National Association, a national banking
association, as trustee (together with its successors in trust thereunder as
provided in the Agreement referred to below, the "Trustee") under the Master
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Pooling and Servicing Agreement, dated as of August 21, 1997 (the "Master
------
Pooling and Servicing Agreement" and, as supplemented by this Series Supplement,
-------------------------------
the "Agreement").
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PRELIMINARY STATEMENTS
Section 6.9 of the Master Pooling and Servicing Agreement provides,
among other things, that the Transferor and the Trustee may at any time and from
time to time enter into one or more Supplements to the Master Pooling and
Servicing Agreement for the purpose of authorizing the issuance by the Trust to
the Transferor, for execution and redelivery to the Trustee for authentication,
of one or more Series of Certificates. The Transferor and the Servicer each
hereby enter into this Series Supplement with the Trustee as required by Section
6.9(c) of the Master Pooling and Servicing Agreement to provide for the
issuance, authentication and delivery of the Investor Certificates of Series
2001-1.
Pursuant to this Series Supplement, the Transferor and the Trustee
shall create a new Series of Investor Certificates and shall specify the
Principal Terms thereof. The Series 2001-1 Certificates shall not be
subordinated to any other Series.
In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Master Pooling and Servicing Agreement, the terms and provisions of this Series
Supplement shall govern.
SECTION 1. Designation. The Certificates issued hereunder shall be
-----------
designated generally as the Series 2001-1 Certificates. The Series 2001-1
Certificates shall be one of the Series of Investor Certificates in Group One
and shall be a Principal Sharing Series. The Investor Certificates of Series
2001-1 (collectively, the "Series 2001-1 Certificates") shall be issued
--------------------------
initially in three classes, which shall be designated generally as the
Class A-1 Variable Funding Certificates, Series 2001-1,
the Class A-2 Variable Funding Certificates, Series 2001-1, and the Subordinate
Class Certificates, Series 2001-1.
SECTION 2. Definitions. All capitalized terms not otherwise defined
-----------
herein are defined in the Master Pooling and Servicing Agreement. All Article,
Section or subsection references herein shall mean Articles, Sections or
subsections of the Master Pooling and Servicing Agreement, except as otherwise
provided herein. Unless otherwise stated herein, as the context otherwise
requires or if such term is otherwise defined in the Master Pooling and
Servicing Agreement, each capitalized term used or defined herein shall relate
only to the Series 2001-1 Certificates and no other Series of Certificates
issued by the Trust.
The following words and phrases shall have the following meanings with
respect to the Series 2001-1 Certificates and the definitions of such terms are
applicable to the singular as well as the plural form of such terms and to the
masculine as well as the feminine and neuter genders of such terms:
"Accrued Interest Component" shall mean, for any Monthly Period for
--------------------------
any Senior Class, the Interest Component of all Related Commercial Paper
outstanding with respect to such Senior Class at any time during such Monthly
Period which has accrued from the first day through the last day of such Monthly
Period, whether or not such Related Commercial Paper matures during such Monthly
Period. For purposes of the immediately preceding sentence, the portion of the
Interest Component of Related Commercial Paper accrued in a Monthly Period
which Related Commercial Paper has a stated maturity date that succeeds the last
day of such Monthly Period shall be computed based on the actual number of days
that such Related Commercial Paper was outstanding during such Monthly Period.
"Additional Investor Amount" shall have the meaning specified in the
--------------------------
Certificate Purchase Agreement.
"Additional Senior Class Investor Amounts" shall have the meaning
----------------------------------------
specified in Section 8 of this Series Supplement.
"Agent" shall mean Bank of America, N.A., in its capacity as agent for
-----
the Senior Class Conduits and the Bank Investors pursuant to the Certificate
Purchase Agreement, and any successor thereto appointed pursuant to the
Certificate Purchase Agreement.
2
"Aggregate Initial Investor Amount" shall mean the sum of the
---------------------------------
Class A-1 Initial Investor Amount, the Class A-2 Initial Investor Amount and the
Subordinate Class Initial Investor Amount.
"Aggregate Investor Amount" shall mean, on any date of determination,
-------------------------
the sum of the Investor Amounts on such date.
"Amortization Period" shall mean the period commencing at the close of
-------------------
business on the Termination Date and ending on the date on which the Aggregate
Investor Amount and any other amounts outstanding to the Investor
Certificateholders under the Transaction Documents have been paid in full.
"Assignee" shall have the meaning specified in Section 17 of this
--------
Series Supplement.
"Bank Investors" shall have the meaning specified in the Certificate
--------------
Purchase Agreement.
"Base Rate" shall mean, with respect to any Monthly Period, the sum of
---------
(a) the annualized percentage equivalent of a fraction, the numerator of which
is equal to the aggregate Carrying Costs for all Senior Classes for such Monthly
Period and the denominator of which is the daily average Aggregate Investor
Amount with respect to the preceding Monthly Period and (b) 2.00% per annum.
"Business Day" shall have the meaning specified in the Master Pooling
------------
and Servicing Agreement; provided, however, that the cities specified in the
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definition of "Business Day" in the Master Pooling and Servicing Agreement shall
------------
also include Charlotte, North Carolina and Chicago, Illinois.
"Carrying Costs" shall mean, for each Senior Class, with respect to
--------------
any Monthly Period, the sum (without duplication) of (i) the sum of the dollar
amount of the obligations of the Senior Class Conduit which is a member of such
Senior Class for such Monthly Period determined on an accrual basis in
accordance with generally accepted accounting principles consistently applied
(a) to pay interest accrued during such Monthly Period with respect to the
related Senior Class Certificates and other amounts outstanding under the
related Program Support Agreement at any time during such Monthly Period,
whether or not such interest is payable during such Monthly Period, (b) to pay
the Accrued Interest Component of Related Commercial Paper for such Senior Class
with respect to such Monthly Period, and
3
(c) to pay the portion of any servicing compensation payable to a Successor
Servicer pursuant to Section 4.2 allocable to such Senior Class, and (ii) the
sum of (a) amounts payable in respect of such Senior Class by the Transferor
pursuant to Section 7.3 of the Master Pooling and Servicing Agreement and
Article IV of the Certificate Purchase Agreement, (b) to pay interest accrued as
specified in Section 2.6 of the Certificate Purchase Agreement during the
related Monthly Period to each related Program Support Provider and each related
Bank Investor which has acquired an interest in such Senior Class Certificates
and (c) to pay all fees payable pursuant to the Fee Letter for such Senior Class
accrued from the first day of such Monthly Period through the last day of such
Monthly Period to the extent not paid by the Transferor in accordance with the
provisions of the Certificate Purchase Agreement and such Fee Letter.
"Certificate Purchase Agreement" shall mean the certificate purchase
------------------------------
agreement dated as of March 1, 2001 among the Transferor, the Servicer, EFC, any
other conduit purchaser named therein or subsequently added thereto, the Bank
Investor parties thereto, the Agent and the Senior Class Agents.
"Certificate Rate" shall mean for each Senior Class, with respect to
----------------
the Monthly Period related to any Distribution Date, a per annum interest rate
which if multiplied by the average daily Senior Class Investor Amount for such
Monthly Period, would produce, on the basis of the actual number of days in such
Monthly Period and a 360-day year, an amount equal to the Carrying Costs for
such Senior Class.
"Certificateholder" shall mean each holder of a Series 2001-1
-----------------
Certificate.
"Certificates" shall mean any one of the Senior Class Certificates or
------------
the Subordinate Class Certificates.
"Class" shall mean each of the Senior Classes and the Subordinate
-----
Class.
"Class A-1 Initial Investor Amount" shall mean the initial principal
---------------------------------
amount of the Class A-1 Variable Funding Certificates, which is $0.
"Class A-2 Initial Investor Amount" shall mean the initial principal
---------------------------------
amount of the Class A-2 Variable Funding Certificates, which is $0.
4
"Closing Date" shall mean March 1, 2001.
------------
"Commercial Paper" shall have the meaning specified in the
----------------
Certificate Purchase Agreement.
"Defeasance Account" shall have the meaning specified in Section 16(b)
------------------
of this Series Supplement.
"EFC" shall mean Enterprise Funding Corporation, a Delaware
---
corporation, together with its successors.
"Enhancement" shall mean, with respect to the Senior Class
-----------
Certificates, the subordination of the Subordinate Class Certificates.
"Enhancement Investor Amount" shall mean the Subordinate Class
---------------------------
Investor Amount.
"Enhancement Provider" shall mean each of the holders of the
--------------------
Subordinate Class Certificates.
"Face Amount" shall mean (i) with respect to Commercial Paper issued
-----------
on a discount basis, the face amount stated therein, and (ii) with respect to
Commercial Paper which is interest-bearing, the principal amount of and interest
accrued and to accrue on such Commercial Paper to its stated maturity.
"Finance Charge Shortfall" shall have the meaning specified in Section
------------------------
4.8.
"Fixed/Floating Allocation Percentage" shall mean for each Class, with
------------------------------------
respect to any Monthly Period (with respect to Collections of Principal
Receivables for any Monthly Period during the Amortization Period), the
percentage equivalent of a fraction the numerator of which is equal to the
Investor Amount of such Class as of the end of the last day of the Revolving
Period and the denominator of which is equal to the greater of (i) (x) the
Aggregate Principal Receivables as of the last day of such Monthly Period plus
----
(y) the amount on deposit in the Excess Funding Account as of the last day of
such Monthly Period, and (ii) the sum of the numerators used to calculate the
applicable investor percentages with respect to Collections of Principal
Receivables for any Monthly Period during the Amortization Period for each class
of each Series outstanding as of the date on which such deter-
5
mination is being made; provided, however, that the Fixed/Floating Allocation
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Percentage with respect to Collections of Principal Receivables allocated to
Series 2001-1 shall equal zero until the Series 1998-2 Pay-Out Date. The
Fixed/Floating Allocation Percentage with respect to Collections of Principal
Receivables allocated to Series 2001-1 will be recalculated as of the end of the
day on the Series 1998-2 Pay-Out Date and such Fixed/Floating Allocation
Percentage shall remain in effect for the remainder of the Monthly Period in
which such Series 1998-2 Pay-Out Date occurs. With respect to the Series 1998-2
Certificates, the Investor Percentage (as defined in the Series 1998-2
Supplement) with respect to Principal Receivables shall be set at zero as of the
end of the day on the Series 1998-2 Pay Out Date and thereafter remain zero.
"Floating Allocation Percentage" shall mean for each Class, with
------------------------------
respect to any Monthly Period (with respect to Collections of Principal
Receivables for any Monthly Period during the Revolving Period (except as
otherwise provided herein), with respect to Collections of Finance Charge
Receivables, except as provided below with respect to Series 1998-2 Rapid
Amortization Period and with respect to the Default Amount and Adjustment
Payment Obligations at any time), the percentage equivalent of a fraction the
numerator of which is equal to the Aggregate Investor Amount of such Class as of
last Business day of the preceding Monthly Period provided, that with respect to
--------
the Monthly Period beginning on the Closing Date and ending March 31, 2001, the
numerator shall be equal to the daily average Aggregate Investor Amount for such
Class during such period, and the denominator shall in each case be equal to the
greater of (i) (x) the sum of the Aggregate Principal Receivables as of the last
day of the preceding Monthly Period plus (y) the amount on deposit in the Excess
----
Funding Account as of the last day of the preceding Monthly Period, and (ii) the
sum of the numerators used to calculate the applicable investor percentages with
respect to Collections of Principal Receivables and Collections of Finance
Charge Receivables, as applicable, for any Monthly Period during the Revolving
Period and with respect to the Default Amount and Adjustment Payment
Obligations, as applicable, for each class of each Series outstanding as of the
date on which such determination is being made; provided, however, that the
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Floating Allocation Percentage with respect to Collections of Principal
Receivables allocated to Series 2001-1 shall equal zero until the Series 1998-2
Pay Out Date. The Floating Allocation Percentage with respect to Collections of
Principal Receivables allocated to Series 2001-1 will be recalculated as of the
end of the day on the Series 1998-2 Pay Out Date and such Floating Allocation
Percentages shall remain in effect for the remainder of the applicable Monthly
Period in which the Series 1998-2 Pay-Out Date occurs. From the start of the
Rapid Amortization Period with respect to Series 1998-
6
2, the Floating Allocation Percentage with respect to Collections of Finance
Charge Receivables shall equal zero until the Series 1998-2 Pay Out Date has
occurred.
"Group One" shall mean Series 2001-1 and each other Series specified
---------
in the related Series Supplement to be included in Group One.
"Indebtedness" shall have the meaning specified in the Certificate
------------
Purchase Agreement.
"Initial Investor Amount" shall mean the Class A-1 Initial Investor
-----------------------
Amount, the Class A-2 Initial Investor Amount, and the Subordinated Class
Initial Investor Amount.
"Initial Pre-Funded Amount" shall mean with respect to the Senior
-------------------------
Class Certificates the aggregate amount of $22,000,000.
"Interest Component" shall mean, with respect to Commercial Paper
------------------
issued by a Senior Class Conduit, the per annum rate equivalent to the "weighted
average cost" (as defined below) related to the issuance of Commercial Paper by
such Senior Class Conduit that is allocated, in whole or in part, to maintain
such Senior Class Conduit's investment in the Senior Class Certificates;
provided, however, that if any component of such rate is a discount rate in
-------- -------
calculating the Interest Component, the rate used to calculate such component
of such rate shall be a rate resulting from converting such discount rate to an
interest bearing equivalent rate per annum. As used in this definition, the
"weighted average cost" shall consist of (x) the actual interest rate paid to
purchasers of the Commercial Paper issued by the related Senior Class Conduit,
(y) the costs associated with the issuance of such Commercial Paper as set forth
in the Fee Letter, and (z) interest on other borrowing or funding sources by the
related Senior Class Conduit (other than under any Program Support Agreement),
including to fund small or odd dollar amounts that are not easily accommodated
in the commercial paper market.
"Investor Amount" shall mean, with respect to each Senior Class, the
---------------
Senior Class Investor Amount of such Senior Class and, with respect to the
Subordinate Class, the Subordinate Class Investor Amount.
"Investor Charge Offs" shall mean, with respect to any date of
--------------------
determination, the sum of the Senior Class Investor Charge Offs and the
Subordinate Class Investor Charge Offs for such date of determination.
7
"Investor Default Amount" shall mean for each Class, with respect to
-----------------------
any Distribution Date, an amount equal to the product of (a) the Default Amount
for the immediately preceding Monthly Period and (b) the Investor Percentage for
such Class with respect to such preceding Monthly Period.
"Investor Finance Charge Collections" shall mean for each Class, with
-----------------------------------
respect to any Monthly Period, the product of (a) the Investor Percentage for
such Class with respect to such Monthly Period and (b) the Collections of
Finance Charge Receivables for such Monthly Period.
"Investor Letter" means that Investor Letter delivered to the
---------------
Transferor by the Agent in connection with the purchase of Senior Certificates.
"Investor Monthly Servicing Fee" shall have the meaning specified in
------------------------------
Section 7 of this Series Supplement.
"Investor Percentage" shall mean for each Class, with respect to any
-------------------
Monthly Period, (a) when used with respect to Collections of Principal
Receivables during the Revolving Period, the Floating Allocation Percentage, (b)
when used with respect to Collections of Principal Receivables during the
Amortization Period, the Fixed/Floating Allocation Percentage and (c) when used
with respect to Collections of Finance Charge Receivables or the Default Amount
or Adjustment Payment Obligations at any time, the Floating Allocation
Percentage.
"Investor Servicer Advance" shall mean for each Senior Class the
-------------------------
aggregate amount of all Servicer Advances made with respect to such Senior Class
pursuant to Section 4.4(b).
"Minimum Enhancement Amount" shall mean, as of any date of
--------------------------
determination the sum of (i) 6% of the Aggregate Investor Amount as of such
date and (ii) the Required Spread Account Balance.
"Minimum Transferor Interest Percentage" shall have the meaning
--------------------------------------
specified in Section 3 of this Series Supplement.
"Monthly Period" shall have the meaning specified in the Master
--------------
Pooling and Servicing Agreement; provided, however, that, with respect to the
-------- -------
first Distribution Date, the Monthly Period shall be the period from and
including the Closing Date through and including March 31, 2001.
8
"Pay Out Event" shall mean a Pay Out Event as specified in Section 9.1
-------------
of the Master Pooling and Servicing Agreement or Section 10 of this Series
Supplement.
"Portfolio Adjusted Yield" shall mean, with respect to any Monthly
------------------------
Period, the Portfolio Yield with respect to such Monthly Period minus the Base
-----
Rate with respect to such Monthly Period.
"Portfolio Yield" shall mean, with respect to any Monthly Period, the
---------------
annualized percentage equivalent of a fraction, the numerator of which is equal
to (a) the amount of Collections of Finance Charge Receivables that are
allocated to Series 2001-1 with respect to such Monthly Period, minus (b) the
-----
aggregate Investor Default Amount for all Classes of this Series for such
Monthly Period and the denominator of which is the daily average Aggregate
Investor Amount for such Monthly Period. For the purposes of this definition
only, the Servicer shall have the option to replace the amount described in
clause (a) above, with a pro forma amount calculated as if Collections of
Finance Charge Receivables are allocated among all Series using either daily
average investor amounts during the Monthly Period or actual daily investor
amounts in the numerator, and daily average Aggregate Principal Receivables and
daily average Excess Funding Account Balances during the Monthly Period or
actual daily amounts during the Monthly Period in the denominator for the
allocation formula; provided however that all Series which use a fixed numerator
-------- -------
in the allocation formula upon the occurrence of a Pay Out Event must continue
to do so for the pro forma calculation. This "Portfolio Yield" definition may
be altered at any time upon the written or electronic consent of both the
Servicer and the Agent, and shall not be considered an "Amendment" for purposes
of Section 13 of the Master Pooling and Servicing Agreement or the Certificate
Purchase Agreement.
"Potential Pay Out Event" shall have the meaning specified in the
-----------------------
Certificate Purchase Agreement.
"Pre-Funded Amount" shall mean, as of any date, (a) the Initial Pre-
-----------------
Funded Amount, plus (b) the amount of any deposits in the Pre-Funding Account
----
prior to such date pursuant to the Certificate Purchase Agreement, minus (c) the
-----
amount of any withdrawals from the Pre-Funding Account to fund Additional
Investor Amounts prior to such date.
9
"Pre-Funding Account" shall have the meaning specified in Section
-------------------
4.2(b).
"Principal Shortfall" shall have the meaning specified in Section 4.7.
-------------------
"Pro Forma Spread Percentage" shall mean, with respect to the March
---------------------------
2001 Monthly Period, the sum of (i) the Spread Percentage for Series 2001-1 for
the March 2001 Monthly Period and (ii) the Portfolio Adjusted Yield ("as defined
in the Series 1997-1 Series Supplement") for Series 1997-1 for the February
2001 Monthly Period, divided by two.
"Pro Rata Share" shall mean, for each Senior Class, on any date of
--------------
determination, the amount (expressed as a percentage) obtained by dividing the
Senior Class Investor Amount for such Class by the sum of the Senior Class
Investor Amounts for all Classes as of the close of business on the immediately
preceding Business Day; provided, however, that in the case of any Additional
-------- -------
Investor Amount where all Senior Class Agents shall agree in writing to any
other "Pro Rata Share", the "Pro Rata Share" for each Senior Class for such
-------------- --------------
Additional Investor Amount shall be as so agreed provided that the total of such
"Pro Rata Shares" equals 100%; provided further, that "Pro Rata Share" when used
--------------- -------- ------- --------------
with respect to a Monthly Period shall mean for each Senior Class the weighted
average Pro Rata Share for each day during such Monthly Period for such Senior
Class.
"Program Support Agreement" shall have the meaning specified in the
-------------------------
Certificate Purchase Agreement.
"Program Support Provider" shall have the meaning specified in the
------------------------
Certificate Purchase Agreement.
"Reallocated Subordinate Class Principal Collections" shall have the
---------------------------------------------------
meaning specified in Section 4.4(c).
"Related Commercial Paper" shall have the meaning specified in the
------------------------
Certificate Purchase Agreement.
"Required Investor Certificateholders" shall mean, with respect to any
------------------------------------
date of determination, the holders of not less than 66 2/3% of the aggregate
Senior Class Investor Amounts for the Senior Classes on such date.
10
"Required Spread Account Amount" shall mean, (i) with respect to the
------------------------------
Closing Date, zero and (ii) with respect to any Determination Date, from and
after the April 2001 Determination Date, the product of the Invested Amount on
such Determination Date and a percentage determined based on the Two Month
Rolling Spread Percentage with respect to such Determination Date as follows:
(A) if the Two Month Rolling Spread Percentage with respect to such
Determination Date is greater than or equal to 5.50%, 0%, (B) if the Two Month
Rolling Spread Percentage with respect to such Determination Date is less than
5.50% but greater than or equal to 5.00%, 1.50%, (C) if the Two Month Rolling
Spread Percentage with respect to such Determination Date is less than 5.00% but
greater than or equal to 4.50%, 2.50%, (D) if the Two Month Rolling Spread
Percentage with respect to such Determination Date is less than 4.50% but
greater than or equal to 4.00%, 3.50%, (E) if the Two Month Rolling Spread
Percentage with respect to such Determination Date is less than 4.00% but
greater than or equal to 3.00%, 5.00%, and (F) if the Two Month Rolling Spread
Percentage with respect to such Determination Date is less than 3.00%, 6.00%.
"Revolving Period" shall mean the period from and including the
----------------
Closing Date to but excluding the first day of the Amortization Period.
"Senior Certificateholders" shall mean each holder of a Senior Class
-------------------------
Certificate.
"Senior Class" shall have the meaning specified in the Certificate
------------
Purchase Agreement.
"Senior Class Agent" shall have the meaning specified in the
------------------
Certificate Purchase Agreement.
"Senior Class Certificate Principal Balance" shall mean for a Senior
------------------------------------------
Class, when used with respect to any date of determination, an amount equal to
(a) the Initial Investor Amount for such Senior Class, minus (b) the aggregate
-----
amount of principal payments made to the Senior Class Certificateholders of such
Senior Class prior to such day, plus (c) the aggregate initial principal amount
----
of any Additional Investor Amounts purchased by the Senior Class Conduits or the
Bank Investors of such Senior Class pursuant to Section 2.2 of the Certificate
Purchase Agreement, plus (d) after an assignment to the related Bank Investors
----
pursuant to Section 5.7 of the Certificate Purchase Agreement, any amount paid
by the related Bank Investors pursuant to Section 5.7(d) of the Certificate
Purchase Agreement.
11
"Senior Class Certificates" shall mean any one of the variable funding
-------------------------
certificates executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-1 hereto.
-----------
"Senior Class Conduit" shall have the meaning specified in the
--------------------
Certificate Purchase Agreement.
"Senior Class Facility Limit" shall have the meaning specified in the
---------------------------
Certificate Purchase Agreement.
"Senior Class Investor Amount" shall mean for each Senior Class, on
----------------------------
any date of determination, an amount equal to (a) the Initial Investor Amount of
such Senior Class, plus (b) the aggregate amount of any increases in the
----
Investor Amount of such Senior Class pursuant to Section 8 of this Series
Supplement, minus (c) the aggregate amount of principal payments made to the
-----
Senior Certificateholders of such Senior Class prior to such date (other than
principal payments made from amounts on deposit in the applicable Pre-Funding
Account on the first Distribution Date following the end of the Revolving
Period), minus (d) the aggregate amount of Senior Class Investor Charge Offs
-----
allocated to such Senior Class for all prior Distribution Dates, plus (e) the
----
aggregate amount of Senior Class Investor Charge Offs allocated to such Senior
Class reimbursed pursuant to Section 4.4(a) prior to such date, plus (f) after
----
an assignment to the related Bank Investors pursuant to Section 5.7 of the
Certificate Purchase Agreement, any amount paid by the related Bank Investors
pursuant to Section 5.7(d) of the Certificate Purchase Agreement; provided,
--------
however, that no Senior Class Investor Amount may be reduced below zero.
-------
"Senior Class Investor Charge Off" shall have the meaning specified in
--------------------------------
Section 4.6(a).
"Senior Class Monthly Principal" shall have the meaning specified in
------------------------------
Section 4.3(a).
"Senior Class Servicing Fee" shall have the meaning specified in
--------------------------
Section 7 of this Series Supplement.
"Series 1997-1" shall mean, the series, the terms of which are
-------------
established by the First Amended and Restated Series 1997-1 Series Supplement,
dated as of December 1, 1998, as amended, to the Master Pooling and Servicing
Agreement.
12
"Series 1998-2 Pay Out Date" shall mean the date on which the Class A
--------------------------
Adjusted Investor Amount, the Class B Adjusted Investor Amount, the Collateral
Indebtedness Amount (each as defined in the Series 1998-2 Series Supplement),
and all other amounts owed to the holders of the Series 1998-2 Certificates
(other than the Series 1998-2 Class D Certificates) has been paid in full.
"Series Accounts" shall mean the Spread Account and the Pre-Funding
---------------
Accounts.
"Series Allocation Percentage" shall mean, with respect to any Monthly
----------------------------
Period, (i) when used with respect to Collections of Principal Receivables
during the Revolving Period, with respect to Collections of Finance Charge
Receivables, the Default Amount and Adjustment Payment Obligations at any time,
the sum of the Floating Allocation Percentages for such Monthly Period for each
Senior Class and the Subordinate Class, and (ii) when used with respect to
Collections of Principal Receivables during the Amortization Period the sum of
the Fixed/Floating Allocation Percentages for such Monthly Period for each
Senior Class and the Subordinate Class.
"Series 2001-1" shall mean the Series the terms of which are specified
-------------
in this Series Supplement.
"Series 2001-1 Certificate" shall have the meaning specified in
-------------------------
Section 1 of this Series Supplement.
"Series 2001-1 Certificateholder" shall mean a holder of a Series
-------------------------------
2001-1 Certificate.
"Servicer" shall have the meaning specified in the preamble to this
--------
Series Supplement.
"Servicer Advance" shall have the meaning specified in Section 4.4(b).
----------------
"Servicing Fee Percentage" shall mean 2.00%.
------------------------
13
"Shared Principal Collections" shall mean, with respect to Series
----------------------------
2001-1, amounts to be treated as such pursuant to Sections 4.1(h), 4.5(a),
4.5(b) and 4.6(a) (which amounts shall be available for other Series pursuant to
Section 4.1(h)).
"Spread Account" shall have the meaning set forth in Section 4.2(a).
--------------
"Spread Account Funding Shortfall" shall mean for each Class, with
--------------------------------
respect to any Determination Date, an amount equal to the excess, if any, of the
amount to be deposited in the Spread Account with respect to such Class on the
following Distribution Date pursuant to Section 4.4(a)(i)(G) and Section
4.5(b)(iii), over the amount actually deposited in the Spread Account with
respect to such Class on such Distribution Date pursuant to Section 4.4(G).
"Spread Percentage" shall mean, with respect to any Monthly Period,
-----------------
the Portfolio Yield for such Monthly Period minus the Base Rate for such Monthly
Period.
"Stated Series Termination Date" shall mean the fifty-second
------------------------------
Distribution Date occurring after the Termination Date.
"Subordinate Class" shall mean the Subordinate Class Certificates.
-----------------
"Subordinate Class Certificates" shall mean any one of the
------------------------------
certificates executed by the Transferor and authenticated by or on behalf of the
Trustee, substantially in the form of Exhibit A-2 hereto.
-----------
"Subordinate Class Initial Investor Amount" shall mean the aggregate
-----------------------------------------
initial principal amount of the Subordinate Class Certificates, which is $0.
"Subordinate Class Investor Amount" shall mean, on any date of
---------------------------------
determination, an amount equal to (a) the Subordinate Class Initial Investor
Amount, plus (b) the aggregate amount of any increases in the Subordinate Class
----
Investor Amount pursuant to Section 4.10 and Section 8 of this Series
Supplement, minus (c) the aggregate amount of principal payments made to the
-----
holders of the Subordinate Class Certificates prior to such date, minus (d) the
-----
aggregate amount of Subordinate Class Investor Charge Offs for all prior
Distribution Dates, minus (e) the amount of Reallocated Subordinate Class
-----
Principal Collections allocated on all prior Distribution Dates pursuant to
Section 4.4(c), minus (f) an amount equal to the amount by which the Subordinate
-----
Class Investor Amount has been reduced on all prior Distribu-
14
tion Dates pursuant to Section 4.6(a), plus (g) the aggregate amount by which
----
reductions in the Subordinate Class Investor Amount pursuant to clauses (d), (e)
and (f) above have been reimbursed pursuant to Section 4.4(a)(ii)(C) prior to
such date; provided, however, that the Subordinate Class Investor Amount may not
-------- -------
be reduced below zero.
"Subordinate Class Investor Charge Off" shall have the meaning
-------------------------------------
specified in Section 4.6(b).
"Subordinate Class Investor Default Amount" shall mean, with respect
-----------------------------------------
to any Distribution Date, an amount equal to the product of (i) the Default
Amount for the immediately preceding Monthly Period and (ii) the Floating
Allocation Percentage for the Subordinate Class for such preceding Monthly
Period.
"Subordinate Class Monthly Principal" shall have the meaning specified
-----------------------------------
in Section 4.3(b).
"Subordinate Class Principal Commencement Date" shall mean the
---------------------------------------------
Distribution Date on which the Senior Class Investor Amounts have been paid in
full.
"Subordinate Class Servicing Fee" shall have the meaning specified in
-------------------------------
Section 7 of this Series Supplement.
"Targeted Holder" shall mean each holder of a right to receive
---------------
interest or principal with respect to the Series 2001-1 Certificates (or other
interests in the Trust), other than certificates (or other such interests) with
respect to which an opinion is rendered that such certificates (or other such
interests) will be treated as debt for federal income tax purposes, and any
holder of a right to receive any amount in respect of the Transferor Interest;
provided, however, that any Person holding more than one interest each of which
-------- -------
would cause such Person to be a Targeted Holder shall be treated as a single
Targeted Holder.
"Termination Date" shall have the meaning specified in the Certificate
----------------
Purchase Agreement.
"Transfer" shall have the meaning specified in Section 17 of this
--------
Series Supplement.
15
"Transfer Date" shall mean the Business Day preceding each
-------------
Distribution Date.
"Transferor" shall have the meaning specified in the preamble to this
----------
Series Supplement.
"Trustee" shall have the meaning specified in the preamble to this
-------
Series Supplement.
"Two Month Rolling Spread Percentage" shall mean, with respect to any
-----------------------------------
Determination Date, the sum of the Spread Percentages with respect to the two
preceding Monthly Periods divided by two (or the Pro Forma Spread Percentage
with respect to the March 2001 Monthly Period).
SECTION 3. Minimum Transferor Interest Percentage. The Minimum
--------------------------------------
Transferor Interest Percentage applicable to the Series 2001-1 Certificates
shall be 0%.
SECTION 4. Reassignment and Transfer Terms. The Series 2001-1
-------------------------------
Certificates may be reassigned and transferred to the Transferor on any
Distribution Date during the Amortization Period on or after which the sum of
the Class A-1 Investor Amount, the Class A-2 Investor Amount and the Subordinate
Class Investor Amount held by parties other than the Transferor or any of its
Affiliates is less than or equal to 10% of the sum of the highest amount of the
Class A-1 Investor Amount, the Class A-2 Investor Amount and the Subordinate
Class Investor Amount held by parties other than the Transferor or any of its
Affiliates since the Closing Date. The repurchase price for the Series 2001-1
Certificates will be equal to (a) the Aggregate Investor Amount less the
Subordinate Class Investor Amount held by the Transferor, plus (b) accrued and
unpaid interest on the Series 2001-1 Certificates together with all other
amounts due and unpaid pursuant to the Certificate Purchase Agreement, less (c)
the amount held in the Collection Account allocable to Series 2001-1 to be
applied other than any excess payable to the Transferor as holder of the
Exchangeable Transferor Certificate. The provisions of this Section are
subject to the provisions of Section 12.2 of the Master Pooling and Servicing
Agreement.
SECTION 5. Delivery and Payment for the Certificates. The Trustee
-----------------------------------------
shall deliver the Series 2001-1 Certificates upon the written direction of the
Transferor when authenticated in accordance with Section 6.2.
16
SECTION 6. Form of Delivery of the Series 2001-1 Certificates. Each
--------------------------------------------------
of the Series 2001-1 Certificates shall be delivered as registered, definitive,
physical certificates. Each of the Senior Class Certificates shall be issued in
minimum denominations of $500,000 and in integral multiples of $1,000 in excess
thereof. The Subordinate Class Certificates shall be issued in minimum
denominations of $1,000 and in integral multiples of $1,000 in excess thereof.
SECTION 7. Servicing Compensation. The share of the Monthly
----------------------
Servicing Fee allocable to the Series 2001-1 Certificateholders with respect to
any Distribution Date (the "Investor Monthly Servicing Fee") shall be equal to
------------------------------
one-twelfth of the product of (a) the Servicing Fee Percentage and (b) the
average daily Aggregate Investor Amount for the related Monthly Period. The
share of the Investor Monthly Servicing Fee allocable to the Senior Classes with
respect to any Distribution Date (the "Senior Class Servicing Fee") shall be
--------------------------
equal to the product of (a) the sum of the Floating Allocation Percentages for
the Senior Classes divided by the sum of the Floating Allocation Percentages for
all Classes, in each case with respect to the related Monthly Period, and (b)
the Investor Monthly Servicing Fee with respect to such Distribution Date. The
share of the Investor Monthly Servicing Fee allocable to the Subordinate Class
with respect to any Distribution Date (the "Subordinate Class Servicing Fee")
-------------------------------
shall be equal to the product of (a) the Floating Allocation Percentage for the
Subordinate Class divided by the sum of the Floating Allocation Percentages for
all Classes, in each case with respect to the related Monthly Period, and (b)
the Investor Monthly Servicing Fee with respect to such Distribution Date. The
Senior Class Servicing Fee, that portion of the Senior Class Servicing Fee
payable in respect of any particular Senior Class and the Subordinate Class
Servicing Fee shall be payable solely to the extent amounts are available for
distribution in respect thereof pursuant to this Series Supplement. The
remainder of the Monthly Servicing Fee shall be paid by the Transferor or from
amounts allocable to other Series (as provided in the Master Pooling and
Servicing Agreement and the Supplements relating to such other Series) and in no
event shall the Trust, the Trustee or the Series 2001-1 Certificateholders be
liable for the share of the Monthly Servicing Fee to be paid by the Transferor
or from amounts allocable to any other Series.
SECTION 8. Increase in the Senior Class Investor Amount.
--------------------------------------------
(a) Each Senior Class Certificateholder agrees, by acceptance of its
Series 2001-1 Certificate, that the Transferor may, from time to time prior to
the Termination Date upon satisfaction of the conditions set forth in Section
2.2 of the Certificate Purchase Agreement, require that each Senior Class
Conduit acquire, as
17
of any Business Day, additional undivided interests in the Trust in specified
amounts (any such amount, an "Additional Senior Class Investor Amount") (each
---------------------------------------
such date, a "Purchase Date").
-------------
(b) If the Senior Class Certificateholders acquire an additional
undivided interest in the Trust, then in consideration of such Senior Class
Certificateholders' payments of Additional Senior Class Investor Amounts (which
payments shall be made through a withdrawal of amounts on deposit in the
applicable Pre-Funding Account in accordance with Section 9 of this Series
Supplement or a direct payment by the applicable Senior Class Certificateholder
in accordance with the Certificate Purchase Agreement), the Servicer and the
Trustee shall appropriately note such Additional Senior Class Investor Amounts.
(c) Any additional Senior Class Investor Amount purchased by any
Senior Class Certificateholder shall be evidenced by the related Senior Class
Certificate issued on the Closing Date. The Senior Class Agent shall, and is
hereby authorized to, record on the grid attached to any Senior Class
Certificate (or, at the Senior Class Agent's option, in its internal books and
records) the date and amount of any Additional Senior Class Investor Amount
purchased, and each repayment thereof, which recordations shall be deemed
correct absent manifest error; provided, however, that failure to make any such
-------- -------
recordation on such grid or internal records or any error in such grid or
internal records shall not adversely affect a Senior Class Certificateholder's
rights with respect to any Senior Class Investor Amount and its right to receive
interest payments in respect of any Senior Class Investor Amount held by such
Senior Class Certificateholder.
(d) The Senior Class Certificates will be issued in the initial face
amount of up to $250,410,000. The Servicer shall notify the Trustee in writing
of any increase in the face amount of the Senior Class Certificates and shall
instruct the Trustee in writing to record any such increase on the Certificate
Register.
SECTION 9. Procedure for Pre-Funding Increases in the Senior Class
-------------------------------------------------------
Investor Amount.
---------------
(a) Administration of the Pre-Funding Account. The Senior Class
-----------------------------------------
Certificateholders shall, subject to the terms and conditions of the Certificate
Purchase Agreement, deposit the Initial Pre-Funded Amount for such Class into
the Pre-Funding Account on the Closing Date. All interest (including reinvested
18
interest) and other investment earnings on the Pre-Funded Amount shall not be
considered part of such Pre-Funded Amount for purposes of this Series
Supplement.
(b) Investment of Funds in the Pre-Funding Account. Funds on deposit
----------------------------------------------
in the Pre-Funding Account shall at all times be invested in Eligible
Investments. Any such investment shall mature and such funds shall be available
for withdrawal on or prior to the following Business Day. Subject to the
restrictions set forth above, the Servicer shall instruct the Trustee or the
Qualified Institution maintaining the Pre-Funding Account in writing with
respect to the investment of funds on deposit in the Pre-Funding Account. For
purposes of determining the availability of funds or the balances in the Pre-
Funding Account for any reason under this Agreement, all interest and other
investment earnings (net of losses and investment expenses) on such funds shall
be deemed not to be available or on deposit until actually credited to the Pre-
Funding Account.
(c) Principal Payments from the Pre-Funding Account. On each day that
-----------------------------------------------
Additional Senior Class Investor Amounts are to be purchased with respect to any
Class pursuant to Section 8 of this Series Supplement through a withdrawal of
amounts from the Pre-Funding Account, if all the conditions precedent to such
purchase under the Certificate Purchase Agreement have been satisfied, the
Servicer shall instruct the Trustee in writing to withdraw from the Pre-Funding
Account and pay to the Transferor an amount equal to the lesser of the aggregate
Additional Senior Class Investor Amounts being purchased with respect to such
Class on such date and the amount on deposit in the Pre-Funding Account. In the
event that the applicable Pre-Funded Amount exceeds zero at the end of the
Revolving Period, the Servicer shall apply or shall cause the Trustee to apply
such Pre-Funded Amount to the payment by the Paying Agent, on the next
succeeding Distribution Date, of principal on the applicable Senior Class
Certificates.
SECTION 10. Article IV of the Agreement. Any provisions of Article
---------------------------
IV of the Master Pooling and Servicing Agreement which distribute Collections
to the Transferor on the basis of the Transferor Percentage shall continue to
apply irrespective of the issuance of the Series 2001-1 Certificates. Section
4.1 shall read in its entirety as provided in the Master Pooling and Servicing
Agreement. Article IV of the Agreement (except for Section 4.1 thereof) as it
relates to Series 2001-1 shall read in its entirety as follows:
19
ARTICLE IV
RIGHTS OF SERIES 2001-1 CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.2 Establishment of Series Accounts.
--------------------------------
(a) The Trustee, for the benefit of the Series 2001-1
Certificateholders, shall establish and maintain or cause to be established and
maintained in the name of the Trustee, on behalf of the Trust, with an Qualified
Institution designated by the Servicer, a segregated trust account within the
corporate trust department of such Qualified Institution (the "Spread Account"),
--------------
bearing a designation clearly indicating that the funds deposited therein are
held in trust for the benefit of the Series 2001-1 Certificateholders. The
Servicer hereby designates the Trustee as the Qualified Institution with whom
the Spread Account will initially be maintained.
(b) The Trustee, for the benefit of each Senior Class
Certificateholder, shall establish and maintain or cause to be established and
maintained in the name of the Trustee, on behalf of the Trust, within the
corporate trust department of an Qualified Institution designated by the
Servicer, a segregated trust account with respect to each Class of the Senior
Class Certificates (each, a "Pre-Funding Account"), which will bear a
-------------------
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the applicable Senior Class Certificateholder. The
Servicer hereby designates the Trustee as the Qualified Institution with whom
the Pre-Funding Accounts will initially be maintained.
(c) The Trustee, for the benefit of the applicable Series 2001-1
Certificateholders, shall possess all right, title and interest in all funds on
deposit from time to time in the Series Accounts and in all proceeds thereof.
The Trustee at all times shall maintain accurate records reflecting each
transaction in the Series Accounts. Pursuant to the authority granted to it
pursuant to the Agreement, the Servicer shall have the power, revocable by the
Trustee, to withdraw funds, and to instruct the Trustee to withdraw funds from
the Series Accounts for the purpose of carrying out its duties hereunder. Funds
on deposit in the Spread Account shall at all times be invested in Eligible
Investments. Any such investment shall mature and such funds shall be available
for withdrawal on or prior to the Distribution Date following the Monthly Period
in which such funds were processed for collection. Subject to the restrictions
set forth above, the Servicer shall instruct the Trustee or
20
the Qualified Institution maintaining the Spread Account in writing with respect
to the investment of funds on deposit in the Spread Account. For purposes of
determining the availability of funds or the balances in the Series Accounts
for any reason under this Agreement, all interest and other investment earnings
(net of losses and investment expenses) on such funds shall be deemed not to be
available or on deposit until actually credited to such Series Accounts.
Eligible Investments shall not be disposed of prior to their maturity.
(d) On each Distribution Date, the Trustee, acting at the written
direction of the Servicer, shall transfer to the Collection Account all interest
and other investment earnings (net of losses and investment expenses) credited
to the Series Accounts during the preceding Monthly Period. The amounts so
transferred shall be treated as Collections of Finance Charge Receivables
allocable to the Series 2001-1 Certificates.
Section 4.2.1 Collections and Allocations.
---------------------------
(a) Collections of Finance Charge Receivables with respect to a
Monthly Period shall be allocated to Series 2001-1 and deposited into the
Collection Account in an amount equal to the product of such Collections of
Finance Charge Receivables and the Series Allocation Percentage for such Monthly
Period. Collections of Principal Receivables with respect to a Monthly Period
shall be allocated to Series 2001-1 and deposited into the Collection Account in
an amount equal to the product of such Collections of Principal Receivables and
the Series Allocation Percentage for such Monthly Period. The Servicer shall
apply, or shall instruct the Trustee to apply, all Collections and other funds
on deposit in the Collection Account that are allocated to the Series 2001-1
Certificates as described in this Article IV.
(b) Provided that daily deposits of Collections are required pursuant
to subsection 4.1(f) of the Master Pooling and Servicing Agreement, during the
Revolving Period, so long as the sum of the Subordinate Class Investor Amount
and the amount on deposit in the Spread Account is not less than the Minimum
Enhancement Amount, Collections of Principal Receivables allocable to Series
2001-1 with respect to each Monthly Period need not be deposited into the
Collection Account on a daily basis during such Monthly Period; provided,
--------
however, that in the event that the Minimum Transferor Amount exceeds the
Transferor Amount on any date, such Collections of Principal Receivables shall
be deposited into the Excess Funding Account until the Transferor Amount equals
the Minimum Transferor
21
Amount; and provided, further, that on any date on which the sum of the
-------- -------
Aggregate Principal Receivables and the Excess Funding Amount is less than the
Aggregate Investor Amount, such Collections of Principal Receivables shall be
deposited into the Collection Account on a daily basis. During the Amortization
Period, Collections of Principal Receivables allocable to Series 2001-1 with
respect to each Monthly Period shall be deposited into the Collection Account on
a daily basis.
(c) All allocations of Collections, Default Amounts and Adjustment
Payment Obligations to the Senior Classes shall be made to such classes pari
----
passu.
-----
Section 4.3 Determination of Monthly Principal.
----------------------------------
(a) The amount of principal allocable to each Senior Class on each
Distribution Date (the "Senior Class Monthly Principal"), shall be equal to the
------------------------------
lesser of (i) during the Amortization Period the Fixed/Floating Allocation
Percentage for such Senior Class or during the Revolving Period the Floating
Allocation % for such Senior Class of Collections of Principal Receivables with
respect to the preced ing Monthly Period, plus the Pro Rata Share for such
----
Senior Class of the amount of any Shared Principal Collections with respect to
other Series that are allocated to Series 2001-1 in accordance with the Master
Pooling and Servicing Agreement, plus, any amounts required by Section 4.4(a)(i)
----
or Section 4.9(e) to be applied in accor dance with Section 4.5 governing
Principal Collections plus, prior to the Subordinate Class Principal
----
Commencement Date, the Pro Rata Share for such Senior Class of the amount which
would be, but for the failure of the Subordinate Class Principal Commencement
Date to occur, treated hereunder as the Subordinate Class Monthly Principal for
such Distribution Date, minus the amount of Reallocated Subordinate Class
-----
Principal Collections allocated to such Senior Class on such Distribution Date
pursuant to Section 4.4(c) and (ii) the Senior Class Investor Amount for such
Senior Class with respect to such Distribution Date.
(b) The amount of principal allocable to the Subordinate Class on
each Distribution Date (the "Subordinate Class Monthly Principal"), beginning
-----------------------------------
with the Subordinate Class Principal Commencement Date, shall be equal to the
lesser of (i) the Floating Allocation Percentage for the Subordinate Class of
Collections of Principal Receivables with respect to the preceding Monthly
Period, plus, any amounts required by Section 4.4(a)(ii) to be applied in
----
accordance with Section 4.5 governing Principal Collections plus the Shared
----
Principal Collections with respect to other Series that are allocated to Series
2001-1 in accordance with the
22
Agreement and remaining after application pursuant to Section 4.3(a) and
(ii) the Subordinate Class Investor Amount with respect to such Distribution
Date.
Section 4.4 Application of Collections of Finance Charge Receivables.
--------------------------------------------------------
(a) In accordance with Section 4.2(a) of the Agreement, the Servicer
shall apply or shall instruct the Trustee to apply on each Distribution Date the
Collections of Finance Charge Receivables and any other amounts that are to be
treated as Collections of Finance Charge Receivables pursuant to the Master
Pooling and Servicing Agreement in each case allocable to Series 2001-1 plus the
----
amount of any Shared Excess Finance Charge Collections allocable to Series
2001-1 to make the distributions specified in this Section 4.4.
(i) For each Senior Class, the sum of (x) the Pro Rata Share for
such Senior Class for the related Monthly Period of Collections of Finance
Charge Receivables allocable to Series 2001-1 plus (y) the Pro Rata Share
----
for such Senior Class for the related Monthly Period of the amount of any
Shared Excess Finance Charge Collections allocable to Series 2001-1 will be
applied to make the following distributions to the Senior
Certificateholders of such Senior Class in the following priority:
(A) an amount equal to unpaid Investor Servicer Advances
for such Senior Class for the related Monthly Period, if any, shall be
paid to the Servicer to repay such Investor Servicer Advances;
(B) an amount equal to the Carrying Costs for such Senior
Class for the related Monthly Period (less the amount of any such
Carrying Costs that has been paid by an Investor Servicer Advance),
plus the amount of any Carrying Costs previously due but not paid on
----
a prior Distribution Date plus interest on any such overdue amount at
the Base Rate for the prior Monthly Period plus 2.0%, shall be
distributed to each Senior Class Agent for payment to the
Certificateholders of such Class;
23
(C) if neither Saks Incor porated nor an Affiliate of Saks
Incorporated is the Servicer, an amount equal to the Pro Rata Shares
for such Senior Class for the related Monthly Period of the Senior
Class Servicing Fee with respect to such Distribution Date, plus an
----
amount equal to the Pro Rata Share for such Senior Class for the
related Monthly Period of any Senior Class Servicing Fee previously
due but not distributed to the Servicer on a prior Distribution Date,
shall be distributed to, or retained by, the Servicer;
(D) an amount equal to the Investor Default Amount
allocated to the Senior Classes with respect to such Distribution
Date, if any, shall be applied with respect to each Class in
accordance with the provisions of Section 4.5 governing Collections of
Principal Receivables;
(E) an amount equal to the Floating Allocation Percentage
for such Senior Class for the related Monthly Period of Adjustment
Payment Obligations for the related Monthly Period which the
Transferor fails to make in accordance with the Agreement shall be
applied with respect to such Class in accordance with the provisions
of Section 4.5 governing Collections of Principal Receivables,
provided that any such application shall not relieve the Transferor of
--------
its obligations in respect of such Adjustment Payment Obligations;
(F) an amount equal to the aggregate Senior Class Investor
Charge Offs allocable to such Senior Class not previously reimbursed
shall be applied with respect to such Class in accordance with the
provisions of Section 4.5 governing Collections of Principal
Receivables;
24
(G) an amount equal to the excess, if any, of the Pro Rata
Share for each Senior Class Certificateholder of the Required Spread
Account Amount with respect to such Determination Date over the Pro
Rata Share for such Senior Class Certificateholder of the amount on
deposit in the Spread Account before giving effect to such deposit
(assuming that an amount equal to all unfunded Spread Account Funding
Shortfalls for all Classes with respect to previous Determination
Dates have been deposited in the Spread Account on such Determination
Date) shall be deposited in the Spread Account.
(H) if Saks Incorporated or an Affiliate of Saks
Incorporated is the Servicer, an amount equal to the Pro Rata Share
for such Senior Class for the related Monthly Period of the Senior
Class Servicing Fee for such Distribution Date, plus an amount equal
----
to the Pro Rata Share for such Senior Class for the related Monthly
Period of any Senior Class Servicing Fee previously due but not
distributed to the Servicer on a prior Distribution Date, shall be
distributed to, or retained by, the Servicer;
(I) to the extent Inves tor Finance Charge Collections for
any other Senior Class are insufficient to provide for the payment in
respect of such other Senior Class(es) of the amounts described in
clauses (A) through (F) above, the bal ance, if any, remaining after
application pursuant to clauses (A) through (F) above shall be applied
to cover any such insufficiency(ies) (pro rata among such other Senior
--- ----
Classes, if applicable, based on the amount of their respective Senior
Class Investor Amounts); and
(J) the balance, if any, remaining after application
pursuant to clauses (A) through (I) above shall be distributed as
described in clause (a)(ii) of this Section 4.4.
25
(ii) For the Subordinate Class, the sum of the amounts described
in Section 4.4(a)(i)(J) with respect to all Senior Classes will be applied
to make the following distributions to the holder of the Subordinate Class
Certificate in the following priority:
(A) if neither Saks Incorporated nor an Affiliate of Saks
Incorporated is the Servicer, an amount equal to the Subordinate Class
Servicing Fee with respect to such Distribution Date, plus an amount
----
equal to any Subordinate Class Servicing Fee previously due but not
distributed to the Servicer on a prior Distribution Date, shall be
distributed to, or retained by, the Servicer;
(B) an amount equal to the Investor Default Amount for the
Subordinate Class with respect to such Distribution Date, if any,
shall be applied in accordance with the provisions of Section 4.5
governing Collections of Principal Receivables;
(C) an amount equal to the Floating Allocation Percentage
for the Subordinate Class for the related Monthly Period of Adjustment
Payment Obligations for the related Monthly Period which the
Transferor fails to make in accordance with the Agreement shall be
applied in accordance with the provisions of Section 4.5 governing
Collections of Principal Receivables, provided that any such
--------
application shall not relieve the Transferor of its obligations in
respect of such Adjustment Payment Obligations;
(D) an amount equal to the aggregate amount by which the
Subordinate Class Investor Amount has been reduced pursuant to clauses
(d), (e) and (f) of the definition thereof (but not in excess of the
aggregate amount of such reductions which have not been previously
reimbursed) shall be applied in accordance with the provisions of
Section
26
4.5 governing Collections of Principal Receivables; and
(E) the balance, if any, remaining after application
pursuant to clauses (A) through (D) above shall be distributed as
described in clause (d) of this Section 4.4.
(b) In the event that, on any date, a Senior Class Conduit does not
have sufficient funds to pay any Carrying Costs for such Senior Class Conduit
due and payable on such date, such Senior Class Conduit shall provide to the
Servicer a notice setting forth the amount of such Carrying Costs and the date
on which such Carrying Costs are due, and the Servicer shall make an advance
from its own funds to the related Senior Class Agent for the account of the
Certificateholders of such Senior Class in an amount equal to such deficiency or
deficiencies, but only to the extent the Servicer reasonably expects to be
reimbursed therefor (each, a "Servicer Advance"). The amounts set forth in such
----------------
notice shall be conclusive and binding for all purposes absent manifest error.
In the event that Carrying Costs for a Senior Class are due and
payable to a Bank Investor on any date other than a Distribution Date, the
Senior Class Agent shall provide to the Servicer a notice setting forth the
amount of such Carrying Costs and the date on which such Carrying Costs are due,
and the Servicer shall make an advance from its own funds to the Senior Class
Agent for the benefit of the Bank Investors of such Senior Class in an amount
equal to such deficiency or deficiencies, but only to the extent the Servicer
reasonably expects to be reimbursed therefor (each also, a "Servicer Advance").
----------------
Amounts required to be remitted to a Senior Class Agent pursuant to
this Section 4.4(b) shall be remitted in immediately available funds to the
account of such Senior Class Agent designated in the Certificate Purchase
Agreement no later than 12:00 noon, New York City time, on the date due;
provided, however, that in lieu of such direct payment by the Servicer, to the
-------- -------
extent of available funds, the Servicer may instruct the Trustee in writing to
remit such amounts from the Investor Finance Charge Collections on deposit in
the Collection Account, any such payment to be netted from amounts to be paid
with respect to the related Senior Class pursuant to Section 4.4(a)(i)(B). The
Servicer shall record in its books and records such withdrawal and the
application of funds and net such amounts so applied from the
27
amounts to be paid with respect to such Senior Class under Section 4.4(a)(i)(B)
on the succeeding Distribution Date.
(c) If the Investor Finance Charge Collections with respect to any
Monthly Period are insufficient to pay the sum of the amounts to be distributed
with respect to a Senior Class on the related Distribution Date pursuant to
clauses (A) through (F) of Section 4.4(a)(i), the Servicer shall first, withdraw
-----
from the Spread Account on such Distribution Date, an amount equal to the lesser
of (i) the amount available to be withdrawn from the Spread Account with respect
to such Class (based on the amount previously withdrawn from or deposited in the
Spread Account with respect to such Class) and (ii) such deficiency for such
Senior Class, and apply such amount withdrawn to such deficiency and pay such
amount to the related Senior Class Agent for the account of the
Certificateholders of such Class, and second, to the extent a deficiency
------
continues to remain, the Servicer shall pay on such Distribution Date to the
related Senior Class Agent for the account of the Certificateholders of such
Senior Class, out of the Pro Rata Share for such Senior Class for the related
Monthly Period of the Collections of Principal Receivables allocated to the
Subordinate Class for such Monthly Period, an amount equal to such remaining
deficiency (all such amounts, "Reallocated Subordinate Class Principal
---------------------------------------
Collections"). Such amounts shall be applied with respect to such Senior Class
-----------
in the order of priority set forth in Section 4.4(a)(i) (without giving effect
to the distributions in clauses (H) and (I) thereof).
(d) On each Distribution Date with respect to the Revolving Period,
the amount determined pursuant to Section 4.4(a)(ii)(E) shall be treated as
"Shared Excess Finance Charge Collections" to be applied in accordance with
Section 4.1(i) of the Agreement; and thereafter the balance shall be distributed
to the Transferor. On each Distribution Date with respect to the Amortization
Period, the amount determined pursuant to Section 4.4(a)(ii)(E) shall be
distributed to each Senior Class Agent in accordance with the Pro Rata Share for
the related Senior Class for the account of the Certificateholders of such
Senior Class in reduction of the Senior Class Investor Amount for such Senior
Class until paid in full; and thereafter the balance shall be distributed to the
Transferor.
Section 4.5 Application of Collections of Principal Receivables.
---------------------------------------------------
(a) On each Distribution Date with respect to the Revolving Period,
an amount equal to the Collections of Principal Receivables allocable to Series
2001-1 for the related Monthly Period (after giving effect to any reallocation
28
thereof pursuant to Section 4.4(c) and any distribution described in Section
4.5(d)) shall, at the Transferor's option, either (i) be distributed in whole or
in part to the Senior Class Agent in accordance with the Pro Rata Share for the
related Senior Class for the account of the Certificateholders of such Senior
Class in reduction of the Senior Class Investor Amount for such Senior Class
(provided that the amounts so distributed on any Distribution Date shall not
---------
exceed the Floating Allocation Percentage for the related Monthly Period of the
Collections of Principal Receivables allocated to Series 2001-1 and received
during the related Monthly Period) or (ii) to the extent not distributed
pursuant to clause (i) of this Section 4.5(a), be treated as "Shared Principal
Collections" to be applied to other Series in Group One in accordance with
Section 4.1(h) of the Agreement. Notwithstanding the foregoing, at any time (x)
to the extent that the Transferor Amount is less than the Minimum Transferor
Amount or (y) after the occurrence of a Potential Pay Out Event, Collections of
Principal Receivables allocable to Series 2001-1 (after giving effect to any
reallocation thereof pursuant to Section 4.4(c) and any distribution described
in Section 4.5(d)) shall be applied, in the case of clause (x) above, to the
extent of such deficiency, in the case of clause (y) above, in whole, as
described in clause (i) of this Section 4.5(a).
(b) On each Distribution Date following the commencement of the
Amortization Period, an amount equal to the Collections of Principal Receivables
allocable to Series 2001-1 for the related Monthly Period (after giving effect
to any reallocation thereof pursuant to Section 4.4(c) and any distribution
described in Section 4.5(d)) plus the amount of any Shared Principal Collections
----
allocable to Series 2001-1 plus that portion of the amount on deposit in the
----
Excess Funding Account allocable to Series 2001-1 plus the amount described in
----
Section 4.9(e), if applicable, shall be applied in the following priority:
(i) an amount equal to the Senior Class Monthly Principal for
each Senior Class for such Distribution Date shall be distributed to the
related Senior Class Agent for payment to the related Senior
Certificateholders pro rata until the Senior Class Investor Amount of such
Senior Class has been paid in full;
(ii) an amount equal to the Subordinate Class Monthly Principal
for such Distribution Date shall be distributed to the Paying Agent for
payment to the holders of the Subordinate Class Certificates pro rata until
--- ----
the Subordinate Class Investor Amount has been paid in full; and
29
(iii) the balance, if any, shall be treated as "Shared Principal
Collections" to be applied to other Series in Group One in accordance with
Section 4.1(h) of the Agreement.
(c) [Reserved]
(d) The Transferor may direct the Servicer to (i) deposit to the
Collection Account and (ii) release from the Collection Account, Collections of
Principal Receivables allocable to Series 2001-1 and on deposit therein and
direct that such amounts be distributed to each Senior Class Agent in accordance
with the Pro Rata Share for the related Senior Class for the account of the
Certificateholders of such Senior Class in reduction of the Senior Class
Investor Amount for such Senior Class. Any such release and distribution may
occur only in order (i) to reduce the sum of the Senior Class Investor Amount
and the Interest Component of all outstanding Related Commercial Paper for a
Senior Class to an amount which is less than the Senior Class Facility Limit or
(ii) to reduce the Senior Class Certificate Principal Balances for all Senior
Classes to an amount which is less than the product of (x) the aggregate
Floating Allocation Percentage with respect to Default Amounts for all Senior
Classes (as of the end of the most recent Monthly Period) and (y) the sum of the
Excess Funding Amount and the Aggregate Principal Receivables; provided that
--------
amounts must be distributed to each Senior Class in accordance with the Pro Rata
Share as described above, notwithstanding that the reduction described in clause
(ii) may not be required for each Senior Class.
Section 4.6 Defaulted Amounts; Senior Class Investor Charge Offs.
----------------------------------------------------
(d) If, on any Distribution Date, (i) the sum of the amounts required
to be paid with respect to each Senior Class pursuant to Sections 4.4(a)(i)(A)
through (E) of the Agreement on such Distribution Date exceeds (ii) the sum of
(w) the amount available therefor pursuant to Section 4.4(a)(i) for such
Distribution Date, (x) the amount available to be withdrawn from the Spread
Account in respect of such Senior Class and actually paid to the related Senior
Class Agent pursuant to clause first of Section 4.4(c), (y) the amount of Shared
-----
Principal Collections available pursuant to Section 4.7(d) and (z) the Pro Rata
Share for such Senior Class for the related Monthly Period of the Collections of
Principal Receivables allocated to the Subordinate Class for the related
Monthly Period, then the Subordinate Class Investor Amount shall be reduced by
the amount of such excess, but not by more than the excess of (A) the sum of the
Investor Default Amount for the Senior Class and the Floating Allocation
Percentage for such Class for the related
30
Monthly Period of Adjustment Payment Obligations for such Monthly Period which
the Transferor failed to make in accordance with the Agreement over (B) the
amount available therefor pursuant to Section 4.4(a)(i) for such Distribution
Date plus the amount paid to the related Senior Class Agent from amounts on
----
deposit in the Spread Account pursuant to clause first of Section 4.4(c) plus
----- ----
the amount of Shared Principal Collections available pursuant to Section 4.7(d),
plus the Pro Rata Share for such Senior Class for the related Monthly Period of
----
the Collections of Principal Receivables allocated to the Subordinate Class for
the related Monthly Period, in each case used to fund the Investor Default
Amount for such Senior Class and the Floating Allocation Percentage for the
related Monthly Period of Adjustment Payment Obligations which the Transferor
failed to make in accordance with the Agreement. In the event that such
reduction would cause the Subordinate Class Investor Amount to be a negative
number, the Subordinate Class Investor Amount shall be reduced to zero, and the
Senior Class Investor Amount for such Senior Class shall be reduced by the
amount by which the Subordinate Class Investor Amount would have been reduced
below zero (with respect to such Senior Class, a "Senior Class Investor Charge
----------------------------
Off"); provided, however, that the Senior Class Investor Amount for such Senior
--- -------- -------
Class shall not be reduced below zero. Senior Class Investor Charge Offs for
such Class shall thereafter be reimbursed and the Senior Class Investor Amount
for such Senior Class increased (but not by an amount in excess of the aggregate
unreimbursed Senior Class Investor Charge Offs for such Class) on any
Distribution Date by the amounts allocated and available for that purpose
pursuant to Section 4.4(a)(i)(F). Nothing herein shall affect the Transferor's
obligations to make Adjustment Payment Obligations in accordance with the
Agreement whether before or after any Investor Charge Offs are made with respect
to such Adjustment Payment Obligations.
(b) If, on any Distribution Date, the sum of the amounts to be paid
pursuant to Sections 4.4(a)(ii)(A) through (C) of the Agreement exceeds the
amounts available therefor under Section 4.4(a)(ii), then the Subordinate Class
Investor Amount (after giving effect to any reduction thereof pursuant to
Sections 4.4(c) and 4.6(a) of the Agreement) shall be reduced by the amount of
such excess, but not by more than the excess of (A) the sum of the Subordinate
Class Investor Default Amount and the Floating Allocation Percentage with
respect to the Subordinate Class for the related Monthly Period of Adjustment
Payment Obligations which the Transferor failed to make in accordance with the
Agreement over (B) the amounts available therefor under Section 4.4(a)(ii) used
to fund the Subordinate Class Investor Default Amount and the Floating
Allocation Percentage with respect to the Subordinate Class for the related
Monthly Period of Adjustment Payment
31
Obligations which the Transferor failed to make in accordance with the Agreement
(each, a "Subordinate Class Investor Charge Off"); provided, however, that the
------------------------------------- -------- -------
Subordinate Class Investor Amount shall not be reduced below zero. Any such
reduction of the Subordinate Class Investor Amount shall be given effect after
any reduction of the Subordinate Class Investor Amount pursuant to Sections
4.4(c) and 4.6(a) of the Agreement. Subordinate Class Investor Charge Offs shall
thereafter be reimbursed and the Subordinate Class Investor Amount increased
(but not by an amount in excess of the aggregate unreimbursed Subordinate Class
Investor Charge Offs) on any Distribution Date by the amounts allocated and
available for that purpose pursuant to Section 4.4(a)(ii)(D) of the Agreement.
Section 4.7 Shared Principal Collections. Subject to Section 4.1(h)
----------------------------
of the Agreement, Shared Principal Collections for any Distribution Date will be
allocated to Series 2001-1 in an amount equal to the product of (x) the
aggregate amount of Shared Principal Collections with respect to all Series in
Group One for such Distribution Date and (y) a fraction, the numerator of which
is the Principal Shortfall for Series 2001-1 for such Distribution Date and the
denominator of which is the aggregate amount of Principal Shortfalls for all
Series in Group One. The "Principal Shortfall" for Series 2001-1 will be equal
-------------------
to the sum, during each respective period shown below, of (a) for any
Distribution Date with respect to the Revolving Period, zero or such other
greater amount not exceeding the Aggregate Investor Amount as may be designated
by the Transferor, at its option, (b) for any Distribution Date with respect to
the Amortization Period, the excess, if any, of the Aggregate Investor Amount
over the sum of the Fixed/Floating Allocation Percentages for all Classes for
the related Monthly Period of Collections of Principal Receivables for such
Distribution Date (excluding any portion thereof attributable to Shared
Principal Collections), (c) for any Distribution Date, the excess of the amount
of the Required Spread Account Amount over the amount on deposit in the Spread
Account and (d) for any Distribution Date with respect to which the Investor
Percentage with respect to collections of Principal Receivables is zero, the
amount by which the amount described in Section 4.6(a)(i) exceeds the sum of the
amounts described in clauses (w) and (x) of Section 4.6(a)(ii); provided,
--------
however, that the amount described in clauses (c) and (d) may only be included
-------
in the Principal Shortfall amount for such Distribution Date to the extent such
amount can be funded from Shared Principal Collections otherwise payable to the
Transferor.
32
Section 4.8 Shared Excess Finance Charge Collections. Shared Excess
----------------------------------------
Finance Charge Collections for any Distribution Date will be allocated to Series
2001-1 in an amount equal to the product of (x) the aggregate amount of Shared
Excess Finance Charge Collections with respect to all Series in Group One for
such Distribution Date and (y) a fraction, the numerator of which is the Finance
Charge Shortfall for Series 2001-1 for such Distribution Date and the
denominator of which is the aggregate amount of Finance Charge Shortfalls for
all Series in Group One. The "Finance Charge Shortfall" for Series 2001-1 for
------------------------
any Distribution Date will be equal to the excess, if any, of (a) the full
amount described in clauses (i) and (ii) of Section 4.4(a) on such Distribution
Date for all Classes over (b) the sum of the Collections of Finance Charge
Receivables for such Distribution Date allocable to Series 2001-1 and any other
amounts that are to be treated as Collections of Finance Charge Receivables
allocable to Series 2001-1 in accordance with the Agreement with respect to the
related Monthly Period.
Section 4.9 Applications of Spread Account Funds; Release of Funds
------------------------------------------------------
From Spread Account.
-------------------
(a) On the Closing Date, the Transferor shall deposit in the Spread
Account the Required Spread Account Amount which at such Closing Date shall
equal $0.
(b) On each Distribution Date during the Revolving Period on which
the amount on deposit in the Spread Account exceeds the Required Spread Account
Amount, the Servicer shall, or shall direct the Trustee in writing to, transfer
such excess from the Spread Account to the Transferor on such Distribution Date.
On the date during the Amortization Period on which the sum of the Senior Class
Investor Amounts for all Senior Classes has been reduced to zero and all amounts
payable hereunder and under the Certificate Purchase Agreement with respect to
all Senior Classes shall have been paid in full, the Servicer shall, or shall
direct the Trustee in writing to, transfer all amounts on deposit in the Spread
Account to the Transferor.
(c) On the Series Termination Date, the Servicer shall, or shall
direct the Trustee in writing to, transfer all amounts on deposit in the Spread
Account to the Collection Account and apply such amounts in accordance with
Section 4.4(a) as Collections of Finance Charge Receivables allocable to Series
2001-1.
33
(d) In the event the Trustee shall sell the Receivables pursuant to
Section 9.2, the Servicer shall, or shall direct the Trustee in writing to,
transfer all amounts on deposit in the Spread Account to the Collection Account
and apply such amounts in accordance with Section 4.4(a) as Collections of
Finance Charge Receivables allocable to Series 2001-1.
(e) Upon the occurrence of a Pay Out Event, the Servicer shall, or
shall direct the Trustee in writing to, withdraw all amounts on deposit in the
Spread Account and apply such amounts as Senior Class Monthly Principal in
accordance with Section 4.5(b).
[END OF ARTICLE IV]
SECTION 9. Article V of the Agreement. Article V of the Agreement
--------------------------
shall read in its entirety as follows and shall be applicable to the Series
2001-1 Certificates:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Section 5.1 Distributions. On each Distribution Date, the Servicer
-------------
shall deliver to the Trustee and the Paying Agent a certificate in substantially
the form of Exhibit B hereto prepared by the Servicer.
----------
(a) On each Distribution Date, the Paying Agent shall distribute to
each Senior Class Agent (other than as provided in Section 12.2 of the Agreement
respecting a final distribution) for the account of the Certificateholders of
the related Senior Class the amounts that are distributable on such Distribution
Date in respect of Carrying Costs for such Senior Class pursuant to this Series
Supplement.
(b) On each Distribution Date with respect to the Amortization
Period and on each Distribution Date during the Revolving Period on which
principal is to be distributed pursuant to subsection 4.5(a)(i), the Paying
Agent shall distribute to each Senior Class Agent (other than as provided in
Section 12.2 of the Agreement respecting a final distribution) for the account
of the Certificateholders of
34
the related Senior Class the amounts that are distributable on such Distribution
Date in respect of principal pursuant to this Series Supplement.
(c) On each Distribution Date, the Paying Agent shall distribute to
each holder of record of a Subordinate Class Certificate as of the preceding
Record Date (other than as provided in Section 12.2 of the Agreement respecting
a final distribution) such holder's pro rata share of the amounts that are
--- ----
available on such Distribution Date to be distributed on the Subordinate Class
Certificates pursuant to this Series Supplement.
(d) On each Distribution Date with respect to the Amortization
Period on or after the Subordinate Class Principal Commencement Date, the Paying
Agent shall distribute to each holder of record of a Subordinate Class
Certificate as of the preceding Record Date (other than as provided in Section
12.2 of the Agreement respecting a final distribution) such holder's pro rata
--- ----
share of the amounts that are available on such Distribution Date to pay
principal of the Subordinate Class Certificates pursuant to this Series
Supplement.
(e) Except as provided in Section 12.2 of the Agreement with respect
to a final distribution, distributions to any Senior Class Agent or any Series
2001-1 Certificateholder hereunder shall be made by wire transfer of immediately
available funds to such Senior Class Agent or such Certificateholder's account
so long as the Paying Agent was notified of such account at least five Business
Days prior to such Distribution Date, without presentation or surrender of any
such Series 2001-1 Certificate or the making of any notation thereon.
Section 5.2 Reports and Notices to Series 2001-1 Certificateholders.
-------------------------------------------------------
On each Distribution Date, the Paying Agent, on behalf of the Trustee, shall
forward to each Series 2001-1 Certificateholder a statement substantially in the
form of Exhibit C prepared by the Servicer setting forth certain information
---------
relating to the Trust and the Series 2001-1 Certificates. On or before January
31 of each calendar year, beginning with calendar year 2001, the Paying Agent,
on behalf of the Trustee, shall furnish or cause to be furnished to each Person
who at any time during the preceding calendar year was a Certificateholder of
Series 2001-1, a statement prepared by the Servicer containing the information
which is required to be contained in the monthly statement to the
Certificateholders in the form of Exhibit C referred to in the immediately
---------
preceding sentence, aggregated for such calendar year or the applicable portion
thereof during which such Person was a Certificateholder of such Series,
together with other information as is required to be provided by an issuer of
35
indebtedness under the Internal Revenue Code and such other customary
information as is necessary to enable the Certificateholders of such Series to
prepare their tax returns. Such obligation of the Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Paying Agent pursuant to any requirements of the
Internal Revenue Code as from time to time in effect.
[END OF ARTICLE V]
SECTION 10. Pay Out Events. If any one of the events specified in
--------------
Section 9.1 of the Master Pooling and Servicing Agreement or any one of the
following events shall occur with respect to the Series 2001-1 Certificates:
(a) the Transferor or the Servicer shall fail to make any payment or
deposit on the date required under the Receivables Purchase Agreement, the
Agreement or the Certificate Purchase Agreement, as applicable;
(b) any representation, warranty, certification or statement made by
the Transferor in the Receivables Purchase Agreement, the Agreement, the
Certificate Purchase Agreement or any other Transaction Document to which it is
a party or in any other document delivered pursuant hereto or thereto shall
prove to have been incorrect in any material respect when made or deemed made;
(c) the Transferor or the Servicer shall default in the performance
of any payment or undertaking (other than those covered by clause (a) above) (i)
to be performed or observed under Sections 3.3(a)(vi), 3.3(a)(vii), 3.3(b),
3.3(c), 3.3(h), 3.3(k), 3.3(q), 3.3(t), 3.3(u), 3.3(v), 3.3(w), 3.4(c) or 3.4(d)
of the Certificate Purchase Agreement or Sections 2.5(e) or 2.5(g) (other than
any requirements that the Transferor have more than one independent director in
clause (ii) of such Section 2.5 (g)) of the Master Pooling and Servicing
Agreement or (ii) to be performed or observed under any other provision of the
Agreement or the Certificate Purchase Agreement and such default in the case of
this clause (ii) shall continue for ten (10) days;
(d) failure or the default by the Transferor or any Eligible
Originator in the performance of any material term, provision or condition
contained in any agreement to which any such Person is a party and under which
any Indebtedness greater than $10,000,000 was created or is governed, if such
event is an "event of default" or "default" under any such agreement; or any
Indebtedness of the
36
Transferor or any Eligible Originator greater than $10,000,000 shall be declared
to be due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the scheduled date of maturity thereof;
(e) the Trustee on behalf of the Investor Certificateholders shall
fail for any reason to have a valid and perfected first priority security or
ownership interest in the Receivables and other Trust Property of the type
covered by Article 9 of the UCC;
(f) a Servicer Default shall have occurred;
(g) any Receivables Purchase Agreement shall have terminated,
without the consent of the Agent and each Senior Class Agent;
(h) the Transferor, the Servicer or any Eligible Originator shall
enter into any transaction or merger whereby it is not the surviving entity;
provided that any Eligible Originator may merge into any other Eligible
--------
Originator and, with the consent of the Agent and each Senior Class Agent, the
Transferor may merge or liquidate into the Bank;
(i) the Transferor shall fail to (x) designate, or be unable to
designate, Additional Accounts the Receivables of which will be Eligible
Receivables, as required by Section 2.6(a) of the Agreement or (y) reduce the
Investor Amount pursuant to Section 2.6(a) of the Agreement within the time it
is required to designate Additional Accounts or reduce the Investor Amount
pursuant to Section 2.6(a) of the Agreement;
(j) the Two Month Rolling Spread Percentage is equal to or less
than 2.00%;
(k) the Subordinate Class Investor Amount is less than 6% of the
Aggregate Investor Amount and the Transferor fails to cure such insufficiency
within ten Business Days; or
(l) as of the end of the most recent Monthly Period, the product of
(i) the aggregate Floating Allocation Percentage with respect to Default Amounts
for all Senior Classes and (ii) the sum of the Excess Funding Amount and the
Aggregate Principal Receivables, is less than the sum of the Senior Class
Certificate Principal Balances for all Senior Classes. For purposes of this
subsection
37
10(l), the Servicer shall have the option to calculate the Floating Allocation
Percentage on a daily basis method, using the current day Aggregate Investor
Amount in the numerator and the current day Aggregate Principal Receivables and
Excess Funding Account balance in the denominator.
(m) a "Pay-Out Event" or equivalent event shall have occurred and be
continuing with respect to Series 1998-2; or
(n) the Senior Class Investor Amount is not reduced to $0 by September
15, 2001; then, in the case of any event described in subparagraphs (e), (k),
(l), (m) and (n) above, a Pay Out Event with respect to only the Series 2001-1
Certificates will be deemed to have occurred without any notice or other action
on the part of the Trustee or the Certificateholders, immediately upon the
occurrence of such event, and, in the case of any other event described above in
this Section 10, after the applicable grace periods, if any, specified for such
events, the Trustee or the Required Investor Certificateholders by notice in
writing to the Transferor and the Servicer (and to the Trustee if given by
Certificateholders), may declare that a Pay Out Event with respect to the Series
2001-1 Certificates only has occurred as of the date of such notice; provided,
--------
however, that 100% of the Senior Class Agents may waive any such Pay Out Event
-------
with respect to the Series 2001-1 Certificates. Upon any such waiver, such Pay
Out Event shall be deemed not to have occurred for every purpose of the
Agreement. No such waiver shall extend to any subsequent or other event or
impair any right consequent thereon.
SECTION 11. Consent to Issuance of Additional Series and Additional
-------------------------------------------------------
Eligible Originators. The Transferor shall obtain the prior written consent of
--------------------
the Agent and each Senior Class Agent prior to the issuance of any Series other
than this Series 2001-1 and prior to the designation of any Eligible Originator
other than X.X. Xxxxxxxxx'x, Inc., XxXxx'x, Inc., Parisian, Inc. and Xxxxxx
Xxxxx Xxxxx & Co., National Bank of the Great Lakes, Saks & Company, Saks or any
of their respective affiliates, which consents may not be unreasonably withheld
or delayed; provided however, that the addition of 2001 Additional Accounts, the
-------- -------
removal of 2001 Removed Accounts, the issuance of Series 2001-2 and the issuance
or inclusion of an additional Senior Class, Senior Class Agent or Bank Investor
shall not require the approval of the Agent and the Senior Class Agent.
SECTION 12. Notice to Rating Agencies of Amendments. The Transferor
---------------------------------------
shall provide notice to the Rating Agencies for any amendment to the definition
of "Fixed/Floating Allocation Percentage", "Floating Allocation Percent-
38
age" or any other amendment to this Series Supplement which may be reasonably
expected to adversely effect the subordination of Series 2001-1 to Series 1998-2
or other Series rated by such Rating Agencies.
SECTION 13. Increase or Reduction of Discount Percentage. The
--------------------------------------------
Transferor shall provide to the Agent and each Senior Class Agent 30 days' prior
written notice of any increase, reduction or elimination of the Discount
Percentage which would cause the Discount Percentage to be less than 1% or more
than 3% and shall obtain the prior written consent of the Agent and each Senior
Class Agent to any such increase, reduction or elimination, which consents may
not be unreasonably withheld or delayed.
SECTION 14. Access to Information. Notwithstanding the provisions
---------------------
of Section 2.2(b) of the Agreement, the Trustee may disclose to the Agent, each
Senior Class Agent and each Senior Class Certificateholder the information
contained in the computer files and microfiche lists delivered by the Transferor
to the Trustee under the Agreement.
SECTION 15. Series 2001-1 Investor Exchange. Pursuant to subsection
-------------------------------
6.9(b) of the Agreement, the Certificateholders may tender their Certificates,
and the holder of the Exchangeable Transferor Certificate may tender the
Exchangeable Transferor Certificate, in exchange for (i) one or more newly
issued classes of Investor Certificates and (ii) a reissued Exchangeable
Transferor Certificate in accordance with the terms and conditions contained in
a notice of exchange delivered to the Certificateholders. Such notice of
exchange will specify, among other things: (a) the amount of Certificates that
may be tendered, (b) the certificate rate (or the method for allocating interest
payments or other cash flows to the new Series), if any, with respect to the new
Series, (c) the term of the new Series, (d) the method of computing the investor
percentage, (e) the manner of Enhancement, if any, with respect to the new
Series and (f) the time and the manner at which the tender and cancellation of
the Series 2001-1 Certificates and the issuance of the new Certificates will be
effectuated. Upon satisfaction of the conditions contained in subsections
6.9(b) and 6.9(c) of the Master Pooling and Servicing Agreement, and the receipt
by the Trustee of the exchange notice and the related Supplement, the Trustee
shall cancel the existing Exchangeable Transferor Certificate and the Series
2001-1 Certificates which have been tendered pursuant to this Section 12(a), and
shall issue such new Series of Investor Certificates and a new Exchangeable
Transferor Certificate, each dated the Exchange Date.
39
SECTION 16. Certificate Defeasance.
----------------------
(a) The Trustee, at the request of the Transferor and for the benefit
of the Series 2001-1 Certificateholders, shall establish and maintain or shall
cause to be established and maintained in the name of the Trustee, on behalf of
the Series 2001-1 Certificateholders, with a Qualified Institution a certain
segregated trust account (the "Defeasance Account"). At the option of the
------------------
Transferor, all amounts received by the Trustee from the issuance of new
Certificates or an increase in the invested amount of another Series (or any
class within any such other Series) on the settlement date for such issuance
shall be deposited in the Defeasance Account.
(b) Amounts on deposit in the Defeasance Account shall be applied as
Collections allocable to the Series 2001-1 Certificates in payment of all
accrued and unpaid interest on the Senior Class Certificates and all other
amounts outstanding to the Senior Class Certificateholders under the Transaction
Documents, in accordance with Section 4.4 of the Agreement, then to the payment
in full of the Senior Class Certificate Principal Balance and then, to the
extent funds are available, to the payment in full of the Subordinate Class
Investor Amount. Any Business Day upon which payments are received in the
Defeasance Account shall be deemed to be a Distribution Date. Any funds
remaining in the Defeasance Account after all amounts payable to the
Certificateholders pursuant to Section 4.4 of the Agreement have been paid in
full shall be paid to the Transferor.
SECTION 17. Transfers of Series 2001-1 Certificates; Legends.
------------------------------------------------
(a) No Senior Class Certificate or any interest therein may be sold
(including in the initial offering), conveyed, assigned, hypothecated, pledged,
participated, or otherwise transferred (each, a "Transfer") except in accordance
--------
with this Section 17 and the Investor Letter. No Subordinate Class Certificate
or any interest therein may be Transferred, except as permitted by this Series
Supplement or the Certificate Purchase Agreement. Any Transfer of a Senior
Class Certificate otherwise permitted by this Section 17 will be permitted only
if it consists of a pro rata percentage interest in all payments made with
--------
respect to such holder's Senior Class Certificates. No Senior Class Certificate
or any interest therein may be Transferred to any Person (each, an "Assignee"),
--------
unless the Assignee shall have executed and delivered the certification referred
to in subsection 17(f) below and each of the Transferor and the Servicer shall
have granted its prior consent thereto; provided, that the consent of the
--------
Transferor and the Servicer shall not be required in
40
connection with any transfer to the Bank Investors pursuant to the Certificate
Purchase Agreement or to any Program Support Provider. The consent of the
Transferor and the Servicer shall be granted unless the Transferor reasonably
determines that such Transfer would create a risk that the Trust would be
classified for federal or any applicable state tax purposes as an association or
publicly traded partnership taxable as a corporation. Notwithstanding anything
to the contrary contained herein or in the Master Pooling and Servicing
Agreement, any attempted Transfer that would cause the number of Targeted
Holders to exceed ninety-nine shall be void.
(b) Notwithstanding subsection 6.3(d)(i) of the Agreement, transfers
of less than $500,000 in principal amount of a Senior Class Certificate may be
made, provided that no transfer of a Senior Class Certificate (or a portion
--------
thereof) shall be of less than $200,000 in principal amount and provided further
-------- -------
that any transfer to any Bank Investor pursuant to the Certificate Purchase
Agreement or to any Program Support Provider may be made in any principal
amount.
(c) Each (x) Senior Class Agent shall certify to the Transferor, the
Servicer, and the Trustee that the initial purchaser of a Senior Class
Certificate (of the Senior Class with respect to which such Person is the Senior
Class Agent) or any interest therein and any Assignee thereof which is either a
related Bank Investor or a Program Support Provider is, and (y) each other
Assignee shall certify as to itself to the Transferor, the Servicer, and the
Trustee that it is, either (i)(A) a citizen or resident of the United States,
(B) a corporation or other entity organized in or under the laws of the United
States or any political subdivision thereof which, if such entity is a tax-
exempt entity, recognizes that payments with respect to the Senior Class
Certificates may constitute unrelated business taxable income or (C) a person
not described in (A) or (B) whose ownership of the Senior Class Certificates is
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
Senior Class Certificate will not result in any withholding obligation with
respect to any payments with respect to the Senior Class Certificates by any
person and who will furnish to the Senior Class Agent, the Certificateholder
making the Transfer, the Servicer and the Trustee, a properly executed United
States Internal Revenue Service Form 4224 (and to agree 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 (ii)
an estate or trust the income of which is includable in gross income for United
States federal income tax purposes.
41
(d) Each (i) Senior Class Agent shall certify to the Transferor, the
Servicer, and the Trustee that the initial purchaser of a Senior Class
Certificate (of the Senior Class with respect to which such Person is the Senior
Class Agent) or any interest therein and any Assignee thereof which is either a
related Bank Investor or a Program Support Provider has, and (ii) each other
Assignee shall certify as to itself to the Transferor, the Servicer, and the
Trustee, that it has, neither acquired nor will it sell, trade or transfer any
interest in a Senior Class Certificate or cause an interest in a Senior Class
Certificate to be readily tradable on a secondary market (or the substantial
equivalent thereof) within the meaning of Section 7704(b)(2) of the Code and any
treasury regulation thereunder or to be marketed on or through an "established
securities market" within the meaning of Section 7704(b)(1) of the Code and any
treasury regulation thereunder, including, without limitation, an over-the-
counter-market or an interdealer quotation system that regularly disseminates
firm buy or sell quotations. In addition, each initial purchaser of a Senior
Class Certificate or any interest therein and any Assignee shall certify, prior
to any delivery or Transfer to it of a Senior Class Certificate that it is not
and will not become, for so long as it holds an interest in a Senior Class
Certificate, a partnership, Subchapter S corporation or grantor trust for United
States federal income tax purposes. If an initial purchaser of an interest in a
Senior Class Certificate or an Assignee cannot make the certification described
in the preceding sentence, the Transferor may, in its sole discretion, prohibit
a Transfer to such entity; provided, however, that if the Transferor agrees to
-------- -------
permit such a Transfer, the Transferor, the Servicer or the Trustee may require
additional certifications in order to prevent the Trust from being treated as a
publicly traded partnership.
(e) Each Senior Class Certificate will bear a legend or legends
substantially in the following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF SAKS
CREDIT CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE
BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF
TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (III) A GOVERNMENTAL PLAN, AS
DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW
WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE,
42
(IV) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" (AS DESCRIBED IN 29
C.F.R. 2510.3-101) BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY OR (V) A
PERSON INVESTING "PLAN ASSETS" (AS DESCRIBED IN 29 C.F.R. 2510.3-101) OF ANY
SUCH PLAN (INCLUDING FOR PURPOSES OF CLAUSES (IV) AND (V), INSURANCE COMPANY
GENERAL ACCOUNTS (WITHIN THE MEANING OF SECTION 401(C) OF ERISA), BUT EXCLUDING,
ANY ENTITY REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR
TRANSFERRED, NOR MAY AN INTEREST IN THIS CERTIFICATE BE MADE READILY TRADABLE ON
A SECONDARY MARKET (OR THE SUBSTANTIAL EQUIVALENT THEREOF) WITHIN THE MEANING
OF SECTION 7704(b)(2) OF THE CODE AND ANY TREASURY REGULATION THEREUNDER OR
MARKETED, ON OR THROUGH AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF
SECTION 7704(b)(1) OF THE CODE AND ANY TREASURY REGULATION THEREUNDER,
INCLUDING, WITHOUT LIMITATION, AN OVER-THE-COUNTER-MARKET OR AN INTERDEALER
QUOTATION SYSTEM THAT REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAW. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT
THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND ONLY (1) TO
THE TRANSFEROR, (2) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) AND IN A TRANSACTION
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (UPON DELIVERY
OF THE DOCUMENTATION REQUIRED BY THE MASTER POOLING AND SERVICING AGREEMENT
AND, IF THE TRUSTEE SO REQUIRES, AN OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE) OR (3) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO A PERSON THAT
THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A ("QIB") PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING
FOR THE ACCOUNT OF A QIB, WHOM
43
THE HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A. EACH CERTIFICATE OWNER BY
ACCEPTING A BENEFICIAL INTEREST IN THIS CERTIFICATE IS DEEMED TO REPRESENT THAT
IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT, A QIB PURCHASING FOR THE
ACCOUNT OF ANOTHER QIB OR AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT). THIS CERTIFICATE WILL
NOT BE ACCEPTED FOR REGISTRATION OF TRANSFER EXCEPT UPON PRESENTATION OF
EVIDENCE SATISFACTORY TO THE TRANSFER AGENT AND REGISTRAR THAT THE RESTRICTIONS
ON TRANSFER SET FORTH IN THE SERIES 2001-1 SUPPLEMENT HAVE BEEN COMPLIED WITH.
THIS CERTIFICATE MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
TO ANY PERSON OTHER THAN A BANK INVESTOR OR A PROGRAM SUPPORT PROVIDER WITHOUT
THE PRIOR WRITTEN CONSENT OF EACH OF THE TRANSFEROR AND THE SERVICER AND UNLESS
AND UNTIL THE TRUSTEE SHALL HAVE RECEIVED THE CERTIFICATIONS REQUIRED BY THE
SERIES 2001-1 SUPPLEMENT.
Each Subordinate Class Certificate will bear a legend or legends
substantially in the following form:
THIS CERTIFICATE MAY NOT BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF SAKS
CREDIT CORPORATION AND THE TRUSTEE THAT SUCH PURCHASER IS NOT (I) AN EMPLOYEE
BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF
TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (III) A GOVERNMENTAL PLAN, AS
DEFINED IN SECTION 3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW
WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE UNDERLYING ASSETS
INCLUDE "PLAN ASSETS" (AS DESCRIBED IN 29 C.F.R. 2510.3-101) BY REASON OF A
PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING "PLAN ASSETS" (AS
44
DESCRIBED IN 29 C.F.R. 2510.3-101) OF ANY SUCH PLAN (INCLUDING FOR PURPOSES OF
CLAUSES (IV) AND (V), INSURANCE COMPANY GENERAL ACCOUNTS (WITHIN THE MEANING OF
SECTION 401(C) OF ERISA), BUT EXCLUDING, ANY ENTITY REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
(f) Upon surrender for registration of transfer of a Senior Class
Certificate at the office of the Transfer Agent and Registrar, accompanied by a
certification by the Senior Class Certificateholder substantially in the form
attached as Exhibit D hereto, executed by the registered owner, in person or by
---------
such Senior Class Certificateholder's attorney thereunto duly authorized in
writing, and receipt by the Trustee of the written consent of each of the
Transferor and the Servicer to such transfer, such Senior Class Certificate
shall be transferred upon the Certificate Register, and the Transferor shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferees one or more new registered Senior Class Certificates of
any authorized denominations and of a like aggregate principal amount and tenor.
Such transfers of Senior Class Certificates shall be subject to the restrictions
set forth in this Section 17, to such other restrictions as shall be set forth
in the text of the Senior Class Certificates. Successive registrations and
registrations of transfers as aforesaid may be made from time to time as
desired, and each such registration shall be noted on the Certificate Register.
SECTION 18. Ratification of Master Pooling and Servicing Agreement.
------------------------------------------------------
As supplemented by this Series Supplement, the Master Pooling and Servicing
Agreement is in all respects ratified and confirmed and the Master Pooling and
Servicing Agreement as so supplemented by this Series Supplement shall be read,
taken, and construed as one and the same instrument.
SECTION 19. Counterparts. This Series Supplement may be executed in
------------
any number of counterparts (and by different parties on different counterparts),
each of which so executed shall be deemed to be an original, but all of such
counterparts shall together constitute but one and the same instrument.
SECTION 20. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
45
SECTION 21. Subordination of Certain Termination Payments.
---------------------------------------------
Notwithstanding anything contained in Section 12.2(c) of the Agreement, upon the
sale of Receivables or interests therein as provided in Section 12.2(c) of the
Agreement, the proceeds of any such sale payable in respect of the Series
2001-1 Certificates shall be payable first to the holders of the Senior Class
Certificates on a pro rata basis until all obligations payable in respect of the
--- ----
Senior Class Certificates are paid in full and then to the holders of the
Subordinate Class Certificates on a pro rata basis until the Subordinate Class
--- ----
Certificates are paid in full.
SECTION 22. Opinions of Counsel. Any Opinion of Counsel required to
-------------------
be delivered pursuant to the Agreement shall be acceptable to the Agent, in its
sole discretion.
SECTION 23. No Third-Party Beneficiaries. As provided in Section
----------------------------
13.12 of the Agreement, the Agreement will inure to the benefit of the Series
2001-1 Certificateholders and their respective successors and permitted assigns.
Except as otherwise provided herein, no other person will have any right or
obligation hereunder, whether as third party beneficiary or otherwise.
46
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
SAKS CREDIT CORPORATION,
as Transferor
By:/s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
SAKS INCORPORATED,
as Servicer
By:/s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:/s/ Xxx Xxxxxx
----------------------------
Name: Xxx Xxxxxx
Title: Corporate Trust Officer
