EXHIBIT 4.1
SAKS CREDIT CORPORATION
Transferor
SAKS INCORPORATED
Servicer
and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
on behalf of the Certificateholders
________________________________________________________________________
SERIES 2001-2 SUPPLEMENT
Dated as of July 17, 2001
to the
MASTER POOLING AND SERVICING AGREEMENT
Dated as of August 21, 1997
________________________________________________________________________
$450,000,000
SAKS CREDIT CARD MASTER TRUST
SERIES 2001-2
TABLE OF CONTENTS
PRELIMINARY STATEMENTS.................................................................................................. 1
Section A. Designation.......................................................................................... 1
Section B. Definitions.......................................................................................... 2
Section C. Minimum Transferor Interest Percentage............................................................... 21
Section D. Optional Purchase; Reassignment and Transfer Terms................................................... 22
Section E. Delivery and Payment for the Certificates............................................................ 22
Section F. Form of Delivery of the Series 2001-2 Certificates................................................... 22
Section G. Servicing Compensation............................................................................... 22
Section H. Article IV of the Agreement.......................................................................... 23
ARTICLE IV Rights of Series 2001-2 Certificateholders and Allocation and Application of Collections............. 24
Section 4.2 Collections and Allocations.......................................................................... 24
Section 4.3 Determination of Monthly Interest.................................................................... 25
Section 4.4 Determination of Monthly Principal................................................................... 27
Section 4.5 Required Amounts..................................................................................... 28
Section 4.6 Application of Class A Available Funds, Class B Available Funds, Class C Available Funds,
Class D Available Funds and Collections of Principal Receivables..................................... 30
Section 4.7 Defaulted Amounts; Adjustment Amounts; Investor Charge Offs; Reductions of Adjustment
Amounts.............................................................................................. 33
Section 4.8 Excess Spread; Shared Excess Finance Charge Collections.............................................. 36
Section 4.9 Reallocated Principal Collections.................................................................... 37
Section 4.10 Principal Shortfall.................................................................................. 38
Section 4.11 Finance Charge Shortfall............................................................................. 38
Section 4.12 Spread Account....................................................................................... 39
Section 4.13 Principal Account.................................................................................... 40
Section 4.14 Reserve Account...................................................................................... 41
Section 4.15 Postponement of Accumulation Period.................................................................. 44
Section 4.16 Suspension of Accumulation Period, Qualified Maturity Agreement..................................... 44
Section I Article V of the Agreement.......................................................................... 45
ARTICLE V DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS..................................................... 45
Section 5.1 Distributions....................................................................................... 45
Section 5.2 Statements to Series 2001-2 Certificateholders...................................................... 47
Section J. Pay Out Events...................................................................................... 47
Section J1. Class C Defaults.................................................................................... 49
Section K. Restrictions on Transfer............................................................................ 49
Section K1. Tax Characterization of the Collateral Interest..................................................... 53
Section L. Ratification of Master Pooling and Servicing Agreement.............................................. 53
Section L1. FASIT Election...................................................................................... 53
Section L2. Paired Series....................................................................................... 54
Section M. Counterparts........................................................................................ 54
Section N. Governing Law....................................................................................... 54
Section O. Subordination of Certain Termination Payments....................................................... 55
Section P. Certain Representations and Warranties.............................................................. 55
EXHIBITS
Exhibit A-1 Form of Class A Certificate
Exhibit A-2 Form of Class B Certificate
Exhibit A-3 Form of Class C Securities
Exhibit A-4 Form of Class D Certificate
Exhibit B Form of Monthly Payment Instructions and Notification to Trustee [RESERVED]
Exhibit C Form of Monthly Certificateholder's Statement
Exhibit D Class C Security Rate
Exhibit E Purchaser's Certificate
Exhibit F Certain Representations and Warranties
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SERIES 2001-2 SUPPLEMENT
THIS SERIES 2001-2 SUPPLEMENT, dated as of July 17, 2001 (this "Series
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Supplement"), is by and among SAKS CREDIT CORPORATION, a Delaware corporation
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(the successor to Xxxxxxxx'x Credit Corporation), as Transferor, SAKS
INCORPORATED (formerly named "Xxxxxxxx'x, Inc."), a Tennessee corporation
("Saks"), as Servicer, and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
----
(formerly named "Norwest Bank Minnesota, National Association), a national
banking association organized and existing under the laws of the United States
(together with its successors in trust thereunder the "Trustee"), as trustee
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under the Master Pooling and Servicing Agreement, dated as of August 21, 1997
(as amended and supplemented, the "Agreement"), by and among the Transferor, the
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Servicer and the Trustee.
PRELIMINARY STATEMENTS
Section 6.9 of the 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 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 Investor 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 2001-2.
Pursuant to this Series Supplement, the Transferor and the Trustee are
creating a new Series of Investor Certificates and specifying the Principal
Terms thereof. The Series 2001-2 Certificates shall not be subordinated to any
other Series.
Section A. Designation. The Certificates and the Class C Securities
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issued hereunder shall be designated generally as the "Series 2001-2
-------------
Certificates." The Series 2001-2 Certificates shall be one of the Series of
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Investor Certificates in Group One and shall be a Principal Sharing Series. The
Transferor and the Servicer each hereby enter into this Series Supplement with
the Trustee as required by Section 6.9(c) of the Agreement to provide for the
issuance, authentication and delivery of the Class A Floating Rate Asset Backed
Certificates, Series 2001-2, the Class B Floating Rate Asset Backed
Certificates, Series 2001-2, the Class C Floating Rate Securities, Series 2001-2
and the Class D Asset Backed Certificates, Series 2001-2. The first Distribution
Date with respect to Series 2001-2 shall be the August 2001 Distribution Date.
In the event that any term or provision contained herein shall conflict
with or be inconsistent with any term or provision contained in the Agreement,
the terms and provisions of this Series Supplement shall govern. Notwithstanding
the foregoing provisions of Section A, the provisions of Section 6.9(b) of the
Agreement with respect to the delivery of an Opinion of Counsel to the effect
that a newly issued Series of Investor
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Certificates will be characterized as either indebtedness or an interest in a
partnership (that is not taxable as a corporation) under existing law for
Federal income tax purposes shall not be applicable to the Class D Certificates.
Section B. Definitions. All capitalized terms not otherwise defined
-----------
herein are defined in the Agreement. All Article, Section or subsection
references herein shall mean Articles, Sections or subsections of the Agreement,
except as otherwise provided herein. Unless otherwise stated herein, as the
context otherwise requires or if such term is otherwise defined in the
Agreement, each capitalized term used or defined herein shall relate only to the
Series 2001-2 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 2001-2 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:
"Accumulation Commencement Monthly Period" shall mean the Monthly
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Period in which the Accumulation Period commences.
"Accumulation Period" shall mean, unless a Pay Out Event with respect
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to Series 2001-2 shall have occurred prior thereto and subject to suspension as
provided in Section 4.16 hereof, the period commencing after the close of
business on the last day of the June 2005 Monthly Period, or such later date as
shall be determined in accordance with Section 4.15, and ending on the first to
occur of (a) the commencement of the Rapid Amortization Period, (b) the payment
in full to holders of all Series 2001-2 Certificates of their respective
Investor Amounts or (c) the Stated Series Termination Date.
"Accumulation Period Factor" shall mean, for each Monthly Period, a
--------------------------
fraction, the numerator of which is equal to the sum of the initial investor
amounts of all outstanding Series, and the denominator of which is equal to the
sum, without duplication, of (a) the Initial Investor Amount minus the Class D
Initial Investor Amount, (b) the initial investor amounts (or other applicable
amounts and/or any Transferor election) of all outstanding Series (other than
Series 2001-2) which are not expected to be in their revolving periods during
such Monthly Period and (c) the initial investor amounts (or other applicable
amounts and/or any Transferor election) of all other outstanding Series which
are not allocating Shared Principal Collections to other Series and are expected
to be in their revolving periods during such Monthly Period.
"Accumulation Period Length" shall have the meaning specified in
--------------------------
Section 4.15.
"Adjusted Investor Amount" shall mean, as of any date of
------------------------
determination, an amount equal to the sum of the Class A Adjusted Investor
Amount, the Class B Adjusted Investor Amount and the Collateral Interest
Adjusted Amount.
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"Allocable Amounts" shall mean with respect to any Distribution Date,
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the sum of the Class A Allocable Amount, the Class B Allocable Amount and the
Collateral Interest Allocable Amount.
"Amortization Period" shall mean the Accumulation Period or the Rapid
-------------------
Amortization Period.
"Available Principal Collections" shall mean, with respect to any
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Distribution Date, an amount equal to (a) the applicable Investor Percentage of
Collections of Principal Receivables for the related Monthly Period, plus (b)
the portion of the Class A Available Funds used to cover the Class A Allocable
Amount, plus (c) amounts designated as Available Principal Collections pursuant
to Section 4.8, minus (d) Reallocated Principal Collections applied pursuant to
Section 4.9 for the related Monthly Period, plus (e) Shared Principal
Collections allocated to Series 2001-2.
"Available Reserve Account Amount" shall mean, with respect to any
--------------------------------
Distribution Date, the lesser of (a) the amount held in and available to be
withdrawn from the Reserve Account on such date (before giving effect to any
deposit or withdrawal to be made to or from the Reserve Account on such date)
and (b) the Required Reserve Account Amount for such Distribution Date.
"Average Excess Spread Percentage" shall mean, for any Distribution
--------------------------------
Date, the average of the Excess Spread Percentage for the three consecutive
Monthly Periods preceding such Distribution Date; provided, however, that (i)
for the August 2001 Distribution Date, the Average Excess Spread Percentage
shall equal the Excess Spread Percentage for the July 2001 Monthly Period (and
further provided that the Excess Spread Percentage for such Monthly Period shall
be calculated by accruing Monthly Interest from the Closing Date through and
including the last day of such Monthly Period); and (ii) for the September 2001
Distribution Date, the Average Excess Spread Percentage shall equal the average
of the Excess Spread Percentages calculated for the July 2001 Monthly Period (as
calculated pursuant to the preceding clause (i)) and for the August 2001 Monthly
Period.
"Base Rate" shall mean, with respect to any Monthly Period, the sum of
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(a) the annualized percentage equivalent of a fraction, the numerator of which
is equal to the Monthly Interest payable on the Series 2001-2 Certificates on
the Distribution Date immediately following the last day of such Monthly Period
and the denominator of which is the average Investor Amount during the related
Monthly Period and (b) the product of (i) 2.00% per annum and (ii) a fraction,
the numerator of which is an amount equal to the average Adjusted Investor
Amount and the denominator of which is the average Investor Amount, in each case
determined during such related Monthly Period.
"Business Day" shall have the meaning provided in the Agreement.
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"Class A Account Percentage" means, with respect to any Determination
--------------------------
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount on deposit in the Principal Account with respect to Class A
Monthly Principal and the denominator of which is the aggregate amount on
deposit in the Principal Account, in each case as of the last day of the
preceding Monthly Period.
"Class A Additional Interest" shall have the meaning specified in
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Section 4.3(a).
"Class A Adjusted Investor Amount" shall mean, on any date of
--------------------------------
determination while the Class A Certificates are outstanding, an amount equal to
the Class A Investor Amount minus the Principal Account Balance, but in no event
shall the Class A Adjusted Investor Amount be less than zero.
"Class A Adjustment Amount" shall mean, with respect to each
-------------------------
Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 2001-2 with respect to the related Monthly Period and (ii) the
percentage equivalent of a fraction the numerator of which is the average Class
A Adjusted Investor Amount and the denominator of which is the average Adjusted
Investor Amount, each during the related Monthly Period.
"Class A Allocable Amount" shall mean, with respect to any
------------------------
Distribution Date, the sum of the Class A Investor Default Amount and the Class
A Adjustment Amount.
"Class A Available Funds" shall mean, with respect to any Monthly
-----------------------
Period, an amount equal to the sum of (i) the applicable Class A Investor
Percentage of Collections of Finance Charge Receivables and any other amounts
that are to be treated as Collections of Finance Charge Receivables in
accordance with the Agreement, (ii) an amount equal to the product of (a) the
Class A Account Percentage and (b) the earnings (net of losses and investment
expenses), if any, earned on the Principal Account with respect to such Monthly
Period, and (iii) the amount, if any, to be withdrawn from the Reserve Account
on the Distribution Date immediately following the last day of such Monthly
Period and included in Class A Available Funds pursuant to Section 4.14(d), and
(iv) amounts required to be included in Class A Available Funds pursuant to
Section 4.14(b).
"Class A Certificateholder" shall mean any Person in whose name a
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Class A Certificate is registered in the Certificate Register.
"Class A Certificate Rate" shall mean, with respect to the Class A
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Certificates and each Interest Period, a per annum rate of LIBOR plus 0.24%.
"Class A Certificates" shall mean any one of the Certificates executed
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by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-1.
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"Class A Initial Investor Amount" shall mean the aggregate initial
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principal amount of the Class A Certificates, which is $333,000,000.
"Class A Interest Shortfall" shall have the meaning specified in
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Section 4.3(a).
"Class A Investor Amount" shall mean, on any date of determination, an
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amount equal to (a) the Class A Initial Investor Amount, minus (b) the aggregate
amount of principal payments made to the Class A Certificateholders prior to
such date, minus (c) the excess, if any, of the aggregate amount of Class A
Investor Charge Offs for all prior Distribution Dates over the sum of the
aggregate amount of Class A Investor Charge Offs reimbursed pursuant to Section
4.8(b) and, without duplication, the aggregate amount of the reductions of the
Series Adjustment Amounts allocable to the Class A Certificates pursuant to
Section 4.7(e) prior to such date; provided, however, that the Class A Investor
Amount may not be reduced below zero.
"Class A Investor Charge Off" shall have the meaning specified in
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Section 4.7(a).
"Class A Investor Default Amount" shall mean, with respect to each
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Distribution Date, an amount equal to the product of (i) the Default Amount for
the related Monthly Period and (ii) the Class A Investor Percentage applicable
for such Monthly Period.
"Class A Investor Percentage" shall be calculated by substituting the
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Class A Adjusted Investor Amount and the Class A Initial Investor Amount in all
references to the Adjusted Investor Amount and the Initial Investor Amount,
respectively, in the definition of Investor Percentage.
"Class A Monthly Interest" shall have the meaning specified in Section
------------------------
4.3(a).
"Class A Monthly Principal" shall have the meaning specified in
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Section 4.4(a).
"Class A Penalty Rate" shall mean the sum of the Class A Certificate
--------------------
Rate for the related Interest Period and 2.00% per annum.
"Class A Pool Factor" shall mean the seven-digit decimal, which the
-------------------
Servicer will compute monthly, expressing as of the end of the Monthly Period
preceding each Distribution Date, the Class A Investor Amount as a proportion of
the Class A Investor Amount as of the Closing Date, which initially shall be
1.0000000.
"Class A Required Amount" shall have the meaning specified in Section
-----------------------
4.5(a).
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"Class A Servicing Fee" shall have the meaning specified in Section G
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hereof.
"Class B Account Percentage" means, with respect to any Determination
--------------------------
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount on deposit in the Principal Account with respect to Class B
Monthly Principal and the denominator of which is the aggregate amount on
deposit in the Principal Account, in each case as of the last day of the
preceding Monthly Period.
"Class B Additional Interest" shall have the meaning specified in
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Section 4.3(b).
"Class B Adjusted Investor Amount" shall mean, on any date of
--------------------------------
determination while the Class B Certificates are outstanding, an amount equal to
the Class B Investor Amount, minus the excess of the Principal Account Balance
over the Class A Investor Amount, if any, but in no event shall the Class B
Adjusted Investor Amount be less than zero.
"Class B Adjustment Amount" shall mean, with respect to each
-------------------------
Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 2001-2 with respect to the related Monthly Period and (ii) the
percentage equivalent of a fraction, the numerator of which is the average Class
B Adjusted Investor Amount and the denominator of which is the average Adjusted
Investor Amount, each during the related Monthly Period.
"Class B Allocable Amount" shall mean, with respect to any
------------------------
Distribution Date, the sum of the Class B Investor Default Amount and the Class
B Adjustment Amount.
"Class B Available Funds" shall mean, with respect to any Monthly
-----------------------
Period, an amount equal to the sum of (i) the applicable Class B Investor
Percentage of Collections of Finance Charge Receivables and any other amounts
that are to be treated as Collections of Finance Charge Receivables in
accordance with the Agreement, (ii) an amount equal to the product of (a) the
Class B Account Percentage and (b) the earnings (net of losses and investment
expenses), if any, earned on the Principal Account with respect to such Monthly
Period, (iii) the amount, if any, to be withdrawn from the Reserve Account on
the Distribution Date immediately following the last day of such Monthly Period
and included in Class B Available Funds pursuant to Section 4.14(d).
"Class B Certificateholder" shall mean any Person in whose name a
-------------------------
Class B Certificate is registered in the Certificate Register.
"Class B Certificate Rate" shall mean, with respect to the Class B
------------------------
Certificates and each Interest Period, a per annum rate of LIBOR plus 0.65%.
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"Class B Certificates" shall mean any one of the Certificates executed
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by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-2.
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"Class B Initial Investor Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class B Certificates, which is $36,000,000.
"Class B Interest Shortfall" shall have the meaning specified in
--------------------------
Section 4.3(b).
"Class B Investor Amount" shall mean, on any date of determination, an
-----------------------
amount equal to (a) the Class B Initial Investor Amount, minus (b) the aggregate
amount of principal payments made to the Class B Certificateholders prior to
such date, minus (c) the aggregate amount of Class B Investor Charge Offs for
all prior Distribution Dates, minus (d) the amount of Class B Subordinated
Principal Collections allocated on all prior Distribution Dates pursuant to
Section 4.9(a), minus (e) an amount equal to the amount by which the Class B
Investor Amount has been reduced on all prior Distribution Dates pursuant to
Section 4.7(a), plus (f) the sum of the amount of Excess Spread and Shared
Excess Finance Charge Collections allocated and available on all prior
Distribution Dates pursuant to Section 4.8(f) for the purpose of reimbursing
amounts deducted pursuant to the foregoing clauses (c), (d) and (e) and, without
duplication, the aggregate amount of the reductions of the Series Adjustment
Amounts allocable to the Class B Investor Amount pursuant to Section 4.7(e)
prior to such date; provided, however, that the Class B Investor Amount may not
be reduced below zero.
"Class B Investor Charge Offs" shall have the meaning specified in
----------------------------
Section 4.7(b).
"Class B Investor Default Amount" shall mean, with respect to each
-------------------------------
Distribution Date, an amount equal to the product of (i) the Default Amount for
the related Monthly Period and (ii) the Class B Investor Percentage applicable
for such Monthly Period.
"Class B Investor Percentage" shall be calculated by substituting the
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Class B Adjusted Investor Amount and the Class B Initial Investor Amount in all
references to the Adjusted Investor Amount and the Initial Investor Amount
respectively, in the definition of Investor Percentage.
"Class B Monthly Interest" shall have the meaning specified in Section
------------------------
4.3(b).
"Class B Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.4(b).
"Class B Penalty Rate" shall mean the sum of the Class B Certificate
--------------------
Rate for the related Interest Period and 2.00% per annum.
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"Class B Pool Factor," shall mean the seven-digit decimal, which the
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Servicer will compute monthly, expressing as of the end of the Monthly Period
preceding each Distribution Date, the Class B Investor Amount as a proportion of
the Class B Investor Amount as of the Closing Date, and which decimal initially
shall be 1.0000000.
"Class B Required Amount" shall have the meaning specified in Section
-----------------------
4.5(b).
"Class B Servicing Fee" shall have the meaning specified in Section G
---------------------
hereof.
"Class B Subordinated Principal Collections" shall mean, with respect
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to any Monthly Period, an amount equal to the product of (i) the applicable
Class B Investor Percentage with respect to Collections of Principal Receivables
and (ii) the aggregate amount of Collections of Principal Receivables for such
Monthly Period.
"Class C Account Percentage" means, with respect to any Determination
--------------------------
Date, the percentage equivalent of a fraction, the numerator of which is the
aggregate amount on deposit in the Principal Account with respect to Class C
Monthly Principal and the denominator of which is the aggregate amount on
deposit in the Principal Account, in each case as of the last day of the
preceding Monthly Period.
"Class C Additional Interest" shall have the meaning specified in
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Section 4.3 (c).
"Class C Adjusted Investor Amount" shall mean, on any date of
--------------------------------
determination, an amount equal to the Class C Investor Amount, minus the excess
of the Principal Account Balance over the sum of the Class A Investor Amount and
the Class B Investor Amount, if any, on such date (up to the Class C Investor
Amount), but in no event shall the Class C Adjusted Investor Amount be less than
zero.
"Class C Adjustment Amount" shall mean, with respect to each
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Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 2001-2 with respect to the related Monthly Period and (ii) the
percentage equivalent of a fraction the numerator of which is the average Class
C Adjusted Investor Amount and the denominator of which is the average Adjusted
Investor Amount, each during the related Monthly Period.
"Class C Allocable Amount" shall mean, with respect to any
------------------------
Distribution Date, the sum of the Class C Default Amount and the Class C
Adjustment Amount.
"Class C Available Funds" means, with respect to any Monthly Period,
-----------------------
an amount equal to the sum of (i) the applicable Class C Investor Percentage of
the Collections of Finance Charge Receivables with respect to such Monthly
Period and any other amounts that are to be treated as Collections of Finance
Charge Receivables, (ii) an
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amount equal to the product of (a) the Class C Account Percentage and (b) the
earnings (net of losses and investment expenses), if any, earned on the
Principal Account with respect to such Monthly Period, and (iii) the amount, if
any, to be withdrawn from the Reserve Account and included in Class C Available
Funds pursuant to Section 4.14(d).
"Class C Charge Off" shall have the meaning provided in Section
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4.7(c).
"Class C Default" means either of the following events: (i) accrued
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but unpaid Class C Monthly Interest is not paid in full to the Class C Holders
on two consecutive Distribution Dates; or (ii) there is a charge off with
respect to the Class C Securities on three consecutive Distribution Dates. If
one Class C Monthly Interest payment is not paid in full, the Servicer shall
promptly notify the Rating Agencies.
"Class C Default Amount" shall mean, with respect to any Distribution
----------------------
Date, an amount equal to the product of (i) the Class C Investor Percentage
applicable to Allocable Amounts with respect to such Monthly Period and (ii) the
Default Amount for such Monthly Period.
"Class C Holder" shall mean any Person in whose name a Class C
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Security is registered in the Certificate Register.
"Class C Initial Investor Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class C Securities, which is $65,250,000.
"Class C Interest Shortfall" shall have the meaning provided in
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Section 4.3(c).
"Class C Investor Amount" means, on any date of determination, an
-----------------------
amount equal to (a) the Class C Initial Investor Amount minus (b) the aggregate
amount of principal payments made to the Class C Holders on or prior to such
date, minus (c) the amount of Class C Subordinated Principal Collections used to
make payments in respect of the Class A Certificates and Class B Certificates on
all prior Distribution Dates that have resulted in a reduction of the Class C
Investor Amount, minus (d) an amount equal to the amount by which the Class C
Investor Amount has been reduced on all prior Distribution Dates in respect of
the Class A Allocable Amount, the Class B Allocable Amount and the Class C
Allocable Amount, plus (e) the sum of the amount of Excess Spread and Shared
Excess Finance Charge Collections allocated and available on all prior
Distribution Dates for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c) and (d) and, without duplication, the aggregate amount
of the reductions of the Series Adjustment Amount allocable to the Class C
Investor Amount; provided, however, that the Class C Investor Amount may not be
reduced below zero.
"Class C Investor Percentage" shall be calculated by substituting the
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Class C Adjusted Investor Amount and the Class C Initial Investor Amount in all
references to the Adjusted Investor Amount and the Initial Investor Amount,
respectively, in the definition of Investor Percentage.
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"Class C Monthly Interest" shall have the meaning specified in Section
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4.3(c).
"Class C Monthly Principal" shall have the meaning specified in
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Section 4.4(c).
"Class C Penalty Rate" shall mean the sum of the Class C Rate for the
--------------------
related Interest Period and 2.00% per annum.
"Class C Pool Factor" shall mean the seven-digit decimal, which the
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Servicer will compute monthly, expressing as of the end of the Monthly Period
preceding each Distribution Date , the Class C Investor Amount as a proportion
of the Class C Investor Amount as of the Closing Date, which initially shall be
1.0000000.
"Class C Rate" shall have the per annum rate specified in Exhibit D
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hereto.
"Class C Required Amount" shall have the meaning specified in Section
-----------------------
4.5(c).
"Class C Securities" shall mean any of the instruments executed by the
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Transferor and authenticated by the Trustee, substantially in the form of
Exhibit A-3, and which shall represent the interest in the Collateral Interest
not represented by the Class D Certificates.
"Class C Servicing Fee" shall have the meaning specified in Section G
---------------------
hereof.
"Class C Subordinated Principal Collections" means, with respect to
------------------------------------------
any Monthly Period, an amount equal to the product of (i) the applicable Class C
Investor Percentage with respect to Collections of Principal Receivables and
(ii) the aggregate amount of Collections of Principal Receivables for such
Monthly Period.
"Class D Adjustment Amount" shall mean with respect to each
-------------------------
Distribution Date, an amount equal to the product of (i) the Series Adjustment
Amount for Series 2001-2 with respect to the related Monthly Period and (ii) the
percentage equivalent of a fraction the numerator of which is the average Class
D Investor Amount and the denominator of which is the average Adjusted Investor
Amount, each during the related Monthly Period.
"Class D Allocable Amount" shall mean with respect to any Distribution
------------------------
Date, the sum of the Class D Investor Default Amount and the Class D Adjustment
Amount.
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"Class D Available Funds" means, with respect to any Monthly Period,
-----------------------
an amount equal to the applicable Class D Investor Percentage of the Collections
of Finance Charge Receivables with respect to such Monthly Period and any other
amounts that are to be treated as Collections of Finance Charge Receivables in
accordance with the Agreement.
"Class D Certificate" 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-4.
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"Class D Certificateholder" shall mean any Person in whose name a
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Class D Certificate is registered in the Certificate Register.
"Class D Initial Investor Amount" shall mean the aggregate initial
-------------------------------
principal amount of the Class D Certificates, which is $15,750,000.
"Class D Investor Amount" means, on any date of determination, an
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amount equal to (a) the Class D Initial Investor Amount, minus (b) the aggregate
amount of principal payments made to the Class D Certificateholders prior to
such date, minus (c) the amount of Class D Subordinated Principal Collections
used to make payments in respect of the Class A Certificates, the Class B
Certificates and the Class C Securities on all prior Distribution Dates, minus
(d) an amount equal to the amount by which the Class D Investor Amount has been
reduced on all prior Distribution Dates in respect of the Class A Allocable
Amount, the Class B Allocable Amount, the Class C Allocable Amount and the Class
D Allocable Amount, plus (e) the sum of the amount of Excess Spread and Shared
Excess Finance Charge Collections allocated and available on all prior
Distribution Dates for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c) and (d) and, without duplication, the aggregate amount
of the reductions of the Series Adjustment Amount allocable to the Class D
Investor Amount; provided, however, that the Class D Investor Amount may not be
reduced below zero.
"Class D Investor Charge Offs" shall have the meaning specified in
----------------------------
Section 4.7(c).
"Class D Investor Default Amount" shall mean, with respect to each
-------------------------------
Distribution Date, an amount equal to the product of (i) the Default Amount for
the related Monthly Period and (ii) the Class D Investor Percentage applicable
to Allocable Amounts for such Monthly Period.
"Class D Investor Percentage" shall be calculated by substituting the
---------------------------
Class D Investor Amount and the Class D Initial Investor Amount in all
references to the Adjusted Investor Amount and the Initial Investor Amount,
respectively, in the definition of Investor Percentage.
"Class D Monthly Interest" shall be zero.
------------------------
-11-
"Class D Monthly Principal" shall have the meaning specified in
-------------------------
Section 4.4(d).
"Class D Pool Factor" shall mean the seven-digit decimal, which the
-------------------
Servicer will compute monthly, expressing as of the end of the Monthly Period
preceding each Distribution Date, the Class D Investor Amount as a proportion of
the Class D Investor Amount as of the Closing Date, which initially shall be
1.0000000.
"Class D Servicing Fee" shall have the meaning specified in Section G.
---------------------
"Class D Subordinated Principal Collections" means, with respect to
------------------------------------------
any Monthly Period, an amount equal to the product of (i) the applicable Class D
Investor Percentage with respect to Collections of Principal Receivables and
(ii) the aggregate amount of Collections of Principal Receivables for such
Monthly Period.
"Closing Date" shall mean July 17, 2001.
------------
"Collateral Interest Charge Off" shall mean the sum of the Class C
------------------------------
Charge Off and the Class D Investor Charge Off.
"Collateral Interest" shall mean a fractional undivided interest in
-------------------
the Trust which shall consist of the right to receive, to the extent necessary
to make the required payments to the Collateral Interest under this Series
Supplement, the portion of Collections allocable thereto under the Agreement and
this Series Supplement, funds held in the Spread Account for the sole benefit of
the Class C Securities, funds held in the Collection Account allocable to the
Class C Securities and the Class D Certificates thereto pursuant to the
Agreement and this Series Supplement and, subject to the respective rights of
the Series 2001-2 Certificateholders with respect thereto, funds held in the
Reserve Account.
"Collateral Interest Adjusted Amount" means, for any Determination
-----------------------------------
Date, an amount equal to the sum of the Class C Adjusted Investor Amount and the
Class D Investor Amount as of such Determination Date.
"Collateral Interest Adjustment Amount" shall mean, with respect to
-------------------------------------
each Distribution Date, the sum of the Class C Adjustment Amount and the Class D
Adjustment Amount as of such Distribution Date.
"Collateral Interest Allocable Amount" shall mean, with respect to any
------------------------------------
Distribution Date, the sum of the Class C Allocable Amount and the Class D
Allocable Amount.
"Collateral Interest Amount" shall mean, as of any date of
--------------------------
determination, the sum of the Class C Investor Amount and the Class D Investor
Amount.
-12-
"Collateral Interest Default Amount" shall mean, with respect to each
----------------------------------
Distribution Date, an amount equal to the sum of the Class C Investor Default
Amount and the Class D Investor Default Amount as of such Distribution Date.
"Collateral Interest Monthly Principal" shall mean the sum of the
-------------------------------------
Class C Monthly Principal and the Class D Monthly Principal.
"Collateral Interest Percentage" shall mean the sum of the Class C
------------------------------
Investor Percentage and the Class D Investor Percentage.
"Collateral Interest Pool Factor," shall mean the seven-digit decimal,
-------------------------------
which the Servicer will compute monthly, expressing as of the end of the Monthly
Period preceding each Distribution Date, the Collateral Interest Amount as a
proportion of the Collateral Interest Amount as of the Closing Date, which
initially shall be 1.0000000.
"Collateral Interest Servicing Fee" shall have the meaning specified
---------------------------------
in Section G hereof.
"Collateral Monthly Interest" shall mean the sum of the Class C
---------------------------
Monthly Interest and the Class D Monthly Interest.
"Collateral Required Amount" shall mean, as of any date of
--------------------------
determination, the sum of the Class C Required Amount and the Class D Allocable
Amount.
"Collateral Subordinated Principal Collections" shall mean, with
---------------------------------------------
respect to any Monthly Period, an amount equal to the sum of the Class C
Subordinated Principal Collections and the Class D Subordinated Principal
Collections for such Monthly Period.
"Controlled Accumulation Amount" shall mean for any Distribution Date
------------------------------
with respect to the Accumulation Period, $36,187,500; provided, however, if the
Accumulation Period Length shall be determined to be less than 12 months in
accordance with Section 4.15, the Controlled Accumulation Amount shall be equal
to (i) the product of (x) the Initial Investor Amount minus the Class D Initial
Investor Amount, and (y) the Accumulation Period Factor for such Monthly Period
divided by (ii) the Required Accumulation Factor Number.
"Controlled Deposit Amount" shall mean, for any Distribution Date with
-------------------------
respect to the Accumulation Period, an amount equal to the sum of the Controlled
Accumulation Amount for such Distribution Date and any Deficit Controlled
Accumulation Amount for the immediately preceding Distribution Date.
"Covered Amount" shall mean an amount, determined as of each
--------------
Distribution Date with respect to any Interest Period, equal to the sum of (a)
the product of (i) a fraction, the numerator of which is the actual number of
days in such Interest Period and the denominator of which is 360, times (ii) the
Class A Certificate Rate in effect with respect to such Interest Period, times
(iii) the aggregate amount on deposit in
-13-
the Principal Account with respect to Class A Monthly Principal as of the Record
Date preceding such Distribution Date, plus (b) the product of (i) a fraction,
the numerator of which is the actual number of days in such Interest Period and
the denominator of which is 360, times (ii) the Class B Certificate Rate in
effect with respect to such Interest Period times (iii) the aggregate amount on
deposit in the Principal Account with respect to Class B Monthly Principal as of
the Record Date preceding such Distribution Date, plus, (c) the product of (i) a
fraction, the numerator of which is the actual number of days in such Interest
Period and the denominator of which is 360, times (ii) the Class C Rate in
effect with respect to such Interest Period, times (iii) the aggregate amount on
deposit in the Principal Account with respect to Class C Monthly Principal as of
the Record Date preceding such Distribution Date.
"Defaulted Receivables" shall mean, for any Monthly Period, the
---------------------
Principal Receivables in Accounts which became Defaulted Accounts during such
Monthly Period.
"Deficit Controlled Accumulation Amount" shall mean (a) on the first
--------------------------------------
Distribution Date with respect to the Accumulation Period, the excess, if any,
of the Controlled Accumulation Amount for such Distribution Date over the amount
deposited into the Principal Account for such Distribution Date, and (b) on each
subsequent Distribution Date with respect to the Accumulation Period, the
excess, if any, of the applicable Controlled Deposit Amount for such subsequent
Distribution Date over the amount deposited into the Principal Account for such
subsequent Distribution Date.
"Excess Spread" shall mean, with respect to any Distribution Date, the
-------------
sum of the amounts, if any, specified pursuant to Sections 4.6(a)(iv),
4.6(b)(iii), 4.6(c)(ii), 4.6(d)(ii) and 4.12(b) with respect to such
Distribution Date.
"Excess Spread Percentage" means, for any Monthly Period, the amount
------------------------
(expressed as a percentage), if any, by which (i) the Portfolio Yield (including
for this purpose, any Shared Excess Finance Charge Collections allocated to
Series 2001-2 during such Monthly Period) for such Monthly Period exceeds (ii)
the Base Rate for such Monthly Period.
"Expected Payment Date" shall mean the July 17, 2006 Distribution
---------------------
Date.
"Finance Charge Shortfall" shall have the meaning specified in Section
------------------------
4.11.
"Fitch" shall mean Fitch, Inc.
-----
"Initial Investor Amount" shall mean the aggregate initial principal
-----------------------
amount of the Series 2001-2 Certificates, which is $450,000,000.
"Interest Period" shall mean, with respect to any Distribution Date,
---------------
the period beginning on and including the Distribution Date immediately
preceding such
-14-
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to, but excluding, such Distribution Date.
"Investor Amount" shall mean, as of any date of determination, an
---------------
amount equal to the sum of the Class A Investor Amount, the Class B Investor
Amount and the Collateral Interest Amount, in each case as of such date.
"Investor Default Amount" shall mean, 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 applicable Investor Percentage
applicable to Allocable Amounts for such Monthly Period. The Servicer will
calculate the Investor Default Amount on each Determination Date for the
preceding Monthly Period. The Investor Default Amount will be allocated among
the Class A Investor Default Amount, the Class B Investor Default Amount and the
Collateral Interest Default Amount.
"Investor Monthly Servicing Fee" shall have the meaning specified in
------------------------------
Section G hereof.
"Investor Percentage" shall mean:
-------------------
(a) with respect to (A) Principal Receivables during any Monthly
Period with respect to the Revolving Period, (B) Finance Charge Receivables
during any Monthly Period other than during a Rapid Amortization Period,
and (C) the Allocable Amount during any Monthly Period, the percentage
equivalent of a fraction, the numerator of which is equal to the average
Adjusted Investor Amount during the immediately preceding Monthly Period
and the denominator of which is the greater of (i) the sum of the Aggregate
Principal Receivables and the amount in the Excess Funding Account, in each
case at the close of business on the last day of the immediately preceding
Monthly Period and (ii) the sum of the numerators used to calculate the
applicable investor percentages with respect to Principal Receivables,
Finance Charge Receivables or the Allocable Amounts, as applicable, for all
Series outstanding as of the date on which such determination is being
made;
(b) with respect to Finance Charge Receivables (and any other amounts
treated as Finance Charge Receivables) during any Monthly Period during a
Rapid Amortization Period, the percentage equivalent of a fraction the
numerator of which is equal to the Adjusted Investor Amount as of the last
day of the Revolving Period (or after the close of business on the day
preceding the onset of the Rapid Amortization Period if a Pay Out Event
occurs during the Accumulation Period) and the denominator of which is the
greater of (i) the sum of the Aggregate Principal Receivables and the
amount in the Excess Funding Account, in each case at the close of business
on the last day of the immediately preceding Monthly Period and (ii) the
sum of the numerators used to calculate the investor percentages with
respect to Finance Charge Receivables for all Series outstanding as of the
date on which such determination is being made; and
-15-
(c) with respect to Principal Receivables during any Monthly Period
with respect to an Amortization Period, the percentage equivalent of a
fraction the numerator of which is equal to the Adjusted Investor Amount as
of the last day of the Revolving Period and the denominator of which is the
greater of (i) the sum of the Aggregate Principal Receivables and the
amount in the Excess Funding Account, in each case at the close of business
on the last day of the immediately preceding Monthly Period and (ii) the
sum of the numerators used to calculate the investor percentages with
respect to Principal Receivables for all Series outstanding as of the date
on which such determination is being made; provided, however, that if the
Series 2001-2 Certificates are paired with a Paired Series and a Rapid
Amortization Period commences for such Paired Series, the Transferor may,
by written notice to the Trustee, the Servicer and the Rating Agencies,
designate a different numerator to be used to determine such percentage,
(provided that such numerator is not less than the Adjusted Investor Amount
as of the last day of the revolving period for such Paired Series).
"LIBOR" means, as of any LIBOR Determination Date, the rate for
-----
deposits in United States dollars for a one-month period which appears on
Telerate Page 3750 as of 11:00 A.M., London time, on such date. If such rate
does not appear on Telerate Page 3750, the rate for that LIBOR Determination
Date will be determined on the basis of the rates at which deposits in United
States Dollars are offered by the Reference Banks at approximately 11:00 A.M.,
London time, on that day to prime banks in the London interbank market for a
one-month period. The Trustee will request the principal London office of each
of the Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that LIBOR Determination Date will be the
arithmetic mean of such quotations. If fewer than two quotations are provided,
the rate for that LIBOR Determination Date will be the arithmetic mean of the
rates quoted by four major banks in New York City, selected by the Servicer, at
approximately 11:00 A.M., New York City time, on that day for loans in United
States Dollars to leading European banks for a one-month period.
"LIBOR Determination Date" shall mean July 13, 2001 for the period
------------------------
from and including the Closing Date through but excluding August 15, 2001,
August 13, 2001 for the period from and including August 15, 2001 through but
excluding September 17, 2001, and for each Interest Period thereafter, on the
second London business day prior to the Distribution Date on which such Interest
Period commences.
"London business day" means any business day on which dealings in
-------------------
deposits in United States dollars are transacted in the London interbank market.
"Minimum Transferor Interest Percentage" shall have the meaning
--------------------------------------
specified in Section C.
-16-
"Monthly Interest" shall mean, with respect to any Distribution Date,
----------------
the sum of the Class A Monthly Interest, the Class B Monthly Interest and the
Class C Monthly Interest for such Distribution Date.
"Paired Series" shall have the meaning specified in Section L2.
-------------
"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 (x)
the sum of (i) the amount of collections of Finance Charge Receivables and
Shared Excess Finance Charge Collections allocated to Series 2001-2 for such
Monthly Period (provided, however, that Shared Excess Finance Charge Collections
will be excluded from the Portfolio Yield if the Rating Agency Condition with
respect to Standard & Poor's is not otherwise satisfied) plus (ii) the amount of
investment earnings (net of investment expenses and losses), if any, on the
Principal Account and Reserve Account balances, plus (iii) the amount of funds
withdrawn from the Reserve Account minus (iv) an amount equal to the Default
Amount allocable to Series 2001-2 for such Monthly Period, and the denominator
of which is (y) the average Investor Amount during the related Monthly Period.
"Principal Account" shall have the meaning specified in Section
-----------------
4.13(a).
"Principal Account Balance" shall mean, with respect to any date of
-------------------------
determination during the Accumulation Period, the amount, if any, of funds held
in the Principal Account on such date of determination.
"Principal Investment Proceeds" shall have the meaning specified in
-----------------------------
Section 4.13(b).
"Principal Shortfall" shall have the meaning specified in Section
-------------------
4.10.
"Qualified Maturity Agreement" means an agreement between the
----------------------------
Transferor and a Qualified Maturity Agreement Provider under which the Qualified
Maturity Agreement Provider agrees to deposit into the Principal Account on or
before the Expected Payment Date, an amount equal to the aggregate outstanding
principal balance of the Class A Certificates, the Class B Certificates and the
Class C Securities on such date; provided that the amount to be deposited may be
reduced by any amount funded, at the election of the Transferor, from any
source, including, without limitation, the proceeds of a new Series on or before
the Expected Payment Date and by any amount on deposit in the Principal Account.
"Qualified Maturity Agreement Provider" means a Qualified Institution
-------------------------------------
that is a counterparty to the Qualified Maturity Agreement; provided, however,
for
-17-
purposes of this definition only, the ratings required in clause (i) of the
definition of Qualified Institution shall be at least A-1, P-1 and F-1 for
short-term unsecured debt or certificates of deposit or A, A2 and A for long-
term unsecured debt (Standard & Poor's, Xxxxx'x and Fitch, respectively).
"Rapid Amortization Period" shall mean the period commencing at the
-------------------------
close of business on the day on which a Pay Out Event with respect to Series
2001-2 has occurred, and ending on the first to occur of (a) the payment in full
of the Investor Amount or (b) the Stated Series Termination Date.
"Rating Agencies" shall mean Xxxxx'x, Standard & Poor's, Fitch, and,
---------------
if applicable, such other nationally recognized statistical rating organization
that has rated the Certificates at the request of the Company.
"Reallocated Principal Collections" shall mean, with respect to any
---------------------------------
Monthly Period, an amount equal to the sum of Class B Subordinated Principal
Collections and Collateral Subordinated Principal Collections for such Monthly
Period.
"Record Date" shall mean, with respect to Series 2001-2, the close of
-----------
business on the last Business Day preceding any Distribution Date.
"Reference Banks" shall mean four major banks in the London interbank
---------------
market selected by the Servicer.
"Required Accumulation Factor Number" shall be a fraction, rounded
-----------------------------------
upwards to the nearest whole number, the numerator of which is one and the
denominator of which is equal to the lowest monthly principal payment rate on
the Accounts for the 12 months preceding the date of such calculation (or any
lower monthly principal payment rate selected by the Servicer at its option in
its sole discretion), expressed as a decimal.
"Required Draw Amount" shall have the meaning specified in Section
--------------------
4.12(c).
"Required Reserve Account Amount" shall mean, with respect to any
-------------------------------
Distribution Date prior to the Reserve Account Funding Date, zero, and on or
after the Reserve Account Funding Date, an amount not less than (a) 1.50% of the
Investor Amount as of the preceding Distribution Date (after giving effect to
all changes therein on such date), (b) any other amount designated by the
Transferor; provided, however, that if such designation pursuant to (b) above is
of a lesser amount, (i) the Rating Agency Condition shall have been satisfied,
and (ii) the Transferor shall have delivered to the Trustee an Officer's
Certificate to the effect that, based on the facts known to such officer at such
time, in the reasonable belief of such officer, such designation will not cause
a Pay Out Event or an event that, after the giving of notice or the lapse of
time, would cause a Pay Out Event, to occur with respect to Series 2001-2, (c)
if the Accumulation Period is suspended pursuant to Section 4.16, the amount on
deposit, if any, in the Reserve Account at the date of such suspension for so
long as the Accumulation Period is
-18-
suspended, or (d) the amount specified in clause (a) above immediately upon the
premature termination of a Qualified Maturity Agreement or if the Qualified
Maturity Agreement Provider ceases to be qualified as such and a satisfactory
replacement is not obtained, as specified in Section 4.16.
"Required Spread Account Amount" shall mean as of any date of
------------------------------
determination an amount equal to the product of (i) the Required Spread Account
Percentage as shown in the following table, and (ii) the Investor Amount;
provided that the Required Spread Account Amount for the August 15, 2001
Distribution Date shall be zero.
Average Excess Spread Required Spread Account
Percentage Percentage
-----------------------------------------------------------
less than
or equal to 5.5% 0.0%
-----------------------------------------------------------
less than greater
or equal to 5.0% and than 5.5% 1.0%
-----------------------------------------------------------
less than greater
or equal to 4.0% and than 5.0% 1.5%
-----------------------------------------------------------
less than greater
or equal to 3.5% and than 4.0% 2.0%
-----------------------------------------------------------
less than greater
or equal to 3.5% 4.0%
-----------------------------------------------------------
No amounts shall be held in the Spread Account as of the Closing Date.
"Required Spread Account Percentage" shall mean, as of any
----------------------------------
Distribution Date, the respective percentages specified above under the
definition of "Required Spread Account Amount" that are applied to the Investor
Amount as of the end of the preceding Monthly Period. Any reduction in the
Required Spread Account Percentage resulting from an increase in the Average
Excess Spread Percentage will not take effect until the amount on deposit in the
Spread Account is greater than or equal to the Required Spread Account Amount
for three consecutive Distribution Dates (in which case such reduction will take
effect on the third of such Distribution Dates).
"Reserve Account" shall have the meaning specified in Section 4.14(a).
---------------
"Reserve Account Funding Date" shall mean the Distribution Date with
----------------------------
respect to the Monthly Period which commences no later than three (3) months
prior to the Accumulation Period, provided that the Reserve Account Funding Date
shall be accelerated to (a) the Distribution Date with respect to the Monthly
Period which commences no later than four (4) months prior to the Accumulation
Commencement Monthly Period if the average of the Portfolio Adjusted Yields for
any three (3) consecutive Monthly Periods shall be less than 6.00%; (b) the
Distribution Date with respect to the Monthly Period which commences no later
than six (6) months prior to the Accumulation Commencement Monthly Period if the
average of the Portfolio Adjusted Yields for any three (3) consecutive Monthly
Periods shall be less than 3.00%; (c) the Distribution Date which commences no
later than nine (9) months prior to the Accumulation Commencement Monthly Period
if the average of the Portfolio Adjusted Yields for any three (3) consecutive
Monthly Periods shall be less than 2.00%; or (d) the
-19-
Distribution Date immediately following the date on which a Qualified Maturity
Agreement is terminated and the Transferor is unable to obtain a substitute
Qualified Maturity Agreement, or the Qualified Maturity Agreement Provider is no
longer qualified as such hereunder.
"Reserve Account Surplus" shall mean, as of any date of determination,
-----------------------
the amount, if any, by which the amount held in the Reserve Account exceeds the
Required Reserve Account Amount.
"Reserve Draw Amount" shall mean, with respect to each Distribution
-------------------
Date relating to the Accumulation Period and the first Special Distribution
Date, an amount equal to the excess, if any, of the Covered Amount with respect
to such Distribution Date or Special Distribution Date over the Principal
Funding Investment Proceeds for such Distribution Date or Special Distribution
Date.
"Revolving Period" shall mean the period beginning on the Closing Date
----------------
and ending on the earlier of (a) the close of business on the day the
Accumulation Period commences and (b) the close of business on the day the Rapid
Amortization Period commences.
"Series Adjustment Amount" shall mean, with respect to each
------------------------
Distribution Date, an amount equal to the product of (i) any unpaid Adjustment
Payment Obligation for the related Monthly Period and (ii) the Investor
Percentage applicable to allocations of Allocable Amounts during the related
Monthly Period, as calculated on the last day of the Monthly Period preceding
the related Monthly Period.
"Series 2001-2" shall mean the Series established hereby, and the
-------------
terms of which are specified in this Series Supplement.
"Series 2001-2 Certificate" shall mean the Class A Certificates, the
-------------------------
Class B Certificates, the Class C Securities and the Class D Certificates.
"Series 2001-2 Certificateholder" shall mean a Class A
-------------------------------
Certificateholder, a Class B Certificateholder, a Class C Holder, or a Class D
Certificateholder.
"Servicing Fee" shall mean the amount paid monthly from the Trust to
-------------
the Servicer and which shall be equal to one-twelfth (/1//12th) of the product
of the Servicing Fee Percentage and the average Adjusted Investor Amount during
the immediately preceding Monthly Period.
"Servicing Fee Percentage" shall mean 2.00% per annum.
------------------------
"Shared Excess Finance Charge Collections" shall mean, with respect to
----------------------------------------
any Monthly Period, the aggregate amount for all outstanding Series in Group One
of Collections of Finance Charge Receivables which the related Supplements
specify are to be treated as "Shared Excess Finance Charge Collections" for such
Monthly Period.
-20-
"Shared Principal Collections" shall mean, with respect to any Monthly
----------------------------
Period, the aggregate amount for all outstanding Series in Group One of
Collections of Principal Receivables available after covering required
distributions and deposits under each Series Supplement and that are to be
treated herein as "Shared Principal Collections" pursuant to Section 4.6(e) and
Section 4.6(f)(v) and in the respective applicable sections of any Supplement
for other Series in Group One.
"Special Distribution Date" shall mean each Distribution Date with
-------------------------
respect to the Rapid Amortization Period.
"Spread Account" shall have the meaning specified in Section 4.12(a).
--------------
"Stated Series Termination Date" shall mean the December 15, 2009
------------------------------
Distribution Date.
"Telerate Page 3750" shall mean the display page currently so
------------------
designated on the Bridge Telerate Service (or such other page as may replace
that page on that service for the purpose of displaying comparable rates or
prices).
"Treasury" shall mean the United States Department of the Treasury and
--------
any successor Governmental Authority thereto.
Section C. Minimum Transferor Interest Percentage. The Minimum
--------------------------------------
Transferor Interest Percentage applicable to the Series 2001-2 Certificates
shall be 0%; provided, however, that (a) the Transferor may, at its option and
in its sole discretion, designate a higher percentage as the Minimum Transferor
Interest Percentage so long as, after giving effect to such designation and any
repurchase of Investor Certificates or designation of Additional Accounts, the
Transferor Amount shall equal or exceed the Minimum Transferor Amount and (b) if
on any Distribution Date during the Revolving Period (after giving effect to all
distributions and adjustments to be made on such Distribution Date), the portion
of the Class D Investor Amount owned by the Transferor is less than 2.00% of the
Investor Amount and the Minimum Transferor Interest Percentage is less than
---
2.00%, the Transferor shall, on or before the last day of the second Monthly
Period following the Monthly Period in which such Distribution Date occurred
(unless the portion of the Class D Investor Amount owned by the Transferor shall
then equal or exceed 2.00% of the Investor Amount), (i) repurchase or otherwise
repay Investor Certificates (to the extent permitted by any Supplement) or
designate Additional Accounts to the extent necessary to permit the designation
of a Minimum Transferor Interest Percentage of 2.00% without causing the
Transferor Amount to be less than the Minimum Transferor Amount and (ii) upon
compliance with clause (i), designate 2.00% as the Minimum Transferor Interest
Percentage. In the event that the Transferor shall have designated a Minimum
Transferor Interest Percentage in excess of 0%, the Transferor may, during the
Revolving Period, designate a lower percentage (but not less than 0%) if the
portion of the Class D Investor Amount owned by the Transferor as a percentage
of the Investor Amount averaged over the three Distribution Dates preceding
-21-
such designation (after giving effect to all distributions and adjustments made
on each such Distribution Date) shall equal or exceed 4.00 %; provided, however,
that such lower percentage may not be less than 2.00% if the portion of the
Class D Investor Amount owned by the Transferor as a percentage of the Investor
Amount on the Distribution Date preceding such designation (after giving effect
to all distributions and adjustments made on such Distribution Date) shall not
equal or exceed 2.00%.
Section D. Optional Purchase; Reassignment and Transfer Terms. All the
--------------------------------------------------
Series 2001-2 Certificates may be repurchased by, and reassigned and transferred
to, the Transferor in the Transferor's sole discretion, on any Distribution Date
on or after the Distribution Date on which the sum of the Class A Adjusted
Investor Amount, the Class B Adjusted Investor Amount, and the portion of the
Collateral Interest Adjusted 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 Class A
Initial Investor Amount, the Class B Initial Investor Amount, and the portion of
the maximum amount of the Collateral Interest Amount held by parties other than
the Transferor or any of its affiliates since the Closing Date. The repurchase
price for the Series 2001-2 Certificates will be equal to (a) the Adjusted
Investor Amount, plus (b) accrued and unpaid interest on the 2001-2
Certificates, less (c) the amount held in the Collection Account allocable to
Series 2001-2 to be applied other than to deposits to the Reserve Account, with
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 Agreement.
Section E. Delivery and Payment for the Certificates. The Trustee shall
-----------------------------------------
deliver the Series 2001-2 Certificates when authenticated in accordance with
Section 6.2 of the Agreement. The Class C Securities and the Class D
Certificates have not been registered under the Securities Act or any state or
foreign securities laws, and shall bear legends appropriately limiting their
transfer in accordance herewith and applicable securities laws.
Section F. Form of Delivery of the Series 2001-2 Certificates. The Class
--------------------------------------------------
A Certificates, the Class B Certificates and the Class C Securities shall be
delivered as provided in Section 6.11 of the Agreement. The Class A
Certificates, the Class B Certificates and the Class C Securities will initially
be held by the Trustee as custodian for The Depository Trust Company, and will
be registered in the name of Cede & Co., as nominee of The Depository Trust
Company.
Section G. Servicing Compensation. The share of the Monthly Servicing Fee
----------------------
allocable to the Series 2001-2 Certificateholders with respect to any
Distribution Date (the "Investor Monthly Servicing Fee") shall be equal to one-
------------------------------
twelfth (1/12th) of the product of (a) the Servicing Fee Percentage and (b)
each of the average Class A Adjusted Investor Amount, the average Class B
Adjusted Investor Amount and the average Collateral Interest Adjusted Amount,
respectively, during the immediately preceding Monthly Period; provided,
however, with respect to the first Distribution Date, the Investor Monthly
Servicing Fee shall be equal to $375,000. The share of the Investor Monthly
Servicing Fee allocable to the Class A Certificateholders with respect to any
-22-
Distribution Date (the "Class A Servicing Fee") shall be equal to the product of
---------------------
(a) one-twelfth (1/12th) of the Servicing Fee Percentage and (b) the average
Class A Adjusted Investor Amount; provided, however, that with respect to the
first Distribution Date, the Class A Servicing Fee shall be equal to $277,500.
The share of the Investor Monthly Servicing Fee allocable to the Class B
Certificateholders with respect to any Distribution Date (the "Class B Servicing
-----------------
Fee") shall be equal to the product of (a) one-twelfth (1/12th) of the
---
Servicing Fee Percentage and (b) the average Class B Adjusted Investor Amount;
provided, however, that with respect to the first Distribution Date, the Class B
Servicing Fee shall be equal to $30,000. The share of the Investor Monthly
Servicing Fee allocable to the Collateral Interest with respect to any
Distribution Date (the "Collateral Interest Servicing Fee") shall be equal to
---------------------------------
the product of (a) one-twelfth (1/12th) of the Servicing Fee Percentage and
(b) the average Collateral Interest Adjusted Amount; provided, however, that
with respect to the first Distribution Date, the Collateral Interest Servicing
Fee shall be equal to $67,500. The Collateral Interest Servicing Fee shall be
subdivided into the Class C Servicing Fee and the Class D Servicing Fee. The
share of the Collateral Interest Servicing Fee allocable to the Class C Holders
(the "Class C Servicing Fee") with respect to any Distribution Date shall be
---------------------
equal to one-twelfth (1/12th) of the product of (a) the Servicing Fee
Percentage and (b) the average Class C Adjusted Investor Amount; provided,
however, with respect to the first Distribution Date, the Class C Servicing Fee
shall be equal to $54,375. The share of the Collateral Interest Servicing Fee
allocable to the Class D Certificateholders (the "Class D Servicing Fee") with
---------------------
respect to any Distribution Date shall be equal to one-twelfth (1/12th) of the
product of (a) the Servicing Fee Percentage and (b) the average Class D Investor
Amount; provided, however, with respect to the first Distribution Date, the
Class D Servicing Fee shall be equal to $13,125.
The Class A Servicing Fee, the Class B Servicing Fee and the Collateral
Interest Servicing Fee (including the Class C Servicing Fee and the Class D
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 from amounts allocable to
other Series (as provided in the Agreement and the Supplements relating to such
other Series) or by the Transferor and in no event shall the Trust, the Trustee
or the Series 2001-2 Certificateholders be liable for the share of the Monthly
Servicing Fee to be paid from amounts allocable to any other Series or by the
Transferor.
Section H. Article IV of the Agreement. Any provisions of Article IV of
---------------------------
the 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 2001-2 Certificates. Section 4.1 of the Agreement shall read in its
entirety as provided in the Agreement. Article IV of the Agreement (except for
Section 4.1) as it relates to Series 2001-2 shall read in its entirety as
follows:
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ARTICLE IV
Rights of Series 2001-2 Certificateholders and
----------------------------------------------
Allocation and Application of Collections
-----------------------------------------
Section 4.2. Collections and Allocations.
----------------------------
(a) The Servicer shall apply, or shall instruct the Trustee to apply, all
Collections, and other funds held in the Collection Account that are allocated
to Series 2001-2 as described in this Article IV. Provided that daily deposits
of Collections into the Collection Account are required pursuant to Section
4.1(f) of the Agreement, the applicable Investor Percentage of Finance Charge
Collections shall be deposited into the Collection Account on a daily basis. If
the amount on deposit in the Collection Account in respect of the applicable
Investor Percentage of Finance Charge Collections is less than the sum of: (i)
the sum of Class A Monthly Interest, Class B Monthly Interest and Class C
Monthly Interest due on the next succeeding Distribution Date, (ii) if Saks is
no longer the Servicer, the Servicing Fee due on the next succeeding
Distribution Date, and (iii) an amount equal to the product of (a) the Default
Amount allocated to Series 2001-2 for the immediately preceding Monthly Period
and (b) a factor of 1.80, or such lesser factor as may be determined by the
Servicer subject to the Rating Agency Condition with respect to Standard &
Poor's, then Class B Subordinated Principal Collections and Collateral
Subordinated Principal Collections shall also be deposited into the Collection
Account until such time that such deficiency is eliminated.
(b) During the Revolving Period, so long as the Collateral Interest
Adjusted Amount divided by the Adjusted Investor Amount is greater than or equal
to 18%, Collections of Principal Receivables allocable to Series 2001-2, other
than the amounts described in subsection 4.2(a), 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
allocable to Series 2001-2 (other than amounts deposited pursuant to the
preceding paragraph) shall be deposited into the Excess Funding Account until
the Transferor Amount equals the Minimum Transferor 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 Adjusted
Investor Amount, such Collections of Principal Receivables shall be deposited
into the Collection Account on a daily basis until (unless otherwise required
herein) such time that the sum of the Aggregate Principal Receivables and the
Excess Funding Amount is greater than or equal to the Aggregate Adjusted
Investor Amount.
(c) During the Accumulation Period, so long as the Collateral Interest
Adjusted Amount divided by the Adjusted Investor Amount is greater than or equal
to 18%, after an amount of Collections of Principal Receivables allocable to
Series 2001-2 equal to the Controlled Deposit Amount with respect to each
Monthly Period has been deposited into the Collection Account, Collections of
Principal Receivables allocable to Series 2001-2 with respect to each Monthly
Period need not be deposited into the Collection Account on a daily basis during
such Monthly Period (subject to the
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provisions of subsection 4.2(a)); provided, however, that in the event that the
Minimum Transferor Amount exceeds the Transferor Amount on any date, such
remaining Collections of Principal Receivables shall be deposited into the
Excess Funding Account until the Transferor Amount equals the Minimum Transferor
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 Adjusted Investor Amount, such Collections of Principal Receivables
shall be deposited into the Collection Account on a daily basis until (unless
otherwise required herein) such time that the sum of the Aggregate Principal
Receivables and the Excess Funding Amount is greater than or equal to the
Aggregate Adjusted Investor Amount.
(d) Notwithstanding any of the foregoing provisions of this Section 4.2,
the Servicer need not make daily deposits of Collections into the Collection
Account at any time when the requirements of Section 4.1(f) of the Agreement are
satisfied.
Section 4.3 Determination of Monthly Interest.
---------------------------------
(a) The amount of monthly interest ("Class A Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class A
Certificates on any Distribution Date shall be an amount equal to the product of
(i) the Class A Certificate Rate for the related Interest Period, (ii) the
actual number of days in such Interest Period divided by 360, and (iii) the
outstanding principal amount of the Class A Certificates as of the preceding
Record Date; provided, however, with respect to the first Distribution Date,
Class A Monthly Interest shall be equal to $1,091,422.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class A Interest Shortfall"),
--------------------------
of (x) the Class A Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class A Monthly
Interest on such Distribution Date. If the Class A Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class A Additional Interest") equal to the product of (i) the Class A Penalty
---------------------------
Rate for the related Interest Period, and (ii) such Class A Interest Shortfall
(or the portion thereof which has not theretofore been paid to Class A
Certificateholders), shall be payable as provided herein with respect to the
Class A Certificates on each Distribution Date following such Distribution Date
to but excluding the Distribution Date on which such Class A Interest Shortfall
is paid to Class A Certificateholders. Such Class A Additional Interest shall be
calculated in the same manner as Class A Monthly Interest. Notwithstanding
anything to the contrary herein, Class A Additional Interest shall be payable or
distributed to Class A Certificateholders only to the extent permitted by
applicable law.
(b) The amount of monthly interest ("Class B Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class B
Certificates on any Distribution Date shall be an amount equal to the product of
(i) the Class B Certificate Rate for the related Interest Period, (ii) the
actual number of days in such Interest Period divided by 360, and (iii) the
outstanding principal amount of the Class B Certificates as
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of the preceding Record Date; provided, however, with respect to the first
Distribution Date, Class B Monthly Interest shall be equal to $129,884.
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class B Interest Shortfall"),
--------------------------
of (x) the Class B Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class B Monthly
Interest on such Distribution Date. If the Class B Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class B Additional Interest") equal to the product of (i) the Class B Penalty
---------------------------
Rate for the related Interest Period, and (ii) such Class B Interest Shortfall
(or the portion thereof which has not theretofore been paid to Class B
Certificateholders), shall be payable as provided herein with respect to the
Class B Certificates on each Distribution Date following such Distribution Date
to but excluding the Distribution Date on which such Class B Interest Shortfall
is paid to Class B Certificateholders. Such Class B Additional Interest shall be
calculated in the same manner as Class B Monthly Interest. Notwithstanding
anything to the contrary herein, Class B Additional Interest shall be payable or
distributed to Class B Certificateholders only to the extent permitted by
applicable law.
(c) The amount of monthly interest ("Class C Monthly Interest")
------------------------
distributable from the Collection Account with respect to the Class C Securities
on any Distribution Date shall be an amount equal to the product of (i) the
outstanding principal amount of the Class C Securities as of the preceding
Record Date, (ii) the Class C Rate for the related Interest Period, and (iii) a
fraction, the numerator of which is the actual number of days in such Interest
Period and the denominator of which is 360; provided, however, with respect to
the first Distribution Date, the Class C Monthly Interest shall be equal to the
amount specified in Exhibit D hereto.
---------
On the Determination Date preceding each Distribution Date, the
Servicer shall determine the excess, if any (the "Class C Interest Shortfall"),
--------------------------
of (x) the Class C Monthly Interest for such Distribution Date over (y) the
aggregate amount of funds allocated and available to pay such Class C Monthly
Interest on such Distribution Date. If the Class C Interest Shortfall with
respect to any Distribution Date is greater than zero, an additional amount
("Class C Additional Interest") equal to the product of (i) the Class C Penalty
---------------------------
Rate for the related Interest Period, and (ii) such Class C Interest Shortfall
(or the portion thereof which has not theretofore been paid to the Class C
Holders) shall be payable as provided herein with respect to the Class C
Securities on each Distribution Date following such Distribution Date to but
excluding the Distribution Date on which such Class C Interest Shortfall is paid
to the Class C Holders. Such Class C Additional Interest shall be calculated in
the same manner as Class C Monthly Interest. Notwithstanding anything to the
contrary herein, Class C Additional Interest shall be payable or distributed to
the Holder only to the extent permitted by applicable law.
(d) Since the Class D Monthly Interest is zero, no monthly interest
shall be distributable from the Collection Account with respect to the Class D
Certificates on any Distribution Date.
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Section 4.4 Determination of Monthly Principal.
----------------------------------
(a) During the Amortization Period, the amount of monthly principal
("Class A Monthly Principal") distributable to Class A Certificateholders
-------------------------
(during the Rapid Amortization Period) or available for deposit into the
Principal Account (during the Accumulation Period), from the Collection Account
with respect to the Class A Certificates on each Distribution Date shall be
equal to the least of (x) the Available Principal Collections held in the
Collection Account and available for distribution with respect to such
Distribution Date, (y) for each Distribution Date with respect to the
Accumulation Period, the Controlled Deposit Amount for such Distribution Date
and (z) the Class A Adjusted Investor Amount on such Distribution Date.
(b) The amount of monthly principal ("Class B Monthly Principal")
-------------------------
distributable to Class B Certificateholders (during the Rapid Amortization
Period) or available for deposit into the Principal Account (during the
Accumulation Period) from the Collection Account with respect to the Class B
Certificates on each Distribution Date relating to an Amortization Period,
beginning with the Distribution Date on which an amount equal to the Class A
Investor Amount has been deposited into the Principal Account (after taking into
account deposits to be made on such Distribution Date), or with respect to any
Distribution Date relating to the Rapid Amortization Period, beginning with the
Distribution Date on which the Class A Certificates will be paid in full (after
taking into account payments to be made on such Distribution Date), shall be
equal to the least of (i) the Available Principal Collections on deposit in the
Principal Account with respect to such Distribution Date (minus the portion of
such Available Principal Collections applied to Class A Monthly Principal on
such Distribution Date), (ii) for each Distribution Date with respect to the
Accumulation Period, the Controlled Deposit Amount for such Distribution Date
(minus the Class A Monthly Principal with respect to such Distribution Date) and
(iii) the Class B Adjusted Investor Amount prior to any deposits on such
Distribution Date.
(c) The amount of monthly principal ("Class C Monthly Principal")
-------------------------
distributable to Class C Holders (during the Rapid Amortization Period) or
available for deposit into the Principal Account from the Collection Account
(during the Accumulation Period) with respect to the Class C Securities on each
Distribution Date relating to an Amortization Period, beginning with the
Distribution Date on which an amount equal to the Class A Investor Amount and
the Class B Investor Amount has been deposited into the Principal Account (after
taking into account deposits to be made on such Distribution Date), or with
respect to any Distribution Date relating to the Rapid Amortization Period
beginning with the Distribution Date on which the Class A Certificates and the
Class B Certificates will be paid in full (after taking into account payments to
be made on such Distribution Date), shall be equal to the least of (i) the
Available Principal Collections on deposit in the Collection Account and
available for distribution with respect to such Distribution Date (minus the
portion of such Available Principal Collections applied to Class A Monthly
Principal and Class B Monthly Principal on such Distribution Date), (ii) for
each Distribution Date with respect to the Accumulation Period, the Controlled
-27-
Deposit Amount for such Distribution Date (minus the sum of the Class A Monthly
Principal and the Class B Monthly Principal with respect to such Distribution
Date) and (iii) the Class C Adjusted Investor Amount prior to any deposits on
such Distribution Date.
(d) The amount of monthly principal ("Class D Monthly Principal")
-------------------------
distributable to Class D Certificateholders:
(i) during the Accumulation Period is a portion of any remaining
Available Principal Collections on deposit in the Collection
Account after application of Class A Monthly Principal, Class B
Monthly Principal and Class C Monthly Principal, provided that
(x) no such allocation and distribution will be made until
beginning with the Distribution Date on which an amount equal to
the Class A Investor Amount and the Class B Investor Amount has
been deposited into the Principal Account (after taking into
account deposits to be made on such Distribution Date), and
thereafter (y) any such allocation permissible under the
preceding clause (x) will be limited so that after each such
payment the percentage obtained by dividing the then current
Class D Investor Amount by the then current Adjusted Investor
Amount will be no less that 3.5%; or
(ii) with respect to any Distribution Date relating to the Rapid
Amortization Period beginning with the Distribution Date on which
the Class A Certificates, the Class B Certificates and the Class
C securities will be paid in full (after taking into account
payments to be made on such Distribution Date), shall be equal to
the Available Principal Collections on deposit in the Collection
Account and available for distribution with respect to such
Distribution Date (minus the portion of such Available Principal
Collections applied to Class A Monthly Principal, Class B Monthly
Principal and Class C Monthly Principal on such Distribution
Date).
Section 4.5 Required Amounts.
----------------
(a) On each Determination Date, the Servicer shall determine the
amount (the "Class A Required Amount"), if any, by which (x) the sum of (i)
-----------------------
Class A Monthly Interest for the following Distribution Date, (ii) any Class A
Monthly Interest previously due but not paid to the Class A Certificateholders
on a prior Distribution Date, (iii) any Class A Additional Interest for the
following Distribution Date and any Class A Additional Interest previously due
but not paid to Class A Certificateholders on a prior Distribution Date, (iv)
the Class A Allocable Amount, if any, for such Distribution Date and (v) if Saks
is no longer the Servicer, the Class A Servicing Fee for the related
Distribution Date and the amount of any Class A Servicing Fee previously due but
not distributed to the Servicer on a prior Distribution Date exceeds (y) the
Class A Available
-28-
Funds with respect to the preceding Monthly Period. In the event that the Class
A Required Amount for such Distribution Date is greater than zero, the Servicer
shall give written notice to the Trustee of such positive Class A Required
Amount on the date of computation and all or a portion of the Excess Spread and
the Shared Excess Finance Charge Collections allocable to Series 2001-2 pursuant
to Section 4.1(i) of the Agreement and Section 4.8(m) hereof with respect to the
related Monthly Period in an amount equal to the Class A Required Amount for
such Distribution Date shall be distributed from the Collection Account on such
Distribution Date pursuant to Section 4.8(a). In the event that the Class A
Required Amount for such Distribution Date exceeds the amount of the Excess
Spread and the Shared Excess Finance Charge Collections allocable to Series 200
1-2 with respect to the related Monthly Period, all or a portion of the
Reallocated Principal Collections with respect to such Monthly Period in an
amount equal to such excess shall be distributed from the Collection Account on
such Distribution Date pursuant to Section 4.9(a).
(b) On each Determination Date, the Servicer shall determine the
amount (the "Class B Required Amount"), if any, equal to the sum of (x) the
-----------------------
amount, if any, by which the sum of (i) Class B Monthly Interest for the
following Distribution Date, (ii) any Class B Monthly Interest previously due
but not paid to the Class B Certificateholders on a prior Distribution Date,
(iii) any Class B Additional Interest for the following Distribution Date and
any Class B Additional Interest previously due but not paid to Class B
Certificateholders on a prior Distribution Date and (iv) if Saks is no longer
the Servicer, the Class B Servicing Fee for the related Distribution Date and
the amount of any Class B Servicing Fee previously due but not distributed to
the Servicer on a prior Distribution Date exceeds Class B Available Funds with
respect to the preceding Monthly Period and (y) the amount, if any, by which the
Class B Allocable Amount, if any, for such Distribution Date exceeds the amount
available to make payments with respect thereto pursuant to Section 4.8(d). In
the event that the Class B Required Amount for such Distribution Date is greater
than zero, the Servicer shall give written notice to the Trustee of such
positive Class B Required Amount on the date of computation and all or a portion
of the Excess Spread and the Shared Excess Finance Charge Collections allocable
to Series 2001-2 pursuant to Section 4.1(i) of the Agreement and Section 4.8(m)
hereof with respect to the related Monthly Period shall be distributed from the
Collection Account on such Distribution Date pursuant to Sections 4.8(c) and
(d). In the event that the Class B Required Amount for such Distribution Date
exceeds such portion of the amounts distributed pursuant to Sections 4.8(c) and
(d), all or a portion of the Reallocated Principal Collections with respect to
such Monthly Period (other than the portion of the Reallocated Principal
Collections applied to fund the Class A Required Amount and other than Class B
Subordinated Principal Collection) in an amount equal to such excess shall be
distributed from the Collection Account on such Distribution Date pursuant to
Section 4.9(b).
(c) On each Determination Date, the Servicer shall determine the
amount (the "Class C Required Amount"), if any, equal to the sum of (x) the
-----------------------
amount, if any, by which the sum of (i) Class C Monthly Interest for the
following Distribution Date, (ii) any Class C Monthly Interest previously due
but not paid to the Class C Holders on a
-29-
prior Distribution Date, (iii) any Class C Additional Interest for the following
Distribution Date and any Class C Additional Interest previously due but not
paid to the Class C Holders on a prior Distribution Date and (iv) if Saks is no
longer the Servicer, the Class C Servicing Fee for the related Distribution Date
and the amount of any Class C Servicing Fee previously due but not distributed
to the Servicer on a prior Distribution Date exceeds the amount available to
make payments with respect thereto pursuant to Sections 4.6(c)(i), 4.8(g) and
4.8(h) with respect to the preceding Monthly Period and (y) the amount, if any,
by which the Class C Allocable Amount, if any, for such Distribution Date
exceeds the amount available to make payments with respect thereto pursuant to
Section 4.8(i). In the event that the Class C Required Amount for such
Distribution Date is greater than zero, the Servicer shall give written notice
to the Trustee of such positive Class C Required Amount on the date of
computation and all or a portion of the Excess Spread and the Shared Excess
Finance Charge Collections allocable to Series 2001-2 pursuant to Section 4.1(i)
of the Agreement and Section 4.8(m) hereof with respect to the related Monthly
Period shall be distributed from the Collection Account on such Distribution
Date pursuant to Sections 4.8(g), (h) and (i), and any remaining Class C
Required Amount shall be drawn from the Spread Account pursuant to Section 4.12
on such Distribution Date. In the event that the Class C Required Amount for
such Distribution Date exceeds such portion of the amounts distributed pursuant
to the previous sentence, then Class D Subordinated Principal Collections not
required to fund the Class A Required Amount and the Class B Required Amount in
an amount equal to such excess shall be distributed from the Collection Account
on such Distribution Date.
Section 4.6 Application of Class A Available Funds, Class B Available
---------------------------------------------------------
Funds, Class C Available Funds, Class D Available Funds and Collections of
--------------------------------------------------------------------------
Principal Receivables.
---------------------
The Servicer shall apply or shall instruct the Trustee to apply, on
each Distribution Date, Class A Available Funds, Class B Available Funds, Class
C Available Funds, Class D Available Funds and Collections of Principal
Receivables allocable to Series 2001-2 held in the Collection Account with
respect to the Monthly Period immediately preceding such Distribution Date to
make the following distributions:
(a) On each Distribution Date, Class A Available Funds with respect
to the Monthly Period immediately preceding such Distribution Date shall be
distributed in the following priority:
(i) an amount equal to Class A Monthly Interest for such Distribution
Date, plus the amount of any Class A Monthly Interest previously
due but not paid to Class A Certificateholders on a prior
Distribution Date, plus the amount of any Class A Additional
Interest for such Distribution Date and any Class A Additional
Interest previously due but not distributed to Class A
Certificateholders on a prior Distribution Date, shall be
distributed to the Paying Agent for payment to the Class A
Certificateholders;
-30-
(ii) if Saks is no longer the Servicer, an amount equal to the Class A
Servicing Fee for such Distribution Date, plus the amount of any
Class A Servicing Fee previously due but not distributed to the
Servicer on a prior Distribution Date, shall be distributed to
the Servicer;
(iii) an amount equal to the Class A Allocable Amount, if any, for
such Distribution Date shall be treated as a portion of Available
Principal Collections allocable to Series 2001-2 for such
Distribution Date; and
(iv) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as set forth in Section 4.8.
(b) On each Distribution Date, Class B Available Funds with respect
to the Monthly Period immediately preceding such Distribution Date shall be
applied in the following priority:
(i) an amount equal to the Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Monthly
Interest previously due but not distributed to Class B
Certificateholders on a prior Distribution Date, plus the amount
of any Class B Additional Interest for such Distribution Date and
any Class B Additional Interest previously due but not
distributed to Class B Certificateholders on a prior Distribution
Date, shall be distributed to the Paying Agent for payment to the
Class B Certificateholders;
(ii) if Saks is no longer the Servicer, an amount equal to the Class B
Servicing Fee for such Distribution Date, plus the amount of any
Class B Servicing Fee previously due but not distributed to the
Servicer on a prior Distribution Date, shall be distributed to
the Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as set forth in Section 4.8.
(c) On each Distribution Date, Class C Available Funds with respect
to the Monthly Period immediately preceding such Distribution Date shall be
applied in the following priority:
(i) if Saks is no longer the Servicer, an amount equal to the Class C
Servicing Fee for such Distribution Date, plus the amount of any
Class C Servicing Fee previously due but not distributed to the
Servicer on a prior Distribution Date, shall be distributed to
the Servicer; and
-31-
(ii) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as set forth in Section 4.8.
(d) On each Distribution Date, Class D Available Funds with respect
to the Monthly Period immediately preceding such Distribution Date shall be
applied in the following priority:
(i) if Saks is no longer the Servicer, an amount equal to the Class D
Servicing Fee for such Distribution Date, plus the amount of any
Class D Servicing Fee previously due but not distributed to the
Servicer on a prior Distribution Date, shall be distributed to
the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and shall be
allocated and distributed as set forth in Section 4.8.
(e) On each Distribution Date with respect to the Revolving Period,
all such Available Principal Collections, shall be treated as "Shared Principal
----------------
Collections" with respect to Group One to be applied in accordance with Section
-----------
4.1(h) (and retained in the Excess Funding Account, if required by such
provision).
(f) On each Distribution Date following the commencement of an
Amortization Period, all such Available Principal Collections shall be applied
in the following priority:
(i) an amount equal to Class A Monthly Principal for such
Distribution Date shall, during the Accumulation Period, be
deposited in the Principal Account for payment to Class A
Certificateholders on the earlier to occur of the Expected
Payment Date or the first Special Distribution Date or, during
the Rapid Amortization Period, be distributed to the Paying Agent
for payment to the Class A Certificateholders;
(ii) an amount equal to Class B Monthly Principal for such
Distribution Date shall, during the Accumulation Period, after an
amount equal to the Class A Investor Amount has been deposited in
the Principal Account, be deposited in the Principal Account for
payment to Class B Certificateholders on the earlier to occur of
the Expected Payment Date or the first Special Distribution Date
or, during the Rapid Amortization Period, be distributed to the
Paying Agent for payment to the Class B Certificateholders after
the Class A Investor Amount has been paid in full;
(iii) an amount equal to Class C Monthly Principal for such
Distribution Date shall, during the Accumulation Period, after an
-32-
amount equal to the sum of the Class A Investor Amount and Class
B Investor Amount has been deposited in the Principal Account, be
deposited in the Principal Account for payment to Class C Holders
on the earlier to occur of the Expected Payment Date or the first
Special Distribution Date or, during the Rapid Amortization
Period, be distributed to the Paying Agent for payment to the
Class C Holders after the Class A Investor Amount and the Class B
Investor Amount have been paid in full;
(iv) an amount equal to Class D Monthly Principal shall be distributed
to the Paying Agent for payment to the Class C Holders in
accordance with Section 4.4(d) herein; and
(v) the balance, if any, shall be treated as "Shared Principal
----------------
Collections" as provided in Section 4.1(h) and allocated among
-----------
each Series in Group One as specified in each Supplement for
Series included in Group One.
Section 4.7 Defaulted Amounts; Adjustment Amounts; Investor
-----------------------------------------------
Charge Offs; Reductions of Adjustment Amounts.
---------------------------------------------
(a) On each Determination Date, the Servicer shall calculate the
Class A Required Amount, if any, for the related Distribution Date. If, on any
Distribution Date, the Class A Required Amount for such Distribution Date
exceeds the sum of (x) the amount of the Excess Spread and the Shared Excess
Finance Charge Collections allocable to Series 2001-2 with respect to such
Distribution Date and (y) the amount of Reallocated Principal Collections
available pursuant to Section 4.9(a) with respect to the preceding Monthly
Period, the Collateral Interest Amount (after giving effect to any reduction
thereof pursuant to this Section 4.7) shall be reduced by the amount of such
excess, but not by more than the excess of the Class A Allocable Amount for such
Distribution Date over the amount of Excess Spread and Shared Excess Finance
Charge Collections and the amount of Reallocated Principal Collections used to
fund the Class A Allocable Amount for such Distribution Date. In the event that
such reduction would cause the Collateral Interest Amount to be a negative
number, the Collateral Interest Amount shall be reduced to zero and the Class B
Investor Amount (after giving effect to any reduction thereof pursuant to this
Section 4.7) shall be reduced by the amount by which the Collateral Interest
Amount would have been reduced below zero, but not by more than the excess, if
any, of the Class A Allocable Amount for such Distribution Date over the
aggregate amount of the reductions, if any, of the Collateral Interest Amount
with respect to such Distribution Date and the amount of Excess Spread and
Shared Excess Finance Charge Collections and the amount of Reallocated Principal
Collections used to fund the Class A Allocable Amount for such Distribution
Date. In the event that such reduction would cause the Class B Investor Amount
to be a negative number, the Class B Investor Amount shall be reduced to zero,
and the Class A Investor Amount shall be reduced by the amount by which the
Class B Investor Amount would have been reduced below zero, but not by more than
the excess, if any, of the Class A Allocable
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Amount for such Distribution Date over the aggregate amount of the reductions,
if any, of the Collateral Interest Amount and the Class B Investor Amount for
such Distribution Date and the amount of Excess Spread and Shared Excess Finance
Charge Collections and the amount of Reallocated Principal Collections used to
fund the Class A Allocable Amount for such Distribution Date (a "Class A
-------
Investor Charge Off"). Class A Investor Charge Offs shall thereafter be
-------------------
reimbursed and the Class A Investor Amount increased (but not by an amount in
excess of the aggregate unreimbursed Class A Investor Charge Offs) on any
Distribution Date by (i) the amount of Excess Spread and Shared Excess Finance
Charge Collections allocated and available for that purpose pursuant to Section
4.8(b), and (ii) without duplication, the aggregate amount of the reductions of
the Series Adjustment Amounts allocable to the Class A Investor Amount pursuant
to Section 4.7(e).
(b) On each Determination Date, the Servicer shall calculate the
Class B Required Amount, if any, for the related Distribution Date. If, on any
Distribution Date, the Class B Required Amount for such Distribution Date
exceeds the sum of (x) the amount of the Excess Spread and the Shared Excess
Finance Charge Collections allocable to Series 2001-2 with respect to such
Distribution Date which are not used to fund the Class A Required Amount and
Class A Investor Charge Offs on the related Distribution Date and (y) the amount
of Reallocated Principal Collections (exclusive of Class B Subordinated
Principal Collections) which are available to fund the Class B Required Amount
on such Distribution Date pursuant to Section 4.9(b), then the Collateral
Interest Amount (after giving effect to any reduction thereof pursuant to this
Section 4.7) shall be reduced by the amount of such excess, but not by more than
the excess of the Class B Allocable Amount for such Distribution Date over the
amount of Excess Spread and Shared Excess Finance Charge Collections and the
amount of Reallocated Principal Collections used to fund the Class B Allocable
Amount for such Distribution Date. In the event that such reduction would cause
the Collateral Interest Amount to be a negative number, the Collateral Interest
Amount shall be reduced to zero, and the Class B Investor Amount shall be
reduced by the amount by which the Collateral Interest Amount would have been
reduced below zero, but not by more than the excess, if any, of the Class B
Allocable Amount for such Distribution Date over the aggregate amount of the
reductions, if any, of the Collateral Interest Amount with respect to such
Distribution Date and the amount of Excess Spread and Shared Excess Finance
Charge Collections and the amount of Reallocated Principal Collections used to
fund the Class B Allocable Amount for such Distribution Date (a "Class B
-------
Investor Charge Off"). Class B Investor Charge Offs shall thereafter be
-------------------
reimbursed and the Class B Investor Amount increased (but not by an amount in
excess of the aggregate unreimbursed Class B Investor Charge Offs) on any
Distribution Date by (i) the amount of Excess Spread and Shared Excess Finance
Charge Collections allocated and available for that purpose pursuant to Section
4.8(f), and (ii) without duplication, the aggregate amount of the reductions of
the Series Adjustment Amounts allocable to the Class B Investor Amount pursuant
to Section 4.7(e).
(c) If, on any Distribution Date, the Class C Required Amount exceeds
the amount of the Excess Spread and the Shared Excess Finance Charge Collections
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allocable to Series 2001-2 with respect to such Distribution Date which are not
used to fund the Class A Required Amount, Class A Investor Charge Offs, Class B
Required Amount, Class B Investor Charge Offs and the Reserve Account on the
related Distribution Date and the amounts, if any, in the Spread Account
available for the sole benefit of the Class C Securities, then the Collateral
Interest Amount shall be reduced by the amount of such excess, but not by more
than the excess of the Collateral Interest Allocable Amount for such
Distribution Date over the amount of Excess Spread and Shared Excess Finance
Charge Collections and the amount withdrawn from the Spread Account and used to
fund the Collateral Interest Allocable Amount for such Distribution Date.
Collateral Charge Offs shall be allocated first to the Class D Investor Amount,
and the Class D Investor Amount shall be reduced by such amount, but not by an
amount in excess of the Class D Investor Amount prior to such allocation ("Class
-----
D Investor Charge Off"). Any excess of the Collateral Charge Off over the Class
---------------------
D Investor Charge Off shall then be allocated to the Class C Investor Amount in
reduction of the Class C Investor Amount ("Class C Charge Off'). Collateral
------------------
Charge Offs shall thereafter be reimbursed and the Collateral Investor Amount
increased (but not by an amount in excess of the aggregate unreimbursed
Collateral Charge Offs) on any Distribution Date by (i) the amount of Excess
Spread and Shared Excess Finance Charge Collections allocated and available for
that purpose pursuant to Section 4.8(j), and (ii) without duplication, the
aggregate amount of the reductions of the Series Adjustment Amounts allocable to
the Collateral Interest Amount pursuant to Section 4.7(e). Collateral Charge
Off reimbursements shall be allocated first to the Class C Investor Amount and
second to the Class D Investor Amount in reimbursement thereof.
(d) Whenever funds or other amounts are available hereunder in
respect of the Class A Allocable Amount, the Class B Allocable Amount, or the
Collateral Interest Allocable Amount, as the case may be, such funds or other
amounts shall be applied first to the elimination of any deficiency resulting
from Default Amounts and then to any deficiency resulting from Series Adjustment
Amounts.
(e) Any reduction of the Series Adjustment Amount for Series 2001-2
as a result of the deposit of funds into the Excess Funding Account, the
repurchase or other repayment of Investor Certificates or the increase of
Principal Receivables in the Trust shall be allocated first to the Class A
Certificates, then to the Class B Certificates, then to the Collateral Interest,
in each case to the extent of any unreimbursed reduction of the Investor Amount
thereof attributable to Series Adjustment Amounts.
(f) Any reduction or charge off of the Collateral Interest Amount
described within this Section 4.7 shall be allocated first to reduce the Class D
Investor Amount to not less than zero, and any remaining reductions of the
Collateral Interest Amount shall be allocated to reduce the Class C Investor
Amount to not less than zero.
(g) Any reimbursements of the Collateral Interest Amount described
within this Section 4.7 shall be allocated first to the Class C Investor Amount
in reimbursement thereof, and any remaining reimbursements of the Collateral
Interest
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Amount thereafter shall be allocated to the Class D Investor Amount in
reimbursement thereof.
Section 4.8 Excess Spread; Shared Excess Finance Charge Collections.
-------------------------------------------------------
The Servicer shall apply, or shall instruct the Trustee to apply, on each
Distribution Date, Excess Spread and Shared Excess Finance Charge Collections
allocable to Series 2001-2 pursuant to Section 4.1(i) with respect to the
related Monthly Period, in the following priority:
(a) an amount up to the Class A Required Amount, if any, with respect
to such Distribution Date shall be used to fund any deficiency pursuant to
Sections 4.6(a)(i), (ii) and (iii), in that order of priority;
(b) an amount equal to the aggregate amount of Class A Investor
Charge Offs which have not been previously reimbursed shall be treated as a
portion of Available Principal Collections allocable to Series 2001-2 for such
Distribution Date;
(c) an amount up to the Class B Required Amount, if any, with respect
to such Distribution Date shall be used to fund any deficiency pursuant to
Sections 4.6(b)(i) and (ii), in that order of priority;
(d) an amount equal to the Class B Allocable Amount for such
Distribution Date shall be treated as a portion of Available Principal
Collections allocable to Series 2001-2 for such Distribution Date;
(e) an amount equal to the excess, if any, of the Required Reserve
Account Amount over the amount held in the Reserve Account shall be deposited
into the Reserve Account;
(f) an amount equal to unreimbursed reductions of the Class B
Investor Amount, if any, due to (i) Class B Investor Charge Offs; (ii)
allocations of Reallocated Principal Collections for the benefit of the Class A
Certificates on all prior Distribution Dates that have resulted in a reduction
of the Class B Investor Amount; or (iii) reallocations of the Class B Investor
Amount to the Class A Investor Amount as a result of unfunded Class A Allocable
Amounts shall each be treated as a portion of Available Principal Collections
allocable to Series 2001-2 for such Distribution Date;
(g) an amount equal to Class C Monthly Interest for such Distribution
Date, plus the amount of Class C Monthly Interest previously due but not
distributed to the Class C Holders on all prior Distribution Dates, plus the
amount of Class C Additional Interest for such Distribution Date and any Class C
Additional Interest previously due but not distributed to the Class C Holders
shall be distributed to the Class C Holders;
(h) an amount equal to the Class A Servicing Fee, the Class B
Servicing Fee and the Collateral Interest Servicing Fee for such Distribution
Date (or if Saks is no
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longer the Servicer, the portion thereof not paid pursuant to Section 4.6), plus
the amount of any Class A Servicing Fee, Class B Servicing Fee, or Collateral
Interest Servicing Fee previously due but not distributed to the Servicer on all
prior Distribution Dates, shall be distributed to the Servicer;
(i) an amount equal to the Collateral Interest Allocable Amount for
such Distribution Date shall be treated as a portion of Available Principal
Collections allocable to Series 2001-2 for such Distribution Date (allocable
first to cover the Class C Allocable Amount and allocable second to cover the
Class D Allocable Amount);
(j) an amount equal to the unreimbursed reductions of the Collateral
Interest Amount, if any, due to: (i) Collateral Interest Charge Offs; (ii)
Reallocated Principal Collections used to make payments in respect of the Class
A and Class B Certificates on all prior Distribution Dates that have resulted in
a reduction of the Collateral Interest Amount and (iii) reallocations of the
Collateral Interest Amount to the Class A Investor Amount or the Class B
Investor Amount as a result of unfunded Class A Allocable Amounts or unfunded
Class B Allocable Amounts, respectively, will be treated as a portion of
Available Principal Collections allocable to Series 2001-2 for such Distribution
Date (and with such amount allocable first to the Class C Allocable Amount and
second to the Class D Allocable Amount);
(k) an amount equal to the excess, if any, of the Required Spread
Account Amount over the amount held in the Spread Account shall be deposited
into the Spread Account;
(l) an amount equal to the aggregate of any other amounts, if any,
due to the Collateral Interest; and
(m) the balance, if any, shall constitute "Shared Excess Finance
Charge Collections" with respect to Group One to be applied in accordance with
Section 4.1(i).
Section 4.9 Reallocated Principal Collections. The Servicer shall apply,
---------------------------------
or shall instruct the Trustee to apply, on each Distribution Date, Reallocated
Principal Collections (applying all Class D Subordinated Principal Collections
prior to applying any Class C Subordinated Principal Collections, and applying
all Class C Subordinated Principal Collections prior to applying any Class B
Subordinated Principal Collections, and applying no Class B Subordinated
Principal Collections with respect to the Class B Required Amount pursuant to
clause (b) below and applying no Class B Subordinated Principal Collections or
Class C Subordinated Principal Collections with respect to the Class C Required
Amount pursuant to clause (c) below) with respect to such Distribution Date, to
make the following distributions in the following priority:
(a) an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Distribution Date over (ii) the
sum of the amount of Excess Spread and Shared Excess Finance Charge Collections
allocable to Series 2001-2 and applied with respect to the Class A Required
Amount with respect to the related
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Monthly Period shall be distributed by the Trustee to fund any deficiency
pursuant to Sections 4.6(a)(i), (ii) and (iii), in that order of priority;
(b) an amount equal to the excess, if any, of the Class B Required
Amount, if any, with respect to such Distribution Date over the amount of Excess
Spread and Shared Excess Finance Charge Collections allocable to Series 2001-2
with respect to the related Monthly Period available in respect of the Class B
Required Amount pursuant to Section 4.8(c) and (d) on such Distribution Date
shall be distributed by the Trustee to fund any deficiency pursuant to Sections
4.8(c) and (d), in that order of priority; and
(c) an amount equal to the excess, if any, of (i) the Collateral
Required Amount, if any, with respect to such Distribution Date over (ii) the
sum of (x) the amount of Excess Spread and Shared Excess Finance Charge
Collections allocable to Series 2001-2 with respect to the related Monthly
Period available in respect of the Collateral Required Amount pursuant to
Sections 4.8(g) and (i) on such Distribution Date and (y) the amounts withdrawn
from the Spread Account in respect of the Class C Required Amount with respect
to such Distribution Date shall be distributed by the Trustee to fund any
deficiency pursuant to Section 4.6(c)(i) and Sections 4.8(g) and (i), in that
order of priority.
Section 4.10 Principal Shortfall. The "Principal Shortfall" for Series
------------------- -------------------
2001-2 shall be equal to (a) for any Distribution Date with respect to the
Revolving Period, zero, (b) for any Distribution Date with respect to the
Accumulation Period (on or prior to the Expected Payment Date), the excess, if
any, of the Controlled Deposit Amount with respect to such Distribution Date
over the amount of Available Principal Collections for such Distribution Date
(excluding any portion thereof attributable to Shared Principal Collections),
and (c) for each Distribution Date with respect to a Rapid Amortization Period,
unless and until the Class D Investor Amount has been paid in full, the excess,
if any, of the Investor Amount over the amount of Available Principal
Collections for such Distribution Date (excluding any portion thereof
attributable to Shared Principal Collections).
Section 4.11 Finance Charge Shortfall. The "Finance Charge Shortfall"
------------------------ ------------------------
for Series 2001-2 for any Distribution Date shall be equal to the excess, if
any, of (a) the full amount required to be paid, without duplication, pursuant
to Sections 4.6(a), 4.6(b), 4.6(c) and 4.6(d) and Sections 4.8 (a)-(m) on such
Distribution Date over (b) the Investor Percentage of Collections of Finance
Charge Receivables with respect to the related Monthly Period.
Section 4.12 Spread Account.
--------------
(a) The Servicer shall establish and maintain, in the name of the
Trustee, for the benefit of the Series 2001-2 Class C Holders, with a Qualified
Institution a segregated trust account (the "Spread Account"), bearing a
--------------
designation clearly indicating that the funds held therein are held for the
benefit of the Series 2001-2 Class C Holders. The Spread Account shall
initially be established with the Trustee. The
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Spread Account shall be under the sole dominion and control of the Trustee,
which shall possess all right, title and interest in all funds held from time to
time in the Spread Account and in all proceeds thereof for the benefit of the
Class C Holders. If, at any time, the institution holding the Spread Account
ceases to be a Qualified Institution, the Trustee (or the Servicer on its
behalf) shall within five (5) Business Days establish a new Spread Account
meeting the conditions specified above with a Qualified Institution and shall
transfer any cash and/or any investments to such new Spread Account. The
Trustee, at the direction of the Servicer, shall make deposits to and
withdrawals from the Spread Account in the amounts and at the times set forth in
this Agreement. All withdrawals from the Spread Account shall be made in the
priority set forth below.
(b) Funds held in the Spread Account shall be invested at the
direction of the Servicer by the Trustee in Permitted Investments. Funds held
in the Spread Account on any Distribution Date, after giving effect to any
withdrawals from the Spread Account on such Distribution Date, shall be invested
in such investments that will mature so that such funds will be available for
withdrawal on or prior to the following Distribution Date. The Trustee shall
maintain, for the benefit of the Series 2001-2 Certificateholders, control of
the negotiable instruments or securities, if any, evidencing such Permitted
Investments. Such control may be maintained through a Clearing Agency or other
securities intermediary, which shall agree with the Trustee that (i) such
investment property shall at all times be credited to a securities account of
the Trustee, (ii) such securities intermediary shall treat the Trustee as
entitled to exercise the rights that comprise each financial asset credited to
such securities account, (iii) all property credited to such securities account
shall be treated as a financial asset, (iv) such securities intermediary shall
comply with entitlement orders originated by the Trustee without the further
consent of any other person or entity, (v) such securities intermediary shall
not agree with any person other than the Trustee to comply with entitlement
orders originated by such other person, (vi) such securities intermediary waives
any lien on, security interest in, or right of set-off with respect to any
property credited to such securities account, and (vii) such agreement shall be
governed by the laws of the State of New York. No Permitted Investment shall be
disposed of prior to its maturity; provided, however, that the Trustee may sell,
liquidate or dispose of any Permitted Investment before its maturity, if so
directed by the Servicer, provided the Servicer having reasonably determined
that the interest of the Class C Holders may be adversely affected if such
Permitted Investment is held to its maturity. The proceeds of any such
investments that are sold, liquidated or disposed of shall be invested in such
investments that will mature so that funds will be available for withdrawal on
or prior to the Distribution Date immediately following the date of such
investment. The Trustee shall maintain for the benefit of the Class C Holders
possession of the negotiable instruments or securities, if any, evidencing such
Permitted Investments. On each Distribution Date, all interest and earnings
(net of losses and investment expenses) on funds held in the Spread Account
shall be treated as a portion of Excess Spread for such Distribution Date and
applied in accordance with Section 4.8.
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(c) On each Determination Date, the Servicer shall calculate the sum
of (i) the Class C Required Amount, (ii) the amount, if any, by which the Class
C Investor Amount will be reduced pursuant to Section 4.7 (without giving effect
to this Section 4.12(c)), and (iii) all unreimbursed reductions of the Class C
Investor Amount pursuant to Section 4.7 (the "Required Draw Amount"). In the
--------------------
event that for any Distribution Date, the Required Draw Amount is greater than
zero, the Servicer shall give written notice to the Trustee of such positive
Required Draw Amount on the related Determination Date. On the Distribution
Date, the Required Draw Amount, if any, up to the Available Spread Account
Amount, shall be withdrawn from the Spread Account and distributed to fund the
above items.
(d) If the amount in the Spread Account on any Distribution Date
exceeds the Required Spread Account Amount, after taking into account all
amounts deposited in the Spread Account and distributed therefrom on such
Distribution Date, such excess, if any, shall be distributed to the Transferor.
(e) On the earlier of the Stated Series Termination Date or the
Distribution Date on which the Class A Investor Amount and the Class B Investor
Amount have been reduced to zero, the Trustee shall withdraw from the Spread
Account to pay to the Class C Holders the lesser of (i) the Class C Adjusted
Investor Amount plus any other amounts due to the C Class Holders including
interest and cumulative unreimbursed Class C Allocable Amounts and (ii) the
amount on deposit in the Spread Account and, if the amount on deposit in the
Spread Account is not sufficient to cover the amounts on clause (i), investment
earnings, if any, on deposit in the Spread Account up to the amount required to
cover such amounts.
Section 4.13 Principal Account.
-----------------
(a) The Servicer shall establish and maintain, in the name of the
Trustee, for the benefit of the Series 2001-2 Certificateholders, with a
Qualified Institution a segregated trust account (the "Principal Account"),
-----------------
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Series 2001-2 Certificateholders. The Principal
Account shall initially be established with the Trustee. The Trustee shall
possess all right, title and interest in all funds held from time to time in the
Principal Account and in all proceeds thereof. The Principal Account shall be
under the sole dominion and control of the Trustee for the benefit of the Series
2001-2 Certificateholders. If, at any time, the institution holding the
Principal Account ceases to be a Qualified Institution, the Trustee (or the
Servicer on its behalf) shall within five (5) Business Days establish a new
Principal Account meeting the conditions specified above with a Qualified
Institution and shall transfer any cash and/or any investments to such new
Principal Account. Pursuant to the authority granted to the Servicer in Section
3.1(b) of the Agreement, the Servicer shall have the power, revocable by the
Trustee, to make withdrawals and payments or to instruct the Trustee to make
withdrawals and payments from the Principal Account for the purposes of carrying
out the Servicer's or the Trustee's duties hereunder.
-40-
(b) Funds held in the Principal Account shall be invested at the
direction of the Servicer by the Trustee in Permitted Investments. All such
Permitted Investments shall be held by the Trustee for the benefit of the Series
2001-2 Certificateholders; provided, however, that on each Distribution Date all
interest and other investment income (net of losses and investment expenses)
("Principal Investment Proceeds") on funds held therein shall be applied as set
-------------------------------
forth in Section 4.13(c) below. Funds held in the Principal Account shall be
invested in Permitted Investments that will mature so that such funds will be
available for withdrawal on or prior to the following Distribution Date. The
Trustee shall maintain, for the benefit of the Series 2001-2 Certificateholders,
control of the negotiable instruments or securities, if any, evidencing such
Permitted Investments. Such control may be maintained through a Clearing Agency
or other securities intermediary, which shall agree with the Trustee that (i)
such investment property shall at all times be credited to a securities account
of the Trustee, (ii) such securities intermediary shall treat the Trustee as
entitled to exercise the rights that comprise each financial asset credited to
such securities account, (iii) all property credited to such securities account
shall be treated as a financial asset, (iv) such securities intermediary shall
comply with entitlement orders originated by the Trustee without the further
consent of any other person or entity, (v) such securities intermediary shall
not agree with any person other than the Trustee to comply with entitlement
orders originated by such other person, (vi) such securities intermediary waives
any lien on, security interest in, or right of set-off with respect to any
property credited to such securities account, and (vii) such agreement shall be
governed by the laws of the State of New York. No Permitted Investment shall be
disposed of prior to its maturity; provided, however, that the Trustee may sell,
liquidate or dispose of a Permitted Investment before its maturity, if so
directed by the Servicer, the Servicer having reasonably determined that the
interest of the Series 2001-2 Certificateholders may be adversely affected if
such Permitted Investment is held to its maturity.
(c) On each Distribution Date with respect to the Accumulation
Period, the Servicer shall direct the Trustee to withdraw from the Principal
Account and deposit into the Collection Account all Principal Investment
Proceeds then held in the Principal Account and such Principal Investment
Proceeds shall be treated for such Distribution Date as Class A Available Funds,
Class B Available Funds, Class C Available Funds and Class D Available Funds, as
herein provided.
(d) Reinvested interest and other investment income on funds
deposited in the Principal Account shall not be considered to be principal
amounts held therein for purposes of this Agreement.
Section 4.14 Reserve Account.
---------------
(a) The Servicer shall establish and maintain, in the name of the
Trustee, for the benefit of Series 2001-2 Certificateholders, with a Qualified
Institution a segregated trust account (the "Reserve Account"), bearing a
---------------
designation clearly indicating that the funds deposited therein are held for the
benefit of the Series 2001-2 Certificateholders. The Reserve Account shall
initially be established with the Trustee.
-41-
The Trustee shall possess all right, title and interest in all funds held from
time to time in the Reserve Account and in all proceeds thereof. The Reserve
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Series 2001-2 Certificateholders. If at any time the institution
holding the Reserve Account ceases to be a Qualified Institution, the Trustee
(or the Servicer on its behalf) shall within five (5) Business Days establish a
new Reserve Account meeting the conditions specified above with a Qualified
Institution, and shall transfer any cash and/or any investments to such new
Reserve Account. The Trustee, at the direction of the Servicer, shall (i) make
withdrawals from the Reserve Account from time to time in an amount up to the
Available Reserve Account Amount at such time, for the purposes set forth in
this Agreement, and (ii) on each Distribution Date (from and after the Reserve
Account Funding Date) prior to the termination of the Reserve Account shall make
a deposit into the Reserve Account in the amount specified in, and otherwise in
accordance with, Section 4.8(e).
(b) Funds held in the Reserve Account shall be invested at the
direction of the Servicer by the Trustee in Permitted Investments. Funds held in
the Reserve Account on any Distribution Date, after giving effect to any
withdrawals from the Reserve Account on such Distribution Date, shall be
invested in such investments that will mature so that such funds will be
available for withdrawal on or prior to the following Distribution Date. The
Trustee shall maintain, for the benefit of the Series 2001-2 Certificateholders,
control of the negotiable instruments or securities, if any, evidencing such
Permitted Investments. Such control may be maintained through a Clearing Agency
or other securities intermediary, which shall agree with the Trustee that (i)
such investment property shall at all times be credited to a securities account
of the Trustee, (ii) such securities intermediary shall treat the Trustee as
entitled to exercise the rights that comprise each financial asset credited to
such securities account, (iii) all property credited to such securities account
shall be treated as a financial asset, (iv) such securities intermediary shall
comply with entitlement orders originated by the Trustee without the further
consent of any other person or entity, (v) such securities intermediary shall
not agree with any person other than the Trustee to comply with entitlement
orders originated by such other person, (vi) such securities intermediary waives
any lien on, security interest in, or right of set-off with respect to any
property credited to such securities account, and (vii) such agreement shall be
governed by the laws of the State of New York. No Permitted Investment shall be
disposed of prior to its maturity; provided, however, that the Trustee may sell,
liquidate or dispose of any Permitted Investment before its maturity, if so
directed by the Servicer, the Servicer having reasonably determined that the
interest of the Series 2001-2 Certificateholders may be adversely affected if
such Permitted Investment is held to its maturity. On each Distribution Date,
all interest and earnings (net of losses and investment expenses) on funds held
in the Reserve Account shall be retained in the Reserve Account to the extent
that the Available Reserve Account Amount is less than the Required Reserve
Account Amount and the balance, if any, shall be deposited in the Collection
Account and treated as a portion of Class A Available Funds. For purposes of
determining the availability of funds or the balance in the Reserve Account for
any reason under this Agreement, except as otherwise
-42-
provided in the preceding sentence, investment earnings on such funds shall be
deemed not to be available or held.
(c) On the Determination Date preceding each Distribution Date with
respect to the Accumulation Period and the first Special Distribution Date, the
Servicer shall calculate the Reserve Draw Amount.
(d) In the event that the Reserve Draw Amount for any Distribution
Date during the Accumulation Period or the first Special Distribution Date
following the commencement of the Rapid Amortization Period, is greater than
zero, the Reserve Draw Amount, up to the Available Reserve Account Amount, shall
be withdrawn from the Reserve Account on such Distribution Date by the Trustee
(acting in accordance with the instructions of the Servicer), deposited into the
Collection Account and applied in the following priority:
(i) an amount up to the excess, if any, of (x) an amount equal to
that portion of the Covered Amount computed pursuant to clause (a) of the
definition of Covered Amount over (y) an amount equal to that portion of the
Class A Available Funds computed pursuant to clause (ii) of the definition of
Class A Available Funds shall be treated as Class A Available Funds to be
applied pursuant to subsection 4.6(a); and
(ii) an amount up to the excess, if any, of (x) an amount equal
to that portion of the Covered Amount computed pursuant to clause (b) of the
definition of Covered Amount over (y) an amount equal to that portion of the
Class B Available Funds computed pursuant to clause (b) of the definition of
Class B Available Funds shall be treated as Class B Available Funds to be
applied pursuant to subsection 4.6(b).
(iii) an amount up to the excess, if any, of (x) an amount equal
to that portion of the Covered Amount computed pursuant to clause (c) of the
definition of Covered Amount over (y) an amount equal to that portion of the
Class C Available Funds computed pursuant to clause (ii) of the definition
thereof shall be treated as a portion of Class C Available Funds to be applied
pursuant to Section 4.6(c).
(e) In the event that the Reserve Account Surplus on any Distribution
Date, after giving effect to all deposits to and withdrawals from the Reserve
Account with respect to such Distribution Date, is greater than zero, the
Trustee, acting in accordance with the instructions of the Servicer, shall
withdraw from the Reserve Account, and pay an amount equal to such Reserve
Account Surplus to the Transferor.
(f) Upon the earliest to occur of (i) the termination of the Trust
pursuant to Article XII of the Agreement, (ii) the day on which the Class A
Investor Amount, the Class B Investor Amount and the Class C Investor Amount
have been paid in full, (iii) if the Accumulation Period has not commenced, the
day on which a Pay Out Event with respect to Series 2001-2 has occurred and (iv)
if the Accumulation Period has commenced, the earlier of the first Special
Distribution Date and the Expected Payment Date, the Trustee, acting in
accordance with the instructions of the Servicer, after the
-43-
prior payment of all amounts owing to the Series 2001-2 Certificateholders which
are payable from the Reserve Account as provided herein, shall withdraw from the
Reserve Account and pay or distribute to the Transferor all amounts, if any,
held in the Reserve Account, and the Reserve Account shall be deemed to have
terminated for all purposes of the Agreement.
Section 4.15 Postponement of Accumulation Period. The Accumulation
-----------------------------------
Period is scheduled to commence after the end of the day on the last day of the
June 2005 Monthly Period; provided, however, if the Accumulation Period Length
(determined as described below) shall be less than 12 months, the date on which
the Accumulation Period actually commences may, at the option of the Transferor,
be delayed to the first day of any month that is a number of whole months prior
to the Expected Payment Date at least equal to the Accumulation Period Length
and, as a result, the number of Monthly Periods in the Accumulation Period shall
at least equal the Accumulation Period Length. On each Determination Date until
the Accumulation Period begins, the Servicer shall determine the "Accumulation
------------
Period Length," which shall equal the number of whole months such that the sum
-------------
of the Accumulation Period Factors for each month during such period will be
equal to or greater than the Required Accumulation Factor Number; provided,
however, that the Accumulation Period Length shall not be determined to be less
than one month nor greater than 12 months.
Section 4.16 Suspension of the Accumulation Period, Qualified Maturity
---------------------------------------------------------
Agreement.
---------
(a) The commencement of the Accumulation Period shall also be
postponed, and the Accumulation Period shall be suspended after it has
commenced, if the Transferor obtains and provides to the Trustee a Qualified
Maturity Agreement and an Opinion of Counsel to the effect that the Qualified
Maturity Agreement is a valid and enforceable obligation of the Qualified
Maturity Agreement Provider and provides notice thereof to the Rating Agencies
together with such Opinion of Counsel and a copy of the Qualified Maturity
Agreement.
(b) The Qualified Maturity Agreement shall terminate no earlier than
the close of business on the Expected Payment Date; provided, however:
(i) the Transferor may terminate the Qualified Maturity Agreement
earlier if the Servicer obtains a substitute Qualified Maturity Agreement;
(ii) the Transferor may terminate the Qualified Maturity
Agreement earlier if the Qualified Maturity Agreement Provider ceases to be a
Qualified Maturity Agreement Provider and the Transferor is unable to obtain a
substitute Qualified Maturity Agreement;
(iii) the Transferor may terminate the Qualified Maturity
Agreement prior to the close of business on the Expected Payment Date if a Pay
Out Event occurs; and
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(iv) the Transferor may terminate the Qualified Maturity
Agreement prior to the later of:
(A) the date on which the Accumulation Period was scheduled
to begin, before giving effect to the suspension of the
Accumulation Period; and
(B) the date to which the commencement of the Accumulation
Period may be postponed, as determined on the Determination Date
preceding the termination of the Qualified Maturity Agreement.
(c) If the Qualified Maturity Agreement Provider ceases to be
qualified as such, the Transferor will, unless it elects to terminate the
Qualified Maturity Agreement and is not required hereby to obtain a substitute
Qualified Maturity Agreement hereunder, use its best commercial efforts to
obtain a substitute Qualified Maturity Agreement.
(d) If a Qualified Maturity Agreement is terminated prior to the
earlier of the Expected Payment Date and the commencement of the Rapid
Amortization Period and the Transferor does not obtain a substitute Qualified
Maturity Agreement, the Accumulation Period will then begin on the latest of:
(i) the date on which the Accumulation Period was scheduled to
begin, before giving effect to the suspension of the Accumulation Period;
(ii) at the Transferor's election, the date to which the
commencement of the Accumulation Period may be otherwise postponed pursuant to
Section 4.15, as determined on the Determination Date preceding the termination
of the Qualified Maturity Agreement; and
(iii) the first day of the Monthly Period following the
termination of the Qualified Maturity Agreement.
(e) If a Qualified Maturity Agreement is terminated early, or if a
Qualified Maturity Agreement Provider ceases to be qualified as such and a
replacement is not obtained within 30 days, the Transferor shall notify Standard
& Poor's.
Section I. Article V of the Agreement. Article V of the Agreement as it
--------------------------
relates to Series 2001-2 shall read in its entirety as follows:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO CERTIFICATEHOLDERS
Section 5.1 Distributions.
-------------
(a) On each Determination Date, the Servicer shall deliver to the
Trustee and Paying Agent a certificate substantially in the form of Exhibit B
---------
prepared by the
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Servicer. The Trustee shall be under no duty to recalculate, verify or recompute
the information on such certificate.
(b) On each Distribution Date, the Paying Agent shall distribute to
each Class A Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) such Class A
Certificateholder's pro rata share of the amounts that are available on such
Distribution Date to pay interest on the Class A Certificates pursuant to this
Agreement.
(c) On the Expected Payment Date and each Special Distribution Date,
the Paying Agent shall distribute to each Class A Certificateholder of record as
of the preceding Record Date (other than as provided in Section 12.2 respecting
a final distribution) such Class A Certificateholder's pro rata share of the
amounts that are available on such date to pay principal of the Class A
Certificates pursuant to this Agreement.
(d) On each Distribution Date, the Paying Agent shall distribute to
each Class B Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) such Class B
Certificateholder's pro rata share of the amounts that are available on such
Distribution Date to pay interest on the Class B Certificates pursuant to this
Agreement.
(e) On the Expected Payment Date and each Special Distribution Date,
the Paying Agent shall distribute to each Class B Certificateholder of record as
of the preceding Record Date (other than as provided in Section 12.2 respecting
a final distribution) such Class B Certificateholder's pro rata share of the
amounts that are available on such date to pay principal of the Class B
Certificates pursuant to this Agreement.
(f) On each Distribution Date, the Paying Agent shall distribute to
each Class C Holder of record as of the preceding Record Date (other than as
provided in Section 12.2 respecting a final distribution) such Class C Holder's
pro rata share of the amounts that are available on such Distribution Date to
pay interest on the Class C Securities pursuant to this Agreement.
(g) On the Expected Payment Date and each Special Distribution Date,
the Paying Agent shall distribute to each Class C Holder of record as of the
preceding Record Date (other than as provided in Section 12.2 respecting a final
distribution) such Class C Holder's pro rata share of the amounts that are
available on such date to pay principal of the Class C Securities pursuant to
this Agreement.
(h) On each Distribution Date, the Paying Agent shall distribute to
each Class D Certificateholder of record as of the preceding Record Date (other
than as provided in Section 12.2 respecting a final distribution) such Class D
Certificateholder's pro rata share of the amounts that are available on such
Distribution Date that are distributable to the Class D Certificates pursuant to
this Series Supplement.
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(i) On the Expected Payment Date and each Special Distribution Date,
the Paying Agent shall distribute to each Class D Certificateholder of record as
of the preceding Record Date (other than as provided in Section 12.2 respecting
a final distribution) such Class D Certificateholder's pro rata share of the
amounts that are available on such date to pay principal of the Class D
Certificates pursuant to this Agreement.
(j) Except as provided in Section 12.2 with respect to a final
distribution, distributions to Series 2001-2 Certificateholders hereunder shall
be made by check mailed to each such Certificateholder at such
Certificateholder's address appearing in the Certificate Register without
presentation or surrender of any such Series 2001-2 Certificate or the making of
any notation thereon; provided, however, that with respect to such Certificates
registered in the name of a Clearing Agency, such distributions shall be made to
such Clearing Agency in immediately available funds.
Section 5.2 Statements to Series 2001-2 Certificateholders. On each
----------------------------------------------
Distribution Date, the Paying Agent, on behalf of the Trustee, shall forward to
each Series 2001-2 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 2001-2 Certificates.
On or before January 31 of each calendar year, beginning with the year
2002, 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 Series 2001-2 Certificateholder a statement prepared by the Servicer
containing the information which is required to be contained in Exhibit C,
---------
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 indebtedness under the
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 have been provided by the Paying
Agent pursuant to any requirements of the Code as from time to time in effect.
[END OF ARTICLE V]
Section J. Pay Out Events. If any one of the events specified in
--------------
Section 9.1 of the Agreement or any of the following events shall occur during
either the Revolving Period or the Accumulation Period with respect to the
Series 2001-2 Certificates:
(a) failure on the part of the Transferor or the Servicer (x) to make
any payment or deposit required by the terms of the Agreement or this Series
Supplement on or before the date occurring five (5) Business Days after the date
such payment or deposit is required to be made or (y) duly to observe or perform
in any material respect any other covenants or agreements applicable to such
party set forth in the Agreement or this Series
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Supplement, which failure has a material adverse effect on the holders of Class
A Certificates, Class B Certificates and Class C Securities, and which continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by the Class A
Certificateholders, the Class B Certificateholders and the Class C
certificateholders representing not less than 50% of the Investor Amount, and
continues to materially and adversely affect the holders of Class A
Certificates, Class B Certificates and Class C Securities for such period;
(b) any representation or warranty made by the Transferor in the
Agreement or this Series Supplement, or information contained in a computer
file, microfiche or written list required to be delivered by the Transferor
pursuant to the Agreement, shall prove to have been incorrect in any material
respect when made or when delivered, (i) which continues to be incorrect in any
material respect for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Transferor by the Trustee, or to the Transferor and the Trustee by holders of
Class A Certificates, Class B Certificates and Class C Securities representing
not less than 50% of the Investor Amount, and (ii) as a result of which the
interests of the Series 2001-2 Certificateholders are materially and adversely
affected and continue to be materially and adversely affected for such period;
provided, however, a Pay Out Event shall not be deemed to have occurred if the
Transferor has accepted reassignment of the related Receivable, or all of such
Receivables, if applicable, during such period in accordance with the provisions
of the Agreement;
(c) the average of the Portfolio Yields for any three (3) consecutive
Monthly Periods is less than the average Base Rate for such three (3) Monthly
Periods;
(d) the failure to pay the Investor Amount on the Expected Payment
Date;
(e) the Transferor shall fail to designate, or be unable to
designate, Additional Accounts, the Receivables of which will be Eligible
Receivables, as required by the Agreement, and such failure shall continue for a
period of five (5) Business Days; or
(f) any Servicer Default shall occur which would have a material
adverse effect on the holders of the Class A Certificates, the Class B
Certificates and the Class C Securities; then, (i) in the case of any event
described in clause (a), (b) or (f), after the applicable grace period set forth
in such subparagraphs, either the Trustee or Series 2001-2 Certificateholders
representing more than 50% of the Investor Amount, by notice then given in
writing to the Transferor and the Servicer (and to the Trustee, if given by the
Series 2001-2 Certificateholders) may declare that a Pay Out Event has occurred
with respect to only the Series 2001-2 Certificates as of the date of such
notice and (ii) in the case of any event described in Section 9.1 of the
Agreement or in clauses (c), (d) or (e) above, a Pay Out Event with respect to
only the Series 2001-2 Certificates will be
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deemed to have occurred without any notice or other action on the part of the
Trustee or the Series 2001-2 Certificateholders or all certificateholders, as
appropriate, immediately upon the occurrence of such event.
Section J1. Class C Defaults. If a Class C Default has occurred, upon
----------------
the direction of Class C Holders holding more than 50% of the Class C Investor
Amount, (i) before the payment in full of the Class A Certificates and the Class
B Certificates, the Required Spread Account Percentage will thereafter be equal
to an amount such that the amount required to be on deposit in the Spread
Account equals the Class C Investor Amount and (ii) following the payment in
full of the Class A Certificates and the Class B Certificates, the Trustee will
sell or cause to be sold an amount of Principal Receivables and the related
Finance Charge Receivables (or interests therein) up to 110% of the Investor
Amount at the close of business on the date of such sale and pay the proceeds of
such sale and in final payment of all principal of and accrued interest on
Series 2001-2 (which proceeds will be applied first to the Class C Investor
Amount until the Class C Securities have been paid in full and then to the Class
D Investor Amount until the Class D Certificates have been paid in full);
provided, however, that the amount of such Principal Receivables shall not
exceed the sum of (1) the product of (A) the Transferor Amount on such date and
(B) a fraction, the numerator of which is the Investor Amount on such date and
the denominator of which is the Aggregate Investor Amount on such date and (2)
the Investor Amount on such date. The Transferor at its option and in its sole
discretion, may, but is not required to, purchase such Receivables in such case,
and will have a right of first refusal with respect thereto to the extent of a
bona fide offer by an unrelated third party for fair value. Any proceeds of
such sale in excess of such principal and interest paid will be paid to the
Transferor.
Section K. Restrictions on Transfer.
------------------------
(a) None of the Class C Securities have been registered under the
Securities Act or the securities or blue sky laws of any foreign or domestic
jurisdiction. Transfers and dispositions of Class C Securities or any interest
therein are restricted and will only be made in compliance with applicable law
and consistent with the following restrictions. Any person seeking to transfer a
Class C Security or any interest therein must satisfy the Servicer that such
transfer or disposition is permissible under and consistent with applicable
securities laws and the restrictions contained in this Section K. Each Class C
Security will bear a conspicuous legend or legends substantially in the
following form:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF SAKS CREDIT
CORPORATION, SAKS INCORPORATED 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
-49-
CODE OF 1986, AS AMENDED (THE "CODE"), INCLUDING, WITHOUT LIMITATION,
INDIVIDUAL RETIREMENT ACCOUNTS OR XXXXX PLANS (III) 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, INCLUDING, WITHOUT
LIMITATION, INSURANCE COMPANY GENERAL ACCOUNTS OR (IV) A PERSON INVESTING
"PLAN ASSETS" (AS DESCRIBED IN 29 C.F.R. 2510.3-101) OF ANY SUCH PLAN.
THIS CLASS C SECURITY 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 CLASS C SECURITY,
AGREES THAT THIS CLASS C SECURITY 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 OR (2) IN RELIANCE ON RULE
144A UNDER THE SECURITIES ACT TO A PERSON WHOM 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 ANOTHER QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT
THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A. EACH HOLDER OF A CLASS C SECURITY BY ACCEPTING A BENEFICIAL
INTEREST IN THIS CLASS C SECURITY, IF SUCH PERSON ACQUIRED THIS CLASS C
SECURITY IN A TRANSFER DESCRIBED IN CLAUSE (2) ABOVE, IS DEEMED TO
REPRESENT THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.
PRIOR TO PURCHASING ANY CLASS C SECURITY, PURCHASERS SHOULD CONSULT COUNSEL
WITH RESPECT TO THE AVAILABILITY AND CONDITIONS OF EXEMPTION FROM THE
RESTRICTION ON RESALE OR TRANSFER. THE TRANSFEROR HAS NO OBLIGATION OR
INTENT TO REGISTER THE CLASS C SECURITIES UNDER THE SECURITIES ACT, TO
QUALIFY THE CLASS C SECURITIES UNDER THE SECURITIES LAWS OF ANY STATE OR TO
PROVIDE REGISTRATION RIGHTS TO ANY PURCHASER."
(b) Upon surrender for registration of transfer of a Class C Security
at the office of the Transfer Agent and Registrar, accompanied by a
certification by the
-50-
Class C Holder substantially in the form attached as Exhibit A-3 hereto,
executed by the registered owner, in person or by such Class C Holder's attorney
thereunto duly authorized in writing, such Class C Security 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 Class C Securities of any authorized denominations and of a
like aggregate principal amount and tenor. All transfers of Class C Securities
and any interests therein shall be subject to the restrictions set forth in this
Section K and to such other restrictions as shall be set forth in the text of
the Class C Securities.
(c) None of the Class D Certificates has been registered under the
Securities Act or the securities or blue sky laws of any foreign or domestic
jurisdiction. Transfers and dispositions of Class D Certificates or any interest
therein are restricted and will only be made in compliance with applicable law
and consistent with the following restrictions. Any person seeking to transfer a
Class D Certificate or any interest therein must satisfy the Servicer that such
transfer or disposition is permissible under and consistent with applicable
securities laws and the restrictions contained in this Section K. Each Class D
Certificate will bear a conspicuous legend or legends substantially in the
following form:
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 AND/OR ANY INTEREST HEREIN 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 OR (2) IN RELIANCE
ON RULE 144A UNDER THE SECURITIES ACT TO A PERSON WHOM 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 ANOTHER QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A. EACH HOLDER OF CLASS D CERTIFICATE, BY ACCEPTING A
BENEFICIAL INTEREST IN THIS CERTIFICATE, IF SUCH PERSON ACQUIRED THIS
CERTIFICATE IN A TRANSFER DESCRIBED IN CLAUSE (2) ABOVE, IS DEEMED TO
REPRESENT THAT IT IS EITHER A QIB PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.
(d) Upon surrender for registration of transfer of a Class D
Certificate at the office of the Transfer Agent and Registrar, accompanied by a
certification by the
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Class D Certificateholder substantially in the form attached as Exhibit A-4
-----------
hereto, executed by the registered owner, in person or by such Class D
------
Certificateholder's attorney thereunto duly authorized in writing, such Class D
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 Class D
Certificates of any authorized denominations and of a like aggregate principal
amount and tenor. All transfers of Class D Certificates and any interests
therein shall be subject to the restrictions set forth in this Section K and to
such other restrictions as shall be set forth in the text of the Class D
Certificates.
(e) The Transferor may at any time, without the consent of the Class
A Certificateholders, the Class B Certificateholders, the Class C Holders or any
holders of Class D Certificates, (i) sell or transfer all or a portion of the
Class D Certificates or any interest therein, provided that (A) the Transferor
shall have given notice to the Trustee, the Servicer and the Rating Agencies of
such proposed sale or transfer of the Class D Certificates or any interest
therein at least five (5) Business Days prior to the consummation of such sale
or transfer; (B) the Rating Agency Condition shall have been satisfied; (C) no
Pay Out Event shall have occurred prior to the consummation of such proposed
sale or transfer of Class D Certificates or any interest therein; (D) the
Transferor shall have delivered an Officer's Certificate dated the date of the
consummation of such proposed sale or transfer to the effect that, in the
reasonable belief of the Transferor, such action will not, based on the facts
known to such officer at the time of such certification, cause a Pay Out Event
to occur with respect to any Series, and (E) the Transferor shall have provided
an Opinion of Counsel addressed to the Trustee, dated the date of such
certificate with respect to such action, that such proposed sale or transfer
will not adversely affect the tax characterization as debt of Investor
Certificates of any outstanding Series or Class with respect to which an Opinion
of Counsel addressed to the Trustee was delivered at the time of their issuance
that such Investor Certificates would be characterized as debt, cause the Trust
to be classified, for federal income tax purposes, as an association (or
publicly traded partnership) taxable as a corporation and cause or constitute an
event in which gain or loss would be recognized by any Certificateholder.
(f) In addition to the foregoing restrictions of this Section K, each
initial transferee of the Class C Securities or Class D Certificates, or any
interest therein and any assignee thereof or participant therein (each a
"holder") shall certify to the Transferor, the Servicer and the Trustee that it
------
has neither acquired nor will it sell, transfer, assign participate, pledge,
hypothecate, or otherwise dispose (any such act, a "transfer") of any interest
--------
in its Class C or Class D Certificates or cause an interest in Class C or Class
D Certificates to be marketed on or through (i) an "established securities
market" within the meaning of Section 7704(b)(1) of 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 or (ii) a "secondary market" within the meaning of Section 7704(b)(2)
of the Code and any Treasury regulation thereunder, including, without
limitation, a market wherein interests in the Class C or Class D Certificates
are regularly quoted by any Person making a market in
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such interests and a market wherein any Person regularly makes available bid or
offer quotes with respect to interests in the Class C or Class D Certificates
and stands ready to effect buy or sell transactions at the quoted price for
itself or on behalf of others. In addition, each holder shall certify, prior to
any delivery or transfer to it of any Class D Certificate or interest therein,
that it is not and will not become a partnership, Subchapter S corporation or
grantor trust for United States federal income tax purposes. If a holder cannot
make the certification described in the preceding sentence, the Transferor, the
Trustee or the Servicer may prohibit a transfer to such entity; provided,
however, that if the Transferor, the Trustee or the Servicer 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. Each holder acknowledges that special tax counsel
to the Transferor may render Opinions of Counsel from time to time to the
Transferor and others that the Trust will not be treated as an association or as
a publicly traded partnership taxable as a corporation, and that such Opinions
of Counsel will rely in part on the accuracy of the certifications in this
subsection K(f).
Section K1. Tax Characterization of the Collateral Interest. It is the
-----------------------------------------------
intention of the parties hereto that the Collateral Interest (including all the
Class C Securities and Class D Certificates that comprise the Collateral
Interest) be treated under applicable tax law as indebtedness. In the event
that either the Class C Securities or the Class D Certificates are not so
treated, it is the intention of the parties that the Class C Securities and the
Class D Certificates, as applicable, be treated under applicable tax law as an
interest in a partnership that owns the Receivables. In the event that either
the Class C Securities or the Class D Certificates are treated under applicable
tax law as interests in a partnership, it is the intention of the parties that
either the Class C Securities or the Class D Certificates, as the case may be,
be treated as guaranteed payments and, if for any reason they are not so
treated, that the holders of the Class C Securities and/or the Class D
Certificates, as the case may be, Interest be specially allocated gross interest
income equal to the interest accrued during each Interest Period on the Class C
Securities and/or the Class D Certificates, as the case may be.
Section L. Ratification of Master Pooling and Servicing Agreement. As
------------------------------------------------------
supplemented by this Series Supplement, the Agreement is in all respects
ratified and confirmed and the Agreement as so supplemented by this Series
Supplement shall be read, taken, and construed as one and the same instrument.
Section L1. FASIT Election. Each Series 2001-2 Certificateholder, by
--------------
acquiring an interest in a Series 2001-2 Certificate, is deemed to consent to
any amendment to the Agreement or this Series Supplement necessary for the
Transferor to elect for the Trust or any portion thereof to be treated as a
FASIT within the meaning of Section 860L of the Code (or any successor provision
thereto), provided that, such election may not be made unless the Transferor
delivers to the Trustee (i) an Opinion of Counsel to the effect that (x) the
issuance of FASIT regular interests will not adversely affect the tax
characterization as debt of Investor Certificates of any outstanding Series or
Class with respect to which an Opinion of Counsel was delivered at the time of
their
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issuance that such Investor Certificates would be characterized as debt, (y)
following such issuance, the Trust will not be classified, for federal income
tax purposes, as an association (or publicly traded partnership) taxable as a
corporation, and (z) such issuance will not cause or constitute an event in
which gain or loss would be recognized by any Investor Certificateholder, and
(ii) an Officer's Certificate to the effect that such issuance will not have a
material adverse effect on Investor Certificateholders of any outstanding Series
or class (viewed as a Series or a class, as applicable).
Section L2. Paired Series. Subject to obtaining confirmation by each
-------------
Rating Agency of the then existing ratings of each class of Series 2001-2
Certificates which are then rated, and prior to a Pay Out Event, the Series
2001-2 Certificates may be paired with one or more other Series (each a "Paired
------
Series"). Each Paired Series either will be pre-funded with an initial deposit
------
to a pre-funding account in an amount up to the initial principal balance of
such Paired Series, primarily from the proceeds of the sale of such Paired
Series or will have a variable principal amount. Any such pre-funding account
will be held for the benefit of such Paired Series and not for the benefit of
the Series 2001-2 Certificateholders. As principal is deposited into the
Principal Account or is paid with respect to the Series 2001-2 Certificates,
either (i) in the case of a pre-funded Paired Series, an equal amount of funds
held in any pre-funding account for such pre-funded Paired Series will be
released (which funds will be distributed to the Transferor) or (ii) in the case
of a Paired Series having a variable principal amount, an interest in such
variable Paired Series in an equal or lesser amount may be sold by the Trust
(and the proceeds thereof will be distributed to the Transferor) and, in either
case, the invested amount in the Trust of such Paired Series will increase by up
to a corresponding amount. Upon payment in full of the Series 2001-2
Certificates, assuming that there have been no unreimbursed charge offs with
respect to any related Paired Series, the aggregate investor amount of such
related Paired Series will have been increased by an amount up to an aggregate
amount equal to the Investor Amount paid to the Certificateholders since the
issuance of such Paired Series. The issuance of a Paired Series will be subject
to the conditions described in Section 6.9(b) of the Agreement. The numerator
of the Investor Percentage with respect to allocations of Principal Receivables
may be changed upon the occurrence of a pay out event with respect to a Paired
Series (provided that such numerator is not less than the Adjusted Investor
Amount as of the last day of the revolving period for such Paired Series).
Section M. Counterparts. This Series Supplement may be executed in any
------------
number of counterparts (and by different parties on separate 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 N. Governing Law. THIS SERIES SUPPLEMENT SHALL BE CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
-54-
Section O. 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 2001-2
Certificates shall be payable first to the Class A Certificates until paid in
full, then to the Class B Certificates until paid in full, then to the Class C
Securities until paid in full, and then to the Class D Certificates until paid
in full.
Section P. Certain Representations and Warranties. The Transferor and
--------------------------------------
the Servicer make the respective representations and warranties contained in
Exhibit F hereto, that are incorporated herein by reference and constitute a
---------
part hereof. These representations and warranties shall survive the execution
and delivery of this Series Supplement and the execution, authentication and
delivery of the Class A Certificates, the Class B Certificates, the Class C
Securities and the Class D Certificates. The representations and warranties
contained in Exhibit F cannot be waived, and are subject to Section 13.10 of the
---------
Agreement. Nothing contained in Exhibit F is intended or should affect or be
---------
deemed to limit the provisions of Section 13.2 of the Agreement.
[Signatures on next page]
-55-
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee 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/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By: /s/
-----------------------
Name:
Title:
EXHIBIT A-1
to the
SERIES 2001-2 SUPPLEMENT
FORM OF CLASS A CERTIFICATE
EXHIBIT A-1
to the
SERIES 2001-2 SUPPLEMENT
FORM OF CLASS A CERTIFICATE
REGISTERED $333,000,000
No. A-1 CUSIP No. 79377B AE 4
Unless this Class A Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the issuer or
---
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
SAKS CREDIT CARD MASTER TRUST
CLASS A FLOATING RATE ASSET BACKED CERTIFICATE, SERIES 2001-2
Class A Expected Payment Date:
July 2006 Distribution Date
Each $1,000 minimum denomination represents a
fractional undivided interest
in certain assets of the
SAKS CREDIT CARD MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables acquired from
SAKS CREDIT CORPORATION
(Not an interest in or obligation of Saks Credit Corporation
or any Affiliate thereof)
This certifies that Cede & Co. (the "Class A Certificateholder") is
-------------------------
the registered owner of a fractional undivided interest in certain assets of a
trust (the "Trust") created
-----
A-1-1
pursuant to the Master Pooling and Servicing Agreement, dated as of August 21,
1997 (as amended and supplemented, the "Agreement"), as supplemented by the
----------
Series 2001-2 Supplement, dated as of July 17, 2001 (as amended and
supplemented, the "Series Supplement"), among Saks Credit Corporation (as
------ ----------
successor to Xxxxxxxx'x Credit Corporation), as Transferor, Saks Incorporated
(formerly named "Xxxxxxxx'x, Inc."), as Servicer, and Xxxxx Fargo Bank
Minnesota, National Association (formerly named "Norwest Bank Minnesota,
National Association"), a national banking association, as trustee (the
"Trustee"). The corpus of the Trust consists of (i) receivables (the
--------
"Receivables") generated from time to time in a portfolio of consumer revolving
------------
credit card accounts identified under the Agreement and the Series Supplement
(the "Accounts"), (ii) all monies due or to become due in payment of the
--------
Receivables, (iii) all proceeds of the Receivables and proceeds of Insurance
Policies relating to the Receivables, (iv) all monies held in certain accounts
of the Trust (excluding investment earnings, unless otherwise specified in the
Agreement or any Supplement), (v) all Recoveries and Collections of the
Receivables, (vi) any Enhancement with respect to any Series (or class thereof)
and (vii) all other assets and interests constituting the Trust Property.
Although a summary of certain provisions of the Agreement and the Series
Supplement is set forth below and on the Summary of Terms and Conditions
attached hereto and made a part hereof, this Class A Certificate does not
purport to summarize the Agreement and the Series Supplement and reference is
made to the Agreement and the Series Supplement for information with respect to
the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Trustee. A copy of the
Agreement and the Series Supplement (without schedules) may be requested from
the Trustee by writing to the Trustee at Xxxxx Fargo Bank Minnesota, N.A., Sixth
Street and Marquette Avenue, N9311-161, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Asset Backed Securities Corporate Trust Department. To the extent not defined
herein, the capitalized terms used herein have the meanings ascribed to them in
the Agreement or the Series Supplement, as applicable.
This Class A Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series Supplement, to which
Agreement and Series Supplement, each as amended and supplemented from time to
time, the Class A Certificateholder by virtue of the acceptance hereof assents
and is bound.
It is the intent of the Transferor and the Investor Certificateholders
(and Certificate Owners) that, for Federal, state and local income and franchise
tax purposes only, the Investor Certificates will qualify as indebtedness of the
Transferor secured by the Receivables. The Class A Certificateholder (and each
Certificate Owner of a Class A Certificate), by the acceptance of this Class A
Certificate (or its interest therein), is deemed to agree to treat this Class A
Certificate for Federal, state and local income and franchise tax purposes and
any other tax imposed on or measured by income as indebtedness of the
Transferor.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this 2001-2 Class A
Certificate shall not be
A-1-2
entitled to any benefit under the Agreement or the Series Supplement or be valid
for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class A Certificate
to be duly executed by its undersigned officer thereunto duly authorized.
SAKS CREDIT CORPORATION
By:
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Dated: July 17, 2001
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates described in the within-mentioned
Agreement and Series 2001-2 Supplement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By:
------------------------------
Authorized Officer
Dated: July 17, 2001
A-1-3
SAKS CREDIT CARD MASTER TRUST
CLASS A FLOATING RATE ASSET BACKED CERTIFICATE, SERIES 2001-2
Summary of Terms and Conditions
This Class A Certificate is one of a Series of Certificates entitled
"Saks Credit Card Master Trust, Series 2001-2 Certificates" (the "Series 2001-2
-------------
Certificates"), and one of a class thereof entitled "Class A Floating Rate Asset
------------
Backed Certificates, Series 2001-2" (the "Class A Certificates"), each of which
--------------------
represents a fractional undivided interest in certain assets of the Trust. The
Trust Property is allocated in part to the Investor Certificateholders of all
outstanding Series (the "Certificateholders' Interest") and the interests, if
----------------------------
any, of any Enhancement Providers, with the remainder allocated to the
Transferor. The aggregate interest represented by the Class A Certificates at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class A Investor Amount at such time. The Class A Initial Investor
Amount is $333,000,000. The Class A Investor Amount on any date will be an
amount equal to (a) the Class A Initial Investor Amount, minus (b) the aggregate
amount of principal payments made to the Class A Certificateholders prior to
such date, minus (c) the excess, if any, of the aggregate amount of Class A
Investor Charge Offs for all prior Distribution Dates over the sum of the
aggregate amount of Class A Investor Charge Offs reimbursed pursuant to the
Series 2001-2 Supplement and, without duplication, the aggregate amount of the
reductions of the Series Adjustment Amounts allocable to the Class A
Certificates; provided, however, that the Class A Investor Amount may not be
reduced below zero. The "Class A Adjusted Investor Amount" shall mean, on any
--------------------------------
date of determination while the Class A Certificates are outstanding, an amount
equal to the Class A Investor Amount minus the Principal Account Balance (but
not less than zero). In addition, classes of the Series 2001-2 Certificates
entitled "Class B Floating Rate Asset Backed Certificates, Series 2001-2" (the
"Class B Certificates"), "Class C Floating Rate Securities, Series 2001-2" (the
---------------------
"Class C Securities") and "Class D Asset Backed Certificates, Series 2001-2"
------------------
(the "Class D Certificates") will be issued. The Exchangeable Transferor
--------------------
Certificate has been issued to Saks Credit Corporation pursuant to the
Agreement, which represents the Transferor Interest.
Subject to the terms and conditions of the Agreement, the Transferor
may from time to time direct the Trustee, on behalf of the Trust, to issue one
or more new Series of Investor Certificates, and/or Additional Class D
Certificates, which will represent fractional undivided interests in certain
Trust Property.
Each Class A Certificate represents the right to receive payments of
(i) interest at the rate of one-month LIBOR plus 0.24% per annum accruing from
July 17, 2001, payable on August 15, 2001 and on the 15th day of each month
thereafter (or, if such 15th day is not a Business Day, the next succeeding
Business Day) (each, a "Distribution Date") and (ii) principal on the July 2006
-----------------
Distribution Date (the "Class A Expected Payment Date") (and on each
-----------------------------
Distribution Date thereafter, if the Class A
A-1-4
Certificates are not paid in full on the Class A Expected Payment Date) or, upon
the occurrence of a Pay Out Event, on each Distribution Date relating to the
Rapid Amortization Period, in each case funded from a percentage of the payments
received with respect to the Receivables and certain other funds, all as more
fully described in the Agreement and the Series 2001-2 Supplement. Interest on
the Class A Certificates will be calculated on the basis of the actual number of
days in the related Interest Period and a 360-day year.
The Class B Certificates, the Class C Securities and the Class D
Certificates are subordinated to the Class A Certificates to the extent set
forth in the Series 2001-2 Supplement.
On each Distribution Date, the Paying Agent shall distribute to each
Class A Certificateholder of record at the close of business on the last
Business Day immediately preceding such Distribution Date (each a "Record Date")
-----------
such Class A Certificateholder's pro rata share of such amounts (including
amounts held in the Principal Account) as are payable to the Class A
Certificateholders pursuant to the Agreement and the Series 2001-2 Supplement.
Distributions with respect to this Class A Certificate will be made by the
Paying Agent by check mailed to the address of the Class A Certificateholder of
record appearing in the Certificate Register without the presentation or
surrender of this Class A Certificate or the making of any notation thereon
(except for the final distribution in respect of this Class A Certificate),
except that with respect to Class A Certificates registered in the name of Cede
& Co., as nominee for The Depository Trust Company, distributions will be made
in the form of immediately available funds. Final payment of this Class A
Certificate will be made only upon presentation and surrender of this Class A
Certificate at the office or agency specified in the notice of final
distribution delivered by the Trustee in accordance with the Agreement and the
Series 2001-2 Supplement.
On any Distribution Date occurring on or after the day on which the
sum of the Class A Adjusted Investor Amount, the Class B Adjusted Investor
Amount, the Class C Adjusted Investor Amount and the amount of the Class D
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 Class A Investor
Amount on the Closing Date, the Class B Investor Amount on the Closing Date, the
Class C Investor Amount on the Closing Date and the highest amount of the Class
D Investor Amount held by parties other than the Transferor or any of its
Affiliates since the Closing Date, the Class A Certificates are subject to
optional repurchase by the Transferor, if certain conditions set forth in the
Agreement or the Series 2001-2 Supplement are satisfied. The repurchase price
will be equal to the Class A Adjusted Investor Amount plus accrued and unpaid
interest thereon less the amount held in the Collection Account allocable to
Series 2001-2 to be applied other than to deposits in the Reserve Account, with
any excess payable to the Transferor as holder of the Exchangeable Transferor
Certificate.
Subject to certain conditions in the Agreement, if the Investor Amount
is greater than zero on the December 2009 Distribution Date (the "Stated Series
-------------
A-1-5
Termination Date"), the Trustee shall sell or cause to be sold an amount of
----------------
Receivables up to 110% of the Adjusted Investor Amount at the close of business
on such date, but not more than the total amount of Receivables allocable to the
Series 2001-2 Certificates, and apply the proceeds of such sale as provided in
the Agreement and the Series 2001-2 Supplement.
This Class A Certificate does not represent a recourse obligation of,
or an interest in, the Transferor, the Servicer or any Affiliate of any of them
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other governmental agency or instrumentality. This Class A Certificate is
limited in right of payment to certain Collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
hereinabove and in the Agreement and the Series 2001-2 Supplement.
The Agreement and any Supplement may be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to cure any ambiguity, to revise certain exhibits
and schedules, to correct or supplement any provision therein which may be
inconsistent with any other provision therein or to add other identifying code
numbers or identifying characteristics to the definition of Account or to add
any other provisions with respect to matters or questions raised under the
Agreement which shall not be inconsistent with the provisions of the Agreement;
provided, however, that such action shall not adversely affect in any material
respect the interests of any of the Investor Certificateholders. Additionally,
the Agreement and any Supplement may be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to add to, change or eliminate any of the
provisions of the Agreement or any right of Investor Certificateholders or to
enable Bearer Certificates to be issued in conformity with the Bearer Rules, to
provide that Bearer Certificates may be registrable as to principal, to change
or eliminate any restrictions on the payment of principal (or premium, if any)
or any interest on Bearer Certificates to comply with the Bearer Rules, to
permit Bearer Certificates to be issued in exchange for Registered Certificates
(if then permitted by the Bearer Rules), to permit Bearer Certificates to be
issued in exchange for Bearer Certificates of other authorized denominations or
to permit the issuance of Investor Certificates in uncertificated form, provided
any such action shall not adversely affect the interest of the holders of Bearer
Certificates of any Series or any related Coupons in any material respect unless
such amendment is necessary to comply with the Bearer Rules, or any right of the
Investor Certificateholders of any outstanding Series; provided that (i) the
Servicer shall have provided an Officer's Certificate to the Trustee to the
effect that such amendment will not materially and adversely affect the
interests of the Investor Certificateholders of any outstanding Series, (ii)
such amendment shall not cause the Trust to be characterized as a corporation
for Federal income tax purposes or otherwise have a material adverse effect on
the Federal income taxation of any Series and (iii) the Servicer shall have
given each Rating Agency ten (10) Business Days' prior written notice of such
amendment and shall have received written confirmation from each Rating Agency
that the Rating Agency Condition will be met. No such amendment, however, may
effect any of the amendments that require unanimous Certificateholder
A-1-6
consent as set forth herein, in the Agreement or the Series 2001-2 Supplement or
(i) reduce in any manner the amount of, or delay the timing of, distributions
which are required to be made on any Investor Certificates of any Series, (ii)
change the definition of or the manner of calculating the interest of any
Certificateholder, (iii) alter the requirements for changing the percentage by
which the Minimum Transferor Amount is determined, (iv) change the manner in
which the Transferor Amount is determined, or (v) reduce the percentage required
in Section 13.1(b) of the Agreement to consent to such amendment.
Notwithstanding the foregoing, any amendment providing for the transfer of
Receivables to or by, and the generation of new Receivables by, the Bank as
Seller, Transferor, or Eligible Originator, the appointment of the Bank as
Servicer, and/or the assignment of this Agreement, including any Supplement to
the Bank in connection with such transfer and any amendments necessary to
reflect such Bank and any related special purpose, bankruptcy remote entity that
is an Affiliate of Saks Incorporated and that is organized for the purpose of
purchasing Accounts and Receivables from such Bank and serving as Transferor
will be deemed not to materially and adversely affect the interests of the
Certificateholders.
The Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee with the consent of the Investor
Certificateholders evidencing Undivided Interests aggregating not less than 50%
of the Investor Amount of all Series adversely affected, for the purpose of
adding any provisions to, changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of the
Investor Certificateholders of any Series then issued and outstanding; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, distributions which are required to be made on any Investor
Certificate of such Series without the consent of all holders of the related
Investor Certificates; (ii) change the definition of or the manner of
calculating the Investor Amount, the Investor Percentage, the required amount
under any Enhancement or the Investor Default Amount of such Series without the
consent of all holders of the related Investor Certificates; or (iii) reduce the
aforesaid percentage required to consent to any such amendment, without the
consent of all holders of the related Investor Certificates of all Series
adversely affected thereby. Any amendment pursuant to this paragraph shall
require prior written confirmation from the applicable Rating Agency that the
Rating Agency Condition will be met.
Subject to Section 13.1(c) of the Agreement, each Certificateholder by
its acceptance of this Certificate or any interest in this Certificate, consents
to any amendment to the Agreement or any Supplement necessary for the Transferor
to elect FASIT status for the Trust or any portion thereof under the Code.
The Class A Certificates are issuable only in minimum denominations of
$1,000 and integral multiples of $1,000. The transfer of this Class A
Certificate shall be registered in the Certificate Register upon surrender of
this Class A Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar, and thereupon one or more new
Class A Certificates in authorized
A-1-7
denominations representing like aggregate undivided interests in the Trust will
be issued to the designated transferee or transferees.
As provided in the Agreement and the Series 2001-2 Supplement, and
subject to certain limitations therein set forth, Class A Certificates are
exchangeable for new Class A Certificates in authorized denominations of like
aggregate undivided interests in the Trust as requested by the Class A
Certificateholder surrendering such Class A Certificates. No service charge may
be imposed for any transfer or exchange but the Transfer Agent and Registrar and
the Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and Registrar and
any agent or representative of any of them may treat the person in whose name
this Class A Certificate is registered as the owner hereof for all purposes, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar, nor any
agent or representative of any of them, shall be affected by notice to the
contrary.
THE AGREEMENT AND THIS CLASS A CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
A-1-8
ASSIGNMENT
Social Security or other Taxpayer Identification number (T.I.N.) of
assignee _____
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
------------------------------
the within Certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: *
-----------------------------------
Signature Guaranteed:
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
X-0-0
XXXXXXX X-0
to the
SERIES 2001-2 SUPPLEMENT
FORM OF CLASS B CERTIFICATE
EXHIBIT A-2
to the
SERIES 2001-2 SUPPLEMENT
FORM OF CLASS B CERTIFICATE
REGISTERED $36,000,000
No. B-1 CUSIP No. 79377B AF 1
Unless this Class B Certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the issuer or
---
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
SAKS CREDIT CARD MASTER TRUST
CLASS B FLOATING RATE ASSET BACKED CERTIFICATE, SERIES 2001-2
Class B Expected Payment Date:
July 2006 Distribution Date
Each $1,000 minimum denomination represents a
fractional undivided interest
in certain assets of the
SAKS CREDIT CARD MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables acquired from
SAKS CREDIT CORPORATION
(Not an interest in or obligation of Saks Credit Corporation
or any Affiliate thereof)
A-2-1
This certifies that Cede & Co. (the "Class B Certificateholder") is
-------------------------
the registered owner of a fractional undivided interest in certain assets of a
trust (the "Trust") created pursuant to the Master Pooling and Servicing
Agreement, dated as of August 21, 1997, (as amended and supplemented, the
"Agreement"), as supplemented by the Series 2001-2 Supplement, dated as of July
----------
17, 2001 (as amended and supplemented, the "Series Supplement"), among Saks
-----------------
Credit Corporation (as successor to Xxxxxxxx'x Credit Corporation), as
Transferor, Saks Incorporated (formerly named "Xxxxxxxx'x, Inc."), as Servicer,
and Xxxxx Fargo Bank Minnesota, National Association (formerly named "Norwest
Bank Minnesota, National Association"), a national banking association, as
trustee (the "Trustee"). The corpus of the Trust consists of (i) receivables
-------
(the "Receivables") generated from time to time in a portfolio of consumer
-----------
revolving credit card accounts identified under the Agreement and the Series
Supplement (the "Accounts"), (ii) all monies due or to become due in payment of
--------
the Receivables, (iii) all proceeds of the Receivables and proceeds of Insurance
Policies relating to the Receivables, (iv) all monies held in certain bank
accounts of the Trust (excluding investment earnings, unless otherwise specified
in the Agreement or any Supplement), (v) all Recoveries and Collections of the
Receivables, (vi) any Enhancement with respect to any Series (or class thereof)
and (vii) all other assets and interests constituting the Trust Property.
Although a summary of certain provisions of the Agreement and the Series 2001-2
Supplement is set forth below and on the Summary of Terms and Conditions
attached hereto and made a part hereof, this Class B Certificate does not
purport to summarize the Agreement and the Series 2001-2 Supplement and
reference is made to the Agreement and the Series 2001-2 Supplement for
information with respect to the interests, rights, benefits, obligations,
proceeds and duties evidenced hereby and the rights, duties and obligations of
the Trustee. A copy of the Agreement and the Series 2001-2 Supplement (without
schedules) may be requested from the Trustee by writing to the Trustee at Xxxxx
Fargo Bank Minnesota, N.A., Sixth Street and Marquette Avenue, N9311-161,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Asset Backed Securities, Corporate
Trust Department. To the extent not defined herein, the capitalized terms used
herein have the meanings ascribed to them in the Agreement or the Series 2001-2
Supplement, as applicable.
This Class B Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series 2001-2 Supplement, to
which Agreement and Series 2001-2 Supplement, each as amended and supplemented
from time to time, the Class B Certificateholder by virtue of the acceptance
hereof assents and is bound.
It is the intent of the Transferor and the Investor Certificateholders
(and Certificate Owners) that, for Federal, state and local income and franchise
tax purposes only, the Investor Certificates will qualify as indebtedness of the
Transferor secured by the Receivables. The Class B Certificateholder (and each
Certificate Owner of a Class B Certificate), by the acceptance of this Class B
Certificate (or its interest therein), is deemed to agree to treat this Class B
Certificate for Federal, state and local income and franchise tax purposes and
any other tax imposed on or measured by income as indebtedness of the
Transferor.
A-2-2
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class B Certificate shall
not be entitled to any benefit under the Agreement or the Series 2001-2
Supplement or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class B Certificate
to be duly executed by its undersigned officer thereunto duly authorized.
SAKS CREDIT CORPORATION
By:
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Dated: July 17, 2001
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates described in the within-mentioned
Agreement and Series 2001-2 Supplement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By:
---------------------------------
Authorized Officer
Dated: July 17, 2001
A-2-3
SAKS CREDIT CARD MASTER TRUST
CLASS B FLOATING RATE ASSET BACKED CERTIFICATE, SERIES 2001-2
Summary of Terms and Conditions
This Class B Certificate is one of a Series of Certificates entitled
"Saks Credit Card Master Trust, Series 2001-2 Certificates" (the "Series 2001-2
-------------
Certificates"), and one of a class thereof entitled "Class B Floating Rate Asset
------------
Backed Certificates, Series 2001-2" (the "Class B Certificates"), each of which
--------------------
represents a fractional undivided interest in certain assets of the Trust. The
Trust Property is allocated in part to the Investor Certificateholders of all
outstanding Series (the "Certificateholders' Interest") and the interests, if
----------------------------
any, of any Enhancement Providers, with the remainder allocated to the
Transferor. The aggregate interest represented by the Class B Certificates at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class B Investor Amount at such time. The Class B Initial Investor
Amount is $36,000,000. The Class B Investor Amount on any date will be an
amount equal to (a) the Class B Initial Investor Amount, minus (b) the aggregate
amount of principal payments made to the Class B Certificateholders prior to
such date, minus (c) the aggregate amount of Class B Investor Charge Offs for
all prior Distribution Dates, minus (d) the amount of Class B Subordinated
Principal Collections allocated to certain shortfalls in respect of the Class A
Certificates on all prior Distribution Dates pursuant to the Series 2001-2
Supplement (excluding any Class B Subordinated Principal Collections that have
resulted in a reduction in the Class C Investor Amount or the Class D Investor
Amount pursuant to the Series 2001-2 Supplement), minus (e) an amount equal to
the amount by which the Class B Investor Amount has been reduced on all prior
Distribution Dates to avoid certain reductions in respect of the Class A
Allocable Amount, plus (f) the sum of the amount of Excess Spread and Shared
Excess Finance Charge Collections allocated and available on all prior
Distribution Dates pursuant to the Series 2001-2 Supplement for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and (e)
and, without duplication, the aggregate amount of the reductions of the Series
Adjustment Amounts allocable to the Class B Investor Amount pursuant to the
Series 2001-2 Supplement prior to such date; provided, however, that the Class B
Investor Amount may not be reduced below zero. The "Class B Adjusted Investor
-------------------------
Amount" shall mean, on any date of determination, an amount equal to the Class B
------
Investor Amount minus, prior to the payment in full of the Class A Investor
Amount, the excess of the Principal Account Balance over the Class A Investor
Amount, and after the payment in full of the Class A Investor Amount, the
Principal Account Balance, if any (but not less than zero). In addition,
classes of the Series 2001-2 Certificates entitled "Class A Floating Rate Asset
Backed Certificates, Series 2001-2" (the "Class A Certificates"), "Class C
--------------------
Floating Rate Securities, Series 2001-2" (the "Class C Securities") and "Class D
------------------
Asset Backed Certificates, Series 2001-2" (the "Class D Certificates") will be
--------------------
issued. The Exchangeable Transferor Certificate has been issued to Saks Credit
Corporation pursuant to the Agreement, which represents the Transferor Interest.
A-2-4
Subject to the terms and conditions of the Agreement, the Transferor
may from time to time direct the Trustee, on behalf of the Trust, to issue one
or more new Series of Investor Certificates, and/or Additional Class D
Certificates, which will represent fractional undivided interests in certain
Trust Property.
Each Class B Certificate represents the right to receive payments of
(i) interest at the rate of one-month LIBOR plus 0.65% per annum accruing from
July 17, 2001, payable on August 15, 2001, and on the 15th day of each month
thereafter (or, if such 15th day is not a Business Day, the next succeeding
Business Day) (each, a "Distribution Date") and (ii) principal on the July 2006
-----------------
Distribution Date (the "Class B Expected Payment Date") (and each Distribution
-----------------------------
Date thereafter, if the Class B Certificates are not paid in full on the Class B
Expected Payment Date) or, upon the occurrence of a Pay Out Event, on each
Distribution Date relating to the Rapid Amortization Period, provided that no
principal payments will be made on the Class B Certificates until the Class A
Certificates have been paid in full, in each case funded from a percentage of
the payments received with respect to the Receivables and certain other funds,
all as more fully described in the Agreement and the Series 2001-2 Supplement.
Interest on the Class B Certificates will be calculated on the basis of the
actual number of days in the related Interest Period and a 360-day year.
The Class B Certificates are subordinated to the Class A Certificates
to the extent set forth in the Series 2001-2 Supplement. The Class C Securities
and the Class D Certificates are subordinated to the Class A Certificates and to
the Class B Certificates to the extent set forth in the Series 2001-2
Supplement.
On each Distribution Date, the Paying Agent shall distribute to each
Class B Certificateholder of record on the last Business Day immediately
preceding such Distribution Date (each a "Record Date") such Class B
-----------
Certificateholder's pro rata share of such amounts (including, after the Class A
Certificates have been paid in full, amounts held in the Principal Account) as
are payable to the Class B Certificateholders pursuant to the Agreement and the
Series 2001-2 Supplement. Distributions with respect to this Class B
Certificate will be made by the Paying Agent by check mailed to the address of
the Class B Certificateholder of record appearing in the Certificate Register
without the presentation or surrender of this Class B Certificate or the making
of any notation thereon (except for the final distribution in respect of this
Class B Certificate), except that with respect to Class B Certificates
registered in the name of Cede & Co., as nominee for The Depository Trust
Company, distributions will be made in the form of immediately available funds.
Final payment of this Class B Certificate will be made only upon presentation
and surrender of this Class B Certificate at the office or agency specified in
the notice of final distribution delivered by the Trustee in accordance with the
Agreement and the Series 2001-2 Supplement.
On any Distribution Date occurring on or after the day on which the
sum of the Class A Adjusted Investor Amount, the Class B Adjusted Investor
Amount, the Class C Adjusted Investor Amount and the amount of the Class D
Investor Amount held
A-2-5
by parties other than the Transferor or any of its Affiliates is less than or
equal to 10% of the sum of the Class A Investor Amount on the Closing Date, the
Class B Investor Amount on the Closing Date, the Class C Investor Amount on the
Closing Date and the highest amount of the Class D Investor Amount held by
parties other than the Transferor or any of its Affiliates since the Closing
Date, the Class B Certificates are subject to optional repurchase by the
Transferor, if certain conditions set forth in the Agreement or the Series 2001-
2 Supplement are satisfied. The repurchase price will be equal to the Class B
Adjusted Investor Amount plus accrued but unpaid interest thereon less the
amount held in the Collection Account allocable to Series 2001-2 to be applied
other than to deposits in the Reserve Account and any excess payable to the
Transferor as holder of the Exchangeable Transferor Certificate.
Subject to certain conditions in the Agreement, if the Investor Amount
is greater than zero on the December 2009 Distribution Date (the "Stated Series
-------------
Termination Date"), the Trustee shall sell or cause to be sold an amount of
----------------
Receivables up to 110% of the Adjusted Investor Amount at the close of business
on such date, but not more than the total amount of Receivables allocable to the
Series 2001-2 Certificates, and apply the proceeds of such sale as provided in
the Agreement and the Series 2001-2 Supplement.
This Class B Certificate does not represent a recourse obligation of,
or an interest in, the Transferor, the Servicer, or any Affiliate of any of them
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other governmental agency or instrumentality. This Class B Certificate is
limited in right of payment to certain Collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
hereinabove and in the Agreement and the Series 2001-2 Supplement.
The Agreement and any Supplement may be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to cure any ambiguity, to revise certain exhibits
and schedules, to correct or supplement any provision therein which may be
inconsistent with any other provision therein or to add other identifying code
numbers or identifying characteristics to the definition of Account or to add
any other provisions with respect to matters or questions raised under the
Agreement which shall not be inconsistent with the provisions of the Agreement;
provided, however, that such action shall not adversely affect in any material
respect the interests of any of the Investor Certificateholders. Additionally,
the Agreement and any Supplement may be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to add to, change or eliminate any of the
provisions of the Agreement or right of Investor Certificateholders or to enable
Bearer Certificates to be issued in conformity with the Bearer Rules, to provide
that Bearer Certificates may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal (or premium, if any) or
any interest on Bearer Certificates to comply with the Bearer Rules, to permit
Bearer Certificates to be issued in exchange for Registered Certificates (if
then permitted by the Bearer Rules), to permit Bearer Certificates to be issued
in exchange for Bearer
A-2-6
Certificates of other authorized denominations or to permit the issuance of
Investor Certificates in uncertificated form, provided any such action shall not
adversely affect the interest of the holders of Bearer Certificates of any
Series or any related Coupons in any material respect unless such amendment is
necessary to comply with the Bearer Rules, or any right of the Investor
Certificateholders of any outstanding Series; provided that (i) the Servicer
shall have provided an Officer's Certificate to the Trustee to the effect that
such amendment will not materially and adversely affect the interests of the
Investor Certificateholders of any outstanding Series, (ii) such amendment shall
not cause the Trust to be characterized as a corporation for Federal income tax
purposes or otherwise have a material adverse effect on the Federal income
taxation of any Series and (iii) the Servicer shall have given each Rating
Agency ten (10) Business Days' prior written notice of such amendment and shall
have received written confirmation from each Rating Agency that the Rating
Agency Condition will be met. No such amendment, however, may effect any of the
amendments that require unanimous Certificateholder consent as set forth herein
in the Agreement or the Series 2001-2 Supplement or (i) reduce in any manner the
amount of, or delay the timing of, distributions which are required to be made
on any Investor Certificates of any Series, (ii) change the definition of or the
manner of calculating the interest of any Certificateholder, (iii) alter the
requirements for changing the percentage by which the Minimum Transferor Amount
is determined, (iv) change the manner in which the Transferor Amount is
determined, or (v) reduce the percentage required in Section 13.1(b) of the
Agreement to consent to such amendments. Notwithstanding the foregoing, any
amendment providing for the transfer of Receivables to or by, and the generation
of new Receivables by, the Bank as Seller, Transferor, or Eligible Originator,
the appointment of the Bank as Servicer, and/or the assignment of this
Agreement, including any Supplement, to the Bank in connection with such
transfer and any amendments necessary to reflect Bank and any related special
purpose, bankruptcy remote entity that is an Affiliate of Saks Incorporated and
that is organized for the purpose of purchasing Accounts and Receivables from
such Bank and serving as Transferor will be deemed not to materially and
adversely affect the interests of the Certificateholders.
The Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee with the consent of the Investor
Certificateholders evidencing Undivided Interests aggregating not less than 50%
of the Investor Amount of all Series adversely affected, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of the
Investor Certificateholders of any Series then issued and outstanding; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, distributions which are required to be made on any Investor
Certificate of such Series without the consent of all holders of the related
Investor Certificates; (ii) change the definition of or the manner of
calculating the Investor Amount, the Investor Percentage, the required amount
under any Enhancement or the Investor Default Amount of such Series without the
consent of all holders of the related Investor Certificates; or (iii) reduce the
aforesaid percentage required to consent to any such amendment, without the
consent of all holders of the related Investor Certificates of all Series
adversely affected thereby. Any amendment
A-2-7
pursuant to this paragraph shall require prior written confirmation from the
applicable Rating Agency that the Rating Agency Condition will be met.
Subject to Section 13.1(c) of the Agreement, each Certificateholder,
by its acceptance of this Certificate or any interest in this Certificate,
consents to any amendment to the Agreement or any Supplement necessary for the
Transferor to elect FASIT status for the Trust or any portion thereof under the
Code.
The Class B Certificates are issuable only in minimum denominations of
$1,000 and integral multiples of $1,000. The transfer of this Class B
Certificate shall be registered in the Certificate Register upon surrender of
this Class B Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar, and thereupon one or more new
Class B Certificates in authorized denominations representing like aggregate
undivided interests in the Trust will be issued to the designated transferee or
transferees.
As provided in the Agreement and the Series 2001-2 Supplement and
subject to certain limitations therein set forth, Class B Certificates are
exchangeable for new Class B Certificates in authorized denominations of like
aggregate undivided interests in the Trust as requested by the Class B
Certificateholder surrendering such Class B Certificates. No service charge may
be imposed for any transfer or exchange but the Transfer Agent and Registrar and
the Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and Registrar and
any agent or representative of any of them may treat the person in whose name
this Class B Certificate is registered as the owner hereof for all purposes, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar, nor any
agent or representative of any of them, shall be affected by notice to the
contrary.
THE AGREEMENT AND THIS CLASS B CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
A-2-8
ASSIGNMENT
Social Security or other Taxpayer Identification Number (T.I.N.) of
assignee ______
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
------------------------------
the within Certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
Certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: *
-----------------------------------
Signature Guaranteed:
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
X-0-0
XXXXXXX X-0
to the
SERIES 2001-2 SUPPLEMENT
FORM OF CLASS C FLOATING RATE SECURITY
EXHIBIT A-3
to the
2001-2 SERIES SUPPLEMENT
FORM OF CLASS C FLOATING RATE SECURITY
REGISTERED $65,250,000
No. C-1 CUSIP No. 79377B AD 6
Unless this Class C Floating Rate Security ("Class C Security") is
--------
presented by an authorized representative of The Depository Trust Company, a New
York corporation ("DTC"), to the issuer or its agent for registration of
---
transfer, exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THIS CLASS C SECURITY 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 CLASS C SECURITY, AGREES
THAT THIS CLASS C SECURITY 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 OR (2) PURSUANT TO RULE 144A UNDER THE SECURITIES
ACT TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A (A "QIB") PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB, WHOM THE
HOLDER HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE SECURITIES ACT. EACH
HOLDER OF A CLASS C SECURITY BY ACCEPTING A BENEFICIAL INTEREST IN THIS CLASS C
SECURITY, IF SUCH PERSON ACQUIRED THIS CLASS C SECURITY IN A TRANSFER DESCRIBED
IN CLAUSE (2) ABOVE, IS DEEMED TO REPRESENT THAT IT IS EITHER A QIB PURCHASING
FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER QIB.
A-3-1
PRIOR TO PURCHASING ANY CLASS C SECURITY, PURCHASERS SHOULD CONSULT COUNSEL
WITH RESPECT TO THE AVAILABILITY AND CONDITIONS OF EXEMPTION FROM THE
RESTRICTION ON RESALE OR TRANSFER. THE TRANSFEROR HAS NO OBLIGATION OR INTENT TO
REGISTER THE CLASS C SECURITIES UNDER THE SECURITIES ACT, TO QUALIFY THE CLASS C
SECURITIES UNDER THE SECURITIES LAWS OF ANY STATE OR TO PROVIDE REGISTRATION
RIGHTS TO ANY PURCHASER.
THE CLASS C SECURITIES MAY NOT BE PURCHASED OR HELD BY OR ON BEHALF OF (I)
EMPLOYEE BENEFIT PLANS (AS DEFINED IN SECTION 3(3) OF ERISA) WHETHER OR NOT
SUBJECT TO TITLE I OF ERISA, (II) PLANS (AS DEFINED IN SECTION 4975(e)(1) OF THE
CODE) WHETHER OR NOT SUBJECT TO SECTION 4975 OF THE CODE, INCLUDING, WITHOUT
LIMITATION, INDIVIDUAL RETIREMENT ACCOUNTS OR XXXXX PLANS, (III) ENTITIES WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN SUCH
ENTITIES, INCLUDING, WITHOUT LIMITATION, INSURANCE COMPANY GENERAL ACCOUNTS
(EACH OF (I), (II), AND (III), A "PLAN") OR (IV) PERSONS INVESTING PLAN ASSETS
OF ANY PLAN, PROVIDED, HOWEVER, THAT THE CLASS C SECURITIES MAY BE PURCHASED OR
HELD BY OR ON BEHALF OF AN INSURANCE COMPANY GENERAL ACCOUNT ONLY IF LESS THAN
25% OF THE ASSETS OF SUCH GENERAL ACCOUNT CONSTITUTE PLAN ASSETS. EACH PURCHASER
IS DEEMED TO REPRESENT, WARRANT AND COVENANT BY ITS ACCEPTANCE OF A CLASS C
SECURITY THAT IT EITHER (I) IS NOT A PLAN AND THAT IT IS NOT PURCHASING SUCH
CLASS C SECURITY ON BEHALF OF OR WITH PLAN ASSETS OF ANY PLAN OR (II) (X) IT IS,
OR IS ACTING ON BEHALF OF, AN INSURANCE COMPANY GENERAL ACCOUNT, (Y) LESS THAN
25% OF THE ASSETS OF SUCH GENERAL ACCOUNT CONSTITUTE PLAN ASSETS AND (Z) SUCH
PURCHASE AND HOLDING IS EXEMPT FROM THE PROHIBITED TRANSACTION RULES OF ERISA
AND SECTION 4975 OF THE CODE.
SAKS CREDIT CARD MASTER TRUST
CLASS C FLOATING RATE SECURITIES, SERIES 2001-2
Expected Payment Date:
July 2006 Distribution Date
Representing an undivided interest
in certain assets of the
SAKS CREDIT CARD MASTER TRUST
A-3-2
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables acquired from
SAKS CREDIT CORPORATION
(Not an interest in or obligation of Saks Credit Corporation
or any Affiliate thereof)
This certifies that Cede & Co (the "Class C Holder") is the registered
--------------
owner of a fractional undivided interest in certain assets of a trust (the
"Trust") created pursuant to the Master Pooling and Servicing Agreement, dated
as of August 21, 1997 (as amended and supplemented, the "Agreement"), as
---------
supplemented by the Series 2001-2 Supplement, dated as of July 17, 2001 (as
amended and supplemented, the "Series 2001-2 Supplement"), among Saks Credit
------------------------
Corporation (as successor to Xxxxxxxx'x Credit Corporation), as Transferor, Saks
Incorporated (formerly named "Xxxxxxxx'x, Inc.") as Servicer, and Xxxxx Fargo
Bank Minnesota, National Association (formerly named "Norwest Bank Minnesota,
National Association"), a national banking association, as trustee (the
"Trustee"). The corpus of the Trust consists of (i) receivables (the
-------
"Receivables") generated from time to time in a portfolio of consumer revolving
-----------
credit card accounts identified under the Agreement (the "Accounts"), (ii) all
--------
monies due or to become due in payment of the Receivables, (iii) all proceeds of
the Receivables and proceeds of Insurance Policies relating to the Receivables,
(iv) all monies held in certain accounts of the Trust (excluding investment
earnings, unless otherwise specified in the Agreement or any Supplement), (v)
all Recoveries and Collections of the Receivables, (vi) any Enhancement with
respect to any Series (or class thereof) and (vii) all other assets and
interests constituting the Trust Property. Although a summary of certain
provisions of the Agreement and the Series 2001-2 Supplement is set forth below
and on the Summary of Terms and Conditions attached hereto and made a part
hereof, this Class C Security does not purport to summarize the Agreement and
the Series 2001-2 Supplement and reference is made to the Agreement and the
Series 2001-2 Supplement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee. A copy of the Agreement and the Series
2001-2 Supplement (without schedules) may be requested from the Trustee by
writing to the Trustee at Xxxxx Fargo Bank Minnesota, N.A., Sixth Street and
Marquette Avenue, N9311-161, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Asset
Backed Securities Corporate Trust Department. To the extent not defined herein,
the capitalized terms used herein have the meanings ascribed to them in the
Agreement or the Series 2001-2 Supplement, as applicable.
This Class C Security is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series 2001-2 Supplement, to
which Agreement and Series 2001-2 Supplement, each as amended and supplemented
from time to time, the Class C Holder by virtue of the acceptance hereof assents
and is bound.
A-3-3
It is the intent of the Transferor and the Investor Certificateholders
(and Certificate Owners) that, for Federal, state and local income and franchise
tax purposes only, the Investor Certificates will qualify as indebtedness of the
Transferor secured by the Receivables. The Class C Holder (and each Certificate
Owner of a Class C Security), by the acceptance of this Class C Security (or its
interest therein), is deemed to agree to treat this Class C Security for
Federal, state and local income and franchise tax purposes and any other tax
imposed on or measured by income as indebtedness of the Transferor.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class C Security shall
not be entitled to any benefit under the Agreement or the Series 2001-2
Supplement or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class C Security to
be duly executed.
SAKS CREDIT CORPORATION
By:
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Dated: July 17, 2001
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class C Securities described in the within-mentioned
Agreement and Series 2001-2 Supplement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee,
By:
---------------------------------
Authorized Officer
Dated: July 17, 2001
A-3-4
SAKS CREDIT CARD MASTER TRUST
CLASS C SECURITY, SERIES 2001-2
Summary of Terms and Conditions
This Class C Security is one of a Series of Certificates entitled Saks
Credit Card Master Trust, Series 2001-2 Certificates (the "Series 2001-2
-------------
Certificates"), and one of a class thereof entitled "Class C Floating Rate
------------
Securities, Series 2001-2" (the "Class C Securities"), each of which represents
------------------
a fractional undivided interest in certain assets of the Trust. The Trust
Property is allocated in part to the Investor Certificateholders of all
outstanding Series (the "Certificateholders' Interest") and the interests, if
----------------------------
any, of any Enhancement Providers, with the remainder allocated to the
Transferor. The aggregate interest represented by the Class C Securities at any
time in the Principal Receivables in the Trust shall not exceed an amount equal
to the Class C Investor Amount at such time. The initial Class C Investor Amount
is $65,250,000. The Class C Investor Amount on any date will be an amount equal
to (a) the initial Class C Investor Amount equal to $65,250,000 minus (b) the
aggregate amount of principal payments made to the Class C Holders on or prior
to such date, minus (c) the amount of Class C Subordinated Principal Collections
used to make payments in respect of the Class A Certificates and Class B
Certificates on all prior Distribution Dates that have resulted in a reduction
of the Class C Investor Amount, minus (d) an amount equal to the amount by which
the Class C Investor Amount has been reduced on all prior Distribution Dates in
respect of the Class A Allocable Amount, the Class B Allocable Amount and the
Class C Allocable Amount, plus (e) the sum of the amount of Excess Spread and
Shared Excess Finance Charge Collections allocated and available on all prior
Distribution Dates for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c) and (d) and, without duplication, reductions of the
Series Adjustment Amount allocable to the Class C Investor Amount; provided,
however, that the Class C Investor Amount may not be reduced below zero. In
addition, classes of the Series 2001-2 Certificates entitled Class A Floating
Rate Asset Backed Certificates, Series 2001-2 (the "Class A Certificates"),
--------------------
Class B Floating Rate Asset Backed Certificates, Series 2001-2 (the "Class B
-------
Certificates") and Class D Asset Backed Certificates, Series 2001-2 (the "Class
------------ -----
D Certificates") will be issued. The Exchangeable Transferor Certificate has
--------------
been issued to Saks Credit Corporation pursuant to the Agreement, which
represents the Transferor Interest.
Subject to the terms and conditions of the Agreement, the Transferor
may from time to time direct the Trustee, on behalf of the Trust, to issue one
or more new Series of Investor Certificates and/or Additional Class D
Certificates, which will represent fractional undivided interests in certain
Trust Property.
Each Class C Security represents the right to receive (i) interest at
the rate of one-month LIBOR plus 1.50% per annum accruing from July 17, 2001,
payable on August 15, 2001, and on the 15th day of each month thereafter (or, if
such 15th day is not a Business Day, the next succeeding Business Day) (each, a
"Distribution Date") and (ii)
-----------------
A-3-5
payments of principal on each Distribution Date on and after the Distribution
Date on which the Class B Certificates have been paid in full (subject to
certain exceptions), in each case funded from a percentage of the payments
received with respect to the Receivables and certain other funds, all as more
fully described in the Agreement and the Series 2001-2 Supplement. Interest on
the Class C Securities will be calculated on the basis of the actual number of
days in the related Interest Period and a 360-day year.
The Class C Securities are subordinated to the Class A Certificates
and the Class B Certificates to the extent set forth in the Series 2001-2
Supplement. The Class D Certificates are subordinated to the Class C Securities
to the extent set forth in the Series 2001-2 Supplement.
On each Distribution Date, the Paying Agent shall distribute to each
Class C Holder of record at the close of business on the last Business Day
immediately preceding such Distribution Date (each a "Record Date") such Class C
-----------
Holder's pro rata share of such amounts as are payable to the Class C Holders
pursuant to the Agreement and the Series 2001-2 Supplement. Distributions with
respect to this Class C Security will be made by the Paying Agent by check
mailed to the address of the Class C Holder of record appearing in the
Certificate Register without the presentation or surrender of this Class C
Security or the making of any notation thereon (except for the final
distribution in respect of this Class C Security), except that with respect to
Class C Securities registered in the name of Cede & Co., as nominee for The
Depository Trust Company, distributions will be made in the form of immediately
available funds. Final payment of this Class C Security will be made only upon
presentation and surrender of this Class C Security at the office or agency
specified in the notice of final distribution delivered by the Trustee in
accordance with the Agreement and the Series 2001-2 Supplement.
On any Distribution Date occurring on or after the day on which the
Class A Adjusted Investor Amount, the Class B Adjusted Investor Amount, the
Class C Adjusted Investor Amount and the amount of the Class D 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 Class A Investor Amount on the Closing Date,
the Class B Investor Amount on the Closing Date, the Class C Investor Amount on
the Closing Date and the highest amount of the Class D Investor Amount held by
parties other than the Transferor or any of its Affiliates since the Closing
Date, the Class C Securities are subject to optional repurchase by the
Transferor if certain conditions set forth in the Agreement or Series 2001-2
Supplement are satisfied. The repurchase price will be equal to the Class C
Adjusted Investor Amount plus accrued and unpaid interest thereon less the
amount held in the Collection Account allocable to Series 2001-2 to be applied
other than to deposits in the Reserve Account, with any excess payable to the
Transferor as holder of the Exchangeable Transferor Certificate.
Subject to certain conditions in the Agreement, if the Investor Amount
is greater than zero on the December 2009 Distribution Date (the "Stated Series
-------------
Termination Date"), the Trustee shall sell or cause to be sold an amount of
----------------
Receivables
A-3-6
up to 110% of the Adjusted Investor Amount at the close of business on such
date, but not more than the total amount of Receivables allocable to the Series
2001-2 Certificates, and apply the proceeds of such sale as provided in the
Agreement and the Series 2001-2 Supplement.
This Class C Security does not represent a recourse obligation of, or
an interest in, the Transferor, the Servicer, or any Affiliate of any of them
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other governmental agency or instrumentality. This Class C Security is
limited in right of payment to certain Collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
hereinabove and in the Agreement and the Series 2001-2 Supplement.
The Agreement and any Supplement may be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to cure any ambiguity, to revise certain exhibits
and schedules, correct or supplement any provision therein which may be
inconsistent with any other provision therein or to add other identifying code
numbers or identifying characteristics to the definition of Account or to add
any other provisions with respect to matters or questions raised under the
Agreement which shall not be inconsistent with the provisions of the Agreement;
provided, however, that such action shall not adversely affect in any material
respect the interests of any of the Investor Certificateholders. Additionally,
the Agreement and any Supplement may be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to add to, change or eliminate any of the
provisions of the Agreement or any right of Investor Certificateholders or to
enable Bearer Certificates to be issued in conformity with the Bearer Rules, to
provide that Bearer Certificates may be registrable as to principal, to change
or eliminate any restrictions on the payment of principal (or premium, if any)
or any interest on Bearer Certificates to comply with the Bearer Rules, to
permit Bearer Certificates to be issued in exchange for Registered Certificates
(if then permitted by the Bearer Rules), to permit Bearer Certificates to be
issued in exchange for Bearer Certificates of other authorized denominations or
to permit the issuance of Investor Certificates in uncertificated form, provided
any such action shall not adversely affect the interest of the holders of Bearer
Certificates of any Series or any related Coupons in any material respect unless
such amendment is necessary to comply with the Bearer Rules, or any right of the
Investor Certificateholders of any outstanding Series; provided that (i) the
Servicer shall have provided an Officer's Certificate to the Trustee to the
effect that such amendment will not materially and adversely affect the
interests of the Investor Certificateholders of any outstanding Series, (ii)
such amendment shall not cause the Trust to be characterized as a corporation
for Federal income tax purposes or otherwise have a material adverse effect on
the Federal income taxation of any Series and (iii) the Servicer shall have
given each Rating Agency ten (10) Business Days' prior written notice of such
amendment and shall have received written confirmation from each Rating Agency
that the Rating Agency Condition will be met. No such amendment, however, may
effect any of the amendments that require unanimous Certificateholder consent as
set forth herein, in the Agreement or the Series 2001-2 Supplement or (i)
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reduce in any manner the amount of, or delay the timing of, distributions which
are required to be made on any Investor Certificates of any Series, (ii) change
the definition of or the manner of calculating the interest of any
Certificateholder, (iii) alter the requirements for changing the percentage by
which the Minimum Transferor Amount is determined, (iv) change the manner in
which the Transferor Amount is determined or (v) reduce the percentage required
in Section 13.1(b) to consent to such amendments. Notwithstanding the foregoing,
any amendment providing for the transfer of Receivables to or by, and the
generation of new Receivables by, the Bank as Seller, Transferor, or Eligible
Originator, the appointment of the Bank as Servicer, and/or the assignment of
this Agreement, including any Supplement, to the Bank in connection with such
transfer and any amendments necessary to reflect such Bank and any related
special purpose, bankruptcy remote entity that is an Affiliate of Saks
Incorporated and that is organized for the purpose of purchasing Accounts and
Receivables from such Bank and serving as Transferor will be deemed not to
materially and adversely affect the interests of the Certificateholders.
The Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee with the consent of the Investor
Certificateholders evidencing undivided interests aggregating not less than 50%
of the Investor Amount of all Series adversely affected, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of the
Investor Certificateholders of any Series then issued and outstanding; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, distributions which are required to be made on any Investor
Certificate of such Series without the consent of all holders of the related
Investor Certificates; (ii) change the definition of or the manner of
calculating the Investor Amount, the Investor Percentage, the required amount
under any Enhancement or the Investor Default Amount of such Series without the
consent of the holders of the related Investor Certificates; or (iii) reduce the
aforesaid percentage required to consent to any such amendment, without the
consent of all holders of the related Investor Certificates of all Series
adversely affected thereby. Any amendment pursuant to this paragraph shall
require prior written confirmation from the applicable Rating Agency that the
Rating Agency Condition will be met.
Subject to Section 13.1(c) of the Agreement, each Class C Holder by
its acceptance of this Class C Security or any interest in this Class C
Security, consents to any amendment to the Agreement or any Supplement necessary
for the Transferor to elect FASIT status for the Trust or any portion thereof
under the Code.
As provided in the Series 2001-2 Supplement, each initial transferee
of the Class C Securities or Class D Certificates, or any interest therein and
any assignee thereof or participant therein (each a "holder") shall certify to
------
the Transferor, the Servicer and the Trustee that it has neither acquired nor
will it sell, transfer, assign participate, pledge, hypothecate, or otherwise
dispose (any such act, a "transfer") of any interest in its Class C Securities
--------
or Class D Certificates or cause an interest in such Class C Securities or Class
D Certificates to be marketed on or through (i) an "established securities
market"
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within the meaning of Section 7704(b)(1) of 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 or (ii) a "secondary market" within the meaning of Section 7704(b)(2)
of the Code and any Treasury regulation thereunder, including, without
limitation, a market wherein interests in the Class C Securities or Class D
Certificates are regularly quoted by any Person making a market in such
interests and a market wherein any Person regularly makes available bid or offer
quotes with respect to interests in the Class C Securities or Class D
Certificates and stands ready to effect buy or sell transactions at the quoted
price for itself or on behalf of others.
The Class C Securities are issuable only in minimum denominations of
$250,000 and integral multiples of $1,000. The transfer of this Class C Security
shall be registered in the Certificate Register upon surrender of this Class C
Security for registration of transfer at any office or agency maintained by the
Transfer Agent and Registrar, and thereupon one or more new Class C Securities
in authorized denominations representing like aggregate undivided interests in
the Trust will be issued to the designated transferee or transferees.
As provided in the Agreement and the Series 2001-2 Supplement and
subject to certain limitations therein set forth, Class C Securities are
exchangeable for new Class C Securities in authorized denominations of like
aggregate undivided interests in the Trust as requested by the Class C Holder
surrendering such Class C Securities. No service charge may be imposed for any
transfer or exchange but the Transfer Agent and Registrar and the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and Registrar and
any agent or representative of any of them may treat the person in whose name
this Class C Security is registered as the owner hereof for all purposes, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar, nor any
agent or representative of any of them, shall be affected by notice to the
contrary.
THE AGREEMENT AND THIS CLASS C SECURITY SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
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ASSIGNMENT
Social Security or other Taxpayer Identification Number (T.I.N.) of
assignee ______
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
------------------------------
the within Class C Security and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
Class C Security on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: *
-----------------------------------
Signature Guaranteed:
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
X-0-00
XXXXXXX X-0
to the
SERIES 2001-2 SUPPLEMENT
FORM OF CLASS D CERTIFICATE
EXHIBIT A-4
to the
2001-2 SERIES SUPPLEMENT
FORM OF CLASS D CERTIFICATE
REGISTERED $15,750,000
No. D-1
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS OR
---
"BLUE SKY" LAWS, AND MAY NOT DIRECTLY OR INDIRECTLY BE OFFERED OR SOLD OR
OTHERWISE DISPOSED OF WITHOUT COMPLIANCE WITH SUCH LAWS. PRIOR TO ANY TRANSFER
OF THIS CERTIFICATE, THE TRUSTEE OR THE TRANSFER AGENT AND REGISTRAR AND THE
SERVICER SHALL REQUIRE A TRANSFEREE AGREEMENT FROM THE TRANSFEREE DEMONSTRATING
COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND CONTAINING CERTAIN
REPRESENTATIONS AND COVENANTS AS TO VARIOUS ERISA MATTERS. THE TRUSTEE OR THE
TRANSFER AGENT AND REGISTRAR AND THE SERVICER ALSO MAY REQUIRE AN OPINION OF
COUNSEL WITH RESPECT THERETO. IN ADDITION, THE TRANSFEROR SHALL NOT TRANSFER
THIS CERTIFICATE UNLESS THE TRANSFEROR SHALL HAVE DELIVERED TO THE TRUSTEE AN
OPINION OF COUNSEL TO THE EFFECT THAT SUCH PROPOSED TRANSFER WOULD NOT ADVERSELY
AFFECT THE TAX CHARACTERIZATION OF THE TRUST.
THIS CERTIFICATE MAY NOT BE ACQUIRED, SOLD, TRADED OR TRANSFERRED, NOR
MAY AN INTEREST IN THIS CERTIFICATE BE MARKETED, ON OR THROUGH (I) AN
"ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(b)(1) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND ANY PROPOSED,
----
TEMPORARY OR FINAL TREASURY REGULATION THEREUNDER, INCLUDING, WITHOUT
LIMITATION, AN OVER-THE-COUNTER-MARKET OR AN INTERDEALER QUOTATION SYSTEM THAT
REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS OR (II) A "SECONDARY MARKET"
WITHIN THE MEANING OF SECTION 7704(b)(2) OF THE CODE AND ANY PROPOSED, TEMPORARY
OR FINAL TREASURY REGULATION THEREUNDER, INCLUDING A MARKET WHEREIN INTERESTS IN
THE CLASS D CERTIFICATES ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN
SUCH INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES AVAILABLE BID
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OR OFFER QUOTES WITH RESPECT TO INTERESTS IN THE CLASS D CERTIFICATES AND STANDS
READY TO EFFECT BUY OR SELL TRANSACTIONS AT THE QUOTED PRICES FOR ITSELF OR ON
BEHALF OF OTHERS.
SAKS CREDIT CARD MASTER TRUST
CLASS D ASSET BACKED CERTIFICATE, SERIES 2001-2
Representing an undivided interest
in certain assets of the
SAKS CREDIT CARD MASTER TRUST
Evidencing an undivided interest in a trust, the corpus of which consists
primarily of receivables acquired from
SAKS CREDIT CORPORATION
(Not an interest in or obligation of Saks Credit Corporation
or any Affiliate thereof)
This certifies that Saks Credit Corporation (the "Class D
-------
Certificateholder") is the registered owner of a fractional undivided interest
-----------------
in certain assets of a trust (the "Trust") created pursuant to the Master
Pooling and Servicing Agreement, dated as of August 21, 1997 (as amended and
supplemented, the "Agreement"), as supplemented by the Series 2001-2 Supplement,
---------
dated as of July 21, 1999 (as amended and supplemented, the "Series 2001-2
-------------
Supplement"), among Saks Credit Corporation (as successor to Xxxxxxxx'x Credit
----------
Corporation), as Transferor, Saks Incorporated (formerly named "Xxxxxxxx'x,
Inc.") as Servicer, and Xxxxx Fargo Bank Minnesota, National Association
(formerly named "Norwest Bank Minnesota, National Association"), a national
banking association, as trustee (the "Trustee"). The corpus of the Trust
-------
consists of (i) receivables (the "Receivables") generated from time to time in a
-----------
portfolio of consumer revolving credit card accounts identified under the
Agreement (the "Accounts"), (ii) all monies due or to become due in payment of
--------
the Receivables, (iii) all proceeds of the Receivables and proceeds of Insurance
Policies relating to the Receivables, (iv) all monies held in certain accounts
of the Trust (excluding investment earnings, unless otherwise specified in the
Agreement or any Supplement), (v) all Recoveries and Collections of the
Receivables, (vi) any Enhancement with respect to any Series (or class thereof)
and (vii) all other assets and interests constituting the Trust Property.
Although a summary of certain provisions of the Agreement and the Series 2001-2
Supplement is set forth below and on the Summary of Terms and Conditions
attached hereto and made a part hereof, this Class D Certificate does not
purport to summarize the Agreement and the Series 2001-2 Supplement and
reference is made to the Agreement and the Series 2001-2 Supplement for
information with respect to the interests, rights, benefits, obligations,
proceeds and
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duties evidenced hereby and the rights, duties and obligations of the Trustee. A
copy of the Agreement and the Series 2001-2 Supplement (without schedules) may
be requested from the Trustee by writing to the Trustee at the Corporate Trust
Office: Xxxxx Fargo Bank Minnesota, N.A., Sixth Street and Marquette Avenue,
N9311-161, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Asset Backed Securities
Corporate Trust Department. To the extent not defined herein, the capitalized
terms used herein have the meanings ascribed to them in the Agreement or the
Series 2001-2 Supplement, as applicable.
This Class D Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement and the Series 2001-2 Supplement, to
which Agreement and Series 2001-2 Supplement, each as amended and supplemented
from time to time, the Class D Certificateholder by virtue of the acceptance
hereof assents and is bound.
It is the intent of the Transferor and the Investor Certificateholders
(and Certificate Owners) that, for Federal, state and local income and franchise
tax purposes only, the Investor Certificates will qualify as indebtedness of the
Transferor secured by the Receivables (unless otherwise specified in the related
Supplement). The Class D Certificateholder (and each Certificate Owner of a
Class D Certificate), by the acceptance of this Class D Certificate (or its
interest therein), is deemed to agree to treat this Class D Certificate for
Federal, state and local income and franchise tax purposes and any other tax
imposed on or measured by income as indebtedness of the Transferor.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class D Certificate shall
not be entitled to any benefit under the Agreement or the Series 2001-2
Supplement or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this Class D Certificate
to be duly executed.
SAKS CREDIT CORPORATION
By:
---------------------------------
Name: Xxxxx X.Xxxxxxx
Title: Vice President
Dated: July 17, 2001
A-4-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates described in the within-mentioned
Agreement and Series 2001-2 Supplement.
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee,
By:
---------------------------------
Authorized Officer
Dated: July 17, 2001
A-4-4
SAKS CREDIT CARD MASTER TRUST
CLASS D ASSET BACKED CERTIFICATE, SERIES 2001-2
Summary of Terms and Conditions
This Class D Certificate is one of a Series of Certificates entitled
Saks Credit Card Master Trust, Series 2001-2 Certificates (the "Series 2001-2
-------------
Certificates"), and one of a class thereof entitled "Class D Asset Backed
------------
Certificates, Series 2001-2" (the "Class D Certificates"), each of which
--------------------
represents a fractional undivided interest in certain assets of the Trust. The
Trust Property is allocated in part to the Investor Certificateholders of all
outstanding Series (the "Certificateholders' Interest") and the interests, if
----------------------------
any, of any Enhancement Providers, with the remainder allocated to the
Transferor. The aggregate interest represented by the Class D Certificates at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class D Investor Amount at such time. The Class D Initial Investor
Amount is $15,750,000. The Class D Investor Amount on any date will be an
amount equal to (a) the Class D Initial Investor Amount (plus the aggregate
initial principal amount of any Additional Class D Certificates issued pursuant
to the Series 2001-2 Supplement), minus (b) the aggregate amount of principal
payments made to the Class D Certificateholders prior to such date, minus (c)
the amount of Class D Subordinated Principal Collections used to make payments
in respect of the Class A Certificates, the Class B Certificates and the Class C
Securities on all prior Distribution Dates pursuant to the Series 2001-2
Supplement, minus (d) an amount equal to the amount by which the Class D
Investor Amount has been reduced on all prior Distribution Dates in respect of
the Class A Allocable Amount, the Class B Allocable Amount, the Class C
Allocable Amount and the Class D Allocable Amount, plus (e) the sum of the
amount of Excess Spread and Shared Excess Finance Charge Collections allocated
and available on all prior Distribution Dates pursuant to the Series 2001-2
Supplement for the purpose of reimbursing amounts deducted pursuant to the
foregoing clauses (c) and (d) and, without duplication, the aggregate amount of
the reductions of the Series Adjustment Amounts allocable to the Class D
Investor Amount pursuant to the Series 2001-2 Supplement; provided, however,
that the Class D Investor Amount may not be reduced below zero. In addition,
classes of the Series 2001-2 Certificates entitled Class A Asset Backed
Certificates, Series 2001-2 (the "Class A Certificates"), Class B Asset Backed
--------------------
Certificates, Series 2001-2 (the "Class B Certificates") and Class C Securities,
--------------------
Series 2001-2 (the "Class C Securities") will be issued. The Exchangeable
------------------
Transferor Certificate has also been issued to Saks Credit Corporation pursuant
to the Agreement, which represents the Transferor Interest.
Subject to the terms and conditions of the Agreement, the Transferor
may from time to time direct the Trustee, on behalf of the Trust, to issue one
or more new Series of Investor Certificates, which will represent fractional
undivided interests in certain Trust Property.
Each Class D Certificate represents the right to receive payments of
principal on each Distribution Date on and after the Distribution Date on which
the Class
A-4-5
A Certificates, the Class B Certificates and the Class C Securities have been
paid in full (subject to certain exceptions), in each case funded from a
percentage of the payments received with respect to the Receivables and certain
other funds, and subject to certain restrictions, all as more fully described in
the Agreement and the Series 2001-2 Supplement.
The Class D Certificates are subordinated to the Class A Certificates,
the Class B Certificates and the Class C Securities to the extent set forth in
the Series 2001-2 Supplement.
On each Distribution Date, the Paying Agent shall distribute to each
Class D Certificateholder of record at the close of business on the last
Business Day immediately preceding such Distribution Date (each a "Record Date")
-----------
such Class D Certificateholder's pro rata share of such amounts as are payable
to the Class D Certificateholders pursuant to the Agreement and the Series 2001-
2 Supplement. Distributions with respect to this Class D Certificate will be
made by the Paying Agent by check mailed to the address of the Class D
Certificateholder of record appearing in the Certificate Register without the
presentation or surrender of this Class D Certificate or the making of any
notation thereon (except for the final distribution in respect of this Class D
Certificate). Final payment of this Class D Certificate will be made only upon
presentation and surrender of this Class D Certificate at the office or agency
specified in the notice of final distribution delivered by the Trustee in
accordance with the Agreement and the Series 2001-2 Supplement.
On any Distribution Date occurring on or after the day on which the
Class A Adjusted Investor Amount, the Class B Adjusted Investor Amount, the
Class C Adjusted Investor Amount and the amount of the Class D 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 Class A Investor Amount on the Closing Date,
the Class B Investor Amount on the Closing Date, the Class C Investor Amount on
the Closing Date and the highest amount of the Class D Investor Amount held by
parties other than the Transferor or any of its Affiliates since the Closing
Date, the Class D Certificates are subject to optional repurchase by the
Transferor if certain conditions set forth in the Agreement or Series 2001-2
Supplement are satisfied. The retransfer price will be equal to the Class D
Investor Amount plus accrued and unpaid interest thereon less the amount held in
the Collection Account allocable to Series 2001-2 to be applied other than to
deposits in the Reserve Account, with any excess payable to the Transferor as
holder of the Exchangeable Transferor Certificate.
Subject to certain conditions in the Agreement, if the Investor Amount
is greater than zero on the December 2009 Distribution Date (the "Stated Series
-------------
Termination Date"), the Trustee shall sell or cause to be sold an amount of
----------------
Receivables up to 110% of the Adjusted Investor Amount at the close of business
on such date, but not more than the total amount of Receivables allocable to the
Series 2001-2 Certificates, and apply the proceeds of such sale as provided in
the Agreement and the Series 2001-2 Supplement.
A-4-6
This Class D Certificate does not represent a recourse obligation of,
or an interest in, the Transferor, the Servicer, or any Affiliate of any of them
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other governmental agency or instrumentality. This Class D Certificate is
limited in right of payment to certain Collections with respect to the
Receivables (and certain other amounts), all as more specifically set forth
hereinabove and in the Agreement and the Series 2001-2 Supplement.
The Agreement and any Supplement may be amended from time to time by
the Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to cure any ambiguity, to revise certain exhibits
and schedules, correct or supplement any provision therein which may be
inconsistent with any other provision therein or to add other identifying code
numbers or identifying characteristics to the definition of Account or to add
any other provisions with respect to matters or questions raised under the
Agreement which shall not be inconsistent with the provisions of the Agreement;
provided, however, that such action shall not adversely affect in any material
respect the interests of any of the Investor Certificateholders. Additionally,
the Agreement and any Supplement may be amended from time to time by the
Servicer, the Transferor and the Trustee, without the consent of any of the
Investor Certificateholders, to add to, change or eliminate any of the
provisions of the Agreement or any right of Investor Certificateholders or to
enable Bearer Certificates to be issued in conformity with the Bearer Rules, to
provide that Bearer Certificates may be registrable as to principal, to change
or eliminate any restrictions on the payment of principal (or premium, if any)
or any interest on Bearer Certificates to comply with the Bearer Rules, to
permit Bearer Certificates to be issued in exchange for Registered Certificates
(if then permitted by the Bearer Rules), to permit Bearer Certificates to be
issued in exchange for Bearer Certificates of other authorized denominations or
to permit the issuance of Investor Certificates in uncertificated form, provided
any such action shall not adversely affect the interest of the holders of Bearer
Certificates of any Series or any related Coupons in any material respect unless
such amendment is necessary to comply with the Bearer Rules, or any right of the
Investor Certificateholders of any outstanding Series; provided that (i) the
Servicer shall have provided an Officer's Certificate to the Trustee to the
effect that such amendment will not materially and adversely affect the
interests of the Investor Certificateholders of any outstanding Series, (ii)
such amendment shall not cause the Trust to be characterized as a corporation
for Federal income tax purposes or otherwise have a material adverse effect on
the Federal income taxation of any Series and (iii) the Servicer shall have
given each Rating Agency ten (10) Business Days' prior written notice of such
amendment and shall have received written confirmation from each Rating Agency
that the Rating Agency Condition will be met. No such amendment, however, may
effect any of the amendments that require unanimous Certificateholder consent as
set forth herein, in the Agreement or the Series 2001-2 Supplement or (i) reduce
in any manner the amount of, or delay the timing of, distributions which are
required to be made on any Investor Certificates of any Series, (ii) change the
definition of or the manner of calculating the interest of any
Certificateholder, (iii) alter the requirements for changing the percentage by
which the Minimum Transferor Amount is
A-4-7
determined, (iv) change the manner in which the Transferor Amount is determined
or (v) reduce the percentage required in Section 13(b) to consent to such
amendments. Notwithstanding the foregoing, any amendment providing for the
transfer of Receivables to or by, and the generation of new Receivables by, the
Bank as Seller, Transferor, or Eligible Originator, the appointment of the Bank
as Servicer, and/or the assignment of this Agreement, including any Supplement,
to the Bank in connection with such transfer and any amendments necessary to
reflect such Bank and any related special purpose, bankruptcy remote entity that
is an Affiliate of Saks Incorporated and that is organized for the purpose of
purchasing Accounts and Receivables from such Bank and serving as Transferor
will be deemed not to materially and adversely affect the interests of the
Certificateholders.
The Agreement and any Supplement may also be amended from time to time
by the Servicer, the Transferor and the Trustee with the consent of the Investor
Certificateholders evidencing undivided interests aggregating not less than 50%
of the Investor Amount of all Series adversely affected, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Agreement or of modifying in any manner the rights of the
Investor Certificateholders of any Series then issued and outstanding; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, distributions which are required to be made on any Investor
Certificate of such Series without the consent of all holders of the related
Investor Certificates; (ii) change the definition of or the manner of
calculating the Investor Amount, the Investor Percentage, the required amount
under any Enhancement or the Investor Default Amount of such Series without the
consent of the holders of the related Investor Certificates; or (iii) reduce the
aforesaid percentage required to consent to any such amendment, without the
consent of all holders of the related Investor Certificates of all Series
adversely affected thereby. Any amendment pursuant to this paragraph shall
require prior written confirmation from the applicable Rating Agency that the
Rating Agency Condition will be met.
Subject to Section 13.1(c) of the Agreement, each Certificateholder by
its acceptance of this Certificate or any interest in this Certificate, consents
to any amendment to the Agreement or any Supplement necessary for the Transferor
to elect FASIT status for the Trust or any portion thereof under the Code.
As provided in the Series 2001-2 Supplement, each initial transferee
of the Class C Securities or Class D Certificates, or any interest therein and
any assignee thereof or participant therein (each a "holder") shall certify to
------
the Transferor, the Servicer and the Trustee that it has neither acquired nor
will it sell, transfer, assign participate, pledge, hypothecate, or otherwise
dispose (any such act, a "transfer") of any interest in its Class C Securities
--------
or Class D Certificates or cause an interest in such Class C Securities or Class
D Certificates to be marketed on or through (i) an "established securities
market" within the meaning of Section 7704(b)(1) of 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 or (ii) a "secondary market" within the meaning of Section 7704(b)(2)
of the Code and any
A-4-8
Treasury regulation thereunder, including, without limitation, a market wherein
interests in the Class C Securities or Class D Certificates are regularly quoted
by any Person making a market in such interests and a market wherein any Person
regularly makes available bid or offer quotes with respect to interests in the
Class C Securities or Class D Certificates and stands ready to effect buy or
sell transactions at the quoted price for itself or on behalf of others. In
addition, each holder shall certify, prior to any delivery or transfer to it of
any Class D Certificate or interest therein, that it is not and will not become
a partnership, Subchapter S corporation or grantor trust for United States
federal income tax purposes. If a holder cannot make the certification described
in the preceding sentence, the Transferor, the Trustee or the Servicer may
prohibit a transfer to such entity; provided, however, that if the Transferor,
the Trustee or the Servicer 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. Each
holder acknowledges that special tax counsel to the Transferor may render
Opinions of Counsel from time to time to the Transferor and others that the
Trust will not be treated as an association or as a publicly traded partnership
taxable as a corporation, and that such Opinions of Counsel will rely in part on
the accuracy of the certifications described in the Series 2001-2 Supplement.
The Class D Certificates are issuable only in minimum denominations of
$50,000 and integral multiples of $1,000. The transfer of this Class D
Certificate shall be registered in the Certificate Register upon surrender of
this Class D Certificate for registration of transfer at any office or agency
maintained by the Transfer Agent and Registrar, and thereupon one or more new
Class D Certificates in authorized denominations representing like aggregate
undivided interests in the Trust will be issued to the designated transferee or
transferees.
As provided in the Agreement and the Series 2001-2 Supplement and
subject to certain limitations therein set forth, Class D Certificates are
exchangeable for new Class D Certificates in authorized denominations of like
aggregate undivided interests in the Trust as requested by the Class D
Certificateholder surrendering such Class D Certificates. No service charge may
be imposed for any transfer or exchange but the Transfer Agent and Registrar and
the Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith.
The Trustee, the Paying Agent and the Transfer Agent and Registrar and
any agent or representative of any of them may treat the person in whose name
this Class D Certificate is registered as the owner hereof for all purposes, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar, nor any
agent or representative of any of them, shall be affected by notice to the
contrary.
THE AGREEMENT AND THIS CLASS D CERTIFICATE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE
A-4-9
PARTIES UNDER THE AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-4-10
ASSIGNMENT
Social Security or other Taxpayer Identification Number (T.I.N.) of
assignee ______
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
------------------------------
the within Certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints ______________________, attorney, to transfer said
Certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: *
-----------------------------------
Signature Guaranteed:
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate in
every particular, without alteration, enlargement or any change whatsoever.
A-4-11
EXHIBIT B
to the
2001-2 SERIES SUPPLEMENT
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO THE TRUSTEE
[RESERVED]
EXHIBIT C
to the
2001-2 SERIES SUPPLEMENT
FORM OF MONTHLY CERTIFICATEHOLDER'S STATEMENT
EXHIBIT D
to the
2001-2 SERIES SUPPLEMENT
CLASS C SECURITY RATE
The Class C Rate is LIBOR plus 1.50% per annum.
The Class C Monthly Interest distributable with respect to the first
Distribution Date is $280,092.
EXHIBIT E
to the
SERIES 2001-2 SUPPLEMENT
FORM OF PURCHASER CERTIFICATE
FORM OF PURCHASER CERTIFICATE
-----------------------------
[DATE]
Saks Incorporated
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Xxxxx Fargo Bank Minnesota,
National Association
Sixth Street and Marquette Avenue, N9311-161
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Saks Credit Card Master Trust--[Class C Securities]
[Class D Certificates], Series 2001-2
Ladies and Gentlemen:
In connection with our proposed purchase of $________ in principal amount
of the Saks Credit Card Master Trust, [Class C Security][Class D Asset Backed
Certificate], Series 2001-2 (the "Certificate"), we confirm that:
-----------
1. We agree to be bound by the restrictions and conditions set forth in the
Pooling and Servicing Agreement, dated as of August 21, 1997, as amended and
supplemented from time to time, and the Series 2001-2 Supplement dated as of
July 17, 2001 (the "Series 2001-2 Supplement" and, together with the Pooling and
------------------------
Servicing Agreement, the "Pooling and Servicing Agreement"), each by and between
-------------------------------
Saks Credit Corporation, as Transferor, Saks Incorporated, as Servicer, and
Xxxxx Fargo Bank Minnesota, National Association (formerly named "Norwest Bank
Minnesota, National Association"), as Trustee, relating to the Certificate and
agree to be bound by, and not reoffer, resell, pledge or otherwise transfer (any
such act, a "Transfer") the Certificate or any interest therein except in
--------
compliance with, such restrictions and conditions, including, without
limitation, those in Section K of the Series 2001-2 Supplement. Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
specified in the Pooling and Servicing Agreement, including the Series 2001-2
Supplement.
2. We understand that the Certificate has not been and will not be
registered under the Securities Act of 1933, as amended (the "Securities Act"),
--------------
or any state or foreign securities or blue sky laws and agree that the
Certificate or any interest therein may be reoffered, resold, pledged or
otherwise transferred only in compliance with the
Securities Act and other applicable laws and only (i) to the Transferor or (ii)
to a "qualified institutional buyer" (as defined in Rule 144A under the
-----------------------------
Securities Act) in a transaction exempt from the registration requirements of
the Securities Act (upon delivery of the documentation required by the Pooling
and Servicing Agreement and, if the Trustee or Servicer so requires and the
Pooling and Servicing Agreement so provides, an opinion of counsel satisfactory
to the Trustee or the Servicer, as applicable).
3. We have not acquired nor will we Transfer any Certificate we acquire (or
any interest therein) or cause any Certificate (or any interest therein) to be
marketed on or through (i) an "established securities market" within the meaning
of Section 7704(b)(1) of the Internal Revenue Code of 1986, as amended (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 or (ii) a "secondary market" within the
meaning of Section 7704(b)(2) of the Code and any Treasury regulation
thereunder.
4. We are a person who is either (A) (i) a citizen or resident of the
United States, (ii) a corporation or other entity organized in or under the laws
of the United States or any political subdivision thereof or (iii) a person not
described in (i) or (ii) whose ownership of the Certificate is effectively
connected with a such person's conduct of a trade or business within the United
States (within the meaning of the Code) and our ownership of any interest in a
Certificate will not result in any withholding obligation with respect to any
payments with respect to the Certificate by any person or (B) an estate or trust
the income of which is includible in gross income for United States federal
income tax purposes. We agree that (a) if we are a person described in clause
(A) (i) or (A) (ii) above, we will furnish to the person from whom we are
acquiring a Certificate, the Servicer and the Trustee a properly executed U.S.
Internal Revenue Service Form W-9 and a new Form W-9, or any successor
applicable form, upon the expiration or obsolescence of any previously delivered
form or (b) if we are a person described in clause (A) (iii) above, we will
furnish to the person from whom we are acquiring a Certificate, the Servicer and
the Trustee a properly executed U.S. Internal Revenue Service Form 4224 and a
new Form 4224, or any successor applicable form, upon the expiration or
obsolescence of any previously delivered form (and, in each case, such other
certifications, representations or opinions of counsel as may be requested by
the Transferor, the Servicer or the Trustee). We recognize that, if we are a
tax-exempt entity, payments with respect to the Certificate may constitute
unrelated business taxable income.
5. We understand that no subsequent Transfer of a Certificate is permitted
unless such Transfer is of a Certificate with a denomination of at least
$250,000 in the case of a Class C Security, and $50,000 with respect to a Class
D Certificate, the Transferor and the Servicer consent in writing to the
proposed Transfer, which consent shall be granted (assuming that all other
conditions to such Transfer are satisfied) unless either the Transferor or the
Servicer determines in its sole and absolute discretion 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
F-6
corporation; provided, however, that any attempted Transfer that would cause the
number of holders of Class D Certificates to exceed ninety shall be void; and,
provided further, that there shall not at any time be more than 10 Holders of
Class D Certificates of Series 2001-2 or such other number as may be consented
to by the Transferor, which consent may be withheld in its sole and absolute
discretion].
6. We have such knowledge and experience in financial and business matters,
including the purchase of subordinated asset backed securities, as to be capable
of evaluating the merits and risks of our investment in the Certificate, and we
and any account for which we are acting are each able to bear the economic risk
of our or its investment.
7. We are acquiring each Certificate purchased by us for our own account or
for a single account (each of which is a "qualified institutional buyer" within
the meaning of Rule 144A) as to which we exercise sole investment discretion.
8. We are 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 Code, including, without limitation, individual
retirement accounts and Xxxxx plans, (iii) a "governmental plan," (as defined in
Section 3(32) of ERISA), subject to any federal, state of local law which is, to
a material extent, similar to the provisions of Section 406 of ERISA or Section
4975 of the Code, (iv) any other entity whose underlying assets include "plan
assets" (as defined in United States Department of Labor ("DOL") Regulations
---
Section 2510.3-101, 29 C.F.R. (S)2510.3-101 or otherwise under ERISA) by reason
of a plan's investment in the entity, including, without limitation, an
insurance company general account, or (v) a person (a "Plan Investor") investing
or holding "plan assets" (as described in 29 C.F.R. 2510.3-101) of any such
plan. If we are, or are acting on behalf of, an insurance company general
account, we hereby represent, warrant and covenant that (i) less than 25% of the
assets of such general account constitute assets of one or more Plan Investors
and (ii) one or more statutory or administrative exemptions from the prohibited
transaction rules of ERISA and Section 4975 of the Code applies to our purchase
and holding of an interest in the Class C Securities such that the purchase and
holding does not constitute a non-exempt prohibited transaction for the purposes
of Title I of ERISA or Section 4975 of the Code. In addition, we represent,
warrant and covenant that, if at any time the percentage of the assets of its
general account that constitutes assets of one or more Plan Investors equals or
exceeds 25% of such general account, we will take such steps as may be necessary
to dispose of our interest in the Class C Securities.
9. We further confirm that the Transfer to us complies in all other
respects to the requirements specified in the Series 2001-2 Supplement,
including without limitation [Section K,] and the form of Class C Security and
in the case of a Transfer of Class D Certificates.
F-7
10. We understand that any purported Transfer of any Certificate in
contravention of the restrictions and conditions in paragraphs 1 through 9 above
shall be null and void and the purported transferee shall not be recognized by
the Trustee or any other person as a Holder for any purpose.
11. We further understand that, on any proposed reoffer, resale, pledge or
transfer of any Certificate, we will be required to furnish to the Trustee and
the Transfer Agent and Registrar such certification and other information as the
Trustee or the Transfer Agent and Registrar may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions and with the
restrictions and conditions of the Certificate and the Pooling and Servicing
Agreement, and we agree that if we determine to Transfer any Certificate we will
cause our proposed transferee to provide the Transferor, the Servicer and the
Trustee with a letter substantially in the form of this letter. We further
understand that the Certificate purchased by us will bear a legend to the
foregoing effect.
12. The person signing this letter on behalf of the ultimate beneficial
purchaser of the Certificate has been duly authorized by such beneficial
purchaser of the Certificate to do so.
13. The Certificate purchased by us should be registered in the name and
issued in the denominations set forth on Schedule 1 hereto. All payments on the
Certificate held by us should be wired to us in accordance with the instructions
set forth on Schedule 1 hereto unless we otherwise notify the Transferor, the
Servicer and the Trustee in writing.
You are entitled to rely upon this letter and we understand that, in
granting their respective consents to our purchase of the Certificate, the
Transferor and the Servicer will rely on our representations and warranties in
this letter and on our certifications in the documents (including, without
limitation, the Form W-9 or Form 4224, as applicable) delivered by us to the
Transferor, the Servicer or the Trustee in connection with our purchase of the
Certificate. You are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very truly yours,
[FULL LEGAL NAME OF PURCHASER]
By:
--------------------------------
Name:
Title:
F-8
Schedule 1
----------
Registration and Payment Instructions
-------------------------------------
Registration Instructions:
--------------------------
Full Legal Name of Purchaser:
--------------------------------------------------
Name in Which Certificates Should be Registered:
-----------------------------------------------------
Number and Denomination of Certificates:
-----------------------------------------------------
-----------------------------------------------------
Payment Instructions:
--------------------
Name of Bank:
Address of Bank:
Account Name:
Account Number:
ABA Number:
Reference:
Notice Information:
------------------
Address:
Attention:
Telephone:
Telefax:
PLEASE ATTACH AN ORIGINAL EXECUTED U.S. INTERNAL REVENUE SERVICE FORM W-9 AND/OR
FORM 4224, IF APPLICABLE
F-9
EXHIBIT F
to the
SERIES 2001-2 SUPPLEMENT
CERTAIN REPRESENTATIONS AND WARRANTIES
The following representations and warranties are made by each of the
Transferor and the Servicer, as applicable:
General
-------
1. The Agreement creates a valid and continuing security interest (as
defined in the applicable UCC) in the Receivables and the proceeds thereof
(collectively, the "Collateral") in favor of the Trustee on behalf of the
----------
Certificateholders, which security interest is prior to all other Liens, and is
enforceable as such as against creditors of and purchasers from the Transferor.
2. The Collateral constitutes "accounts," "chattel paper" or "general
intangibles" within the meaning of the applicable UCC.
Creation
3. The Transferor owns and has good and marketable title to the Collateral
free and clear of any Lien, claim or encumbrance of any Person.
4. For sale of loan participations, swaps and other payment intangibles,
the Transferor has received all consents and approvals required by the terms of
the Collateral to the sale of the Collateral hereunder to the Trustee.
Perfection
5. The Transferor has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Collateral granted to the Trustee on behalf of the
Certificateholders under the Agreement.
Priority
6. Other than the security interest granted to the Trustee pursuant to this
Agreement, the Transferor has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Collateral. The Transferor has not
authorized the filing of and is not aware of any financing statements against
the Transferor that include a description of collateral covering the Collateral
other than any financing statement relating to the security interest granted to
the Trustee on behalf of the Certificateholders
F-1
under the Agreement or that has been terminated. The Transferor is not aware of
any judgment or tax lien filings against the Transferor.
Maintenance of Perfection and Priority of Security Interest
7. The Servicer and the Transferor agree to maintain the perfection and
priority of the security interest in the Collateral granted to the Trustee on
behalf of the Certificateholders as provided in the Agreement, including,
without limitation, Sections 2.1, 2.4(a), 2.5(a), 2.5(b), 2.6(a), 2.6(b),
2.6(c), 2.6(d), 2.7 (as amended by Amendment No. 3 to the Agreement) and 3.3(i)
of the Agreement.
F-2
