SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 30, 1999
SAKS CREDIT CARD MASTER TRUST
-----------------------------
(Exact Name of Registrant as Specified in Charter)
Not Applicable 333-28811-01 Not Applicable
-------------- ------------ --------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
P.O. Box 20080, Jackson, Mississippi 39289
---------------------------------------------------
(Addresses of Principal Executive Offices, including Zip Code)
(601) 968-4400
---------------------------------------------
(Registrant's Telephone Number, including Area Code)
Proffitt's Credit Card Master Trust
----------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
- ------ ------------
As of June 30, 1999, Saks Credit Corporation became the Transferor,
pursuant to the Pooling and Servicing Agreement, as amended, among Saks Credit
Corporation (as successor to Proffitt's Credit Corporation), as Transferor, Saks
Incorporated, as Servicer, and Norwest Bank Minnesota, National Association, as
Trustee
As of July 1, 1999 the name of the Registrant was changed from the
Proffitt's Credit Card Master Trust to the Saks Credit Card Master Trust.
Item 7. Financial Statements, Pro Forma Financial Information, and Exhibits.
- ------ -------------------------------------------------------------------
(c) Exhibits.
The following exhibits are filed herewith:
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation of Saks Credit Corporation
3.2 Bylaws of Saks Credit Corporation
99.1 Amendment No. 2 dated as of July 1, 1999, to the Master
Pooling and Servicing Agreement dated as of August 21,
1997, by and among Saks Credit Corporation, as
Transferor, Saks Incorporated, as Servicer, and Norwest
Bank Minnesota, National Association, as Trustee
99.2 Receivables Purchase Agreement dated as of July 1, 1999,
by and among National Bank of the Great Lakes, as Seller,
Saks Incorporated, as Servicer, and Saks Credit
Corporation, as Purchaser
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAKS INCORPORATED, as Servicer under the
SAKS CREDIT CARD MASTER TRUST
(Registrant)
/s/ Charles J. Hansen
------------------------
Charles J. Hansen
Senior Vice President and
Associate General Counsel
Date: July 1, 1999
INDEX TO EXHIBITS
-----------------
Exhibit No. Description
----------- -----------
3.1 Certificate of Incorporation of Saks Credit
Corporation
3.2 Bylaws of Saks Credit Corporation
99.1 Amendment No. 2 dated as of July 1, 1999, to the
Master Pooling and Servicing Agreement dated as of
August 21, 1997, by and among Saks Credit Corporation,
as Transferor, Saks Incorporated, as Servicer, and
Norwest Bank Minnesota, National Association, as
Trustee
99.2 Receivables Purchase Agreement dated as of July 1,
1999, by and among National Bank of the Great Lakes,
as Seller, Saks Incorporated, as Servicer, and Saks
Credit Corporation, as Purchaser
Exhibit 3.1
Certificate of Incorporation of Saks Credit Corporation
_____________________________
CERTIFICATE OF INCORPORATION
OF
SAKS CREDIT CORPORATION
_____________________________
ARTICLE ONE
NAME
The name of the corporation (the "Corporation") is: "Saks Credit
Corporation"
ARTICLE TWO
REGISTERED OFFICE AND AGENT
The address of the Corporation's registered office in the State of
Delaware is 1013 Centre Road, City of Wilmington, County of New Castle. The
name of its registered agent at such address is Corporation Service Company.
ARTICLE THREE
OBJECTS AND POWERS
The nature of the Corporation's business, and its objects, purposes
and powers are as follows:
(1) To enter into and perform any agreement to purchase, make loans
secured by or otherwise acquire, own, hold, sell, securitize, assign,
pledge, transfer, exchange or dispose of interests in, or undivided
interests in, pools of accounts, securities, general intangibles, chattel
paper, instruments, receivables, or other financial assets, or collateral
securing financial assets, of Saks Incorporated, its subsidiary National
Bank of the Great Lakes, or any other Affiliate of Saks Incorporated (all
such assets, "Permitted Assets");
(2) To enter into and perform any agreement providing for (i) the sale
or financing of Permitted Assets or undivided interests therein or (ii)
borrowing or issuing evidences of indebtedness by the Corporation to
facilitate any activity authorized herein, either on an unsecured basis or
secured by a pledge of all or any portion of the Corporation's assets (all
of the foregoing, "Permitted Financings");
(3) To loan or otherwise invest proceeds from the Permitted
Financings, the issuance of the Corporation's equity securities and any
other income as determined by the Corporation's Board of Directors or any
officer or agent exercising authority delegated by the Corporation's Board
of Directors;
(4) To enter into any agreement providing for the management and
administration of the activities of the Corporation, including the
management and servicing of Permitted Assets pursuant to one or more
servicing agreements to be entered into by and among, among others, the
Corporation, and any entity acting as servicer of the Permitted Assets; and
(5) To transact any business, to engage in any act or activity, and to
exercise all powers permitted to corporations by the General Corporation
Law of Delaware that are incident or necessary to the foregoing or to the
accomplishment of such objects, purposes and powers.
ARTICLE FOUR
CAPITAL STOCK
4.01 Total Number of Shares. The total number of shares of all
classes of capital stock ("Shares") which the Corporation shall have the
authority to issue is 1,000, consisting of 1,000 Shares of common stock, $1.00
par value per share ("Common Stock").
4.02 Dividends. Dividends upon all classes and series of Shares shall
be payable only when, as and if declared by the Board of Directors from funds
lawfully available therefor, which funds shall include, without limitation, the
Corporation's capital surplus. Dividends upon any class or series of Shares may
be paid in cash, property, or Shares of any class or series of or other
securities or evidences of indebtedness of the Corporation or any other issuer,
as may be determined by resolution or resolutions of the Board of Directors.
ARTICLE FIVE
DIRECTORS
5.01 Number of Directors. The Board of Directors of the Corporation
shall consist of not less than five, nor more than nine members, including at
least one person who is Independent, and who shall qualify as provided in
Section 8.06(1) hereof. If the initial Independent Director, Mr. Andrew L.
Stidd, resigns, retires or is removed as a director, the Corporation shall
notify each Rating Agency that has rated any outstanding series or class of
certificates issued by the Saks Credit Card Master Trust.
5.02 Terms of Directors and Resignation. Each Director shall hold
office until such Director's successor is elected and qualified or until such
director's earlier resignation or removal. Any director may resign at any time
upon written notice to the Corporation.
5.03 Reliance upon Records, etc. A member of the Board of Directors,
or a member of any committee designated by the Board of Directors, shall, in the
performance of his or her duties, be fully protected in relying in good faith
upon the records of the Corporation and upon such information, opinions, reports
or statements presented to the Corporation by any of the Corporation's officers
or employees or committees of the Board of Directors, or by any person as to
matters the member reasonably believes are within such other person's
professional, expert or other competence and who has been selected with
reasonable care by or on behalf of the Corporation.
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ARTICLE SIX
INDEMNIFICATION
6.01 Indemnification.
(1) Each person who was or is made a party or is threatened to be
made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, arbitral, governmental, administrative, investigative or
otherwise (hereinafter, a "Proceeding"), by reason of the fact that he or
she, or a Person of whom he or she is the legal representative, is or was a
director, officer or employee of the Corporation or is or was serving at
the request of the Corporation as a director, officer or employee of
another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action in an official
capacity as a director, officer or employee or in any other capacity while
serving as a director, officer or employee, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that
such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expenses, liability and loss (including penalties,
fines, judgments, reasonable attorneys' fees and charges, amounts paid or
to be paid in settlement and excise taxes imposed on fiduciaries with
respect to (i) employee benefit plans, (ii) charitable organizations or
(iii) similar matters) reasonably incurred or suffered by such person in
connection therewith, and such indemnification shall continue as to a
person who has ceased to be a director, officer or employee and shall inure
to the benefit of his or her heirs, executors and administrators; provided,
however, that the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated
by such person (other than pursuant to subsection 6.01(2)) only if such
proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. The right to indemnification conferred in this subsection
6.01(1) shall be a contract right and shall include the right to be paid by
the Corporation the reasonable expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however, that, if
the Delaware General Corporation Law requires, the payment of such expenses
incurred by a director or officer in his or her capacity as a director or
officer (and in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final disposition of
a proceeding shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director
or officer is not entitled to be indemnified under this subsection 6.01(1)
or otherwise.
(2) If a claim which the Corporation is obligated to pay under
subsection 6.01(1) is not paid in full by the Corporation within 60 days
after a written claim has been received by the Corporation, the claimant
may at any time thereafter bring suit against the Corporation to recover
the unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the reasonable expense of
prosecuting such claim. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which
make it permissible under the Delaware General Corporation Law for the
Corporation to indemnify the claimant for the amount claims, but the burden
of proving such defense shall be on the Corporation. Neither the failure of
the Corporation (including its Board of Directors, independent legal
counsel or its shareholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper
in the circumstances because he or she has met the applicable standard of
conduct set forth in the
3
Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel or
its shareholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(3) The provisions of this Section 6.01 shall cover claims, actions,
suits and proceedings, civil or criminal, whether now pending or hereafter
commenced, and shall be retroactive to cover acts or omissions or alleged
acts or omissions which heretofore have taken place. If any part of this
Section 6.01 should be found to be invalid or ineffective in any
proceeding, the validity and effectiveness of the remaining provisions
shall not be affected.
(4) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in
this Section 6.01 are non-exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of this Certificate
of Incorporation, or any Corporation By-Law, insurance policy or agreement,
vote of shareholders or disinterested directors or otherwise.
(5) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense,
liability or loss under the Delaware General Corporation Law.
(6) The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification, and rights to be
paid by the Corporation the expenses incurred in defending any proceeding
in advance of its final disposition, to any agent of the Corporation to the
fullest extent of the provisions of this Section 6.01 with respect to the
indemnification and advancement of expenses of directors, officers and
employees of the Corporation.
6.02 Limitation of Monetary Damages. A director shall not be
personally liable to the Corporation or its shareholders for monetary damages
for breach of fiduciary duty as a director, except this provision shall not
eliminate liability of a director (i) for any breach of the director's duty of
loyalty to the Corporation or its shareholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) for unlawful payment of dividend or unlawful stock purchase or
redemption under Delaware General Corporation Law, Section 174, or (iv) for any
transaction from which the director derived an improper personal benefit.
Any repeal or modification of this Section 6.02 by the Corporation's
shareholders shall not adversely affect any right of protection of a director of
the Corporation existing at the time of such repeal or modification with respect
to acts or omissions occurring prior to such repeal or modification. If the
Delaware General Corporation Law hereafter is amended to authorize the further
elimination or limitation of the liability of directors, then the liability of a
director of the Corporation, in addition to the limitation on personal liability
provided herein, shall be limited to the fullest extent permitted by the amended
Delaware General Corporation Law.
6.03 Severability. In the event that any of the provisions of this
Article Six (including any provision within a single sentence) are held by a
court of competent jurisdiction to be invalid, void or otherwise unenforceable,
the remaining provisions are severable and shall remain enforceable to the
fullest extent permitted by law.
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ARTICLE SEVEN
INCORPORATOR
The name and mailing address of the incorporator is:
J. Chad Davis
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
ARTICLE EIGHT
SPECIAL PROVISIONS
In furtherance and not in limitation of the powers conferred herein
and by law, the following provisions for regulation of the Corporation, its
directors and shareholders are hereby established:
8.01 Purchase of Shares. The Corporation shall have the right to
purchase, take, receive or otherwise acquire, hold, own, pledge, transfer or
otherwise dispose of its own Shares to the full extent of undivided profits,
earned surplus, capital surplus or other surplus or any other funds lawfully
available therefor.
8.02 Transactions with Certain Persons. No contract or other
transaction between the Corporation and one or more of its directors or officers
or between the Corporation or any other person, corporation, firm, association
or entity in which one or more of its directors or officers are directors or
officers or are financially interested, shall be void or voidable because of
such relationship or interest, or because such director or officer is present at
or participates in a meeting of the Board of Directors or a committee thereof
which authorizes, approves or ratifies such contract or transaction, or solely
because his or their votes are counted for such purpose, if such contract or
transaction is permitted by the Delaware General Corporation Law, Section 144,
as now or hereafter in effect.
8.03 Transfer Restrictions, etc. Written restrictions on the transfer
or registration of transfer of the Corporation's Shares, securities or evidences
of indebtedness or any interest therein may be entered into as part of an
agreement, adopted as Bylaws, or recognized by the Corporation as the
Corporation's Board of Directors may determine by resolution or resolutions.
Any such transfer restrictions shall be noted conspicuously on the security or
evidence of indebtedness. The Corporation may from time to time enter into any
agreement to which all, or less than all, holders of record of the Corporation's
issued and outstanding Shares are parties, restricting the transfer or
registration of transfer of any or all of the Corporation's Shares, upon such
reasonable terms and conditions as may be approved by resolution or resolutions
adopted by the Corporation's Board of Directors.
8.04 No Liability of Shareholders. The holders of Corporation Shares
shall not be personally or otherwise liable to any extent whatsoever for the
payment of the Corporation's debts, liabilities and obligations, and the private
property of the holders of Corporation Shares shall not be subject to the
payment of the Corporation's debts, liabilities and obligations to any extent
whatsoever.
8.05 Compromises and Arrangements with Creditors. Whenever a
compromise or arrangement is proposed between this Corporation and its creditors
or any class of them and/or between
5
this Corporation and its shareholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this Corporation or of any creditor or shareholder thereof or on
the application of any receiver or receivers appointed for this Corporation
under the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the shareholders or class of shareholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the shareholders or class of shareholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the compromise or arrangement and the reorganization shall, if
sanctioned by the court to which said application has been made, be binding on
all the creditors or class of creditors, and/or on all the shareholders or class
of shareholders, of this Corporation, as the case may be, and also on this
Corporation.
8.06 Corporate Separateness. At all times from and after the
establishment of the Corporation:
(1) At least one of the Corporation's directors shall be a person who
is Independent (an "Independent Director").
(2) The Corporation's assets will not be commingled with those of any
other Person.
(3) The Corporation will maintain separate corporate records and
books of account from those of any other Person.
(4) The Corporation will conduct its business in its own name and
from an office separate from any direct or ultimate parent of the
Corporation.
(5) The Corporation will maintain separate financial statements from
those of any other Person.
(6) The Corporation will pay its own liabilities from its own funds
and will pay the salaries of its own employees.
(7) The Corporation will maintain an arm's length relationship with
its Affiliates.
(8) The Corporation will not guarantee or become obligated for the
debts of any other Person or hold its credit as being available to satisfy
the obligations of any other Person, except in connection with the
Permitted Financings.
(9) The Corporation shall not acquire obligations or securities of
any of its shareholders.
(10) The Corporation shall observe all corporate formalities required
by this Certificate of Incorporation and the Bylaws of the Corporation.
(11) The Corporation will use separate stationery, invoices and checks
and will hold itself out as a separate and distinct entity from any other
Person.
(12) The Corporation shall correct any known misunderstandings
regarding its separate identity.
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(13) The Corporation shall maintain adequate capital in light of its
contemplated business activities pursuant to Article III.
(14) The Corporation will not pledge its assets for the benefit of any
other Person, except in connection with the Permitted Financings.
8.07 Certain Restrictions.
(1) The Corporation shall not incur any indebtedness, or assume or
guarantee any indebtedness of any other entity, other than (i) indebtedness
arising from salaries, fees and expenses to its professional advisors and
counsel, directors, officers and employees, (ii) indebtedness in respect of
servicing fees (or similar fees relating to the processing and
administration of the Permitted Assets) incurred in the ordinary course of
the Corporation's business pursuant to agreements with third parties or any
Affiliates acting as servicer of the Permitted Assets or any portion
thereof (or acting in a similar capacity relating to the processing and
administration of the Permitted Assets), (iii) other indebtedness at any
one time outstanding, on account of incidentals of services supplied or
furnished to the Corporation and (iv) indebtedness incurred in connection
with the acquisition of the Permitted Assets in the ordinary course of the
Corporation's business.
(2) The Corporation shall not dissolve, liquidate, consolidate or
merge or sell all or substantially all of its assets, and shall not
authorize or agree to any of the foregoing, subject to the following
conditions:
(a) so long as any of securities issued in any Permitted
Financings are outstanding (whether or not matured or unmatured,
contingent or noncontingent, or liquidated or unliquidated),
reservation, provided, however, the Corporation may merge, consolidate
or otherwise combine with any single-purpose, bankruptcy-remote,
entity that is an Affiliate and that meets the requirements of each
rating agency that has rated any securities in Permitted Financings
that are outstanding at such time;
(b) unless the entity (if other than the Corporation) formed or
surviving the consolidation or merger or which acquires the properties
and assets of the Corporation is organized and existing under the laws
of any State of the United States or the District of Columbia,
expressly assumes the due and punctual payment or performance of any
and all obligations of the Corporation and has a certificate or
articles of Incorporation containing provisions substantially
identical to the provisions of Article Three, Section 5.01, and this
Article Eight; and
(c) immediately after giving effect to the transaction, no
default or event of default has occurred and is continuing under any
indebtedness of the Corporation or any agreements relating to such
indebtedness.
(3) Notwithstanding anything to the contrary contained in the
Delaware General Corporation Law, this Certificate of Incorporation or the
Bylaws, the shareholders and Board of Directors of the Corporation shall
not authorize the Corporation except upon the affirmative vote of 100% of
the members of its Board of Directors including, without limitation, the
affirmative vote of its Independent Director: (i) to institute proceedings
to be adjudicated as bankrupt or insolvent, or consent to the institution
of bankruptcy or insolvency proceedings against it, or file a petition or
consent to a petition seeking reorganization or relief under any applicable
Federal or state laws relating to bankruptcy or insolvency, or consent to
the appointment of receiver, conservator, liquidator, assignee, trustee,
sequestrator (or other similar official) of the
7
Corporation or a substantial part of its property, or make any assignment
for the benefit of creditors, or except as required by law, admit in
writing its inability to pay its debts generally as they become due, or
take any corporate action and furtherance of any such action, (ii) to
dissolve, liquidate, consolidate or merge the Corporation or sell all or
substantially all of the assets of the Corporation, except pursuant to
Permitted Financings, or (iii) to engage in any business activity other
than the activities set forth in Article Three of the Certificate of
Incorporation and activities incidental thereto.
8.08 Director Actions and Duties. When voting or acting on matters
subject to the vote or action of the Corporation's Board of Directors,
including, without limitation, those matters specified in Section 8.07(3),
notwithstanding that the Corporation is not then insolvent, the Independent
Director shall take into account the interests of the creditors of the
Corporation, as well as the interests of the Corporation and its shareholders.
8.09 Certain Definitions. As used herein, the following terms shall
have the following meanings:
"Affiliate" shall mean any Person other than the Corporation (i) which
owns beneficially, directly or indirectly, individually or as a part of a
"Group" as defined in Securities and Exchange Commission ("SEC") Rule 13d-3, 10%
or more of the outstanding shares of the Corporation's Common Stock, (ii) which
is in control of the Corporation, as "control" is defined under SEC Rule 405, as
in effect on the date hereof, (iii) of which 10% or more of the outstanding
shares of Common Stock is owned beneficially, directly or indirectly, by a
Person, individual or as a part of a Group described in clauses (i) or (ii)
above, or (iv) which is controlled by, or under common control with a Person,
individually or as part of a Group described in clauses (i) or (ii) above, as
"control" and "controlled by" are defined for purposes of such Rule 405.
"Independent" means, with respect to the Corporation, any Person (i)
who is not an employee, or a beneficial owner, directly or indirectly of 10% or
more of any equity interest in the Corporation or any Affiliate thereof, and who
is not related by blood, marriage or adoption with any of the foregoing Persons;
(ii) who has not been an employee of the Corporation or any Affiliate in the
last five years; (iii) who is not affiliated with, or employed by, any Person
providing services to, any of the Corporation's significant customers or
suppliers; (iv) who is not affiliated with any tax exempt or other organization
that receives significant contributions from the Corporation or any of its
Affiliates; and (v) who has not provided and is not providing directly or
indirectly, whether or not through any related corporation, partnership, limited
liability company, limited liability partnership or other Person, legal,
accounting or investment banking services for the Corporation or any Affiliate.
A Person that is otherwise Independent of the Corporation shall not be precluded
from serving as an Independent Director by virtue of his or her service as a
director of any direct or indirect parent of the Corporation. If he or she is
also a director of a single-purpose, bankruptcy-remote, entity that is an
Affiliate of Saks Incorporated with a certificate or articles of incorporation
substantially similar to this Certificate of Incorporation
"Person" means any individual, partnership, corporation, trust,
unincorporated association, joint venture or other entity, or any government, or
any government agency, authority or political subdivision thereof, or any other
form of entity.
8.10 Amendments. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation,
in the manner now or hereafter prescribed by statute or this Certificate, and
all rights conferred upon shareholders herein are granted subject to this
reservation, provided, however, so long as any securities issued in Permitted
Financings are outstanding (whether or not matured or unmatured, contingent or
noncontingent, or liquidated or unliquidated), the Corporation may not amend,
alter or change the provisions contained in Article Three,
8
Sections 8.06, 8.07, or 8.08, without prior notice to, and consent of, any
rating agency that has rated such outstanding securities.
8.11 Bylaws. The Corporation's Board of Directors is authorized and
empowered to amend, alter, change or repeal the Corporation's Bylaws and to
adopt new Bylaws.
ARTICLE NINE
DURATION
The Corporation shall have perpetual duration and existence.
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EXHIBIT 3.2
Saks Credit Corporation Bylaws
________________________________________
SAKS CREDIT CORPORATION
BYLAWS
________________________________________
Adopted as of June 30, 1999
SAKS CREDIT CORPORATION
BYLAWS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I - OFFICES.................................................... 1
Section 1. Registered Office..................................... 1
Section 2. Other Offices......................................... 1
ARTICLE II - MEETING OF SHAREHOLDERS................................... 1
Section 1. Location.............................................. 1
Section 2. Annual Meetings....................................... 1
Section 3. Notice of Annual Meeting.............................. 1
Section 4. Special Meetings...................................... 1
Section 5. Notice of Special Meetings............................ 1
Section 6. Business of Special Meetings.......................... 1
Section 7. Shareholder List...................................... 2
Section 8. Quorum................................................ 2
Section 9. Action by Shareholders................................ 2
Section 10. Voting................................................ 2
Section 11. Waiver of Notice...................................... 2
Section 12. Action Without a Shareholders' Meeting................ 2
Section 13. Form of Written Consent............................... 3
ARTICLE III - BOARD OF DIRECTORS....................................... 3
Section 1. General, Powers, Number, Tenure and Qualifications.... 3
Section 2. Vacancies............................................. 3
Section 3. Location of Meetings.................................. 3
Section 4. Organizational Meetings............................... 3
Section 5. Regular Meetings...................................... 3
Section 6. Special Meetings...................................... 3
Section 7. Meetings by Conference Telephone, etc................. 4
Section 8. Quorum................................................ 4
Section 9. Action Without a Meeting.............................. 4
Section 10. Committees............................................ 4
Section 11. Committee Minutes and Reports......................... 4
</TABLE>
<TABLE>
<S> <C>
Section 12. Compensation......................................... 4
Section 13. Transactions with Directors, etc..................... 5
Section 14. Removal of Directors................................. 5
Section 15. Certain Restrictions................................. 5
ARTICLE IV - NOTICES................................................. 6
Section 1. Manner of Giving Notice............................... 6
Section 2. Waiver of Notice...................................... 6
ARTICLE V - OFFICERS................................................. 6
Section 1. Officers, Election, Terms............................. 6
Section 2. Duties of the Chairman of the Board................... 6
Section 3. Duties of the President............................... 6
Section 4. Vice Presidents....................................... 7
Section 5. Treasurer............................................. 7
Section 6. Assistant Treasurer................................... 7
Section 7. Secretary............................................. 7
Section 8. Assistant Secretaries................................. 8
Section 9. Compensation.......................................... 8
Section 10. Other Officers....................................... 8
Section 11. Vacancies............................................ 8
Section 12. Removal of Officers.................................. 8
ARTICLE VI - CONTRACTS, CHECK, BANK ACCOUNTS, ETC.................... 9
Section 1. Contracts, etc., How Executed......................... 9
Section 2. Loans................................................. 9
Section 3. Checks, Drafts, etc................................... 9
Section 4. Deposits.............................................. 9
Section 5. General and Special Bank Accounts..................... 9
ARTICLE VII - SHARES................................................. 10
Section 1. Certificates for Shares............................... 10
Section 2. Transfer of Shares.................................... 10
Section 3. Regulations........................................... 10
Section 4. Date for Determining Shareholders of Record........... 10
Section 5. Lost, Destroyed and Mutilated Certificates............ 11
Section 6. Examination of Books by Shareholders or Bondholders... 11
</TABLE>
<TABLE>
<S> <C>
ARTICLE VIII - WAIVER OF NOTICE...................................... 11
ARTICLE IX - BUSINESS COMBINATIONS................................... 11
ARTICLE X - FISCAL YEAR.............................................. 12
ARTICLE XI - AMENDMENTS.............................................. 12
ARTICLE XII -DEFINITIONS............................................. 12
</TABLE>
_______________________
SAKS CREDIT CORPORATION
BYLAWS
_______________________
ARTICLE I
OFFICES
Section 1. Registered Office. Saks Credit Corporation (the "Corporation")
shall have its principal office at 140 Industrial Drive in the City of Elmhurst,
County of Dupage, Illinois. The Corporation's registered office in the State of
Delaware shall be at 1013 Centre Road in the City of Wilmington, County of New
Castle.
Section 2. Other Offices. The Corporation may also have offices at such
other places, both within and without the States of Illinois and Delaware, as
the Board of Directors may from time to time determine or the business of the
Corporation may require to the extent not prohibited by law.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Location. All meetings of shareholders shall be held at the
Corporation's principal office or at such other place either within or without
the State of Delaware as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting.
Section 2. Annual Meetings. Annual meetings of shareholders shall be
held on the date and time as shall be designated from time to time by the Board
of Directors and stated in the notice of the meeting. At the annual meeting,
the shareholders shall elect a Board of Directors by plurality vote, and shall
transact any other business as may properly come before the meeting.
Section 3. Notice of Annual Meeting. Written notice of the annual meeting
stating the place, day and hour of the meeting shall be given to each
shareholder of record entitled to vote at such meeting not less than 10 nor more
than 60 days before the date of the meeting.
Section 4. Special Meetings. Special meetings of shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Chairman or the President, or
a majority of the Board of Directors, or upon the written request of
shareholders owning not less than 25% of all shares of capital stock of the
Corporation issued and outstanding and entitled to vote at such meeting. Such
request by the shareholders shall state specifically the purpose or purposes of
the proposed meeting.
Section 5. Notice of Special Meetings. Written notice of a special meeting
stating the place, date and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting, not less than 10 nor more than 60 days before the date of the
meeting.
Section 6. Business of Special Meetings. Business transacted at any
special meeting of shareholders shall be limited to the purposes stated in the
notice.
Section 7. Shareholder List. The officer who has charge of the
Corporation's stock ledger shall prepare and make at least 10 days before every
meeting of shareholders, a complete list of shareholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
shareholder and the number of shares registered in the name of each shareholder.
Such list shall be available for inspection by any shareholder for any purpose
germane to the meeting during ordinary business hours for a period of at least
10 days prior to the meeting either at a place within the city where the meeting
is to be held, which place is specified in the notice of the meeting or at the
place where the meeting is to be held. The list of shareholders entitled to vote
also shall be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any shareholder who is present. The
original stock transfer books shall be the only evidence as to the shareholders
entitled to examine the shareholder list or stock transfer book, or to vote at
any meeting of shareholders.
Section 8. Quorum. The holders of a majority of the Corporation's shares
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of shareholders
for the transaction of business except as otherwise provided by the Delaware
General Corporation Law or the Certificate of Incorporation. If, however, such
quorum is not present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or represented by
proxy, shall have the power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than 30 days,
or if after the adjournment a new record date is fixed for the adjourned
meeting, written notice of the adjourned meeting shall be given to the
shareholders entitled to vote at the meeting. Every meeting of the shareholders
may be adjourned from time to time until its business is completed, and except
as provided herein or by applicable law, no notice need be given of such
adjourned meeting.
Section 9. Action by Shareholders. When a quorum is present at any
meeting, the vote of the holders of a majority of the shares having voting power
present in person or represented by proxy shall decide any question brought
before such meeting, unless the question is one upon which by express provision
of the Delaware General Corporation Law or the Certificate of Incorporation, a
different vote is required, in which case, such express provision shall govern
and control the decision of such question.
Section 10. Voting. Each shareholder shall at every meeting of the
shareholders be entitled to one vote in person or by proxy for each share having
voting power held by such shareholder, except as may otherwise be provided in
the Certificate of Incorporation or any Certificate of Designation thereunder.
Section 11. Waiver of Notice. Whenever any notice is required to be given
to any shareholder, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be equivalent to the giving of such notice. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when the person
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.
Section 12. Action Without a Shareholders' Meeting. Any action required
to be taken at any annual or special meeting of shareholders of the Corporation,
or any action which may be taken at any annual or special meeting of such
shareholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding shares entitled to vote on such matters
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. Any such consent shall be delivered to the
Corporation at its registered office in the State of Delaware, its principal
place of business, or to an officer or agent of the Corporation
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having custody of the minutes of the proceedings of the shareholders. Any
delivery made to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested. Prompt notice of the
taking of corporate action by less than unanimous written consent shall be given
to those shareholders who have not consented in writing and who, if the action
had been taken at a meeting, would have been entitled to notice of the meeting
if the record date for such meeting had been the date that written consents
signed by a sufficient number of shareholders to take the action were delivered
to the Corporation.
Section 13. Form of Written Consent. Every written consent by a
shareholder or shareholders shall bear the date of signature of each shareholder
who signs the consent. No written consent shall be effective with respect to
the action referred therein, unless, within 60 days of the earliest date of
consent delivered as required by these Bylaws and the Delaware General
Corporation Law, written consents signed by a sufficient number of shareholders
to take action are delivered to the Corporation by delivery as provided in
Section 12 of this Article II.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General, Powers, Number, Tenure and Qualifications. The
Corporation's business, properties and affairs shall be managed by its Board of
Directors (the "Board"), comprised of the number and type of directors
determined in the Certificate of Incorporation. Directors shall be elected at
each annual meeting of the shareholders, and shall hold office as provided in
the Certificate of Incorporation and until their successors are elected and
qualified. At all times, at least one member of the Board of Directors shall be
an "Independent Director" (as defined in Section 8.09 of the Certificate of
Incorporation and as further provided in Sections 5.01 and 8.06(1) thereof).
Section 2. Vacancies. Vacancies in the Board shall be filled by the
affirmative vote of a majority of the remaining directors even though such
remaining directors constitute less than a quorum of the Board. A director
elected to fill a vacancy shall serve a term as provided in the Certificate of
Incorporation. Any directorship to be filled by reason of an increase in the
number of directors shall be filled by election at an annual or special meeting
of shareholders. The Independent Director may only vacate his or her position if
a successor Independent Director has been designated who is qualified under the
Certificate of Incorporation, and who is willing and able to serve upon the
resignation of such Independent Director. If there are no directors in office,
then the shareholders may hold a special meeting to elect directors, at least
one of whom shall be an Independent Director.
Section 3. Location of Meetings. Meetings of the Board, regular or
special, shall be held at the Corporation's principal office unless otherwise
specified in the notice thereof, in which event the meeting shall be held where
specified in the notice, either within or without the States of Illinois or
Delaware.
Section 4. Organizational Meetings. The first meeting of each newly-
elected Board shall be held on the day and time specified by the Corporation's
Board. No notice of such meeting shall be necessary to the newly-elected
directors in order to legally constitute the meeting, provided a quorum is
present.
Section 5. Regular Meetings. Regular meetings of the Board shall be held
at such times and places as the Board by resolution may determine.
Section 6. Special Meetings. Special meetings of the Board may be called
by the Chairman or President on 24 hours' personal, telephonic, telegraphic or
facsimile notice to each director, or on three
3
days' written notice to each director. Upon the written request of a majority of
directors constituting the whole Board, special meetings may be called by the
Chairman or President, and appropriate notice given. Any notice or waiver
thereof of a special meeting, whether personal, telephonic, telegraphic or
written, need not include a statement of the business to be transacted at, nor
the purposes of, such special meeting except as expressly required by statute,
the Corporation's Certificate of Incorporation or these Bylaws. Meetings of any
committee of the Board may be called by the Chairman, the President, or by the
chairman of the committee, at any time upon personal, telephonic, telegraphic or
written notice to each member of such committee and need not include a statement
of the business to be transacted at, nor the purposes of, such special meeting.
Section 7. Meetings by Conference Telephone, etc. Meetings of the Board,
and of any committee thereof, may be held by means of a conference telephone or
equivalent communication equipment by which all persons participating in the
meeting can hear each other simultaneously. Participation by such means shall
constitute presence in person at any such meeting.
Section 8. Quorum. At all meetings of the Board, a majority of the
directors then holding office shall constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the Board, except as may otherwise
specifically be provided by statute, the Certificate of Incorporation or these
Bylaws. If a quorum is not present at any meeting of the Board, the directors
present may adjourn the meeting from time to time, without notice other than
announcements at the meeting, until a quorum shall be present.
Section 9. Action Without a Meeting. Any action required or permitted to
be taken at any meeting of the Board or of any committee thereof may be taken
without a meeting or vote, if a written consent setting forth the action taken
is signed by all members of the Board or committee, as the case may be, and such
written consent or consents are filed with the minutes of proceedings of the
Board or of such committee. Such consents shall have the same effect as a
unanimous vote of the Board.
Section 10. Committees. The Board may, by resolution passed by a majority
of the whole Board, designate one or more committees, each committee to consist
of two or more of the directors of the Corporation. Any such committee, to the
extent provided in the resolution or resolutions of the Board, shall have and
may exercise all the powers and authority of the Board in the management of the
business and affairs of the Corporation during intervals between meetings of the
Board, and may authorize the seal of the Corporation, if any, to be affixed to
all papers which may require it; but no such committee shall have any power or
authority to declare a dividend or distribution from capital or earned surplus,
issue shares of the Corporation, amend the Certificate of Incorporation, adopt
an agreement of merger or consolidation, recommend to the shareholders the sale,
lease or exchange of all or substantially all of the Corporation's property and
assets, recommend to the shareholders a dissolution of the Corporation or a
revocation thereof, fill vacancies in the Board, or amend these Bylaws,
authorize the issuance of stock or adopt a certificate of ownership and merger
pursuant to Delaware General Corporation Law, Section 253, or adopt any plan of
bankruptcy or reorganization under the United States Bankruptcy Code, as amended
(the "Bankruptcy Code") or any similar state laws, or otherwise take any action
described in Section 15 of this Article III. Such committee or committees shall
have such name or names as may be determined from time to time by resolution
adopted by the Board.
Section 11. Committee Minutes and Reports. Each committee shall keep
regular minutes of its meetings and report the same to the Board whenever
required or requested.
Section 12. Compensation. The Board shall have the authority to fix the
compensation of directors. The directors may be paid a fixed sum for attendance
at each meeting of the Board and/or a stated salary as directors. No such
payment shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be compensated for attending committee meetings.
4
Section 13. Transactions with Directors, etc. Insofar as not prohibited
by applicable law, no contract or other transaction between the Corporation and
one or more of its directors or any other corporation, partnership, association
or other organization in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be either void or
voidable because of such relationship or interest, or because such director or
directors are present at or participates in the meeting of the Board or a
committee thereof which authorizes, approves or ratifies such contract or
transaction or solely because his or their votes are counted for such purpose,
if the contract or transaction is fair and reasonable to the Corporation and if
either:
(a) The material facts as to such relationship or interest and as
to the contract or transaction are disclosed or are known to the Board or
committee which, in good faith, authorizes, approves or ratifies the
contract or transaction by the affirmative vote or consent of a majority of
the disinterested directors even though the disinterested directors are
less than a quorum; or
(b) The material facts as to his relationship or interest and as
to such contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote or written consent of the
shareholders; or
(c) The contract or transaction is fair as to the Corporation as
of the time it is authorized, approved or ratified by the Board or a
committee thereof or by the shareholders.
Section 14. Removal of Directors. Any director or the entire Board may be
removed from office, with or without cause, by the holders of a majority of the
shares then entitled to vote at an election of directors, provided that the
Independent Director may only be removed if a successor Independent Director has
been designated who is qualified under the Certificate of Incorporation, and who
is willing and able to serve as the Independent Director effective immediately
upon the removal of such Independent Director.
Section 15. Certain Restrictions.
(a) Notwithstanding anything to the contrary contained in the
Delaware General Corporation Law, the Certificate of Incorporation or these
Bylaws, the Board of Directors shall not authorize the Corporation except
upon the affirmative vote of 100% of the members of its Board of Directors
including, without limitation, the affirmative vote of its Independent
Director: (i) to institute proceedings to be adjudicated as bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition or consent to a petition seeking
reorganization or relief under any applicable Federal or state laws
relating to bankruptcy or insolvency, or consent to the appointment of
receiver, liquidation, assignee, trustee, sequestrator (or other similar
official) of the Corporation or a substantial part of its property, or make
any assignment for the benefit of creditors, or except as required by law,
admit in writing its inability to pay its debts generally as they become
due, or take any corporate action and furtherance of any such action; (ii)
to dissolve, liquidate, consolidate or merge the Corporation or sell all or
substantially all of the assets of the Corporation; (iii) to engage in any
business activity other than the activities set forth in Article Three of
the Certificate of Incorporation or (iv) to amend the Certificate of
Incorporation or Bylaws of the Corporation; or authorize or agree to any of
the foregoing.
(b) When voting or acting on matters subject to the vote or
action of the Corporation's Board of Directors, including, without
limitation, those matters specified in this Section, notwithstanding that
the Corporation is not then insolvent, the Independent Director shall
5
take into account the interests of the creditors of the Corporation as well
as the interests of the Corporation and its shareholders.
ARTICLE IV
NOTICES
Section 1. Manner of Giving Notice. Except as otherwise required by law,
whenever notice is required to be given to any director or shareholder, such
notice requirement can be satisfied by giving written notice by mail, postage
prepaid, addressed to such director or shareholder, at his address as it appears
on the records of the Corporation, and such notice shall be deemed to be given
at the time when the same is deposited in the United States mail. Notice to
directors may also be given in person, or by telegram, facsimile or telephone.
Section 2. Waiver of Notice. Whenever any notice is required to be given
to any shareholder or director of the Corporation, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice.
ARTICLE V
OFFICERS
Section 1. Officers, Election, Terms. The officers of the Corporation
shall be a President, a Treasurer, and a Secretary. The Board may also elect a
Chairman of the Board, and one or more Vice Presidents, Assistant Treasurers,
Assistant Secretaries and such other officers as the Board may from time to time
deem proper, at least one of whom shall be Independent. The Corporation's
officers shall be elected annually by the Board at its regular annual
organizational meeting to serve for a term of one year and until their
respective successors are elected and qualified. If the officers or any of them
for any reason should not be elected at the regular annual meeting of the Board,
they may be elected at any regular or special meeting of the Board. Any person
may hold two or more of the offices in the Corporation. The Board may in is
discretion designate one or more of the Vice Presidents as Executive or Senior
Vice Presidents.
Section 2. Duties of the Chairman of the Board. The Chairman of the Board,
if one is elected and serving, shall preside at all meetings of the shareholders
and Board. He shall have authority to execute bonds, mortgages, and other
contracts requiring a seal, under the seal of the Corporation. He shall have
power to endorse, when sold, assigned, transferred or otherwise disposed of by
the Corporation, all certificates or shares of stock, bonds, or other securities
issued by other corporations, associations, trusts, whether public or private,
or by any government agency thereof, and owned or held by the Corporation, and
to make, execute and deliver all instruments or assignments of transfer of any
of such stocks, bonds or other securities. He may, with the approval of the
Board, or shall, at the Board's direction, delegate any or all of such duties to
the President.
Section 3. Duties of the President. The President shall be the
Corporation's chief executive officer and shall be responsible for all of the
operations of the Corporation and shall report to the Board.
The President shall be responsible to the Chairman and to the Board and
shall see that all orders and resolutions of the Board are carried into effect.
He shall, under the direction of the Board, have general supervision and
direction of the other officers, employees and agents of the Corporation and
shall
6
see that their duties, as assigned by the Board, are properly performed. He
shall designate and assign the duties of the officers under his supervision,
with the approval of the Board or at their direction.
The President shall have authority to execute bonds, mortgages and other
contracts requiring a seal, under the seal of the Corporation; he shall have
power to endorse, when sold, assigned, transferred or otherwise disposed of by
the Corporation, all certificates for shares, bonds, or other securities or
evidences of indebtedness issued by other corporations, associations, trusts,
whether public or private, or by any government or agency thereof, and owned or
held by the Corporation and to make, execute and deliver all instruments or
assignments or transfers of any such stocks, bonds, or other securities. In the
absence of the Chairman of the Board, or in the event a Chairman is not elected,
the President shall have authority to do any and all things delegated to the
Chairman of the Board by the Board or by any committee of the Board having
authority.
He shall have general authority over the Corporation's business, and if the
office of Chairman of the Board is vacant, shall exercise the duties and have
the powers of the Chairman of the Board, and shall have such other powers and
perform such other duties as the Board may from time to time prescribe.
Section 4. Vice Presidents. The Vice Presidents (in order of the Executive
Vice President, Senior Vice President and other Vice Presidents, each class in
order of the seniority of its respective members or as designated by resolution
of the Board) shall, in the absence or disability of the Chairman and President,
perform the duties and exercise the powers of said officers, and shall perform
such other duties and exercise such other powers as the Board, the Chairman of
the Board or the President may prescribe. One or more Vice Presidents may be
designated by the Board as either "Executive Vice President" or "Senior Vice
President."
Section 5. Treasurer. The Treasurer shall be the Corporation's chief
financial officer and shall have charge and custody of, and shall be responsible
for, all funds and securities of the Corporation, and shall deposit all such
funds in the name of the Corporation in such banks or other depositories as
shall be selected or authorized to be selected by the Board; shall render or
cause to be rendered a statement of the condition of the finances of the
Corporation at all regular meetings of the Board, and a full financial report at
the annual meeting of shareholders, if called upon so to do; shall receive and
give receipts for moneys due and payable to the Corporation from any source
whatsoever; and, in general, shall perform or cause to be performed all the
duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Board.
Section 6. Assistant Treasurer. The Assistant Treasurers shall perform
such duties as from time to time may be assigned to them by the Chairman of the
Board, the President, the Treasurer or the Board. At the request of the
Treasurer, or in case of his absence or inability to act, any Assistant
Treasurer may act in his place.
Section 7. Secretary. The Secretary, if present, shall act as secretary at
all meetings of the Board and of the shareholders and keep the minutes thereof
in a book or books to be provided for that purpose; shall see that all notices
required to be given by the Corporation are duly given and served; shall be
custodian of the seal of the Corporation, if any, and shall affix the seal or
cause it or a facsimile thereof to be affixed to all documents the execution of
which on behalf of the Corporation under its seal shall be duly authorized in
accordance with the provisions of these Bylaws; shall have charge of the stock
records of the Corporation; shall see that all reports, statements and other
documents required by law are properly kept and filed; may sign, with any other
proper officer of the Corporation thereunto authorized, certificates for shares,
securities or evidences of indebtedness of the Corporation; and, in general,
shall perform all the duties incident to the office of the Secretary and such
other duties as from time to time may be assigned to him by the Chairman of the
Board or the Board.
7
Section 8. Assistant Secretaries. The Assistant Secretaries shall perform
such duties as from time to time may be assigned to them by the Chairman of the
Board, the President, the Secretary or the Board. At the request of the
Secretary, or in case of his absence or inability to act, any Assistant
Secretary may act in his place.
Section 9. Compensation. The salaries of the Corporation's principal
officers shall be fixed from time to time by the Board, after taking account of
any recommendations by any committee to which the power to advise with respect
to salaries is delegated by the Board. The Board may from time to time delegate
to any principal officer or any committee power to fix the salaries of other
officers, agents, factors and employees. No officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
Corporation or a member of any committee contemplated by these Bylaws.
Section 10. Other Officers. The other officers of the Corporation shall
perform such duties and shall exercise such powers as may be prescribed by the
Board, or by the Chairman or the President acting under authority delegated them
by the Board.
Section 11. Vacancies. Vacancies in office arising from any cause may be
filled by action of the Board at any regular or special meeting of the Board,
provided, that, in the case of a vacancy in the office held by the Independent
officer, such vacancy shall be filled with a person who, upon election to such
office, shall be an Independent officer.
Section 12. Removal of Officers. The Board may remove any officer from
office at any time by a majority vote of the whole Board of Directors; provided,
however, if there is only one Independent officer, the Independent officer may
be removed only if a successor has been designated who is qualified under the
Certificate of Incorporation and who is willing and able to serve in such
capacity effective immediately upon the removal of the Independent officer.
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ARTICLE VI
CONTRACTS, CHECKS, BANK ACCOUNTS, ETC.
Section 1. Contracts, etc., How Executed. The Board may authorize any
officer or officers or agent or agents to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances and if the Board so
provides may be delegated by the person so authorized; and, unless so authorized
by the Board or these Bylaws, no officer, agent or employee shall have any power
or authority to bind the Corporation by any contract or engagement or to pledge
its credit or to render it liable pecuniarily for any purpose or to any amount.
Section 2. Loans. No loan shall be contracted on behalf of the
Corporation, and no negotiable paper shall be issued in its name, unless (i)
authorized by the Board and (ii) all necessary consents as are required under
the Certificate of Incorporation have been obtained. When so authorized, the
Chairman of the Board, the President or a Vice President or the Treasurer may
effect loans and advances at any time for the Corporation from any bank, trust
company or other institution or from any firm, corporation or individual, and
for such loans and advances the Chairman of the Board, the President or a Vice
President or the Treasurer shall make, execute and deliver, with the counter-
signature, unless otherwise authorized by the Board of Directors including the
affirmative vote of the Independent Director, of the Secretary or an Assistant
Secretary, bonds, debentures, promissory notes or other evidences of
indebtedness of the Corporation and, when authorized as aforesaid, as security
for the payment of any and all loans, advances, indebtedness and liabilities of
the Corporation, may mortgage, pledge, hypothecate or transfer any real or
personal property at any time held by the Corporation and to that end execute
and deliver instruments of mortgage or pledge or otherwise transfer such
property. Any authority so granted by the Board may be general or confined to
specific instances, and if the Board so provides, may be delegated by the person
so authorized.
Section 3. Checks, Drafts, etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation shall be signed by such officer or officers, or agent or agents,
as shall from time to time be determined by resolution of the Board.
Section 4. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation or
otherwise as the Chairman of the Board, the President or any other officer or
officers authorized by the Board shall direct in such banks, trust companies or
other depositories as may be selected by the Chairman of the Board, the
President or any other officer or officers or agents or agents to whom power in
that respect shall have been delegated by the Board. For the purpose of deposit
and for the purpose of collection for the account of the Corporation, checks,
drafts and other orders for the payment of money which are payable to the order
of the Corporation may be endorsed, assigned and delivered by such officer or
officers or agent or agents as shall be determined by the Chairman of the Board,
the President or any other officer or officers designated by the Board.
Section 5. General and Special Bank Accounts. The Board or the Chairman of
the Board, the President or any other officer or officers designated by the
Board may from time to time authorize the opening and keeping of general and
special bank accounts with such banks, trust companies or other depositories as
may be selected by the Board. The Board may make such special rules and
regulations with respect to such bank accounts, not inconsistent with the
provisions of these Bylaws, as it may deem expedient.
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ARTICLE VII
SHARES
Section 1. Certificates for Shares. Every holder of shares shall be
entitled to have a certificate, in such form as the Board shall prescribe,
certifying the number and class of Corporation shares owned by him. Each such
certificate shall be signed in the name of the Corporation by the Chairman or
Vice Chairman of the Board, the President or a Vice President, and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary.
The signature of any such officer may be a facsimile. In case any officer,
transfer agent or registrar who has signed, or whose facsimile signature has
been placed upon, any such certificate shall cease to be such officer, transfer
agent or registrar, before such certificate shall have been issued by the
Corporation, such certificate may nevertheless be issued by the Corporation with
the same effect as if such person were such officer, transfer agent or registrar
at the date of issue. A record shall be kept of the respective names of the
persons, firms or corporations owning the shares represented by certificates,
respectively, and the respective dates thereof, and, in case of cancellation,
the respective dates of cancellation. Every certificate surrendered to the
Corporation for exchange or transfer shall be cancelled, and a new certificate
or certificates shall not be issued in exchange for any existing certificates
until such existing certificate shall have been so cancelled, except in cases
otherwise provided for in this Article VII.
Section 2. Transfer of Shares. Each transfer of Corporation shares shall
be made only on the books of the Corporation by the registered holder thereof,
or by his attorney thereunto authorized by power of attorney duly executed and
filed with the Secretary of the Corporation, or with a transfer agent appointed
as provided in this Article VII, upon the payment of any taxes thereon and the
surrender of the certificate or certificates for such shares properly endorsed
and in good delivery form. The person in whose name Corporation shares stand on
the books of the Corporation shall be deemed the owner thereof for all purposes
as regards the Corporation; provided that whenever any transfer of shares shall
be made for collateral security and not absolutely, such fact, if known to the
Corporation or to any such transfer agent, shall be so expressed in the entry of
transfer if requested by both the transferor and transferee.
Section 3. Regulations. The Board may make such rules and regulations as
it may deem expedient, not inconsistent with these Bylaws, concerning the issue,
transfer and registration of certificates for Corporation shares. It may
appoint, or authorize the Chairman or President to appoint, one or more transfer
agents and one or more registrars, and may require all certificates for shares
of the Corporation to bear the signature or signatures of any such transfer
agents or registrars.
Section 4. Date for Determining Shareholders of Record.
(a) In order that the Corporation may determine the shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights
in respect to any change, conversion or exchange of shares or for the
purpose of any other lawful action, the Board may fix in advance, a record
date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board, and which shall
not be more than 60 nor less than 10 days before the date of such meeting.
If no record date is fixed by the Board, the record date shall be at the
close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. A determination of
shareholders of record entitled to notice of or to vote at a meeting of
shareholders shall apply to any adjournment of such meeting; provided,
however, that the Board may fix a new record date for the adjourned
meeting.
10
(b) If no record date has been fixed by the Board, the record date
for determining shareholders entitled to consent to corporate action in
writing without a meeting, when no prior action by the Board is required
under the Delaware General Corporation Law, shall be the first date on
which a signed written consent setting forth the action taken or proposed
to be taken is delivered to the Corporation by delivery to its registered
or principal office. Delivery to the Corporation's registered office shall
be by hand or by certified or registered mail, return receipt requested.
Section 5. Lost, Destroyed and Mutilated Certificates. The holder of any
Corporation shares or other securities shall immediately notify the Corporation
of any loss, destruction or mutilation of the certificate(s) therefor, and the
Board may, in its discretion, and after the expiration of such period of time as
it may determine to be advisable, cause to be issued to him a new certificate or
certificates for shares, upon the surrender of the mutilated certificate, or in
case of loss or destruction of the certificate, upon proof satisfactory to the
Board of such loss or destruction, and the Board or its delegee may, in its
discretion, require the owner of the lost, destroyed or mutilated certificate,
or his legal representatives, to give the Corporation a bond, in such sum and
with such surety or sureties as it may direct, or to indemnify the Corporation
against any claim that may be made against it on account of the alleged loss,
destruction or mutilation of any such certificate or the issuance of such new
certificate.
Section 6. Examination of Books by Shareholders or Bondholders. The Board
shall, subject to any applicable statutes, have the power to determine, from
time to time, whether and to what extent and at what times and places and under
what conditions and regulations the accounts and books and documents of the
Corporation, or any of them, shall be open to the inspection of the shareholders
or bondholders; and no shareholder or bondholder shall have any right to inspect
any account or book or document of the Corporation, except as conferred by any
such statute, unless and until authorized so to do by resolution of the Board or
of the shareholders of the Corporation.
ARTICLE VIII
WAIVER OF NOTICE
Whenever any notice whatsoever is required to be given by these Bylaws or
by statute, the person entitled thereto may in person, or in the case of a
shareholder by his attorney thereunto duly authorized, waive such notice in
writing (including, telegraph, cable, radio or wireless), whether before or
after the meeting, or other matter in respect of which such notice is to be
given, and in such event such notice, and any action to be taken after such
notice or after the lapse of a prescribed period of time, may be taken without
such notice and without the lapse of any period of time.
ARTICLE IX
BUSINESS COMBINATIONS
The Corporation expressly elects not to be governed by Section 203 of the
Delaware General Corporation Law. Any "business combination" as defined in such
Section 203 shall be governed by the Corporation's Certificate of Incorporation
and by these Bylaws, without giving effect to said Section 203. This Article IX
shall not be amended, altered or repealed except as provided by law, and by the
Corporation's Certificate of Incorporation and these Bylaws.
11
ARTICLE X
FISCAL YEAR
The fiscal year of the Corporation shall be determined by resolution of the
Board of Directors.
ARTICLE XI
AMENDMENTS
These Bylaws (including, without limitation, this Article XI) may be
altered, amended or repealed or new Bylaws may be adopted by (i) the Board
solely in the manner prescribed in the Corporation's Certificate of
Incorporation, or by (ii) the Corporation's shareholders only upon the favorable
vote of a majority of the voting shares and only at an annual or special meeting
of shareholders where the notice of such meeting specifically described such
action and contains a copy of the proposed alteration, amendment, or new Bylaws.
The foregoing notwithstanding, Article III, Sections 1, 14 and 15; and Article
V, Sections 1, 11 and 12 may not be altered, amended or repealed except as
provided in this Article XI, and in the case of Articles III and V, upon the
unanimous vote of the Board of Directors, including the affirmative vote of the
Independent Director.
ARTICLE XII
DEFINITIONS
Terms defined in the Certificate of Incorporation shall have the same
meanings when used in these Bylaws.
12
Exhibit 99.1
Amendment No. 2 dated as of July 1, 1999, to the Master Pooling and Servicing
Agreement dated as of August 21, 1997, by and among Saks Credit Corporation, as
Transferor, Saks Incorporated, as Servicer, and Norwest Bank Minnesota, National
Association, as Trustee
SAKS CREDIT CORPORATION
(as successor to Proffitt's Credit Corporation)
Transferor
SAKS INCORPORATED
(formerly named Proffitt's, Inc.)
Servicer
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
on behalf of the Certificateholders
of the
Saks Credit Card Master Trust
(formerly named the Proffitt's Credit Card Master Trust)
______________________________
AMENDMENT NO. 2
Dated as of July 1, 1999
to the
MASTER POOLING AND SERVICING AGREEMENT
Dated as of August 21, 1997
______________________________
THIS AMENDMENT NO. 2 ("Amendment") dated as of July 1, 1999 to the Master
Pooling and Servicing Agreement, dated as of August 21, 1997 (as amended, the
"Master Pooling and Servicing Agreement"), is by and among Saks Credit
Corporation (as successor to Proffitt's Credit Corporation"), a Delaware
corporation, (the "Transferor"), Saks Incorporated (formerly named, Proffitt's,
Inc.), a Tennessee corporation, (the "Servicer"), and Norwest Bank Minnesota,
National Association, a national banking association, as trustee (the
"Trustee"). Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Master Pooling and Servicing Agreement
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other party and, to the extent provided
herein or in any Supplement, for the benefit of the Certificateholders and any
Enhancement Provider:
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the parties hereto are authorized by Section 13.1(a) of the Master
Pooling and Servicing Agreement to add to, change or eliminate any of the
provisions of the Pooling and Servicing Agreement, from time to time; and
NOW, THEREFORE, in consideration of the mutual promises contained herein,
in the Master Pooling and Servicing Agreement and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Amendments to the Master Pooling and Servicing Agreement
--------------------------------------------------------
1.1 The name of the Trust is hereby changed to, and the Trust shall be
known as, the "Saks Credit Card Master Trust."
1.2 The definition of "Additional Account Cut-Off Date" in Section 1.1
of the Master Pooling and Servicing Agreement is amended in its entirety to read
as follows:
"Additional Account Cut-Off Date" shall mean with respect to any
-------------------------------
Additional Account the day prior to any Additional Account Closing
Date as may be designated by the Servicer.
1.3 All references to Proffitt's Credit Corporation, as Transferor,
shall be amended to refer to Saks Credit Corporation, as Transferor.
2
Section 3. Representations and Warranties
------------------------------
Each of the Transferor and the Servicer represents and warrants that:
(a) Its execution, delivery and performance of this Amendment are within
its corporate powers, have been duly authorized by all necessary corporate
action and do not require any consent or approval which has not been obtained.
(b) This Amendment and the Master Pooling and Servicing Agreement as
amended hereby are legal, valid and binding obligations of it, enforceable in
accordance with their respective terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by general equitable principles.
Section 4. Conditions Precedent
--------------------
This Amendment shall become effective as of its date, provided that all of
the following conditions are met:
(a) The Servicer shall have furnished the Trustee with an Officer's
Certificate to the effect that the Amendment will not materially and adversely
affect the interests of any Certificateholders;
(b) The Amendment will 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;
(c) The Servicer shall have given each Rating Agency ten (10) Business
Days' prior written notice of the Amendment and shall have received written
confirmation from each Rating Agency rating the affected Series that the Rating
Agency Condition will be met, where appropriate;
(d) The Trustee shall receive and shall be permitted to rely upon an
Opinion of Counsel to the effect that the conditions and requirements of Section
13.1(a) of the Master Pooling and Servicing Agreement have been satisfied; and
(e) The Transferor shall deliver prior written notice of the Amendment to
each Rating Agency.
3
Section 5. Miscellaneous
-------------
(a) Applicability of the Master Pooling and Servicing Agreement
-----------------------------------------------------------
In all respects not inconsistent with the terms and provisions of this
Amendment, the provisions of the Master Pooling and Servicing Agreement are
hereby ratified, approved and confirmed.
(b) Headings
--------
The captions in this Amendment are for convenience of reference only and
shall not define or limit the provisions hereof.
(c) Counterparts
------------
This Amendment may be executed in counterparts, each of which shall
constitute an original but all of which, when taken together, shall constitute
but one and the same instrument.
(d) Governing Law
-------------
THIS AMENDMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written, and it shall be effective upon
delivery to the Trustee.
[Signatures on next page]
4
SAKS CREDIT CORPORATION,
as Transferor
By: /s/ Charles J. Hansen
------------------------------
Name: Charles J. Hansen
Title: Senior Vice President
SAKS INCORPORATED,
as Servicer
By: /s/ Charles J. Hansen
------------------------------
Name: Charles J. Hansen
Title: Senior Vice President and
Associate General Counsel
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By: /s/ S. Dignan
------------------------------
Name: S. Dignan
Title: Corporate Trust Officer
5
EXHIBIT 99.2
Receivables Purchase Agreement dated as of July 1, 1999, by and among National
Bank of the Great Lakes, as Seller, Saks Incorporated, as Servicer, and Saks
Credit Corporation, as Purchaser.
RECEIVABLES PURCHASE AGREEMENT
among
NATIONAL BANK OF THE GREAT LAKES,
as Seller
and
SAKS CREDIT CORPORATION,
as Purchaser
and
SAKS INCORPORATED
(formerly named "Proffitt's, Inc.")
as Servicer
Dated as of July 1, 1999
CONTENTS
<TABLE>
<S> <C>
ARTICLE I - DEFINITIONS........................................................................... 2
SECTION 1.1.Definitions...................................................................... 2
SECTION 1.2.Other Terms...................................................................... 6
SECTION 1.3.Computation of Time Periods...................................................... 6
ARTICLE II - PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES.................................... 6
SECTION 2.1.Sale............................................................................. 6
SECTION 2.2.Servicing of Receivables......................................................... 8
ARTICLE III - CONSIDERATION AND PAYMENT; RECEIVABLES.............................................. 9
SECTION 3.1.Purchase Price................................................................... 9
SECTION 3.2.Payment of Purchase Price........................................................ 9
SECTION 3.3.Monthly Report................................................................... 10
ARTICLE IV - REPRESENTATIONS AND WARRANTIES....................................................... 10
SECTION 4.1.Seller's Representations and Warranties.......................................... 10
SECTION 4.2.Reaffirmation of Representations and Warranties by the Seller; Notice of Breach.. 13
SECTION 4.3.Repurchase of Ineligible Receivables............................................. 14
SECTION 4.4.Repurchase After Cure Period..................................................... 14
SECTION 4.5.Repurchase of All Receivables.................................................... 15
ARTICLE V - COVENANTS OF THE SELLER............................................................... 15
SECTION 5.1.Covenants of the Seller.......................................................... 15
SECTION 5.2.Negative Covenants of the Seller................................................. 17
SECTION 5.3.Indemnification.................................................................. 18
ARTICLE VI - REPURCHASE OBLIGATION................................................................ 19
SECTION 6.1.Mandatory Repurchase............................................................. 19
SECTION 6.2.Dilutions, etc................................................................... 19
ARTICLE VII - CONDITIONS PRECEDENT................................................................ 20
SECTION 7.1.Conditions to the Purchaser's Obligations Regarding Receivables.................. 20
ARTICLE VIII - TERM AND TERMINATION............................................................... 21
SECTION 8.1.Term............................................................................. 21
SECTION 8.2.Effect of Termination............................................................ 21
ARTICLE IX - MISCELLANEOUS PROVISIONS............................................................. 22
SECTION 9.1.Amendment........................................................................ 22
SECTION 9.2.Governing Law.................................................................... 22
</TABLE>
-i-
<TABLE>
<S> <C>
SECTION 9.3.Notices.......................................................................... 22
SECTION 9.4.Severability of Provisions....................................................... 23
SECTION 9.5.Assignment....................................................................... 23
SECTION 9.6.Further Assurances............................................................... 24
SECTION 9.7.No Waiver; Cumulative Remedies................................................... 24
SECTION 9.8.No Bankruptcy Petition Against the Purchaser or Trust............................ 24
SECTION 9.9.Counterparts..................................................................... 24
SECTION 9.10.Binding Effect; Third-Party Beneficiaries....................................... 25
SECTION 9.11.Merger and Integration.......................................................... 25
SECTION 9.12.Headings........................................................................ 25
SECTION 9.13.Exhibits........................................................................ 25
</TABLE>
EXHIBITS
Exhibit A: Form of Subordinated Note
Exhibit B: Location of Records, Principal Place of Business, etc.
Exhibit C: Subsidiaries, Divisions, Trade Names, Bankruptcy Proceedings
-ii-
RECEIVABLES PURCHASE AGREEMENT
THIS RECEIVABLES PURCHASE AGREEMENT, dated as of July 1, 1999 (as
amended, supplemented or otherwise modified and in effect from time to time,
this "Agreement"), between NATIONAL BANK OF THE GREAT LAKES, a national banking
association, as seller (the "Seller"), SAKS CREDIT CORPORATION, a Delaware
------
corporation, as purchaser (the "Purchaser"), and SAKS INCORPORATED (formerly
---------
named "Proffitt's, Inc."), a Tennessee corporation, as servicer (the
"Servicer").
--------
W I T N E S S E T H :
WHEREAS, the Purchaser desires to purchase from time to time accounts
receivable existing on the Closing Date and acquired or generated thereafter in
the normal course of the Seller's business pursuant to certain revolving
consumer credit card accounts;
WHEREAS, the Seller desires to sell and assign from time to time these
receivables to the Purchaser upon the terms and conditions hereinafter set
forth;
WHEREAS, the Servicer has agreed to service these accounts receivable;
WHEREAS, Proffitt's Credit Corporation, a Nevada corporation, as
transferor, the Servicer, and Norwest Bank Minnesota, National Association, as
trustee (together with its successors, the "Trustee") entered into a Master
-------
Pooling and Servicing Agreement dated as of August 21, 1997 (as amended,
supplemented or otherwise modified and in effect from time to time, the "Pooling
-------
and Servicing Agreement"), and thereby created a trust on behalf of the holders
- -----------------------
of certificates in such trust;
WHEREAS, Proffitt's Credit Corporation has merged with and into PCC
Merger Corp. ("PCC Merger"), and PCC Merger and SFA Finance Company have
consolidated (the "Consolidation") to form the Purchaser; and
WHEREAS, the Purchaser has become the Transferor under the Pooling and
Servicing Agreement and has succeeded to all rights, benefits, obligations and
duties as Transferor under the Pooling and Servicing Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Purchaser and the Seller,
intending to be legally bound, agree as follows:
-1-
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All capitalized terms used herein shall have
-----------
the meanings specified herein or, if not so specified, the meaning specified in,
or incorporated by reference into, the Pooling and Servicing Agreement :
"Account" shall mean each consumer revolving credit card account,
-------
originated or acquired by the Seller, which account has been established or
exists pursuant to an Account Agreement between an Obligor and any Person,
including all Accounts of the Department Stores contributed to the Bank;
provided, however, that this shall not include an Account which as of the Cut-
Off Date has been identified on the Servicer's records as (a) "Jackson Facility
Vision 21 system, Organization 006, logo 200," (b) "Elmhurst Facility Vision 21
system Organization 100, logos 191-196," or (c) an Account with respect to which
the related Receivables have been charged-off, an intercompany account, or a
corporate open-end account.
"Additional Accounts" shall have the meaning specified in the Pooling
-------------------
and Servicing Agreement.
"Advance" shall have the meaning specified in Section 3.2(a) hereof.
-------
"Automatic Additional Accounts" shall have the meaning specified in
-----------------------------
the Pooling and Servicing Agreement.
"Benefit Plan" shall mean any employee benefit plan as defined in
------------
Section 3(3) of ERISA which the Seller maintains.
"Certificateholders" shall have the meaning specified in the Pooling
------------------
and Servicing Agreement.
"Closing Date" shall mean the beginning of business on July 1, 1999.
------------
"Creation Date" shall have the meaning specified in the Pooling and
-------------
Servicing Agreement.
"Cut-Off Date" shall mean the close of business on June 28, 1999.
------------
"Department Stores" shall mean the Saks Fifth Avenue, Off Fifth,
-----------------
Bullock & Jones, Proffitt's, Younkers, Parisian, McRae's, Herberger's, Carson
Pirie Scott, Boston Store, and Bergner's department stores, and catalog
businesses currently operated by Saks Incorporated or its subsidiaries, and each
department store or related catalog business hereafter owned or operated by Saks
Incorporated or a subsidiary of Saks Incorporated or a division of Saks
-2-
Incorporated or any of its subsidiaries, where the Bank holds, originates or
acquires Accounts and Receivables for customers of such stores.
"Eligible Account" shall have the meaning specified in the Pooling and
----------------
Servicing Agreement.
"Eligible Receivable" shall have the meaning specified in the Pooling
-------------------
and Servicing Agreement.
"ERISA Affiliate" shall mean, with respect to any Person, (i) any
---------------
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Internal Revenue Code) as such
Person; (ii) a trade or business (whether or not incorporated) under common
control (within the meaning of Section 414(c) of the Internal Revenue Code) with
such Person; or (iii) for purposes of Code Section 412, a member of the same
affiliated service group (within the meaning of Section 414(m) of the Internal
Revenue Code) as such Person, any corporation described in clause (i) above or
any trade or business described in clause (ii) above.
"Event of Bankruptcy" shall have the meaning specified in the Pooling
-------------------
and Servicing Agreement.
"Finance Charges" shall have the meaning specified in the Pooling and
---------------
Servicing Agreement.
"Insurance Charges" shall have the meaning specified in the Pooling
-----------------
and Servicing Agreement.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding five years contributed to by the Seller or Eligible
Originator or any ERISA Affiliate of the Seller or Eligible Originator on behalf
of its employees.
"Purchase Date" shall have the meaning assigned in Section 3.2(b)
-------------
hereof.
"Purchase Rate" shall mean the percentage equivalent of the decimal
-------------
representation of the following expression:
(1.00 + APY) minus (BDA + SF + PCF + OE + RF) where:
APY = average portfolio yield of the Seller (expressed as the decimal
equivalent of a percentage) as reasonably determined over the
preceding twelve (12) months (or such other period mutually
agreed upon by the Purchaser and the Seller);
-3-
BDA = an allowance for bad debts (expressed as the decimal equivalent
of a percentage), based on, among other relevant factors,
historical rates for the previous twelve (12) months (or such
other period mutually agreed upon by the Purchaser and the
Seller);
SF = a Servicer fee equal to 2.00% (expressed as the decimal
equivalent of a percentage) per annum;
PCF = the Purchaser's cost of funds, as calculated from time to time,
equal to the sum (expressed as the decimal equivalent of a
percentage) of (i) the product of a fraction equal to the
adjusted investor amount of all classes of Certificates issued by
the Trust (other than those held by the Purchaser) divided by the
Aggregate Principal Receivables multiplied by the prime rate (as
published in the Money Rates Section of The Wall Street Journal)
plus (ii) the product of (x) 20% (to be adjusted from time to
time based on changes to the Purchaser's reasonably estimated
marginal cost of capital) multiplied by (y) a fraction equal to
the sum of the Transferor Amount plus the investor amount of any
class of Certificates held by the Purchaser divided by the
Aggregate Principal Receivables;
OE = the fraction (expressed as the decimal equivalent of a
percentage), the numerator of which is the Purchaser's annualized
estimate of projected operating expenses for the next twelve (12)
months and the denominator of which is the estimated outstanding
principal balance of Receivables expected to be sold by the
Seller to the Purchaser in the next twelve (12) months; and
RF = a contingency risk factor (expressed as the decimal equivalent of
a percentage) based on industry and economic considerations, as
determined by the Purchaser in its reasonable discretion and as
agreed upon between the Purchaser and the Seller.
"Purchase Period" shall mean, with respect to Receivables sold by the
---------------
Seller to the Purchaser after the Closing Date, the Monthly Period reported upon
in the most recent Monthly Servicer Report delivered after the Closing Date.
"Purchase Price" shall have the meaning set forth in Section 3.1.
--------------
"Purchaser" shall mean Saks Credit Corporation, a Delaware
---------
corporation, and its successors and assigns.
"Receivable" shall mean any amount owing by an Obligor under an
----------
Account with the Seller, including any Additional Account and/or Automatic
Additional Account, from time to
-4-
time, including, without limitation, amounts owing for the payment of
merchandise and services, Insurance Charges, service contract charges, Finance
Charges and all other fees and charges. In calculating the aggregate amount of
Receivables on any day, the amount of Receivables shall be reduced by the
aggregate amount of adjustments stated in Section 3.8 of the Pooling and
Servicing Agreement in the Accounts on such day. Any Receivables which the
Seller is unable to transfer under circumstances similar to those described in
Section 2.5(d) of the Pooling and Servicing Agreement shall not be included for
the period in which such Receivables cannot be transferred under conditions
similar to those described in such Section 2.5(d) in calculating the aggregate
amount of Receivables.
"Records" shall mean all Account Agreements and other documents,
-------
books, records and other information (including, without limitation, computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) maintained with respect to Receivables and the related
Obligors.
"Related Security" means, with respect to any Receivable, all of the
----------------
Seller's rights, title and interest in, to and under the following, as and to
the extent applicable:
(i) all of the Seller's interest, if any, in the merchandise
(including returned or repossessed merchandise), if any, the sale of which
gave rise to such Receivable;
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Account related to such Receivable or
otherwise, together with all financing statements signed by an Obligor
describing any collateral securing such Receivable;
(iii) all guarantees, indemnities, warranties, insurance (and
proceeds and premium refunds thereof) or other agreements or arrangements
of any kind from time to time supporting or securing payment of such
Receivable whether pursuant to the Account related to such Receivable or
otherwise;
(iv) all records related to such Receivable; and
(v) all Proceeds of any of the foregoing.
"Relevant UCC" shall mean the Uniform Commercial Code as in effect in
------------
the State of Illinois.
"Secured Obligations" shall have the meaning set forth in Section
-------------------
2.1(d) hereof.
"Subservicers" shall mean initially McRae's, Inc. and any Person
------------
thereafter appointed by the Servicer as a Subservicer of the Receivables.
-5-
"Subordinated Note" shall mean the subordinated note in the amount of
-----------------
$500,000,000 dated of even date herewith between Saks Incorporated and Saks
Credit Corporation which supersedes and replaces a promissory note in the same
amount and on the same terms dated as of February 2, 1998 between Proffitt's,
Inc. and Proffitt's Credit Corporation.
"Termination Date" shall have the meaning specified in Section 8.1
----------------
hereof.
SECTION 1.2. Other Terms. All accounting terms not specifically
-----------
defined herein shall be construed in accordance with generally accepted
accounting principles. All terms used in Article 9 of the Relevant UCC, and not
specifically defined herein, are used herein as defined in such Article 9. To
the extent that the definitions of accounting terms herein are inconsistent with
the meanings of such terms under generally accepted accounting principles, the
definitions contained herein shall control. The definitions of all terms defined
herein shall include the singular as well as the plural form of such terms and
the masculine of such terms as well as the feminine and neuter genders of such
terms. The terms "include", "including" or "includes" shall mean including
without limitation by way of enumeration or otherwise.
SECTION 1.3. Computation of Time Periods. Unless otherwise stated in
---------------------------
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word "from" means "from and including" and the words
"to" and "until" each means "to but excluding."
ARTICLE II
PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES
SECTION 2.1. Sale. (a) Upon the terms and subject to the conditions
----
set forth herein, the Seller hereby sells, assigns, transfers, sets-over and
conveys to the Purchaser, without recourse, and the Purchaser hereby purchases
from the Seller, on the terms and subject to the conditions specifically set
forth herein, all of the Seller's right, title and interest, whether now owned
or hereafter acquired, in, to and under the Receivables now existing or
hereafter created, and owned by the Seller, through any Termination Date (but
not thereafter), together with all Related Security, if any, and all Collections
and other monies due or to become due with respect thereto (including all
Finance Charges, Recoveries and Interchange, if any) and all proceeds of the
foregoing, including Insurance Proceeds. The foregoing sale, assignment,
transfer and conveyance does not constitute an assumption by the Purchaser of
any obligations of the Seller or any other Person to Obligors or to any other
Person in connection with the Receivables or under any Related Security, Account
Agreement or other agreement and instrument relating to the Receivables. With
respect to Receivables sold by the Seller on the Closing Date, such Receivables
shall be deemed to be all the Receivables of the Seller that exist as of the
close of business on the Cut-Off Date together with any Receivables created
thereafter prior to the Closing Date. With respect to Receivables to be sold
pursuant to this Agreement by the Seller after the
-6-
Closing Date, such Receivables shall be deemed to be all the Receivables created
after the close of business on the Cut-Off Date.
(b) In connection with the foregoing sale, the Seller agrees to record
and file on or prior to the Closing Date, at its own expense, a financing
statement or statements with respect to the Receivables and the other property
described in Section 2.1(a) sold by the Seller hereunder meeting the
requirements of applicable state law in such manner and in such jurisdictions as
are necessary to perfect and protect the interests of the Purchaser created
hereby under the Relevant UCC (subject, in the case of Related Security
constituting returned inventory and proceeds, to the applicable provisions of
Section 9-306 of the Relevant UCC) against all creditors of and purchasers from
the Seller, and to deliver either the originals of such financing statements or
a file-stamped copy of such financing statements or other evidence of such
filings to the Purchaser on the Closing Date.
(c) The Seller agrees that from time to time, at its expense, it will
promptly execute and deliver all instruments and documents and take all actions
as may be necessary or as the Purchaser may reasonably request in order to
perfect or protect the interest of the Purchaser in the Receivables purchased
hereunder or to enable the Purchaser to exercise or enforce any of its rights
hereunder. Without limiting the foregoing, the Seller will, in order to
accurately reflect this purchase and sale transaction, execute and file such
financing or continuation statements or amendments thereto or assignments
thereof (as permitted pursuant hereto) as may be requested by the Purchaser, and
shall indicate clearly and unambiguously in the Seller's computer files and
other Records that the Receivables transferred hereby have been sold to the
Purchaser pursuant to this Agreement and subsequently transferred to the Trustee
pursuant to the Pooling and Servicing Agreement. The Seller shall, upon request
of the Purchaser, obtain such additional search reports as the Purchaser shall
request. To the fullest extent permitted by applicable law, the Purchaser shall
be permitted to sign and file continuation statements and amendments thereto and
assignments thereof without the Seller's signature. Carbon, photographic or
other reproduction of this Agreement or any financing statement shall be
sufficient as a financing statement.
(d) It is the express intent of the Seller and the Purchaser that the
conveyance of the Receivables, all Related Security, if any, and all Collections
and proceeds thereof by the Seller to the Purchaser pursuant to this Agreement
be construed as a sale of such Receivables and other property by the Seller to
the Purchaser, which sale is absolute and irrevocable (except as expressly
provided otherwise herein) and provides the Purchaser with the full benefits of
ownership of such Receivables and other property. Further, it is not the
intention of the Seller and the Purchaser that such conveyance be deemed a grant
of a security interest in the Receivables and such other property by the Seller
to the Purchaser to secure a debt or other obligation of the Seller. However, in
the event that, notwithstanding the express intent of the parties, the
Receivables and such other property are construed to constitute property of the
Seller, then (i) this Agreement also shall be deemed to be, and hereby is, a
security agreement within the meaning of the Relevant UCC; and (ii) the
conveyance by the Seller provided for in this Agreement shall be deemed to be,
and the Seller hereby grants to the Purchaser, a security interest in, to and
under all of the Seller's right, title and interest in, to and under the
Receivables and such other property outstanding on
-7-
the Closing Date and thereafter owned by the Seller, together with all Related
Security, if any, and all Collections and other monies due or to become due with
respect thereto (including all Finance Charges, Recoveries and Interchange, if
any) and all proceeds of the foregoing, including Insurance Proceeds, to secure
the rights of the Purchaser set forth in this Agreement or as may be determined
in connection therewith by applicable law (collectively, the "Secured
-------
Obligations"). The Seller and the Purchaser shall, to the extent consistent with
- -----------
this Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Receivables and such
other property, such security interest would be deemed to be a perfected first
priority security interest in favor of the Purchaser under applicable law and
will be maintained as such throughout the term of this Agreement.
SECTION 2.2. Servicing of Receivables. (a) The servicing,
------------------------
administering and collection of the Receivables shall be conducted by the
Servicer, which hereby agrees to perform, take or cause to be taken all such
action as may be necessary or advisable to collect each Receivable from time to
time, all in accordance with applicable laws, rules and regulations and with the
care and diligence which the Servicer employs in servicing similar receivables
for its own account, in accordance with the Credit Card Guidelines. With the
consent of the Trustee and the Purchaser, the Servicer may delegate certain
functions to the Subservicers; provided, however, no such delegation shall
relieve the Servicer of its obligations hereunder. The Purchaser hereby appoints
the Servicer as its agent to enforce the Purchaser's rights and interests in, to
and under the Receivables, the Related Security, if any, and the Collections
with respect thereto, and the Seller agrees to cooperate with and assist the
Purchaser and the Servicer in connection with any such efforts, including acting
as agent for and on behalf of the Purchaser and the Servicer in connection
therewith. The Servicer shall hold in trust for the Purchaser, in accordance
with its interests, all records which evidence or relate to the Receivables or
Related Security, if any, Collections and proceeds with respect thereto.
Notwithstanding anything to the contrary contained herein, from and after a
Servicer Default (as defined in the Pooling and Servicing Agreement), a
Successor Servicer shall be appointed as provided in Article X of the Pooling
and Servicing Agreement. The Purchaser agrees to pay the Servicer a Servicing
Fee for the Servicer's performance of the duties and obligations described in
this Section 2.2 and in Article III of the Pooling and Servicing Agreement.
(b) The Seller hereby grants to each of the Purchaser and the Servicer
an irrevocable, non-exclusive license to use, without royalty or payment of any
kind, all software used by the Seller to account for the Receivables, to the
extent necessary to administer the Receivables, whether such software is owned
by the Seller or is owned by others and used by the Seller under license
agreements with respect thereto, provided, however, should the consent of any
licensor of the Seller to such grant of the license described herein be
required, the Seller hereby agrees that upon the request of the Purchaser (or
the Trustee as the Purchaser's assignee), the Seller will use its reasonable
efforts to obtain the consent of such third-party licensor. The license granted
hereby shall be irrevocable, and shall terminate on the date this Agreement
terminates in accordance with its terms.
-8-
ARTICLE III
CONSIDERATION AND PAYMENT; RECEIVABLES
SECTION 3.1. Purchase Price (a) The purchase price ("Purchase Price")
--------------
for the Receivables and related property conveyed on the Closing Date to the
Purchaser by the Seller under this Agreement shall be a dollar amount equal to
the product of (i) the Aggregate Principal Receivables as of the Cut-Off Date,
and (ii) the Purchase Rate then in effect.
The Purchase Price for the Receivables and related property conveyed
on any date after the Closing Date shall be the dollar amount equal to the
product of (i) the aggregate outstanding principal balance of the Receivables
sold during the applicable Purchase Period as reflected in the applicable
Monthly Servicer's Certificate or any other certificate delivered pursuant
thereto or pursuant to this Agreement as in effect prior to the date hereof and
(ii) the Purchase Rate on such date.
SECTION 3.2. Payment of Purchase Price. (a) The Purchase Price for the
-------------------------
Receivables sold on the Closing Date shall be paid or has been paid by payment
of cash in immediately available funds. The Purchaser may obtain the cash to pay
the Purchase Price from the sale of Eligible Receivables to the Trust, and
pursuant to advances pursuant to the Subordinated Note (such advance and any
advance thereunder as contemplated by Section 3.2(b), each an "Advance") and
contributions to the capital of the Purchaser by Proffitt's, Inc.
(b) The Purchase Price for the Receivables sold by the Seller on any
date after the initial date of the Receivables Purchase Agreement (each, a
"Purchase Date") shall be paid in cash to the Seller from proceeds from (i) the
-------------
sale by the Purchaser of the Receivables to the Trust or (ii) as the Purchaser
may elect, in its sole discretion, from proceeds of (A) an Advance under the
Subordinated Note, or (iii) a capital contribution by Saks Incorporated to the
Purchaser or (iv) any combination of the foregoing. In the event the Purchaser
does not have sufficient cash to pay the Purchase Price due on any Purchase
Date, or Saks Incorporated determines, in its sole discretion not to make a
capital contribution to the Purchaser, Saks Incorporated, subject to the terms
hereof, irrevocably agrees to make an Advance on such Purchase Date in an
original principal amount equal to such cash insufficiency; provided, however,
that no Advance shall be made if immediately thereafter the Net Worth of the
Purchaser would be less than 10% of the highest Aggregate Principal Receivables
outstanding during the immediately preceding twelve (12) calendar month period.
All Advances made by the Seller to the Purchaser shall be evidenced by the
Subordinated Note.
(c) The terms and conditions of the Subordinated Note and all Advances
thereunder shall be as follows:
(i) Repayment of Advances. All amounts paid by the Purchaser
---------------------
with respect to the Advances shall be allocated first to the repayment of
accrued interest until all such interest is paid, and then to the outstanding
principal amount of the Advances. Subject to the
-9-
provisions of this Agreement, the Purchaser may borrow, repay and reborrow
Advances on and after the date hereof and prior to the termination of this
Agreement, subject to the terms, provisions and limitations set forth herein.
(ii) Interest. The Subordinated Note shall bear interest from
its date on the outstanding principal balance thereof at a rate per annum equal
to one month LIBOR as published in the Money Rates Section of The Wall Street
Journal. Interest on each Advance shall be computed based on the actual number
of days elapsed based upon a year of 360 days.
(iii) Sole and Exclusive Remedy; Subordination. The
----------------------------------------
Subordinated Note shall be fully subordinated to any rights of the Trustee, the
Certificateholders and their permitted assigns pursuant to the Pooling and
Servicing Agreement, all on the terms and conditions set forth in the
Subordinated Note, and shall not evidence any rights in the Receivables.
SECTION 3.3. Monthly Report. On each Determination Date, the Seller
--------------
shall deliver or cause to be delivered to the Purchaser a report covering the
preceding Monthly Period, substantially in the form of the Monthly Servicer's
Certificate attached as Exhibit E to the Pooling and Servicing Agreement,
---------
showing (i) the aggregate Purchase Price of Receivables acquired or generated by
the Seller in the preceding Monthly Period and (ii) the aggregate outstanding
principal balance of such Receivables that are Eligible Receivables as of the
last day of such preceding Monthly Period.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. Seller's Representations and Warranties. The Seller
---------------------------------------
represents and warrants to the Purchaser as of the Closing Date and shall be
deemed to represent and warrant as of the date of any sale of any interest in
Receivables, including Receivables in Additional Accounts and Automatic
Additional Accounts to the Purchaser pursuant to this Agreement that:
(a) Corporate Existence and Power. The Seller is a national banking
-----------------------------
association, duly incorporated, validly existing and in good standing under the
laws of the United States of America, and has full power, authority and legal
right to own its properties and conduct its business as such properties are
presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement. The Seller is duly
qualified to do business and is in good standing (or is exempt from such
requirements) and has obtained all necessary licenses and approvals with respect
to the Seller, in each jurisdiction in which failure to so qualify or to obtain
such licenses and approvals would render any Account Agreement relating to an
Account or any Receivable unenforceable by it, the Purchaser or the Trust and
would have a material adverse effect on the Certificateholders or on the
Purchaser's or the Servicer's ability to
-10-
perform their respective obligations under this Agreement, the Pooling and
Servicing Agreement or any Supplement thereto.
(b) Corporate and Governmental Authorization; Contravention. The
-------------------------------------------------------
execution, delivery and performance by the Seller of this Agreement are within
the Seller's corporate powers, have been duly authorized by all necessary
corporate action, and require no action by or in respect of, or filing with, any
Governmental Authority or official thereof (except for the filing of UCC
financing and continuation statements, and amendments thereto, as required by
this Agreement). The execution and delivery of this Agreement by the Seller, the
performance by the Seller of the transactions contemplated by this Agreement and
the fulfillment by the Seller of the terms hereof and thereof will not conflict
with, violate or result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
default under, any Requirement of Law applicable to the Seller or any indenture,
contract, agreement, mortgage, deed of trust or other instrument to which the
Seller is a party or by which it or any of its properties are bound and which
conflict, violation, breach or default would have a material adverse effect on
the Purchaser or the Certificateholders or on the Purchaser's or the Servicer's
ability to perform their respective obligations under the Pooling and Servicing
Agreement.
(c) Binding Effect. This Agreement will constitute the legal, valid
--------------
and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, subject to applicable bankruptcy, insolvency,
receivership, conservatorship, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general principles
of equity (whether considered in a proceeding at law or in equity).
(d) Perfection. Immediately preceding the sale, transfer and
----------
assignment of the Receivables and the related property pursuant to this
Agreement, the Seller had good and marketable title to all of the Receivables
and such related property, free and clear of all Liens (except those Liens
permitted by the Pooling and Servicing Agreement). On or prior to the date of
each sale of Receivables and such related property pursuant to this Agreement,
all financing statements and other documents required to be recorded or filed in
order to perfect and protect the ownership interest of the Purchaser in and to
the Receivables and such related property against all creditors of and
purchasers from the Seller will have been duly filed in each filing office
necessary for such purpose and all filing fees and taxes, if any, payable in
connection with such filings shall have been paid in full.
(e) Tax Status. The Seller has filed all material tax returns
----------
(federal, state and local) required to be filed and has paid or made adequate
provision for the payment of all taxes, assessments and other governmental
charges.
(f) Action, Suits. There are no proceedings or investigations pending
or, to the knowledge of the Seller, threatened against the Seller before any
Governmental Authority (i) asserting the invalidity of this Agreement, (ii)
seeking to prevent the consummation of any of the
-11-
transactions contemplated by this Agreement, (iii) seeking any determination or
ruling that, in the reasonable judgment of the Seller, would materially and
adversely affect the performance by the Seller of its obligations under this
Agreement, (iv) seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement (v) seeking to
affect adversely the federal income tax attributes of the Trust.
(g) Place of Business. The principal place of business and chief
-----------------
executive office of the Seller is located at 140 Industrial Drive, Elmhurst,
Illinois 60126, and the offices where the Seller keeps all its records with
respect to its Accounts and Receivables, are located at the address(es)
described on Exhibit B hereto or such other locations notified to the Purchaser
---------
in accordance with this Agreement in jurisdictions where all action required by
the terms of this Agreement has been taken and completed.
(h) True Sale. This Agreement constitutes a valid sale, transfer and
---------
assignment to the Purchaser of all right, title and interest of the Seller in
and to the Receivables and related property to be transferred hereby, whether
existing on the date of this Agreement or hereafter created in the Accounts and
the proceeds thereof which is effective as to each Receivable upon the creation
thereof, and upon such transfer to the Purchaser hereunder, the Purchaser shall
obtain good and marketable title to such Receivables and related property, free
and clear of all Liens (except those Liens permitted by the Pooling and
Servicing Agreement).
(i) Trade Names, Etc. As of the date hereof: (i) the Seller's chief
----------------
executive office is located at the address for notices set forth in Section 9.3;
(ii) the Seller has only the subsidiaries and divisions listed on Exhibit C
---------
hereto; and (iii) the Seller has, within the last five (5) years, operated only
under the trade names identified in Exhibit C hereto, and, within the last five
(5) years, has not changed its name, merged with or into or consolidated with
any other corporation or been the subject of any proceeding under Title 11,
United States Code (Bankruptcy), except as disclosed in Exhibit C hereto.
---------
(j) Nature of Receivables. As of the Cut-Off Date or Creation Date,
---------------------
as applicable, and in the case of Receivables in Additional Accounts, as of the
related Additional Account Cut-Off Date, (i) each Receivable then existing is an
Eligible Receivable, and (ii) as of the applicable Additional Account Cut-Off
Date with respect to Additional Accounts, and as of the applicable Distribution
Date on which a computer file, microfiche or written list is delivered pursuant
to Section 2.1(b) of the Pooling and Servicing Agreement with respect to
Automatic Additional Accounts included automatically pursuant to Section 2.6(d)
of the Pooling and Servicing Agreement, Schedule 1 to the Pooling and Servicing
Agreement is in all material respects an accurate and complete listing of all
the Accounts of the Seller the Receivables of which have been sold, transferred
and assigned to the Purchaser as of the Cut-Off Date or the applicable
Additional Account Cut-Off Date, the applicable Creation Date and the date of
such Schedule 1, as the case may be, and the information contained therein with
respect to the identity of such Accounts and the Receivables existing thereunder
is true and correct in all material respects as of the dates thereof, including
the applicable Cut-Off Date, Additional Account Cut-Off Date or Creation Date.
On each day on which any new Receivable is created, the Seller shall be deemed
to
-12-
represent and warrant to the Purchaser that each Receivable created on such day
is an Eligible Receivable.
(k) Eligibility of Accounts. As of the applicable Cut-Off Date,
-----------------------
Additional Account Cut-Off Date or Creation Date, each Account was an Eligible
Account and no selection procedures adverse to the Purchaser or the
Certificateholders have been employed in selecting the Accounts.
(l) Amount of Receivables. As of the Cut-Off Date, the aggregate
---------------------
outstanding principal balance of the Receivables of the Seller in existence was
approximately $1,067,000,000.
(m) Not an Investment Company. The Seller is not, and is not
-------------------------
controlled by, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or is exempt from all provisions of such Act.
(n) ERISA. The Seller and each of its ERISA Affiliates is in
-----
compliance in all material respects with ERISA and no lien exists in favor of
the Pension Benefit Guaranty Corporation on any of the Receivables.
(o) Bulk Sales. No transaction contemplated by this Agreement
----------
requires compliance with any bulk sales act or similar law.
(p) No Insolvency. The Seller is not insolvent immediately prior to
-------------
any transfer of Receivables hereunder, and will not be rendered insolvent
immediately following such transfer.
(q) Reasonably Equivalent Value. The Purchaser has given reasonably
---------------------------
equivalent value to the Seller in consideration for the transfer and sale to the
Purchaser of the applicable Receivables and other property from such Seller, and
each such transfer shall not have been made for or on account of an antecedent
debt owed by such Seller to the Purchaser. The Seller acknowledges that it will
receive reasonably equivalent value in consideration for the transfer to the
Purchaser of all Receivables and other property now or hereafter to be
transferred and sold hereunder.
The Purchaser and the Servicer may rely upon any of these
representations and warranties, and any of the covenants and agreements of the
Seller contained herein in connection with any transactions pursuant to the
Pooling and Servicing Agreement.
SECTION 4.2. Reaffirmation of Representations and Warranties by the
------------------------------------------------------
Seller; Notice of Breach. On each sale date, the Seller, by accepting the
- ------ ----------------
proceeds of such sale, shall be deemed to have certified that all
representations and warranties described in Section 4.1 are true and correct on
and as of such day as though made on and as of such day and that all the
covenants to be performed by the Seller have been performed. The
representations and warranties set forth in Section 4.1 shall survive the
conveyance of the Receivables to the Purchaser, and termination of the rights
and obligations of the Purchaser and the Seller under this
-13-
Agreement. Upon discovery by the Purchaser or the Seller of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other within three (3) Business Days of
such discovery.
SECTION 4.3. Automatic Repurchase of Ineligible Receivables. In the
----------------------------------------------
event that a Receivable is not an Eligible Receivable as a result of the failure
to satisfy the conditions set forth in clause (iii) of the definition of
Eligible Receivable, and either of the following two conditions is met:
(i) the Lien on the subject Receivable (1) ranks prior to the
Lien created pursuant to this Agreement, (2) arises in favor of the United
States of America or any state or any agency or instrumentality thereof or
involves taxes or liens arising under Title IV of ERISA, or (3) has been
consented to by the Seller; or
(ii) the Lien on the subject Receivable is not of the types
described in clause (i) above, but, as a result of such breach or event,
such Receivable becomes a Receivable in a Defaulted Account or the
Purchaser's rights in, to or under such Receivable or its proceeds are
materially impaired or the proceeds of such Receivable are not available
for any reason to the Purchaser free and clear of any Lien except Liens
permitted hereby;
then, upon the earlier to occur of the discovery of such breach or event by the
Seller or receipt by the Seller of written notice of such breach or event given
by the Purchaser, the Servicer or the Trustee, each such Receivable or, at the
option of the Seller, all such Receivables with respect to the related Account,
automatically shall be repurchased by the Seller on the terms and conditions set
forth in Article VI hereof.
SECTION 4.4. Repurchase After Cure Period. In the event of a breach
----------------------------
of any of the representations and warranties set forth in Section 4.1(j) or (k)
with respect to a Receivable (other than in the event that a Receivable is not
an Eligible Receivable as a result of the failure to satisfy the conditions set
forth in clause (iii) of the definition of Eligible Receivable), and as a result
of such breach or event such Receivable becomes a Receivable in a Defaulted
Account or the Purchaser's rights in, to or under such Receivable or its
proceeds are materially impaired or the proceeds of such Receivable are not
available for any reason to the Purchaser free and clear of any Lien except
Liens permitted hereby, then, upon the expiration of 90 days or any longer
period specified by the Servicer (not to exceed an additional 90 days) from the
earlier to occur of (x) the discovery of any such event by the Transferor or the
Servicer or (y) receipt by the Purchaser or the Servicer of written notice of
any such event given by the Trustee, each such Receivable or, at the option of
the Purchaser, all such Receivables with respect to the related Account, shall
be repurchased by the Seller on the terms and conditions set forth in Article VI
hereof; provided, however, that no such repurchase shall be required to be made
if, on any day within such applicable period, (A) such representation and
warranty with respect to such Receivable shall then be true and correct in all
material respects as if such Receivable had been transferred to the Trust on
such day, and (B) the related Account is no longer a Defaulted Account as the
result of the
-14-
breach of such representation and warranty, and the Trust's rights in, to or
under such Receivable or its proceeds are no longer materially impaired as a
result of a breach of such representation and warranty, and the proceeds of such
Receivable are available to the Trust free and clear of all Liens resulting in
the breach of such representation and warranty, as applicable.
SECTION 4.5 Repurchase of All Receivables. In the event that any of
-----------------------------
the representations or warranties set forth in Sections 4.1(a), 4.1(b), 4.1(c),
4.1(d) or 4.1(j) are breached and such breach results in a requirement that the
Purchaser repurchase such Receivable under the Pooling and Servicing Agreement
or a material amount of Receivables are deemed not to be Eligible Receivables,
and such event has a materially adverse effect on the Purchaser or the
Certificateholders, and the Transferor is required to accept reassignment of all
Receivables at the order of the Trustee or the Certificateholders, then the
Seller shall repurchase all Receivables on the terms and conditions set forth in
Article VI hereof.
ARTICLE V
COVENANTS OF THE SELLER
SECTION 5.1. Covenants of the Seller. The Seller hereby covenants and
-----------------------
agrees with the Purchaser that, for so long as this Agreement and the Pooling
and Servicing Agreement are in effect, and until all Receivables, an interest in
which has been sold to the Purchaser pursuant hereto, shall have been paid in
full or charged off, and all amounts owed by the Seller pursuant to this
Agreement have been paid in full, unless the Purchaser otherwise consents in
writing, the Seller covenants and agrees as follows:
(a) Conduct of Business. The Seller will carry on and conduct its
-------------------
credit card business in substantially the same manner as is presently conducted
and do all things necessary to remain duly organized, validly existing and in
good standing as a national banking association. The Seller will maintain all
authority required to conduct its business in each jurisdiction in which its
business is conducted, the failure of which would render any Account Agreement
relating to an Account or any Receivable unenforceable by it, the Purchaser or
the Trustee and would have a material adverse effect on the Certificateholders
or on the Purchaser's or the Servicer's ability to perform their respective
obligations under this Agreement, the Pooling and Servicing Agreement or any
Supplement thereto.
(b) Compliance with Laws. The Seller will comply in all material
--------------------
respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it or its properties may be subject.
(c) Furnishing of Information and Inspection of Records. The Seller
---------------------------------------------------
will furnish or cause to be furnished to the Purchaser from time to time such
information with respect to the Receivables as the Purchaser may reasonably
request, including, without limitation, a computer file, microfiche or written
list showing each Account, identified by account number, and
-15-
Receivable balance and any information which the Purchaser may be required to
deliver pursuant to the Pooling and Servicing Agreement, any Supplement thereto
and any related Certificate Purchase Agreement. The Seller will at any time and
from time to time during regular business hours and upon reasonable prior notice
permit the Purchaser, or its agents or representatives (which may include any
purchasers of certificates not sold to the public), (i) to examine and make
copies of and abstracts from all records and (ii) to visit the offices and
properties of the Seller for the purpose of examining such records, and to
discuss matters relating to Receivables or the Seller's performance hereunder
with any of the officers, directors, employees or independent public accountants
of the Seller having knowledge of such matters.
(d) Keeping of Records and Books of Account. The Seller will
---------------------------------------
maintain a system of accounting established and administered in accordance with
generally accepted accounting principles except to the extent required otherwise
by applicable regulatory authorities and then consistent with regulatory
accounting principles, consistently applied, and will maintain and implement
administrative and operating procedures (including, without limitation, an
ability to produce or recreate records evidencing Receivables in the event of
the destruction of the originals thereof), and keep and maintain, all documents,
books, records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records adequate
to permit the daily identification of each new Receivable and all Collections of
and adjustments to each existing Receivable). The Seller will give the Purchaser
and the Trustee notice of any material change in the administrative and
operating procedures of the Seller referred to in the previous sentence.
(e) Account Agreements and Credit Card Guidelines. The Seller shall
---------------------------------------------
comply with and perform its obligations under the applicable Account Agreements
relating to the Accounts and the Credit Card Guidelines, except insofar as any
failure so to comply or perform would not materially and adversely affect the
rights of the Purchaser, the Trust or the Certificateholders, the ability of the
Servicer to collect the Receivables, the validity or enforceability of this
Agreement, the Pooling and Servicing Agreement, or any documents or agreements
related thereto, or the performance by any party of its obligations hereunder or
thereunder.
(f) Reduction of Charges. Except as required by law or as the Seller
--------------------
shall deem advisable for its credit card program based on a good faith
assessment by the Seller, in its sole discretion, of the various factors
affecting the use of its credit card accounts, the Seller will not reduce the
finance charges or other fees on the Accounts if, as a result of such reduction,
its reasonable expectation of Portfolio Yield as of the time of such reduction
would be less than the weighted average base rates of all outstanding Series. In
addition, the Seller covenants that, unless required by law, it will not reduce
the annual percentage rate if its reasonable expectation of Portfolio Yield
would be less than the highest Certificate Rate for any outstanding Series.
(g) Collections Received. The Seller shall direct or cause all
--------------------
Collections of Receivables to be remitted as directed by the Purchaser. In the
event that the Seller receives any such Collection, the Seller shall hold in
trust for and on behalf of the Purchaser and the Trust, as
-16-
their interests may appear, and remit, immediately, but in any event not later
than the close of business on the second Business Day following its receipt
thereof, to the Servicer, all Collections received from time to time by the
Seller.
(h) Sale Treatment. The Seller agrees to treat this conveyance for
--------------
all purposes (including, without limitation, tax and financial accounting
purposes) as a sale and, to the extent any such reporting is required, shall
report the transactions contemplated by this Agreement on all relevant books,
records, tax returns, financial statements and other applicable documents as a
sale of the Receivables to the Purchaser.
(i) ERISA. The Seller shall promptly give the Purchaser written
-----
notice upon becoming aware that (i) the Seller or any of its ERISA Affiliates is
not in compliance in all material respects with ERISA and to the extent required
of the Purchaser and its ERISA Affiliates in the Certificate Purchase Agreement
or that (ii) any ERISA Lien on any of the Receivables exists.
SECTION 5.2. Negative Covenants of the Seller. During the term of
--------------------------------
this Agreement, unless the Trustee and the Purchaser shall otherwise consent in
writing:
(a) No Sales, Liens, Etc. Except for the conveyances hereunder, the
--------------------
Seller will not sell, pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on (or the filing of any
financing statement with respect to) any Receivable, whether now existing or
hereafter created, or any interest therein; the Seller will notify the Purchaser
and the Trustee of the existence of any Lien on any Receivable transferred and
sold by the Seller to Purchaser hereby; and immediately upon discovery thereof,
the Seller will defend the right, title and interest of the Purchaser and the
Trust in, to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Seller; provided, however, that nothing in this Section 5.2(a) shall prevent or
be deemed to prohibit the Seller from suffering to exist upon any of the
Receivables any Liens for, municipal or other local taxes and other governmental
charges if such taxes or governmental charges shall not at the time be due and
payable or if the Transferor shall currently be contesting the validity thereof
in good faith by appropriate proceedings and shall have set aside on its books
adequate reserves under generally accepted accounting principles with respect
thereto.
(b) Account Agreements and Credit Card Guidelines. Subject to
---------------------------------------------
compliance with all Requirements of Law, the failure to comply with which would
have a material adverse effect on the Purchaser or the Certificateholders, the
Seller or the Servicer may change the terms and provisions of the Account
Agreements or the Credit Card Guidelines in any respect (including, without
limitation, the calculation of the amount, or the timing, of charge offs of
Receivables) as follows: (i) if the Seller owns a comparable segment of
accounts, then such change shall be made applicable to such comparable segment
of the accounts owned and serviced by the Seller that have characteristics the
same as, or substantially similar to, the Accounts that are the subject of such
change, and (ii) if the Seller does not own such a comparable segment, then the
Seller will not
-17-
make or cause to be made any such change with the intent to materially benefit
the Seller over the Purchaser or the Certificateholders.
(c) Change of Name, Etc. The Seller shall not change its name,
-------------------
identity or structure or location of its chief executive office, unless at least
ten (10) Business Days prior to the effective date of any such change the Seller
delivers to the Purchaser such documents, instruments or agreements, including,
without limitation, appropriate financing statements under the Relevant UCC,
executed by the Seller necessary to reflect such change and to continue the
perfection of the Purchaser's and any assignee's first priority interest in the
Receivables.
(d) No Change in Business or Credit Card Guidelines. The Seller will
-----------------------------------------------
not make any change in the Credit Card Guidelines or any change in the character
of its business, which change would, in either case, impair the collectibility
of any substantial portion of the Receivables or otherwise materially and
adversely affect the rights of the Purchaser, the Trust or the
Certificateholders, the ability of the Servicer to collect the Receivables, the
validity or enforceability of this Agreement, the Pooling and Servicing
Agreement, or any documents or agreements related thereto, or the performance by
any party of its obligations hereunder or thereunder.
(e) ERISA Matters. The Seller will not (i) engage in any prohibited
-------------
transaction (as defined in Section 4975 of the Code and Section 406 of ERISA)
for which an exemption is not available or has not previously been obtained from
the U.S. Department of Labor; (ii) permit to exist any accumulated funding
deficiency (as defined in Section 302(a) of ERISA and Section 412(a) of the
Code) or funding deficiency with respect to any Defined Benefit Plan other than
a Multiemployer Plan that could reasonably result in the PBGC or IRS filing a
lien; (iii) fail to make any payments to any Multiemployer Plan that the Seller
or any ERISA Affiliate of the Seller is required to make under the agreement
relating to such Multiemployer Plan or any law pertaining thereto; (iv)
terminate any Defined Benefit Plan so as to result in any liability; or (v)
permit to exist any occurrence of any Reportable Event which represents a
material risk of a liability to the Seller or any ERISA Affiliate of the Seller
under ERISA or the Code.
(f) Transfers of Accounts. The Seller will not convey, transfer or
---------------------
assign any Accounts to any Person, except for Removed Accounts, unless the
Rating Agency Condition is satisfied.
SECTION 5.3. Indemnification. The Seller agrees to indemnify, defend
---------------
and hold the Purchaser harmless from and against any and all loss, liability,
damage, judgment, claim, deficiency, or expense (including interest, penalties,
reasonable attorneys' fees and amounts paid in settlement) (collectively,
"Indemnified Amounts") to which the Purchaser or any assignee thereof may become
-------------------
subject insofar as such loss, liability, damage, judgment, claim, deficiency, or
expense arises out of or is based upon a breach by the Seller of its
representations, warranties and covenants contained herein, or any information
certified in any written schedule or certificate delivered by the Seller
hereunder being untrue in any material respect at the time so certified;
provided, however, neither the Purchaser nor any of its assignees shall be
entitled to
-18-
indemnification hereunder for any Indemnified Amount to the extent the same
resulted from the gross negligence or willful misconduct of the Purchaser or any
of its assignees. The obligations of the Seller under this Section 5.3 shall be
considered to have been relied upon by the Purchaser and shall survive the
execution, delivery, performance and termination of this Agreement and any sale
or transfer of the Receivables or any interest therein by the Purchaser,
regardless of any investigation made by the Purchaser or on its behalf.
ARTICLE VI
REPURCHASE OBLIGATION
SECTION 6.1. Mandatory Repurchase
--------------------
(a) Breach of Warranty. If on any day the repurchase of any
------------------
Receivable which has been sold by the Seller hereunder shall be required
pursuant to Sections 4.3 or 4.4 hereof, the Seller shall be deemed to have
received on such day a Collection of such Receivable in full and shall on such
day pay to the Purchaser an amount equal to the aggregate outstanding principal
balance of such Receivable, plus outstanding Finance Charges accrued thereon
through the date of such repurchase; provided that, prior to the Termination
Date, such amount may be paid, at the election of the Purchaser, by a reduction
in or an offset to the Purchase Price paid to the Seller on the next occurring
Purchase Date, unless the Purchaser is required to make a payment in respect of
such breach pursuant to the Pooling and Servicing Agreement; provided, however,
in all events at least the amount of any cash deposit required to be made by the
Purchaser under the Pooling and Servicing Agreement in respect of the retransfer
of such Ineligible Receivable shall be paid in immediately available funds by
the Seller.
(b) Repurchase of All Receivables. If on any day the repurchase of
-----------------------------
all Receivables which have been sold by the Seller hereunder shall be required
pursuant to Section 4.5 hereof, the Seller shall be deemed to have received on
such day a Collection of such Receivables in full and shall on such day pay to
the Purchaser an amount equal to the aggregate outstanding principal balance of
such Receivable, plus Finance Charges accrued thereon through the date of such
repurchase; provided, however, in all events at least the amount of any cash
deposit required to be made by the Purchaser under the Pooling and Servicing
Agreement in respect of the retransfer of such Ineligible Receivable shall be
paid in immediately available funds by the Seller.
SECTION 6.2. Dilutions, etc. If the Servicer or the Seller adjusts
--------------
downward the amount of any Receivable without receiving Collections therefor or
without charging off such amount as uncollectible, because of a rebate, refund,
unauthorized charge or billing error to an Obligor, or because such Receivable
was created in respect of merchandise or services which were refused, returned
or not received by an Obligor, then the Seller shall be deemed to have received
on such day a Collection of such Receivable in the amount of such reduction,
cancellation or payment made by the Obligor and shall on such day pay to the
Purchaser an amount equal to such reduction or cancellation; provided that,
prior to the Termination Date,
-19-
such amount may be paid by a reduction in the Purchase Price paid to the Seller
on the next occurring Purchase Date, unless the Purchaser is required to make a
payment in respect of such breach sooner pursuant to the Pooling and Servicing
Agreement. Similarly, if the Servicer or the Seller adjusts downward the amount
of any Receivable because such Receivable was discovered as having been created
through a fraudulent or counterfeit charge or with respect to which the covenant
contained in Section 5.2(a) hereof was breached, then the Seller shall be deemed
to have received on such day a Collection of such Receivable in the amount of
such reduction, cancellation or payment made by the Obligor and shall on such
day pay to the Purchaser an amount equal to such reduction or cancellation;
provided that, prior to the Termination Date, such amount may be paid by a
reduction in the Purchase Price paid to the Seller on the next occurring
Purchase Date; provided, however, in all events at least the amount of any cash
deposit required to be made by the Purchaser under the Pooling and Servicing
Agreement in respect of any such adjustment shall be paid in immediately
available funds by the Seller. Any adjustment ("Adjustment Payment Obligation"),
-----------------------------
required pursuant to either of the two preceding sentences shall be made within
two (2) Business Days of the making of the Adjustment Payment Obligation, and in
no event later than the end of the Monthly Period in which such adjustment
obligation arises.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1. Conditions to the Purchaser's Obligations Regarding
---------------------------------------------------
Receivables. The obligations of the Purchaser to purchase the Receivables on
- -----------
the Closing Date and any Purchase Date shall be subject to the satisfaction of
the following conditions:
(a) All representations and warranties of the Seller contained in
this Agreement shall be true and correct on the Closing Date and on each
Purchase Date thereafter with the same effect as though such representations and
warranties had been made on such date (except to the extent any such
representation or warranty specifically related to an earlier date, in which
case such representation or warranty shall have been true as of such earlier
date);
(b) All information concerning the Receivables provided to the
Purchaser shall be true and correct in all material respects as of the Closing
Date, in the case of any Receivables existing on the Closing Date, or the
Purchase Date, in the case of any Receivables created after the Closing Date,
and in each Schedule of Accounts delivered to the Purchaser hereunder for
inclusion in Schedule 1 to the Pooling and Servicing Agreement;
(c) The Seller shall have substantially performed all other
obligations required to be performed by the provisions of this Agreement;
(d) The Seller shall have filed or caused to be filed the financing
and continuation statement(s) and all amendments thereto required to be filed
pursuant to Section 2.1(b); and
-20-
(e) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Purchaser, and the Purchaser shall
have received from the Seller copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Purchaser may reasonably have requested.
ARTICLE VIII
TERM AND TERMINATION
SECTION 8.1. Term. This Agreement shall commence as of the date of
----
execution and delivery hereof and shall continue in full force and effect until
the date following the earlier of (i) the date on which the Trustee declares a
Pay Out Event with respect to all outstanding Series of the Trust pursuant to
the Pooling and Servicing Agreement and any Supplements, (ii) the date on which
the Trust terminates, (iii) the date on which an event described in the first
sentence of Section 9.2(a) of the Pooling and Servicing Agreement occurs with
respect to the Seller and the Trust, (iv) the close of business on the third
Business Day following a conveyance of Receivables to the Purchaser for which
the Purchaser does not pay the Purchase Price in accordance with the provisions
hereof, or (vi) the date on which either the Purchaser or the Seller becomes
unable for any reason to purchase or repurchase any Receivable in accordance
with the provisions of this Agreement or defaults on its obligations hereunder,
which default continues unremedied for more than thirty (30) days after written
notice (any such date being a "Termination Date"); provided, however, that the
----------------
termination of this Agreement pursuant to this Section 8.1 hereof shall not
discharge any Person from any obligations incurred prior to such termination,
including, without limitation, any obligations to make any payments with respect
to the interest of the Purchaser in any Receivable sold prior to such
termination.
SECTION 8.2. Effect of Termination. Following the termination of this
---------------------
Agreement pursuant to Section 8.1, the Seller shall not sell, and the Purchaser
shall not purchase, any Receivables. No termination or rejection or failure to
assume the executory obligations of this Agreement in any proceeding regarding
an event described in the first sentence of Section 9.2(a) of the Pooling and
Servicing Agreement with respect to the Seller or the Purchaser shall be deemed
to impair or affect the obligations pertaining to any executed sale or executed
obligations, including, without limitation, pre-termination breaches of
representations and warranties by the Seller or the Purchaser. Without limiting
the foregoing, prior to termination, the failure of the Seller to deliver or
cause to be delivered computer records of Receivables or any reports regarding
the Receivables shall not render such transfer or obligation executory, nor
shall the continued duties of the parties pursuant to Article V or Section 9.1
of this Agreement render an executed sale executory.
-21-
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Amendment. This Agreement and the rights and obligations
---------
of the parties hereunder may not be changed orally, but only by an instrument in
writing signed by the Purchaser and the Seller. Any reconveyance executed in
accordance with the provisions hereof shall not be considered an amendment to
this Agreement.
SECTION 9.2. Governing Law. THIS AGREEMENT GOVERNS TRANSACTIONS
-------------
EXCLUSIVELY IN INTERSTATE COMMERCE, AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.3. Notices. Except as provided below, all communications
-------
and notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy number set forth below or at such other
address or telecopy number as such party may hereafter specify for the purposes
of notice to such party. Each such notice or other communication shall be
effective (i) if given by telecopy, when such telecopy is transmitted to the
telecopy number specified in this Section 9.3 and confirmation is received, (ii)
if given by mail three (3) Business Days following such posting, postage
prepaid, U.S. first class or overnight mail, (iii) if given by overnight
courier, such as FedEx, one Business Day after deposit thereof with a national
overnight courier service, or (iv) if given by any other means, when received at
the address specified in this Section 9.3.
(a) in the case of the Purchaser:
Saks Credit Corporation
140 Industrial Drive
Elmhurst, Illinois 60126
Attn: Douglas E. Coltharp, President
Telephone: (630) 516-8080
Telecopy: (630) 516-8031
-22-
with a copy to:
Saks Incorporated
750 Lakeshore Parkway
Birmingham, Alabama 35211
Telephone: (205) 940-4600
Telecopy: (205) 940-4098
Attn: Charles J. Hansen
Senior Vice President and
Associate General Counsel
(b) in the case of the Seller:
National Bank of the Great Lakes
140 Industrial Drive
Elmhurst, Illinois 60126
Telephone: (630) 516-8080
Telecopy: (630) 516-8031
Attn: Richard Ehrle
Vice President
(c) in the case of the Servicer:
Saks Incorporated
750 Lakeshore Parkway
Birmingham, Alabama 35211
Telephone: (205) 940-4735
Telecopy: (205) 940-4600
Attn: Charles J. Hansen
Senior Vice President and
Associate General Counsel
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
SECTION 9.4. Severability of Provisions. If any one or more of the
--------------------------
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
-23-
SECTION 9.5. Assignment and Designation of Selling Subsidiaries
--------------------------------------------------
(a) This Agreement may not be assigned by the parties hereto, except
that the Purchaser may assign its rights hereunder pursuant to the Pooling and
Servicing Agreement to the Trustee, for the benefit of the Certificateholders.
The Purchaser hereby notifies the Seller, (and the Seller hereby acknowledges
that, the Purchaser, pursuant to the Pooling and Servicing Agreement, has
assigned all its rights hereunder to the Trustee. All rights of the Purchaser
hereunder may be exercised by the Trustee or its assignees, to the extent of
their respective rights pursuant to such assignments.
(b) Saks Incorporated may from time to time designate its
subsidiaries, divisions or department stores as "Selling Subsidiaries." To
--------------------
become a Selling Subsidiary, (i) the Purchaser, the Seller and the proposed
Selling Subsidiary must execute an assumption agreement pursuant to which the
Selling Subsidiary assumes certain of the Seller's obligations under this
Agreement and is granted the right to sell Receivables to the Purchaser upon the
terms and conditions set forth herein, (ii) such proposed Selling Subsidiary
must deliver certain other documents (including UCC-1 financing statements) to
the Transferor, the Trustee and the Rating Agencies, (iii) certain
representations and warranties made by such Selling Subsidiary must be true as
of the date it first sells Receivables to the Purchaser, and (iv) each Rating
Agency must confirm that the Rating Agency Condition has been met. In the event
any Selling Subsidiary is designated and approved hereunder, each reference to
the Seller herein shall be deemed to include each Selling Subsidiary.
SECTION 9.6. Further Assurances. The Purchaser and the Seller agree
------------------
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the other party more
fully to effect the purposes of this Agreement, including, without limitation,
the execution of any financing statements or continuation statements or
equivalent documents relating to the Receivables for filing under the provisions
of the Relevant UCC or other laws of any applicable jurisdiction.
SECTION 9.7. No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Purchaser, the Seller or the
Trustee (as assignee of the Purchaser), any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privilege
provided by law.
SECTION 9.8. No Bankruptcy Petition Against the Purchaser or Trust.
-----------------------------------------------------
Each of the Seller and the Servicer hereby covenants and agrees that, prior to
the date which is one year and one day after the payment in full of all
Certificates, it will not institute against, or join any other Person in
instituting against, the Purchaser or the Trust any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar proceeding
under the laws of the United States or any state of the United States.
-24-
SECTION 9.9. Counterparts. This Agreement may be executed in two or
------------
more counterparts including telecopy transmission thereof (and by different
parties on separate counterparts), each of which shall be an original, but all
of which together shall constitute one and the same instrument.
SECTION 9.10. Binding Effect; Third-Party Beneficiaries. This
-----------------------------------------
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. The Trustee on behalf of
the Certificateholders is intended by the parties hereto to be a third-party
beneficiary of this Agreement, but otherwise no Person not a party is intended
to or shall have any rights hereunder, whether as a third party beneficiary or
otherwise.
SECTION 9.11. Merger and Integration. Except as specifically
----------------------
stated otherwise herein or incorporated hereby, this Agreement sets forth the
entire understanding and agreement of the parties relating to the subject matter
hereof, and all prior understandings, written or oral, are superseded and
replaced by this Agreement. This Agreement may not be modified, amended, waived
or supplemented except in writing executed by the parties as provided herein.
SECTION 9.12. Headings. The cover page, table of contents, and
--------
article and section headings hereof are for purposes of convenience of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
SECTION 9.13 Exhibits. The schedules and exhibits referred to herein
--------
shall constitute a part of this Agreement and are incorporated into this
Agreement for all purposes.
-25-
IN WITNESS WHEREOF, the Seller, the Purchaser and the Servicer each
have caused this Receivables Purchase Agreement to be duly executed by their
respective officers as of the day and year first above written, and it shall
become effective upon delivery to the Bank and the Trustee on such date.
NATIONAL BANK OF THE GREAT LAKES,
as Seller
By: /s/ Charles J. Hansen
-------------------------------
Name: Charles J. Hansen
Title: Vice President
SAKS CREDIT CORPORATION,
as Purchaser
By: /s/ James S. Scully
-------------------------------
Name: James S. Scully
Title: Vice President and Treasurer
SAKS INCORPORATED,
as Servicer
By: /s/ James S. Scully
-------------------------------
Name: James S. Scully
Title: Senior Vice President and Treasurer
-26-
EXHIBIT A
to the
RECEIVABLES PURCHASE AGREEMENT
FORM OF SUBORDINATED NOTE
$500,000,000
July 1, 1999
FOR VALUE RECEIVED, the undersigned, SAKS CREDIT CORPORATION, a
Delaware corporation (the "Maker"), hereby unconditionally promises to pay to
-----
the order of SAKS INCORPORATED (the "Payee"), on December 31, 2005 or earlier as
-----
provided for in the Receivables Purchase Agreement dated as of the date hereof
between the Maker and the Payee (as such agreement may from time to time be
amended, supplemented or otherwise modified and in effect, the "Receivables
-----------
Purchase Agreement"), the lesser of the principal sum of up to Five Hundred
- ------------------
Million Dollars and No/100 ($500,000,000) or the aggregate unpaid principal
amount of all Advances to the Maker from the Payee pursuant to Section 3.2, and
the other terms, of the Receivables Purchase Agreement, in lawful money of the
United States of America in immediately available funds, and to pay interest
from the date thereof on the principal amount hereof from time to time
outstanding, in like funds, at said office, at the rate per annum set forth in
Section 3.2(c)(iii) of the Receivables Purchase Agreement and shall be payable
in arrears on the first day of each calendar month (or if any such day is not a
Business Day, on the succeeding Business Day).
The Maker hereby waives diligence, presentment, demand, protest and
notice of any kind whatsoever. The non-exercise by the holder hereof of any of
its rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
All borrowings evidenced by this Subordinated Note and all payments
and prepayments of the principal hereof and interest hereon and the respective
dates thereof shall be endorsed by the holder hereof on the schedule attached
hereto and made a part hereof, or on a continuation thereof which shall be
attached hereto and made a part hereof, or otherwise recorded by such holder in
its internal records; provided, however, that (a) the failure of the holder
hereof to make such a notation or record or (b) any error in such a notation,
shall not in any manner affect the obligation of the Maker to make payments of
principal and interest in accordance with the terms of this Subordinated Note
and the Receivables Purchase Agreement. Any such notation or record shall be
conclusive and binding as to the date and amount of such Advance, or payment of
principal or interest thereon, absent manifest error.
The Maker shall have the right to borrow, repay and, subject to the
limitations set forth in the Receivables Purchase Agreement, reborrow Advances
made to it without penalty, premium or charge. The Maker shall be obligated to
repay Advances to the Payee only to the extent of funds available to the Maker
from Collections on the Receivables and, to the extent that such payments are
insufficient to pay all amounts owing to the Payee under the Subordinated
A-1
Note, the Payee shall not have any claim against the Maker for such amounts and
no further or additional recourse shall be available against Maker.
This Subordinated Note is the Subordinated Note referred to in the
Receivables Purchase Agreement. The indebtedness evidenced by this Subordinated
Note is subordinated to the prior payment in full of all of the Maker's recourse
obligations under the Pooling and Servicing Agreement. The subordination
provisions contained herein are for the direct benefit of, and may be enforced
by, the Trustee, the Certificateholders and/or any of their respective permitted
assignees pursuant to the Pooling and Servicing Agreement (collectively, the
"Senior Claimants") under the Pooling and Servicing Agreement. Until the date
- -----------------
on which all obligations of the Maker and/or the Servicer under the Pooling and
Servicing Agreement (all such obligations, collectively, the "Senior Claims")
-------------
have been indefeasibly paid and satisfied in full, the Payee shall not demand,
accelerate, sue for, take, receive or accept from the Maker, directly or
indirectly, in cash or other property or by set-off or any other manner
(including, without limitation, from or by way of collateral) any payment or
security of all or any of the indebtedness under this Subordinated Note or
exercise any remedies or take any action or proceeding to enforce the same;
provided, however, that nothing in this paragraph shall restrict the Maker from
paying, or the Payee from requesting, any payments under this Subordinated Note
so long as the Maker is not required under the Pooling and Servicing Agreement
to set aside for the benefit of, or otherwise pay over to, the funds used for
such payments to any of the Senior Claimants and further provided that the
making of such payment would not otherwise violate the terms and provisions of
the Pooling and Servicing Agreement. Should any payment, distribution or
security or proceeds thereof be received by the Payee in violation of the
immediately preceding sentence, the Payee agrees that such payment shall be
segregated, received and held in trust for the benefit of, and deemed to be the
property of, and shall be immediately paid over and delivered to the Trustee for
the benefit of the Senior Claimants.
Upon the occurrence of any event described in the first sentence of
Section 9.2(a) of the Pooling and Servicing Agreement with respect to the Maker,
then and in any such event the Senior Claimants shall receive payment in full of
all amounts due or to become due on or in respect of the Senior Claims before
the Payee is entitled to receive payment on account of this Subordinated Note,
and to that end, any payment or distribution of assets of the Maker of any kind
or character, whether in cash, securities or other property, in any applicable
insolvency proceeding, which would otherwise be payable to or deliverable upon
or with respect to any or all indebtedness under this Subordinated Note, is
hereby assigned to and shall be paid or delivered by the Person making such
payment or delivery (whether a trustee in bankruptcy, a receiver, custodian or
liquidating trustee or otherwise) directly to the Trustee for application to, or
as collateral for the payment of, the Senior Claims until such Senior Claims
shall have been paid in full and satisfied.
Capitalized terms not otherwise defined herein are used herein with
the respective meanings given them in the Receivables Purchase Agreement.
A-2
This Note shall be governed by, and construed in accordance with, the
laws of the State of New York.
SAKS CREDIT CORPORATION
By: _____________________________
Name: James S. Scully
Title: Vice President and Treasurer
A-3
ADVANCES AND PAYMENTS
Date and Payments Unpaid Principal Name of Person
Amount of Advance Principal/Interest Balance of Note Making Notation
- ----------------- ------------------ --------------- ---------------
A-4
EXHIBIT B
to the
RECEIVABLES PURCHASE AGREEMENT
LOCATION OF RECORDS
1. Purchaser
140 Industrial Drive
Elmhurst, Illinois 60126
2. Seller
140 Industrial Drive
Elmhurst, Illinois 60126
331 West Wisconsin Avenue
Milwaukee, Wisconsin 53203
3455 Highway 80 West
P.O. Box 20080
Jackson, Mississippi 39289-0080
B-1
EXHIBIT C
to the
RECEIVABLES PURCHASE AGREEMENT
SUBSIDIARIES, DIVISIONS, TRADE NAMES, BANKRUPTCY PROCEEDINGS
None
C-1
