1
1475 797
EXHIBIT 10.1.18
[Execution Copy]
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of November 25, 1997
Among
FIRST UNION NATIONAL BANK
solely in its capacity as the trustee for
CHARMING SHOPPES MASTER TRUST
as the Seller
CHARMING SHOPPES RECEIVABLES CORP.
as the Owner and the Subordinated Purchaser
SPIRIT OF AMERICA NATIONAL BANK
as the Servicer and the Originator
CORPORATE RECEIVABLES CORPORATION
as the Purchaser
CITIBANK, N.A.
as a Bank
and
CITICORP NORTH AMERICA, INC.
as the Agent
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TABLE OF CONTENTS
Page
ARTICLE I - AMOUNTS AND TERMS OF THE PURCHASES 4
SECTION 1.01. Purchase Facility 4
SECTION 1.02. Making Purchases 5
SECTION 1.03. Fees 7
SECTION 1.04. Payments and Computations, Etc. 7
SECTION 1.05. Increased Costs 8
SECTION 1.06. Additional Yield on Purchaser Receivable
Interests Bearing a Eurodollar Rate;
Breakage Fee 9
ARTICLE II - ALLOCATION AND DISTRIBUTION
OF COLLECTIONS 10
SECTION 2.01. General Allocation Procedures 10
SECTION 2.02. Allocation Among the Purchasers,
the Banks, the Subordinated Purchaser
and the Seller 10
SECTION 2.03. Allocation and Distribution of Finance
Charges 12
SECTION 2.04. Allocation and Distribution of Excess
Finance Charge Collections 14
SECTION 2.05. Required Amount; Subordinated Principal
Collections; Charge-Offs 15
SECTION 2.06. Allocation and Distribution of Allocable
Principal Collections 18
SECTION 2.07. Dilution Amounts 19
ARTICLE III - REPRESENTATIONS AND WARRANTIES; COVENANTS;
EARLY AMORTIZATION EVENTS 20
SECTION 3.01. Representations and Warranties;
Covenants 20
SECTION 3.02. Early Amortization Events 20
ARTICLE IV - INDEMNIFICATION; PURCHASE OF
INELIGIBLE RECEIVABLES 21
SECTION 4.01. Indemnities by the Owner 21
SECTION 4.02. Indemnities by the Servicer 24
SECTION 4.03. Purchase of Ineligible and Certain Other
Receivables 26
SECTION 4.04. Reassignment of Receivables and Receivable
Interests 26
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SECTION 4.05. Repurchase of Purchaser Receivable Interests 27
ARTICLE V - THE SERVICER 28
SECTION 5.01. Designation of the Servicer;
Delegation of Duties 28
SECTION 5.02. Administration and Collection of the
Pool Receivables 29
SECTION 5.03. Servicer Fee 29
ARTICLE VI - THE PURCHASER REPRESENTATIVE 29
SECTION 6.01. Designation of the Purchaser
Representative 29
SECTION 6.02. Duties of the Purchaser Representative 30
SECTION 6.03. Limitation on Purchaser Representative
Liability, Etc. 30
ARTICLE VII - MISCELLANEOUS 32
SECTION 7.01. Amendments, Waivers, Etc. 32
SECTION 7.02. Notices, Etc. 33
SECTION 7.03. Assignability 34
SECTION 7.04. Costs, Expenses and Taxes 39
SECTION 7.05. No Proceedings 40
SECTION 7.06. Confidentiality 40
SECTION 7.07. GOVERNING LAW 42
SECTION 7.08. Execution in Counterparts 42
SECTION 7.09. Survival of Termination 42
SECTION 7.10. Tax Treatment 42
SECTION 7.11. Duties of the Trustee 43
SECTION 7.12. Limitation on Seller/Trustee
Liability, Etc. 43
SECTION 7.13. Third Party Beneficiaries 44
SECTION 7.14. Limited Recourse 44
SECTION 7.15. Limitation on Rights of Purchasers
and Banks 45
SECTION 7.16. The CO Escrow Account 46
EXHIBITS
Exhibit I Definitions
Exhibit II Conditions of Purchases
Exhibit III Representations and Warranties
Exhibit IV Covenants
Exhibit V Administration and Collection of Pool Receivables
Exhibit VI Early Amortization Events
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ANNEXES
Annex A Form of Servicer Report
Annex B Form of Depositary Agreement
Annex C Form of Opinion of Counsel to the Trustee
Annex D-1 Form of Opinion of Counsel to the Owner, the
Originator, the Subordinated Purchaser, the
Servicer, Charming Shoppes and FSC
Annex D-2 Form of Opinion of Counsel to the Originator
and the Servicer
Annex D-3 Form of Opinion of General Counsel to the Owner,
the Originator, the Subordinated Purchaser and
the Servicer
Annex D-4 Form of Opinion of Counsel to the Subordinated
Purchaser, Charming Shoppes and FSC
Annex E Form of Opinion of General Counsel to Charming
Shoppes and FSC
Annex F Form of Store Payment Notice
Annex G Form of Summary of Interest Rate Agreements
Annex H Form of Assignment and Acceptance
SCHEDULES
Schedule I Material Provisions
Schedule II Depositary Banks
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AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
Dated as of November 25, 1997
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT dated as of
November 25, 1997 among FIRST UNION NATIONAL BANK, a national banking
association, solely in its capacity as the trustee (the "Trustee") for CHARMING
SHOPPES MASTER TRUST, a trust formed pursuant to the Pooling and Servicing
Agreement (this and other capitalized terms used herein are defined in Exhibit I
to this Agreement) (in such capacity, the "Seller"), CHARMING SHOPPES
RECEIVABLES CORP. (formerly known as Fashion SPC, Inc.), a Delaware corporation
in its capacity as the owner (prior to the sale of the Receivables to the Seller
pursuant to the Pooling and Servicing Agreement) of the Receivables (in such
capacity, the "Owner") and in its capacity as the holder of a subordinate
interest (after the sale of the Receivables by the Owner to the Seller pursuant
to the Pooling and Servicing Agreement) in the Receivables (in such capacity,
the "Subordinated Purchaser"), SPIRIT OF AMERICA NATIONAL BANK, a national
banking association ("Spirit"), in its capacity as the Servicer (in such
capacity, the "Servicer"), and in its capacity as the originator (before the
sale of the Receivables to the Owner pursuant to the Purchase Agreement) of the
Receivables (in such capacity, the "Originator"), CORPORATE RECEIVABLES
CORPORATION, a California corporation ("CRC" or the "Purchaser"), CITIBANK,
N.A., a national banking association, and CITICORP NORTH AMERICA, INC., a
Delaware corporation ("CNAI"), as agent (the "Agent") for the Purchasers and the
Banks.
PRELIMINARY STATEMENTS. 0.0.0.0.0.1. Certain terms that are
capitalized and used throughout this Agreement are defined in Exhibit I
to this Agreement. References in the Exhibits to "the Agreement" refer
to this Agreement, as amended, restated, modified or supplemented from
time to time.
0.0.0.0.0.2. The Seller, the Subordinated Purchaser, the
Originator, the Servicer, CXC Incorporated ("CXC") and CNAI as Agent,
entered into a Receivables Purchase Agreement dated as of April 4,
1996, as amended as of December 13, 1996, as of March 31, 1997, as of
June 30, 1997, as of August 31, 1997, as of September 30, 1997 and as
of October 31, 1997 (the "Original RPA"), pursuant to which a Purchaser
may, in its sole discretion, purchase Receivable Interests.
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0.0.0.0.0.3. The Seller, the Subordinated Purchaser, the
Originator, the Servicer, the Banks, and CNAI as Agent for the Banks,
are parties to a Receivables Purchase Agreement (Parallel Purchase
Commitment) dated as of April 4, 1996, as amended as of December 13,
1996, as of March 31, 1997, as of June 30, 1997, as of August 31, 1997,
as of September 30, 1997 and as of October 31, 1997 (the "Original
PPC"; together with the Original RPA, the "Original Agreements"),
pursuant to which the Banks have agreed to purchase Receivable
Interests.
0.0.0.0.0.4. Charming Shoppes and FSC are parties to two
Company Agreements each dated as of April 4, 1996 (the "Original
Company Agreements"), one in favor of the Purchasers and the Agent and
the other in favor of the Banks and the Agent, pursuant to which
Charming Shoppes and FSC agree, among other things, to cause the
performance and observance by each of the Originator, the Servicer and
the Seller and their respective successors and assigns of all of the
terms, covenants, conditions, agreements and undertakings on the part
of the Originator, the Servicer and the Seller, respectively, to be
performed or observed under the Original RPA and the Original PPC.
0.0.0.0.0.5. Pursuant to the terms of an Assignment and
Acceptance effective as of October 31, 1997, CXC sold and assigned to
CRC and CRC purchased and assumed all of CXC's rights and obligations
under the Original RPA.
0.0.0.0.0.6. Pursuant to the terms of the Purchase Agreement,
the Originator has conveyed to the Owner all its interest in all
Receivables and Related Assets (as those terms are defined in the
Purchase Agreement) (subject, in the case of Receivables in existence
on the date hereof, to the rights previously conveyed to the Seller
pursuant to the Prior PSA); and pursuant to the terms of the Pooling
and Servicing Agreement, the Owner has in turn conveyed the Receivables
to the Seller.
0.0.0.0.0.7. The Seller, the Subordinated Purchaser, the
Owner, the Originator, the Servicer, the Purchasers, the Banks, the
Agent, FSC and Charming Shoppes, as the case may be, desire to amend,
restate and combine (i) the Original Agreements to, among other things,
(a) reflect the amendments heretofore made to the Original Agreements,
(b) decrease the maximum Purchase Limit and Total Commitment (each as
defined in the Original Agreements), (c) delete all references to the
Servicer Escrow Account, and (d) reflect the amendment and restatement
of the Prior PSA on the date
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hereof, and (ii) the Original Company Agreements to include obligations
of the Owner and to reflect, among other things, the amendment and
restatement of the Prior PSA on the date hereof.
0.0.0.0.0.8. Pursuant to the Pooling and Servicing Agreement
and certain related agreements, the Seller may, among other things,
sell undivided ownership interests in the Receivables (referred to
herein as "Receivable Interests") to various purchasers and may sell
certificates of beneficial interest in the Receivables in the Trust to
various investors.
0.0.0.0.0.9. Pursuant to the Pooling and Servicing Agreement,
a portion of all Collections of the Receivable Interests and all Loss
Amounts with respect thereto will be allocated to the Receivables
Purchase Interests based on the Allocation Percentage.
0.0.0.0.0.10. Spirit has been requested and is prepared to act
as the Servicer hereunder and has been appointed and agreed to act as
servicer under the Pooling and Servicing Agreement.
0.0.0.0.0.11. This Agreement is one of the "Receivables
Purchase Agreements" referred to in the Pooling and Servicing Agreement
and creates a Receivables Purchase Series thereunder.
0.0.0.0.0.12. Notwithstanding anything to the contrary in this
Agreement, the Agent, the Purchaser, the Banks and the Subordinated
Purchaser hereby acknowledge that their rights and remedies hereunder,
and the rights and remedies of their respective assignees under this
Agreement, may be subject to the limitations set forth in the Pooling
and Servicing Agreement. To the extent that any provision in this
Agreement or in any certificate or document delivered in connection
with this Agreement is inconsistent with any provision under the
Pooling and Servicing Agreement, or in any circumstance in which it is
unclear whether this Agreement or the Pooling and Servicing Agreement
shall control, the provisions contained in the Pooling and Servicing
Agreement shall control, except that with respect to any such
inconsistency between any such provision and Section 2 of this
Agreement (including the defined terms used in such Section 2), this
Agreement shall control.
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0.0.0.0.0.13. The Subordinated Purchaser, the Purchaser and
the Banks are prepared to purchase the Receivable Interests on the
terms set forth herein.
0.0.0.0.0.14. The Purchasers and the Banks acknowledge that
the purchase of the Receivable Interests shall not include the right to
sell the Owner's or the Originator's customer lists, the right to use
the Owner's or the Originator's customer lists for any purpose other
than a purpose expressly set forth in this Agreement, or the right to
use any trademarks of the Seller, the Owner, the Originator or the
Servicer or any of their respective Affiliates.
Accordingly, the parties agree as follows:
ARTICLE 1.
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.1. PURCHASE FACILITY.
1.1.1. On the terms and conditions hereinafter set forth, a Purchaser
may, in its sole discretion, and the Banks shall, ratably in accordance with
their respective Bank Commitments, purchase Purchaser Receivable Interests from
the Seller from time to time during the period from the date hereof to the
Facility Termination Date (in the case of a Purchaser) and to the Commitment
Termination Date (in the case of the Banks). Under no circumstances shall any
Purchaser make any such purchase on any date, or the Banks be obligated to make
any such purchase, if after giving effect to such purchase the aggregate
outstanding Purchaser Capital would exceed the Purchase Limit on such date.
1.1.2. The Subordinated Purchaser shall, on the date of each purchase
of Purchaser Receivable Interests hereunder, be allocated Subordinated
Receivable Interests in the amount determined pursuant to paragraph 3 of Exhibit
II hereto.
1.1.3. The Seller may, upon at least 30 days' prior notice to the
Agent, terminate in whole or, from time to time, reduce in part the unused
portion of the Purchase Limit; provided that each partial reduction shall be in
the amount of at least $1,000,000 or an integral multiple thereof.
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SECTION 1.2. MAKING PURCHASES.
1.2.1. Each offer by the Seller to sell Purchaser Receivable Interests
to the Purchaser or the Banks hereunder shall be made, by written notice from
the Seller to the Agent and the Subordinated Purchaser, at least three Business
Days' prior to the date of the proposed sale. Each such notice of an offer to
sell Purchaser Receivable Interests shall specify (i) the amount requested to be
paid to the Seller (such amount, which shall not be less than $1,000,000, being
referred to herein as the initial "Purchaser Capital" of the Purchaser
Receivable Interest then being sold) and (ii) the proposed date of such purchase
(which shall be a Distribution Date). The Agent shall promptly thereafter notify
the Seller whether CRC has determined that it may make a purchase and, if so,
whether all of the terms specified by the Seller are acceptable to the
Purchaser.
1.2.2. If the Purchaser has determined not to make a proposed purchase,
the Agent shall promptly send notice of the proposed purchase to all of the
Banks concurrently by telecopier, telex or cable specifying the date of such
purchase, each Bank's Percentage multiplied by the aggregate amount of Purchaser
Capital of the Purchaser Receivable Interest being purchased, whether the Yield
for the Fixed Period for such Purchaser Receivable Interest is calculated based
on the Eurodollar Rate (which may be selected only if such notice is given at
least two Business Days prior to the purchase date) or the Alternate Base Rate,
and the duration of the Fixed Period for such Purchaser Receivable Interest
(which shall be one day if the Seller has not selected another period).
1.2.3. On the date of each purchase of a Purchaser Receivable Interest,
the Purchaser or the Banks, as the case may be, shall, upon satisfaction of the
applicable conditions set forth in Exhibit II hereto, make available to the
Seller in same day funds, by deposit to the Seller Account no later than 12:00
Noon (New York City time), an amount equal to the initial Purchaser Capital of
such Purchaser Receivable Interest.
1.2.4. Effective on the date of each purchase pursuant to this Section
1.02 and each reinvestment pursuant to Section 2.06(a) hereof, the Seller hereby
sells and assigns to the Agent, for the benefit of the parties making such
purchase or reinvestment, an undivided percentage ownership interest, to the
extent of the Purchaser Receivable Interest
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then being purchased, in each Pool Receivable then existing or thereafter
arising and in the Collections with respect thereto.
1.2.5. Notwithstanding the foregoing, a Bank shall not be obligated to
make purchases under this Section 1.02 at any time in an amount which would
exceed such Bank's Bank Commitment less (in the case of any Bank other than
Citibank) the outstanding and unpaid amount of any purchases made by such Bank
under the APA. Each Bank's obligation shall be several, such that the failure of
any Bank to make available to the Seller any funds in connection with any
purchase shall not relieve any other Bank of its obligation, if any, hereunder
to make funds available on the date of such purchase, but no Bank shall be
responsible for the failure of any other Bank to make funds available in
connection with any purchase.
1.2.6. On the date of each purchase pursuant to Section 1.02(a) above,
the Seller shall convey and allocate to the Subordinated Receivable Interest,
from the Unallocated Net Receivables Pool Balance, an amount equal to the excess
(if any) of (i) 16% of the aggregate outstanding Purchaser Capital (after giving
effect to any purchase of a Purchaser Receivable Interest on such date) over
(ii) the aggregate outstanding Subordinated Purchaser Capital (immediately prior
to the purchase of a Purchaser Receivable Interest on such date) (such amount
being referred to herein as the initial "Subordinated Purchaser Capital" of such
Subordinated Receivable Interest). Effective on the date of each such allocation
and each reinvestment on behalf of the Subordinated Purchaser pursuant to
Section 2.06(a) hereof, there is hereby conveyed to, and created in favor of,
the Subordinated Purchaser a subordinated (to the extent set forth in Section
1.02(g) and Article II hereof) undivided percentage ownership interest, to the
extent of the Subordinated Receivable Interest then being allocated, in each
Pool Receivable then existing or thereafter arising and in the Collections with
respect thereto.
1.2.7. The interest of the Purchaser and the Banks in the Pool
Receivables and the Collections with respect thereto shall be pari passu
(ratably in accordance with their respective Purchaser Capital) and shall be
deemed to have a priority senior to any interest of the Subordinated Purchaser
therein. Such priority shall be irrespective of the time, order or method of
attachment or perfection of the respective interests of the Purchasers, the
Banks and the Subordinated Purchaser, or the time or order of the filing of
financing
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statements. Until the first day after the later to occur of the
Facility Termination Date or the Commitment Termination Date on which
all amounts described in clauses (i), (ii) and (iv) of the definition
of Final Distribution Date have been paid in full, the Subordinated
Purchaser agrees that it will not commence or continue any default,
foreclosure or liquidation proceedings or remedies in respect of the
Pool Receivables or the Collections.
SECTION 1.3. FEES. The fees set forth in the separate fee
agreement of even date among the Seller, the Owner, the Servicer, the
Subordinated Purchaser and the Agent, as amended or restated from time to time
(the "Fee Letter") shall be payable to the Agent, the Purchaser and the Banks in
the amounts and on the dates set forth therein, subject to the allocation and
priority of distribution of such Collections set forth in Article II hereof.
SECTION 1.4. PAYMENTS AND COMPUTATIONS, ETC.
1.4.1. All amounts to be paid or deposited by the Seller or
the Servicer hereunder shall be paid or deposited no later than 11:00
A.M. (New York City time) on the day when due in same day funds to the
Agent's Account.
1.4.2. The Owner (with respect to payments or deposits to be
paid by the Seller) and the Servicer (with respect to payments or
deposits to be paid by the Servicer) shall, to the extent permitted by
law, pay or cause to be paid interest on any amount not paid or
deposited by the Seller or the Servicer when due hereunder (without
regard to any applicable grace period before such missed payment or
deposit gives rise to an Early Amortization Event hereunder), at an
interest rate per annum equal to 2.0% per annum above the Alternate
Base Rate, payable on demand.
1.4.3. All computations of interest under subsection (b) above
and all computations of Yield, fees, and other amounts hereunder shall
be made on the basis of a year of 360 days for the actual number of
days elapsed. Whenever any payment or deposit to be made hereunder
shall be due on a day other than a Business Day, such payment or
deposit shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of such payment
or deposit.
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SECTION 1.5. INCREASED COSTS.
1.5.1. If CNAI, any Purchaser, any Bank, any entity which enters into a
commitment to purchase Purchaser Receivable Interests or interests therein, or
any of their respective Affiliates (each an "Affected Person") determines that
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be
maintained by such Affected Person and such Affected Person determines that the
amount of such capital is increased by or based upon the existence of any
commitment to make purchases of or otherwise to maintain the investment in Pool
Receivables or interests therein related to this Agreement or to the funding
thereof and other commitments of the same type, then, upon demand by such
Affected Person (with a copy to the Agent), the Owner shall immediately pay, or
cause to be paid, to the Agent, for the account of such Affected Person (as a
third-party beneficiary), from time to time as specified by such Affected
Person, additional amounts sufficient to compensate such Affected Person in the
light of such circumstances, to the extent that such Affected Person reasonably
determines such increase in capital to be allocable to the existence of any of
such commitments. A certificate as to such amounts submitted to the Seller, the
Owner, the Servicer and the Agent by such Affected Person shall be conclusive
and binding for all purposes, absent manifest error.
1.5.2. If, due to either (i) the introduction of or any change (other
than any change by way of imposition or increase of reserve requirements
referred to in Section 1.06) in or in the interpretation of any law or
regulation or (ii) compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to a Purchaser or Bank of agreeing to
purchase or purchasing, or maintaining the ownership of Purchaser Receivable
Interests in respect of which Yield is computed by reference to the Eurodollar
Rate, then, upon demand by such Purchaser or Bank (with a copy to the Agent),
the Owner shall immediately pay, or cause to be paid, to the Agent, for the
account of such Purchaser or Bank (as a third-party beneficiary), from time to
time as specified by such Purchaser or Bank, additional amounts sufficient to
compensate such Purchaser or Bank for such increased costs. A certificate as to
such amounts submitted to the Seller, the Owner, the Servicer and the Agent
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by such Purchaser or Bank shall be conclusive and binding for all
purposes, absent manifest error.
SECTION 1.6. ADDITIONAL YIELD ON PURCHASER RECEIVABLE
INTERESTS BEARING A EURODOLLAR RATE; BREAKAGE FEE.
1.6.1. The Owner shall pay, or cause to be paid, to any
Purchaser or Bank, so long as such Purchaser or Bank shall be required
under regulations of the Board of Governors of the Federal Reserve
System to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, additional Yield
on the unpaid Purchaser Capital of each Purchaser Receivable Interest
of such Purchaser or Bank during each Fixed Period in respect of which
Yield is computed by reference to the Eurodollar Rate, for such Fixed
Period, at a rate per annum equal at all times during such Fixed Period
to the remainder obtained by subtracting (i) the Eurodollar Rate for
such Fixed Period from (ii) the rate obtained by dividing such
Eurodollar Rate referred to in clause (i) above by that percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage of such
Purchaser or Bank for such Fixed Period, payable on the next succeeding
date on which Yield is payable on such Purchaser Receivable Interest.
Such additional Yield shall be determined by such Purchaser or Bank and
notified to the Seller, the Owner and the Servicer through the Agent
within 30 days after any Yield payment is made with respect to which
such additional Yield is requested. A certificate as to such additional
Yield submitted to the Seller, the Owner and the Servicer and the Agent
by such Purchaser or Bank shall be conclusive and binding for all
purposes, absent manifest error.
1.6.2. If (i) any payment of Purchaser Capital with respect to
a Purchaser Receivable Interest as to which Yield is computed by
reference to the Eurodollar Rate is made by the Seller to or for the
account of any Purchaser(s) or Bank(s) other than on the last day of
the Fixed Period for such Purchaser Receivable Interest, as a result of
a payment pursuant to Section 4.03, or for any other reason, or (ii)
the Termination Date shall occur during any Fixed Period, the Owner
shall, upon demand by such Purchaser or Bank (with a copy to the
Seller, the Servicer and the Agent), immediately pay, or cause to be
paid, to the Agent for the account of such Purchaser or Bank (as a
third-party beneficiary) any amounts required to compensate such
Purchaser or Bank for any additional losses, costs or expenses which it
may reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits), costs or
expenses incurred by reason of the liquidation or
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reemployment of deposits or other funds acquired by such Purchaser
or Bank to fund or maintain its interest in such Purchaser Receivable
Interest. A certificate as to such amounts submitted to the Seller, the
Servicer, the Owner and the Agent by such Purchaser or Bank shall be
conclusive and binding for all purposes, absent manifest error.
ARTICLE 2.
ALLOCATION AND DISTRIBUTION
OF COLLECTIONS
SECTION 2.1. GENERAL ALLOCATION PROCEDURES. Pursuant to the
Pooling and Servicing Agreement, the Servicer will allocate to the Receivables
Purchase Interest arising under this Agreement a portion of all Collections of
Pool Receivables and all Loss Amounts for each Due Period, based on the
Allocation Percentage. Collections of Pool Receivables and Loss Amounts which
have been so allocated to the Receivables Purchase Interest arising under this
Agreement shall be allocated and distributed or reallocated among the
Purchasers, the Banks, the Subordinated Purchaser and the Seller as set forth in
this Article II.
SECTION 2.2. ALLOCATION AMONG THE PURCHASERS, THE BANKS, THE
SUBORDINATED PURCHASER AND THE SELLER.
2.2.1. The Servicer shall, on each day on which Collections of
Pool Receivables are received by it which are allocated to the
Receivables Purchase Interest arising under this Agreement, hold such
Collections in trust for the Purchasers, the Banks, the Subordinated
Purchaser and the Seller, and shall allocate such amounts, during each
Due Period, as follows:
2.2.1.1. during the Revolving Period and the
Amortization Period, Allocable Finance Charge Collections will
be allocated to the Purchasers, the Banks and the Subordinated
Purchaser jointly based on the Floating Allocation Percentage
for such Due Period;
2.2.1.2. during the Revolving Period and the
Amortization Period, Allocated Loss Amounts will be allocated
to the Purchasers, the Banks and the Subordinated Purchaser
jointly based on the Floating Allocation Percentage for such
Due Period;
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2.2.1.3. during the Revolving Period, Allocable Principal
Collections will be allocated to the Purchasers, the Banks and the
Subordinated Purchaser jointly based on the Floating Allocation
Percentage for such Due Period and the Servicer shall, on behalf of the
Purchasers, the Banks and the Subordinated Purchaser which own such
Receivables Purchase Interest, have the proceeds of the Allocable
Principal Collections attributable to such Receivables Purchase
Interest automatically reinvested in additional undivided percentage
interests in the Pool Receivables pursuant to Section 2.06(a) below;
2.2.1.4. during the Amortization Period, Allocable Principal
Collections will be allocated to the Purchasers, the Banks and the
Subordinated Purchaser jointly based on the Fixed Allocation Percentage
for such Due Period; and
(v) notwithstanding the occurrence of the Final Distribution
Date or the termination of the Trust under the Pooling and Servicing
Agreement, the Purchasers and the Banks shall be entitled to receive
all amounts constituting the Allocation Percentage of Recoveries of
Pool Receivables up to the amount of the unreimbursed Purchaser
Charge-Offs on such date.
2.2.2. Amounts not allocated to the Purchasers, the Banks and the
Subordinated Purchaser jointly as described above will be allocated to the
Seller Interest and deposited into the Seller Account. Amounts allocated under
subsections (a)(iii) and (a)(iv) above for any Due Period are referred to as the
"Total Principal Collections" for such Due Period.
2.2.3. Amounts which are allocated to the Purchasers, the Banks and the
Subordinated Purchaser jointly as described above will be deposited into the
Collection Account on the date required by Section 4.3(a) of the Pooling and
Servicing Agreement. The portion of such amounts constituting Allocable Finance
Charge Collections shall remain on deposit in the Collection Account until the
next applicable Distribution Date, when such Allocable Finance Charge
Collections shall be distributed pursuant to Sections 2.03 and 2.04. The portion
of such amounts constituting Total Principal Collections shall (i) during the
Revolving Period, be distributed from the Collection Account daily pursuant to
Section 2.06(a), and (ii) during the Amortization Period, remain on deposit in
the Collection Account until the next applicable Distribution Date, when such
Total Principal
16
Collections shall be distributed pursuant to Section 2.06(b).
Notwithstanding the two preceding sentences, the Servicer shall, at the
request of the Agent at any time following an Early Amortization Event,
deposit Collections allocated jointly to the Purchasers, the Banks and
the Subordinated Purchaser pursuant to this Section 2.02 into the
Collection Account within one Business Day after receipt thereof and
deposit or cause such Collections to be deposited into the Agent's
Account within one Business Day of deposit into the Collection Account.
SECTION 2.3. ALLOCATION AND DISTRIBUTION OF FINANCE CHARGES.
2.3.1. On each Distribution Date, the Servicer will allocate
all Allocable Finance Charge Collections for the immediately preceding
Due Period held by it for the Purchasers, the Banks and the
Subordinated Purchaser jointly pursuant to Section 2.02 above to the
Purchasers and the Subordinated Purchaser pro rata based on their
relative Purchaser Capital and Subordinated Purchaser Capital, as the
case may be, as of the end of the second preceding Due Period.
2.3.2. On each Distribution Date, the Servicer shall further
allocate and distribute Allocable Finance Charge Collections allocated
to the Purchasers and the Banks pursuant to Section 2.03(a) in the
following priority:
2.3.2.1. first, an amount equal to the accrued but
unpaid Yield to such Distribution Date with respect to each
Purchaser Receivable Interest plus any additional interest
with respect to Yield that was due with respect to such
Purchaser Receivable Interest but not paid on a prior
Distribution Date will be deposited into the Agent's Account
on behalf of the Purchasers and the Banks owning such
Purchaser Receivable Interest;
2.3.2.2. second, an amount equal to any accrued but
unpaid amounts, fees and expenses (including amounts payable
under the Fee Letter and (if the Agent shall notify the
Servicer at least two Business Days prior to such Distribution
Date) payments under Sections 1.05, 1.06, 4.01, 4.02, 4.03 and
7.04 of this Agreement) due and payable under this Agreement
with respect to each Purchaser Receivable Interest will be
deposited into the Agent's Account, for the Agent's own
account or on behalf of the Purchasers and the Banks owning
such Purchaser Receivable Interest, as the case may be;
17
2.3.2.3. third, an amount equal to the Purchaser Loss
Amount for such Distribution Date shall be allocated and
distributed, in accordance with the provisions of Section 2.06
hereof, in the same manner as the portion of Total Principal
Collections allocated to the Purchasers and the Banks for such
Distribution Date;
2.3.2.4. fourth, if the Servicer is neither Spirit
nor an Affiliate of Spirit, an amount equal to the Purchaser
Servicer Fee for such Distribution Date will be paid to the
Servicer; and
2.3.2.5. fifth, the balance, if any, will constitute
a portion of the Excess Finance Charge Collections for such
Distribution Date and will be allocated as set forth in
Section 2.04 hereof.
2.3.3. Upon receipt of funds deposited into the Agent's
Account pursuant to subsection (b) above, the Agent will distribute
such funds to the relevant Purchasers and Banks or retain such funds
for its own account, as the case may be.
2.3.4. On each Distribution Date, the Servicer shall further
allocate and distribute Allocable Finance Charge Collections allocated
to the Subordinated Purchaser pursuant to Section 2.03(a) in the
following priority:
2.3.4.1. first, if the Servicer is neither Spirit nor
an Affiliate of Spirit, an amount equal to the Subordinated
Purchaser Servicer Fee for such Distribution Date will be
allocated and paid to the Servicer; and
2.3.4.2. second, the balance, if any, will constitute
a portion of Excess Finance Charge Collections for such
Distribution Date and will be allocated and distributed as set
forth in Section 2.04 hereof.
SECTION 2.4. ALLOCATION AND DISTRIBUTION OF EXCESS FINANCE
CHARGE COLLECTIONS. On each Distribution Date, the Servicer will allocate and
distribute all amounts, if any, specified pursuant to Section 2.03(b)(v) and
Section 2.03(d)(ii) (the "Excess Finance Charge Collections" for such
Distribution Date), in the following priority:
2.4.1. first, an amount equal to the Required Amount, if any,
with respect to such Due Period will be deposited into the Agent's
Account, and upon receipt of such funds, the Agent shall apply such
funds to the Required Amount, in the order set forth in Section 2.05(a)
hereof;
18
2.4.2. second, an amount equal to the aggregate amount of Purchaser
Charge-Offs which have not been previously reimbursed will be allocated and
distributed (i) during the Revolving Period, in accordance with the provisions
of Section 2.06(a) hereof, in the same manner as the portion of Total Principal
Collections allocated to the Purchasers and the Banks for such Distribution
Date, and (ii) during the Amortization Period, in accordance with the provisions
of Section 2.06(b) hereof, in the same manner as Purchaser Principal Collections
for such Distribution Date;
2.4.3. third, an amount equal to the Subordinated Purchaser Loss Amount
for such Distribution Date will be allocated and distributed (i) during the
Revolving Period, in accordance with the provisions of Section 2.06(a) hereof,
in the same manner as the portion of Total Principal Collections allocated to
the Subordinated Purchaser for such Distribution Date, and (ii) during the
Amortization Period, in accordance with the provisions of Section 2.06(b)
hereof, in the same manner as the portion of Total Principal Collections
allocated to the Subordinated Purchaser for such Distribution Date;
2.4.4. fourth, if the Servicer is Spirit or an Affiliate of Spirit, an
amount equal to the sum of the Purchaser Servicer Fee and the Subordinated
Purchaser Servicer Fee for such Distribution Date will be allocated and paid to
the Servicer;
2.4.5. fifth, an amount equal to the aggregate amount by which the
Subordinated Purchaser Capital has been reduced pursuant to clauses (c), (d) and
(e) of the definition of "Subordinated Purchaser Capital" (but not in excess of
the aggregate amount of such reductions which have not been previously
reimbursed) will be allocated and distributed (i) during the Revolving Period,
in accordance with the provisions of Section 2.06(a) hereof, in the same manner
as the portion of Total Principal Collections allocated to the Subordinated
Purchaser for such Distribution Date, and (ii) during the Amortization Period,
in accordance with the provisions of Section 2.06(b) hereof, in the same manner
as the portion of Total Principal Collections allocated to the Subordinated
Purchaser for such Distribution Date;
2.4.6. sixth, an amount equal to the Subordinated Purchaser Yield will
be allocated and deposited into the Subordinated Purchaser Account; and
19
2.4.7. seventh, the balance, if any, will be allocated to the
Seller Interest and deposited into the Seller Account.
SECTION 2.5. REQUIRED AMOUNT; SUBORDINATED PRINCIPAL
COLLECTIONS; CHARGE-OFFS.
2.5.1. On the second Business Day preceding each Distribution
Date, the Servicer will determine the amount (the "Required Amount"),
if any, by which:
2.5.1.1. the sum of:
2.5.1.1.1. The accrued but unpaid Yield to
such Distribution date,
2.5.1.1.2. any additional interest with
respect to Yield that was due but not paid on a prior
Distribution Date,
2.5.1.1.3. the amount of any accrued but
unpaid amounts, fees or expenses due and payable to
the Purchasers, the Banks or the Agent under this
Agreement (including amounts payable under the Fee
Letter and (if the Agent shall have notified the
Servicer at least two Business Days prior to such
Distribution Date) payments under Sections 1.05,
1.06, 4.01, 4.02, 4.03 and 7.04 of this Agreement)
accrued to such Distribution Date,
2.5.1.1.4. The Purchaser Loss Amount for the
related Due Period, and
2.5.1.1.5. if Spirit or an Affiliate of
Spirit is no longer the Servicer, the Purchaser
Servicer Fee accrued to such Distribution Date;
exceeds:
2.5.1.2. the product of:
2.5.1.2.1. Allocated Finance Charges, and
2.5.1.2.2. the Purchaser Percentage.
20
The Servicer will give the Agent notice of the Required Amount on each such
determination date on which the Servicer determines that the Required Amount is
greater than zero.
2.5.2. If the Required Amount is greater than zero, Excess
Finance Charge Collections for the related Distribution Date will be
allocated to and used to fund the Required Amount with respect to such
Distribution Date pursuant to Section 2.04(a) hereof.
2.5.3. If Excess Finance Charge Collections with respect to
such Distribution Date are less than the Required Amount, an amount up
to the amount of the Subordinated Principal Collections for such
Distribution Date will be allocated to and used to fund the remaining
Required Amount. The Subordinated Purchaser Capital, if any, will be
reduced by the amount of Subordinated Principal Collections allocated
to fund the Required Amount. In the event that such reduction would
cause the Subordinated Purchaser Capital to be a negative number, the
Subordinated Purchaser Capital will be reduced to zero, and the
Purchaser Capital will be reduced by the amount by which the
Subordinated Purchaser Capital would have been reduced below zero (but
not by more than the Purchaser Loss Amount for such Due Period).
2.5.4. If Subordinated Principal Collections with respect to
any Due Period are insufficient to fund the remaining Required Amount
for such Due Period, then a portion of the Subordinated Purchaser
Capital, if any, equal to such insufficiency (but not in excess of the
Purchaser Loss Amount for such Due Period) will be allocated and
distributed to the Purchasers and the Banks, and the Subordinated
Purchaser Capital will be reduced by the amount so allocated and
distributed. In the event that such reduction would cause the
Subordinated Purchaser Capital to be a negative number, the
Subordinated Purchaser Capital will be reduced to zero, and the
Purchaser Capital will be reduced by the amount by which the
Subordinated Purchaser Capital would have been reduced below zero (but
not by more than the Purchaser Loss Amount for such Due Period) and
such amount will be treated as a Purchaser Charge-Off.
2.5.5. Such reductions of the Subordinated Purchaser Capital
shall thereafter be reimbursed and the Subordinated Purchaser Capital
increased (but not by an amount in excess of the aggregate reductions
of the Subordinated Purchaser Capital) on each Distribution Date by the
amount of Excess Finance Charge Collections for such Distribution Date
21
allocated and available for that purpose pursuant to Section 2.04(e)
hereof.
2.5.6. Purchaser Charge-Offs shall be reimbursed and the
Purchaser Capital increased (but not by an amount in excess of the
aggregate Purchaser Charge-Offs) on any Distribution Date by the amount
of Excess Finance Charge Collections allocated and available for that
purpose pursuant to Section 2.04(b) hereof.
SECTION 2.6. ALLOCATION AND DISTRIBUTION OF ALLOCABLE
PRINCIPAL COLLECTIONS.
2.6.1. On each day during the Revolving Period on which
Collections of Pool Receivables are received by it, the Servicer will
allocate Total Principal Collections to the Purchasers, the Banks and
the Subordinated Purchaser pro rata based on their relative Purchaser
Capital or Subordinated Purchaser Capital, as the case may be, as of
the end of the immediately preceding Due Period. The Servicer shall, on
each day during the Revolving Period on which Total Principal
Collections are allocated pursuant to the preceding sentence, unless
the Servicer shall then have knowledge that any of the conditions
precedent set forth in paragraph 2 of Exhibit II hereto has not been
satisfied, reinvest with the Seller, on behalf of the Purchasers, the
Banks and the Subordinated Purchaser, respectively, in additional
undivided percentage interests in the Pool Receivables, the amount of
the Total Principal Collections so allocated to the Purchasers, the
Banks and the Subordinated Purchaser, as the case may be; provided,
however, that such reinvestment shall be effected in a manner such that
the Purchaser Capital and the Subordinated Purchaser Capital
immediately following such reinvestment are equal to the Purchaser
Capital and the Subordinated Purchaser Capital immediately prior to the
allocation of Total Principal Collections on such day pursuant to the
first sentence of this Section 2.06(a).
2.6.2. On each Distribution Date with respect to the
Amortization Period, the portion of the Total Principal Collections
received by the Servicer during the preceding Due Period not used to
fund any portion of the Required Amount pursuant to Section 2.05(c)
hereof (the "Available Principal Collections") will be allocated and
distributed by the Servicer in the following priority:
2.6.2.0.0.0.0.1. first, an amount equal to the lesser
of (x) such Available Principal Collections and (y) the
Adjusted Purchaser Capital for such Distribution Date
22
will be allocated to the Purchaser Receivable Interests and deposited
into the Agent's Account, and upon receipt of such funds, the Agent
shall distribute such funds to the Purchasers and the Banks;
2.6.2.0.0.0.0.2. second, an amount equal to the lesser of the
balance of such Available Principal Collections and the Subordinated
Purchaser Capital for such Distribution Date will be allocated to the
Subordinated Purchaser Receivable Interests and deposited into the
Subordinated Purchaser Account; and
2.6.2.0.0.0.0.3. third, the balance, if any, will be allocated
to the Seller Interest and deposited into the Seller Account.
23
SECTION 2.7. DILUTION AMOUNTS.
2.7.1. On the last day of each Due Period, the aggregate amount of
Principal Receivables used to calculate the Seller Interest will be reduced by
an amount equal to the sum of the Series Dilution Amount for this Series and for
all other Receivables Purchase Series (such reduction to be in addition to the
reductions required by Section 4.3(d) of the Pooling and Servicing Agreement).
If such reduction would cause the Seller Interest to be less than the Aggregate
Minimum Seller Interest (as defined in the Pooling and Servicing Agreement) (the
amount by which the Seller Interest is reduced below the Aggregate Minimum
Seller Interest is referred to herein as the "Dilution Deficit"), then the Owner
shall calculate an amount (the "Series Dilution Deficit") equal to the lesser of
the Dilution Deficit and the Series Dilution Amount for this Series, and shall
promptly, but in no event later than 10 Business Days after the last day of such
Due Period, either (i) deposit into the Agent's Account in immediately available
funds an amount equal to such Series Dilution Deficit, which deposit shall be
treated as Allocable Principal Collections with respect to such Due Period and
shall be applied in accordance with this Article II, or (ii) convey Principal
Receivables arising in Additional Accounts to the Trust in an aggregate amount
at least equal to such Series Dilution Deficit; provided, that if the Owner
shall fail to either deposit the Series Dilution Deficit into the Agent's
Account or convey Principal Receivables arising in Additional Accounts in an
aggregate amount at least equal to such Series Dilution Deficit with respect to
any Due Period within ten days after the Owner shall be required to make such a
deposit or conveyance, then if such Series Dilution Deficit exceeds the Minimum
Seller Interest,(i) the Subordinated Purchaser Capital will be reduced by an
amount equal to the lesser of such excess and the Subordinated Purchaser Capital
and (ii) the positive difference, if any, between such excess and the
Subordinated Purchaser Capital will be treated as a Purchaser Charge-Off and the
Purchaser Capital will be reduced by such amount.
2.7.2. If the Pool Receivables shall include any Discount Option
Receivables on any date when the Owner is required, pursuant to Section 2.07(a)
of this Agreement, to deposit any amount into the Agent's Account or to convey
Principal Receivables to the Trust, the Owner shall on such date make an
additional deposit into the Agent's Account or convey Principal Receivables
arising in Additional Accounts to the Trust, in each case in an amount equal to
the difference
24
between (i) the amount the Owner would have been required to deposit or
convey on such date pursuant to Section 2.07(a) if none of the Pool
Receivables had been Discount Option Receivables, minus (ii) the amount
actually deposited or conveyed by the Owner on such date pursuant to
Section 2.07(a).
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES; COVENANTS;
EARLY AMORTIZATION EVENTS
SECTION 3.1. REPRESENTATIONS AND WARRANTIES; COVENANTS.
3.1.1. Each of the Trustee, the Subordinated Purchaser, the
Owner, the Servicer and the Originator hereby makes the representations
and warranties set forth for such party in Exhibit III hereto.
3.1.2. Each of the Trustee, the Owner, the Servicer, and the
Originator hereby agrees to perform and observe the covenants set forth
for such party in Exhibit IV hereto.
3.1.3. In addition, the Servicer hereby agrees to perform and
observe the covenants set forth in Exhibit V hereto.
SECTION 3.2. EARLY AMORTIZATION EVENTS. If any of the Early
Amortization Events set forth in Exhibit VI hereto shall occur and be
continuing, then, and in any such event, any or all of the following actions may
be taken by notice to the Owner, the Seller and the Servicer: (x) the Purchasers
or the Agent may declare the Facility Termination Date to have occurred (in
which case the Facility Termination Date shall be deemed to have occurred) and
(y) the Agent may declare the Commitment Termination Date to have occurred (in
which case the Commitment Termination Date shall be deemed to have occurred);
provided that, automatically upon the occurrence of any event (without any
requirement for the passage of time or the giving of notice) described in
paragraph (g) of Exhibit VI, the Facility Termination Date and the Commitment
Termination Date shall occur. Upon any such declaration or upon any such
automatic termination, and subject to any limitations on the Purchasers' and the
Banks' rights and remedies in respect of the Pool Receivables under the Pooling
and Servicing Agreement or pursuant to the other terms of this Agreement, the
Purchasers, the Banks and the Agent shall
25
have, in addition to the rights and remedies which they may have under this
Agreement, all other rights and remedies provided under the UCC with respect to
the Receivable Interests purchased by them hereunder and under other applicable
law, which rights and remedies shall be cumulative; provided, however, that so
long as any Investor Certificates shall be outstanding, the Agent, the
Purchasers and the Banks shall not exercise such other rights and remedies under
the UCC and other applicable law unless the Agent shall have obtained and
delivered to the Trustee an Opinion of Counsel to the effect that the exercise
of such rights and remedies shall not materially and adversely affect the
interests of the holders of the Investor Certificates.
ARTICLE 4.
INDEMNIFICATION; PURCHASE OF
INELIGIBLE RECEIVABLES
SECTION 4.1. INDEMNITIES BY THE OWNER. Without limiting any
other rights that the Agent, the Purchaser Representative, the Seller, the
Trustee, any Purchaser, any Bank or any of their respective Affiliates (each, an
"Indemnified Party") may have under this Agreement or under applicable law, the
Owner hereby agrees to indemnify each Indemnified Party from and against any and
all claims, losses and liabilities (including reasonable attorneys' fees) (all
of the foregoing being collectively referred to as "Indemnified Amounts")
arising out of or resulting from this Agreement or the use of proceeds of
purchases or reinvestments or the ownership of Purchaser Receivable Interests or
in respect of any Receivable or any Cardholder Agreement, excluding, however,
(a) Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of such Indemnified Party or any of its Affiliates, (b)
recourse (except as otherwise specifically provided in this Agreement) for
uncollectible Receivables or (c) any income taxes incurred by such Indemnified
Party arising out of or as a result of this Agreement or the ownership of
Purchaser Receivable Interests or in respect of any Receivable or any Cardholder
Agreement. Without limiting or being limited by the foregoing, the Owner shall
pay on demand to each Indemnified Party any and all amounts necessary to
indemnify such Indemnified Party from and against any and all Indemnified
Amounts relating to or resulting from any of the following:
4.1.0.1. the creation of an undivided percentage ownership
interest in any Receivable (A) which purports to be part of
the Net Receivables Pool Balance but which is not, at the date
of the creation of such
26
interest, an Eligible RPA Receivable or (B) the Obligor of
which is an Affiliate of any of the parties hereto or is a
government or a governmental subdivision or agency;
4.1.0.2. reliance on (A) any written representation or
warranty or statement made or deemed made by the Seller, the
Owner or the Originator (or any of their respective officers)
on or prior to the date of this Agreement under or in
connection with this Agreement, or any exhibit, certificate or
report delivered pursuant hereto or thereto or in connection
herewith or therewith, which shall have been incorrect in any
material respect when made, and (B) thereafter, any
representation or warranty or statement made or deemed made by
the Seller, the Owner or the Originator (or any of their
respective officers) under or in connection with this
Agreement which shall have been incorrect in any material
respect when made;
4.1.0.3. the failure by the Seller, the Owner or the
Originator to comply with any applicable law, rule or
regulation with respect to any Pool Receivable or the related
Cardholder Agreement (including, without limitation,
Regulation Z of the Board of Governors of the Federal Reserve
System, the Federal Consumer Protection Act (including,
without limitation, the Federal Truth in Lending Act), the
Fair Credit Billing Act, and all other laws, rules and
regulations relating to usury, consumer protection, truth in
lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and
privacy); or the failure of any Pool Receivable or the related
Cardholder Agreement to conform to any such applicable law,
rule or regulation;
4.1.0.4. the failure to vest in the relevant Purchaser or Bank
a perfected undivided percentage ownership interest in the
Receivables in, or purporting to be in, the Receivables Pool
and the Collections in respect thereof, free and clear of any
Adverse Claim (except for interests created therein pursuant
to the Pooling and Servicing Agreement);
4.1.0.5. the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents
under the UCC of any applicable jurisdiction or other
applicable laws with respect to any Receivables in, or
purporting to be in, the
27
Receivables Pool and the Collections in respect thereof,
whether at the time of any purchase or reinvestment or at any
subsequent time;
4.1.0.6. any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense
based on such Receivable or the related Cardholder Agreement
not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of the merchandise
or services related to such Receivable or the furnishing or
failure to furnish such merchandise or services;
4.1.0.7. any failure of the Seller, the Owner or the
Originator to perform its duties or obligations in accordance
with the provisions hereof or of the Pooling and Servicing
Agreement or the Purchase Agreement or to perform its duties
or obligations under the Cardholder Agreements;
4.1.0.8. any products liability or other claim arising out of
or in connection with merchandise, insurance or services which
are the subject of any Cardholder Agreement;
4.1.0.9. the commingling of Collections of Pool Receivables at
any time with other funds;
4.1.0.10. any action or omission by the Owner, the Originator
or the Seller reducing or impairing the rights of any
Purchaser or any Bank with respect to any Pool Receivable or
the value of any Pool Receivable (including, without
limitation, any cancellation, modification or netting of any
Receivable by the Owner, the Originator or the Seller); or
4.1.0.11. any investigation, litigation or proceeding related
to this Agreement or the use of proceeds of purchases or
reinvestments or the ownership of Purchaser Receivable
Interests or in respect of any Receivable or Cardholder
Agreement.
SECTION 4.2. INDEMNITIES BY THE SERVICER. Without limiting any
other rights that any Indemnified Party may have under this Agreement or under
applicable law, the Servicer hereby
28
agrees to indemnify each Indemnified Party from and against, and to pay on
demand to each Indemnified Party any and all amounts necessary to indemnify such
Indemnified Party from and against, any and all Indemnified Amounts relating to
or resulting from any of the following:
4.2.0.1. reliance on (A) any written representation or
warranty or statement made or deemed made by the Servicer (or
any of its officers) on or prior to the date of this Agreement
under or in connection with this Agreement, or any exhibit,
certificate or report delivered pursuant hereto or in
connection herewith, which shall have been incorrect in any
material respect when made, and (B) thereafter, any
representation or warranty or statement made or deemed made by
the Servicer (or any of its officers) under or in connection
with this Agreement which shall have been incorrect in any
material respect when made;
4.2.0.2. the failure by the Servicer to comply with any
applicable law, rule or regulation with respect to any Pool
Receivable or the related Cardholder Agreement (including,
without limitation, Regulation Z of the Board of Governors of
the Federal Reserve System, the Federal Consumer Protection
Act (including, without limitation, the Federal Truth in
Lending Act), the Fair Credit Billing Act, and all other laws,
rules and regulations relating to usury, consumer protection,
truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and
privacy);
4.2.0.3. any claim relating to collection activities with
respect to any Pool Receivable;
4.2.0.4. any failure of the Servicer or the Administrative
Servicer to perform its duties or obligations in accordance
with the provisions hereof or of the Administrative Servicer
Agreement or of the Pooling and Servicing Agreement;
4.2.0.5. any action or omission by the Servicer reducing or
impairing the rights of any Purchaser or any Bank with respect
to any Pool Receivable or the value of any Pool Receivable;
excluding, however, (a) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of such Indemnified Party or any of
its Affiliates, (b) recourse
29
(except as otherwise specifically provided in this Agreement) for uncollectible
Receivables or (c) any income taxes incurred by such Indemnified Party arising
out of or as a result of this Agreement or the ownership of Receivable Interests
or in respect of any Receivable or any Cardholder Agreement.
SECTION 4.3. PURCHASE OF INELIGIBLE AND CERTAIN OTHER
RECEIVABLES.
4.3.1. The Owner agrees to make payment when due of all
deposits which the Owner is required to make pursuant to Sections
2.4(d)(iii) and 2.4(e) of the Pooling and Servicing Agreement. Any
amount deposited by the Owner in the Collection Account pursuant to
Section 2.4(d)(iii) or 2.4(e) of the Pooling and Servicing Agreement,
which deposit is made on account of the Receivable Interests created
under this Agreement, shall be deemed to be a Collection in respect of
the related Pool Receivable as to which such deposit is made, and the
amount of each such Collection shall be applied in accordance with
Article II hereof. If any such deposit is made after the end of a Due
Period but on or prior to the first Distribution Date following the end
of such Due Period, such deposit shall be deemed to be a Collection
received during such Due Period.
4.3.2. If the Pool Receivables shall include any Discount
Option Receivables on any date when the Owner is required, pursuant to
Section 2.4(d)(iii) or 2.4(e) of the Pooling and Servicing Agreement,
to deposit any amount into the Collection Account on account of the
Receivable Interests created under this Agreement, the Owner shall make
an additional deposit into the Collection Account on such date in an
amount equal to the difference between (i) the amount the Owner would
have been required to deposit into the Collection Account on such date
on account of such Receivable Interests pursuant to the Pooling and
Servicing Agreement if none of the Pool Receivables had been Discount
Option Receivables, minus (ii) the amount actually deposited by the
Owner into the Collection Account on such date on account of such
Receivable Interests pursuant to the Pooling and Servicing Agreement.
30
SECTION 4.4. REASSIGNMENT OF RECEIVABLES AND RECEIVABLE
INTERESTS.
4.4.1. If, pursuant to Section 2.4(d) of the Pooling and
Servicing Agreement, any Receivables that are "Ineligible Receivables"
(as defined in the Pooling and Servicing Agreement) are required to be
assigned by the Seller to the Owner, each Purchaser, each Bank and the
Subordinated Purchaser hereby assigns such Receivables to the extent of
its Receivable Interest to the Seller, effective upon and
simultaneously with the assignment by the Seller of such Receivable to
the Owner in accordance with the Pooling and Servicing Agreement,
subject to the prior payment by the Owner of the amounts required under
the Pooling and Servicing Agreement.
4.4.2. If, pursuant to Section 2.4(e) of the Pooling and
Servicing Agreement, all Receivable Interests are required to be
assigned by the Seller to the Owner, each Purchaser, each Bank and the
Subordinated Purchaser hereby assigns its Receivable Interest to the
Seller, effective upon and simultaneously with the assignment by the
Seller of the Receivables to the Owner in accordance with the Pooling
and Servicing Agreement, subject to the prior payment by the Owner of
the amounts required under the Pooling and Servicing Agreement.
4.4.3. If, pursuant to Section 9.2 of the Pooling and
Servicing Agreement, all Receivables are to be sold by the Seller, each
Purchaser, each Bank and the Subordinated Purchaser hereby assigns its
Receivable Interest to the Seller, effective upon and simultaneously
with the sale by the Seller of the Receivables in accordance with the
Pooling and Servicing Agreement.
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SECTION 4.5. REPURCHASE OF PURCHASER RECEIVABLE INTERESTS. On
any Distribution Date on or after the Facility Termination Date and the
Commitment Termination Date, the Owner may, upon 30 days' prior notice to the
Agent, purchase all, but not less than all, of the Purchaser Receivable
Interests outstanding on such Distribution Date, in accordance with the terms
specified in Section 12.2(a) of the Pooling and Servicing Agreement, provided
that on such Distribution Date (a) the Subordinated Purchaser Capital has not
been reduced to zero, and (b) the sum of the Purchaser Capital plus the
Subordinated Purchaser Capital is equal to or less than 5% of the highest
Purchase Limit theretofore in effect under this Agreement. The deposit required
in connection with any such purchase shall be made to the Agent's Account, for
the account of the relevant Purchaser(s) and Bank(s), and shall be in an amount
equal to the Purchaser Capital plus all Yield accrued thereon through the date
of such purchase. The Owner shall also pay to the Agent, on the date of any such
purchase, for the account of the Agent and the relevant Purchaser(s) and
Bank(s), Indemnified Parties and Affected Persons as the case may be, all
accrued fees, costs and expenses and Indemnified Amounts payable hereunder to
the Agent, the Purchasers, the Banks, Indemnified Parties and/or Affected
Persons.
ARTICLE 5.
THE SERVICER
SECTION 5.1. DESIGNATION OF THE SERVICER; DELEGATION OF
DUTIES.
5.1.1. Each of the Seller, the Subordinated Purchaser, the
Purchasers, the Banks and the Agent hereby confirms that the Person
appointed from time to time to act as Servicer under the Pooling and
Servicing Agreement, initially Spirit, shall act as its agent and as
agent for the holders of the Investor Certificates in servicing the
Pool Receivables and the Collections. The parties hereto confirm that
it is impracticable to have more than one Servicer servicing the Pool
Receivables and, accordingly, all servicing activities described in the
Pooling and Servicing Agreement shall be the responsibility of the
Servicer and shall be performed in accordance with the Pooling and
Servicing Agreement. Spirit as the initial Servicer hereby confirms,
for the benefit of the parties hereto, that it shall perform the duties
and
32
obligations of the Servicer pursuant to the terms of the Pooling and
Servicing Agreement.
5.1.2. In accordance with Section 10.2 of the Pooling and
Servicing Agreement, the Servicer may be terminated from time to time.
Any Successor Servicer shall be appointed by the Trustee in accordance
with Section 10.2 of the Pooling and Servicing Agreement and any
Successor Servicer so appointed shall act as the Servicer.
5.1.3. The Servicer may subcontract with any other Person,
with the prior consent of the Agent (which consent will not be
unreasonably withheld), for the administration and collection of the
Pool Receivables; provided, however, that such subcontract shall not
affect the Servicer's liability for performance of its duties and
obligations pursuant to the terms hereof and of the Pooling and
Servicing Agreement. The Agent hereby acknowledges and consents to the
continuation of Alliance Data Services, Inc. as the Administrative
Servicer pursuant to the terms and conditions set forth in the
Administrative Servicer Agreement.
SECTION 5.2. ADMINISTRATION AND COLLECTION OF THE POOL
RECEIVABLES. In addition to performing the duties undertaken pursuant to the
Pooling and Servicing Agreement, the Servicer shall conduct the administration
and collection of the Pool Receivables in accordance with the provisions of
Exhibit V.
SECTION 5.3. SERVICER FEE. The Servicer shall be paid a
servicing fee (the "Servicer Fee") at the per annum rate of 2.0% (the "Servicing
Fee Rate") on the average daily Purchaser Capital and Subordinated Purchaser
Capital of each Receivable Interest, from the date of purchase of such
Receivable Interest until the date on which such Purchaser Capital and
Subordinated Purchaser Capital is reduced to zero, payable on each Distribution
Date for the immediately preceding Settlement Period. The Servicer Fee shall be
payable only from Collections pursuant to, and subject to the priority of
payment set forth in, Article II of the Agreement.
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ARTICLE 6.
THE PURCHASER REPRESENTATIVE
SECTION 6.1. DESIGNATION OF THE PURCHASER REPRESENTATIVE.
6.1.1. CNAI is hereby designated as, and hereby agrees to
perform the duties and obligations of, the Purchaser Representative
pursuant to the terms hereof and (with respect to the Receivables
Purchase Series arising in connection with this Agreement) pursuant to
the Pooling and Servicing Agreement.
6.1.2. The Purchasers, the Banks, the Subordinated Purchaser
and the Agent hereby appoint the Purchaser Representative, from time to
time designated pursuant to this Section 6.01, as the representative
for themselves and for the Purchasers and the Banks to perform the
duties and obligations of the Purchaser Representative on their behalf
under the Pooling and Servicing Agreement.
6.1.3. The Agent may, by notice to the Seller, the Owner, the
Subordinated Purchaser and the Servicer, designate another Person
(including, without limitation, the Agent itself) to succeed CNAI as
the Purchaser Representative if such Person shall consent and agree to
the terms hereof and of the Pooling and Servicing Agreement.
SECTION 6.2. DUTIES OF THE PURCHASER REPRESENTATIVE.
6.2.1. The Purchaser Representative shall furnish to each
Purchaser, each Bank and to the Subordinated Purchaser a copy of each
notice, instrument or other document received by it in connection with
this Agreement or the Pooling and Servicing Agreement within a
reasonable period of time after receipt thereof.
6.2.2. The Purchaser Representative shall, on behalf of the
Purchasers, the Banks and the Subordinated Purchaser, direct the time,
method and place of exercising any right or remedy available to the
Purchasers, the Banks and/or the Subordinated Purchaser under the
Pooling and Servicing Agreement and take such other actions under the
Pooling and Servicing Agreement as could be taken by the Purchasers,
the Banks and/or the Subordinated Purchaser and as are, in the sole
discretion of the Purchaser Representative, necessary or desirable to
effectuate the purposes of this Agreement; provided, however, that the
Purchaser Representative shall not
34
be required to take any action which exposes the Purchaser
Representative to personal liability or which is contrary to this
Agreement or applicable law.
SECTION 6.3. LIMITATION ON PURCHASER REPRESENTATIVE LIABILITY,
ETC.
6.3.1. Neither the Purchaser Representative nor any of its
directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Purchaser Representative:
6.3.1.1. may treat the Purchaser of or the Bank which
funded any purchase of any Purchaser Receivable Interest as
the holder thereof, and may treat the Subordinated Purchaser
as the holder of the Subordinated Receivable Interest, until
the Purchaser Representative receives written notice of the
assignment or transfer thereof signed by such Person and in
form satisfactory to the Purchaser Representative;
6.3.1.2. may consult with legal counsel (including
counsel for the Seller, the Owner, the Originator or the
Servicer), independent public accountants and other experts
selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts;
6.3.1.3. makes no warranty or representation to any
Purchaser, any Bank or to the Subordinated Purchaser and shall
not be responsible to any Purchaser, any Bank or to the
Subordinated Purchaser for any statements, warranties or
representations made in or in connection with this Agreement,
the Pooling and Servicing Agreement or the Purchase Agreement;
6.3.1.4. shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement, the Pooling
and Servicing Agreement or the Purchase Agreement on the part
of the Seller, the Owner, the Originator or the Servicer or to
inspect the property (including the books and records) of the
Seller, the Owner or the Servicer;
35
6.3.1.5. shall not be responsible to any Purchaser,
any Bank or the Subordinated Purchaser for the due execution,
legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement, the Pooling and Servicing
Agreement or the Purchase Agreement or any instrument or
document furnished pursuant hereto; and
6.3.1.6. shall incur no liability under or in respect
of this Agreement, the Pooling and Servicing Agreement, the
Purchase Agreement or any such other document or instrument by
acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram) believed by
it to be genuine and signed or sent by the proper party or
parties.
6.3.2. With respect to rights and obligations under this Agreement and
as the Purchaser or a Bank hereunder, CRC shall have the same rights and powers
under this Agreement, the Pooling and Servicing Agreement, the Purchase
Agreement or any such other document or instrument as any other Purchaser or
Bank and may exercise the same as though CNAI were not the Purchaser
Representative hereunder. CNAI and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, the Seller, the Owner or the Servicer, any of their respective
Affiliates and any Person or entity who may do business with or own securities
of the Seller, the Owner or the Servicer or any of its Affiliates, all as if
CNAI were not the Purchaser Representative and without any duty to account
therefor to the Purchasers, the Banks or the Subordinated Purchaser.
6.3.3. The Subordinated Purchaser acknowledges that it has,
independently and without reliance upon the Purchaser Representative and based
on such financial statements and other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. The Subordinated Purchaser also acknowledges that it will,
independently and without reliance upon the Purchaser Representative or any
other Purchaser or Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement, the Pooling and Servicing
Agreement, the Purchase Agreement and any other agreement or other document.
36
ARTICLE 7.
MISCELLANEOUS
SECTION 7.1. AMENDMENTS, WAIVERS, ETC.
7.1.1. No amendment or waiver of any provision of this Agreement or
consent to any departure by the Seller, the Owner, the Servicer or the
Subordinated Purchaser therefrom shall be effective unless in a writing signed
by the Owner, the Seller, the Servicer, the Subordinated Purchaser and the
Agent, as agent for the Purchasers and the Banks, and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided that so long as any Investor
Certificates shall be outstanding, no such amendment shall become effective
unless (i) the Owner shall have delivered an Opinion of Counsel to the Agent and
the Trustee to the effect that such amendment shall not materially and adversely
affect the interests of the holders of the Investor Certificates or (ii) S&P and
Xxxxx'x shall have notified the Owner, the Servicer and the Trustee in writing
that such action will not result in a reduction or withdrawal of their
respective ratings on any Investor Certificates. In addition, and so long as any
Investor Certificates shall be outstanding, (y) if such amendment relates to any
of the provisions of Article II hereof (and regardless of whether an Opinion of
Counsel has been delivered pursuant to clause (i) of the preceding sentence),
S&P shall have notified the Owner, the Servicer and the Trustee in writing that
such action will not result in a reduction or withdrawal of its rating on any
Investor Certificates, or (z) if such amendment relates to any other provisions
of this Agreement (other than an amendment the sole effect of which is to extend
the Facility Termination Date or the Commitment Termination Date, to reduce the
Purchase Limit or to modify the terms of an Enhancement which is for the sole
benefit of the Receivables Purchase Interest under this Agreement), S&P shall
have been given at least one Business Day's prior written notice of such
amendment and S&P shall not have advised the Owner or the Servicer at the close
of business on the Business Day following receipt of such notice that such
action would result in a reduction or withdrawal of its rating on any Investor
Certificates. Defined terms which are incorporated herein by reference from the
Pooling and Servicing Agreement shall not be altered or affected by any
subsequent amendment to the Pooling and Servicing Agreement which relates to
such terms, unless the Agent shall have consented in writing to such amendment.
37
7.1.2. No failure on the part of any Purchaser, any Bank, the
Subordinated Purchaser or the Agent to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right.
SECTION 7.2. NOTICES, ETC.
7.2.1. All notices and other communications hereunder shall, unless
otherwise stated herein, be in writing (which shall include facsimile
communication) and faxed or delivered, to each party hereto, at its address set
forth under its name on the signature pages hereof or at such other address as
shall be designated by such party in a written notice to the other parties
hereto. Notices and communications by facsimile shall be effective when sent
(and shall be followed by hard copy sent by regular mail), and notices and
communications sent by other means shall be effective when received.
7.2.2. So long as Spirit is the Servicer under this Agreement, any
notice required to be given to the Owner and the Servicer hereunder shall be
deemed to have been delivered to both the Owner and the Servicer if such notice
is delivered to Spirit at its address set forth below its name on the signature
page hereof.
38
SECTION 7.3. ASSIGNABILITY.
7.3.1. This Agreement and each Purchaser's rights and obligations
herein (including ownership of each Purchaser Receivable Interest) shall be
assignable by such Purchaser and its successors and assigns; provided, that no
assignee shall be entitled to compensation pursuant to Section 1.05(a) hereof at
a rate in excess of that to which the assignor Purchaser was entitled
immediately prior to such assignment; and provided, further, that, unless the
proposed assignee is CNAI or a Bank, (i) each assignor of a Purchaser Receivable
Interest or any interest therein shall give the Agent, the Owner, the Servicer
and the Seller at least ten Business Days' notice of a proposed assignment and
shall not consummate such assignment if the Owner notifies such assignor that
the proposed assignee or any Affiliate of a proposed assignee is a competitor of
the Owner, Charming Shoppes or any of their respective Affiliates, and (ii) the
amount being assigned pursuant to each such assignment (determined as of the
date of such assignment) shall in no event be less than the lesser of (x)
$10,000,000 and (y) the assigning Purchaser's share of the Purchase Limit.
7.3.1.1. Each Bank may assign to any Eligible Assignee or to any other
Bank all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Bank Commitment and any
Purchaser Receivable Interests or interests therein owned by it); provided, that
no assignee shall be entitled to compensation pursuant to Section 1.05(a) hereof
at a rate in excess of that to which the assignor Bank was entitled immediately
prior to such assignment; and provided, further, that, unless the proposed
assignee is CNAI or a Bank, each assignor of a Purchaser Receivable Interest or
any interest therein shall give the Agent, the Owner, the Servicer and the
Seller at least ten Business Days' notice of a proposed assignment and shall not
consummate such assignment if the Owner notifies such assignor that the proposed
assignee or any Affiliate of the proposed assignee is a competitor of the Owner,
Charming Shoppes or any of their respective Affiliates; and provided, further,
that in the case of any assignment,
7.3.1.1.1. each such assignment shall be of a constant, and
not a varying, percentage of all rights and obligations under this
Agreement,
7.3.1.1.2. the amount being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment)
39
shall in no event be less than the lesser of (x) $10,000,000 and (y)
the assigning Bank's Bank Commitment,
7.3.1.1.3. the parties to each such assignment shall execute
and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and
recordation fee of $2,500,
7.3.1.1.4. concurrently with such assignment, if such Bank is
a Bank other than Citibank, the assignor thereunder shall assign to
such Eligible Assignee an equal percentage of its rights and
obligations under the APA, and
7.3.1.1.5. Citibank may not assign any portion of its Bank
Commitment to the extent it reduces such Bank Commitment below (x) 10%
of the Purchase Limit minus (y) the Purchaser Capital of all Purchaser
Receivable Interests owned by CNAI or any of its Affiliates.
7.3.1.2. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in each Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Bank hereunder and (y) the
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Bank's rights and obligations under this Agreement, such
Bank shall cease to be a party hereto).
7.3.1.3. The Agent shall maintain at its address referred to in Section
7.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Banks and
the Bank Commitment of, and aggregate outstanding Purchaser Capital of Purchaser
Receivable Interests or interests therein owned by, each Bank from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Seller, the Owner, the
Servicer, the Agent and the Banks may treat each person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Seller, the Owner, the
Servicer, or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
40
7.3.1.4. Upon its receipt of an Assignment and Acceptance
executed by an assigning Bank and by an assignee which is an Eligible
Assignee or an existing Bank, the Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Annex
H hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt
notice thereof to the Seller, the Owner and the Servicer.
7.3.1.5. Notwithstanding any of the other provisions of this
Section 7.03, Citibank or any of its Affiliates may assign any of its
rights (including, without limitation, rights to payment of Purchaser
Capital and Yield) under this Agreement to any Federal Reserve Bank
without notice to or consent of the Agent, the Owner, the Servicer or
the Seller.
7.3.2. Subject to the provisions of Section 7.06(b) hereof, each
assignor of a Purchaser Receivable Interest may in connection with the
assignment or participation, disclose to the assignee or participant any
information relating to the Seller, the Servicer, the Owner or the Originator,
including the Receivables, furnished to such assignor by or on behalf of the
Seller, the Servicer, the Owner or the Originator or by the Agent.
7.3.3. This Agreement and the rights and obligations of the Agent (in
its capacity as agent hereunder) herein shall be assignable by the Agent and its
successors and assigns; provided, however, that the Agent agrees that it will
not assign of its own volition such rights and obligations to any Person other
than an Affiliate of CNAI unless:
7.3.3.1. in the reasonable judgment of the Agent consistent
with its internal policy (including, without limitation, the internal
policy of any Affiliate of the Agent, with respect to which the manner
in which conflicts of interest are to be resolved) and legal and
regulatory restrictions, the Agent determines that it would be
disadvantageous to the Agent or an Affiliate of the Agent for it to
continue as the Agent hereunder, or
7.3.3.2. the Agent's decision to assign its rights and
obligations (in its capacity as the agent hereunder) is consistent with
its determination to assign its rights and obligations as the agent in
respect of a majority of the other transactions with sellers of
receivables in which it is, at such time, the agent, which
41
involve receivables having a tenor similar to the tenor of the
Receivables.
7.3.4. None of the Seller or subject to paragraph 2(m) of Exhibit IV
hereto, the Owner, or subject to Section 8.2 of the Pooling and Servicing
Agreement and paragraph 3(e) of Exhibit IV hereto, the Servicer, may assign its
rights or obligations hereunder or any interest herein without the prior written
consent of the Agent.
7.3.5. Each Purchaser may sell participations, to one or more banks or
other financial institutions, in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, any Purchaser
Receivable Interests or interests therein owned by it); provided, however, that
(i) unless the proposed participant is CNAI or a Bank, each seller of a
participation shall give the Agent, the Owner, the Servicer and the Seller at
least ten Business Days' notice of a proposed participation and shall not
consummate such participation if the Owner notifies such seller that the
proposed participant or any Affiliate of the proposed participant is a
competitor of the Owner, Charming Shoppes or any of their respective Affiliates;
(ii) such selling Purchaser's obligations under this Agreement shall remain
unchanged; (iii) such selling Purchaser shall remain solely responsible to the
other parties hereto for the performance of such obligations; and (iv) the
amount being participated pursuant to each such participation (determined as of
the date of such participation) shall in no event be less than the lesser of (x)
$10,000,000 and (y) the selling Purchaser's share of the Purchase Limit. The
parties to this Agreement shall continue to deal solely and directly with such
selling Purchaser in connection with such Purchaser's rights and obligations
under this Agreement.
7.3.6. Each Bank may sell participations, to one or more banks or other
financial institutions, in or to all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Bank Commitment and any Purchaser Receivable Interests or interests therein
owned by it); provided, however, that (i) unless the proposed participant is
CNAI or a Bank, each seller of a participation shall give the Agent, the Owner,
the Servicer and the Seller at least ten Business Days' notice of a proposed
participation and shall not consummate such participation if the Owner notifies
such seller that the proposed participant or any Affiliate of the proposed
participant is a competitor of the Owner, Charming Shoppes or any of their
respective Affiliates; (ii) such selling Bank's
42
obligations under this Agreement (including, without limitation, its Bank
Commitment hereunder) shall remain unchanged; (iii) such selling Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations; (iv) the amount being participated pursuant to each such
participation (determined as of the date of such participation) shall in no
event be less than the lesser of (x) $10,000,000 and (y) the selling Bank's Bank
Commitment; and (v) concurrently with such participation, the selling Bank (if
other than Citibank) thereunder shall sell to such participant an equal
percentage of its rights and obligations under the APA. The parties to this
Agreement shall continue to deal solely and directly with such selling Bank in
connection with such Bank's rights and obligations under this Agreement
7.3.7. No transfer (or purported transfer) of all or any part of the
Purchaser Receivable Interests (or any participation or other economic interest
therein) or the Subordinated Receivable Interests (or any participation or other
economic interest therein), whether to another Receivables Purchaser or to a
person who is not a Receivables Purchaser, shall be effective, and any such
transfer (or purported transfer) shall be void ab initio, and no Person shall
otherwise become a holder of a Purchaser Receivable Interest or a Subordinated
Receivable Interest if (i) at the time of such transfer (or purported transfer)
any Purchaser Receivable Interests or Subordinated Receivable Interests are
traded on a Market, (ii) after such transfer (or purported transfer) the Trust
would have more than 25 Private Holders of the Purchaser Receivable Interests or
the Subordinated Receivable Interests (or any participation or other economic
interests in any of the foregoing), (iii) the Purchaser Receivable Interests or
Subordinated Receivable Interests were required to be registered under the
Securities Act (or, to the extent sold or offered pursuant to Regulation S (17
CFR 230.901 through 230.904 or any successor thereto), would have been required
to be registered under the Securities Act if sold or offered within the United
States) or (iv) such transfer (or purported transfer) is to a Person other than
(x) an "accredited investor" as defined in paragraph (1), (2), (3) or (7) of
Rule 501(a) under the Securities Act, (y) a qualified institutional buyer as
defined in Rule 144A under the Securities Act or (z) an Affiliate of the Owner,
provided, however, that the Trustee shall not be responsible for monitoring
compliance with the requirements of this subsection (h) with respect to any
transfer (or purported transfer) unless it shall have received prior written
notice of the applicability thereof from the Servicer.
43
SECTION 7.4. COSTS, EXPENSES AND TAXES.
7.4.1. In addition to the rights of indemnification granted under
Sections 4.01 and 4.02 hereof, the Owner agrees to pay on demand all costs and
expenses in connection with the preparation, execution, delivery and
administration of this Agreement, any asset purchase agreement or similar
agreement relating to the sale or transfer of interests in Purchaser Receivable
Interests and the other documents and agreements to be delivered hereunder,
including, without limitation, (i) the reasonable fees and out-of-pocket
expenses of counsel for the Agent, CNAI, Citicorp Securities Inc., Citibank, CRC
with respect thereto and with respect to advising the Agent, CNAI, Citicorp
Securities, Inc., Citibank and CRC as to their rights and remedies under this
Agreement, (ii) the Agent's out-of-pocket costs and expenses in connection with
annual audits under paragraph 1(b) of Exhibit V, and (iii) all costs and
expenses, if any (including reasonable counsel fees and expenses), of the Agent,
CNAI, Citicorp Securities, Inc., Citibank, the Seller, the Trustee, the
Purchasers or the Banks in connection with the enforcement of this Agreement and
the other documents and agreements to be delivered hereunder.
7.4.2. In addition, the Owner shall pay any and all stamp and other
taxes and fees payable in connection with the execution, delivery, filing and
recording of this Agreement or the other documents or agreements to be delivered
hereunder, and agrees to save each Indemnified Party harmless from and against
any liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.
SECTION 7.5. NO PROCEEDINGS.
7.5.1. Each of the Seller, the Agent, the Owner, the Originator, the
Servicer, the Subordinated Purchaser, each Purchaser, each Bank, each assignee
of a Purchaser Receivable Interest or any interest therein and each entity which
enters into a commitment to purchase Purchaser Receivable Interests or interests
therein hereby agrees that it will not institute against CRC any proceeding of
the type referred to in paragraph (g) of Exhibit VI so long as any senior
indebtedness issued by CRC shall be outstanding or there shall not have elapsed
one year plus one day since the last day on which any such senior indebtedness
shall have been outstanding.
7.5.2. Each of the Agent, the Owner, the Originator, the Servicer, each
Purchaser, each Bank, each assignee of a
44
Purchaser Receivable Interest or any interest therein and each entity which
enters into a commitment to purchase Purchaser Receivable Interests or interests
therein hereby agrees that it will not institute against the Trust any
proceeding of the type referred to in paragraph (g) of Exhibit VI so long as any
Investor Certificate shall be outstanding or there shall not have elapsed one
year plus one day since the last day on which any Investor Certificate shall
have been outstanding.
SECTION 7.6. CONFIDENTIALITY.
7.6.1. Unless otherwise required by applicable law, each of the Seller,
the Owner, the Originator, the Servicer and the Subordinated Purchaser agrees to
maintain the confidentiality of this Agreement (and all drafts thereof) in
communications with third parties and otherwise; provided that this Agreement
may be disclosed (i) to third parties to the extent such disclosure is made
pursuant to a written agreement of confidentiality in form and substance
reasonably satisfactory to the Agent, (ii) to independent financial rating
agencies in connection with the rating of any Certificate Series issued or to be
issued pursuant to the Pooling and Servicing Agreement, and (iii) to the
Seller's legal counsel and auditors, the Owner's or the Originator's legal
counsel and auditors, the Servicer's legal counsel and auditors, and the
Subordinated Purchaser's legal counsel and auditors if, in each case, they agree
(whether or not in writing) to hold it confidential; and provided, further, that
this Agreement may be filed by Charming Shoppes with the Securities and Exchange
Commission as an exhibit to an annual report on Form 10-K or a quarterly report
on Form 10-Q under the Exchange Act, in each case without any special
confidentiality requirement.
7.6.2. Each of the Agent, each Purchaser and each Bank agrees (i) to
maintain the confidentiality of this Agreement (and all drafts thereof) in
communications with third parties and otherwise, (ii) to use reasonable efforts
(e.g., procedures substantially comparable to those applied by the Agent, such
Purchaser or Bank, as the case may be, in respect of non-public information as
to its business) to maintain the confidentiality of (x) the Owner's or the
Originator's customer lists, the list of Stores delivered to the Agent pursuant
to paragraph 2(n) of Exhibit IV hereto, and any other non-public information as
to the Owner's or the Originator's business and the Servicer's business and (y)
the contents of the Administrative Servicer Agreement, in each case, to the
extent that such information is not and does not become publicly available
(other than by the filing of
45
financing statements pursuant to this Agreement), and (iii) not to use
any of the information described in the preceding clauses (x) and (y)
for any purposes not specifically related to its business relationship
with the Owner, the Servicer and the Trust or its ownership of
Purchaser Receivable Interests or interests therein; provided, that
nothing in this subsection (b) shall affect the disclosure of this
Agreement or such non-public information (1) to the extent required by
law (including statute, rule, regulation or judicial process), (2) to
the Agent's, a Purchaser's or a Bank's counsel or accountants, as the
case may be, provided they agree (whether or not in writing) to hold it
confidential, and (3) to bank and insurance company examiners and
auditors, appropriate government examining authorities and independent
financial rating agencies, and provided, further, that the Agent, each
Bank, each Purchaser and each assignee of Receivable Interests may, in
connection with any assignment or participation, or proposed assignment
or participation, disclose this Agreement to the assignee or
participant or to a proposed assignee or participant and any
information relating to the Owner, the Originator or the Servicer
furnished to such entity by or on behalf of the Owner, the Originator
or the Servicer or by the Agent, if, prior to any such disclosure, such
assignee or participant or proposed assignee or participant agrees, in
a writing reasonably satisfactory to the Owner, the Originator or the
Servicer, as the case may be, to preserve the confidentiality of this
Agreement and any confidential information relating to the Owner, the
Originator or the Servicer received by it from any of the foregoing
entities and to be bound by the provisions of this Section 7.06(b). The
Agent, each Purchaser and each Bank shall, as promptly as practicable
after becoming aware of any disclosure of any confidential information
relating to the Owner, the Originator or the Servicer, use good faith
efforts to notify the Owner, the Originator and the Servicer of such
disclosure; provided, however, that the failure by the Agent, any
Purchaser or any Bank to give such notice shall not subject it to
liability.
SECTION 7.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF), EXCEPT TO THE EXTENT THAT
THE PERFECTION OF THE INTERESTS OF THE PURCHASERS, THE BANKS OR THE SUBORDINATED
PURCHASER IN THE RECEIVABLES OR REMEDIES HEREUNDER, IN RESPECT THEREOF, ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
46
SECTION 7.8. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one and the
same agreement.
SECTION 7.9. Survival of Termination. The provisions of Sections 1.05,
1.06, 4.01, 4.02, 4.03, 7.04, 7.05 and 7.06 shall survive any termination of
this Agreement.
SECTION 7.10. Tax Treatment. The Owner and the Seller have structured
this Agreement and the Purchaser Receivable Interests with the intention that
the Purchaser Receivable Interests will qualify under applicable federal, state
and local tax law as indebtedness. Except as otherwise required by law, the
Seller, the Servicer, the Agent and each Purchaser agree to treat and to take no
action inconsistent with the treatment of the Purchaser Receivable Interests as
indebtedness for purposes of federal, state and local income or franchise taxes
and any other tax imposed on or measured by income.
SECTION 7.11. Duties of the Trustee. The Trustee hereby agrees to (i)
perform its duties and obligations as set forth in the Pooling and Servicing
Agreement and (ii) promptly take each action which the Agent may specify in
accordance with Section 11.14(a) or any other applicable Section of the Pooling
and Servicing Agreement to enforce the Pooling and Servicing Agreement for the
benefit of the Purchasers, the Banks, any other receivables purchasers, and any
holders of Investor Certificates, all with reasonable care and diligence and in
accordance with applicable laws, rules and regulations and the Pooling and
Servicing Agreement.
SECTION 7.12. Limitation on Seller/Trustee Liability, Etc.
7.12.1. Neither the Trustee, in its individual capacity or in
its capacity as the Seller hereunder, nor any of its directors,
officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Trustee:
47
7.12.1.1. may consult with legal counsel (including
counsel for the Seller, the Owner, the Originator or the
Servicer), independent public accountants and other experts
selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts;
7.12.1.2. makes no warranty or representation to any
Purchaser, any Bank or to the Subordinated Purchaser and shall
not be responsible to any Purchaser, any Bank or to the
Subordinated Purchaser for any statements, warranties or
representations made in or in connection with this Agreement,
the Pooling and Servicing Agreement or the Purchase Agreement;
7.12.1.3. shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the
terms, covenants or conditions of this Agreement, the Pooling
and Servicing Agreement or the Purchase Agreement on the part
of the Seller, the Owner, the Originator or the Servicer or to
inspect the property (including the books and records) of the
Seller, the Owner, the Originator or the Servicer;
7.12.1.4. shall not be responsible to any Purchaser,
any Bank or the Subordinated Purchaser for the due execution,
legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement, the Pooling and Servicing
Agreement or the Purchase Agreement or any instrument or
document furnished pursuant hereto; and
7.12.1.5. shall incur no liability under or in
respect of this Agreement, the Pooling and Servicing
Agreement, the Purchase Agreement or any such other document
or instrument by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram)
believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.13. THIRD PARTY BENEFICIARIES.
7.13.1. Each of the Seller, the Owner, the Originator and the Trustee
hereby acknowledge that the Agent, for the benefit of the Purchasers and the
Banks, and the Purchasers and the Banks are, to the extent of the Purchasers'
and the Banks' respective rights and obligations under this Agreement, intended
to be third party beneficiaries under Section 13.14 of the Pooling and Servicing
Agreement.
48
7.13.2. No "Investor Certificateholder" or "Enhancement Provider" (in
each case as defined in the Pooling and Servicing Agreement) shall be a
third-party beneficiary of this Agreement or have any benefit or any legal or
equitable right, remedy or claim under this Agreement.
SECTION 7.14. LIMITED RECOURSE.
7.14.1. In no event will any Purchaser or any Bank have any right or
interest in the Trust to the extent allocated to the holder of Investor
Certificates or attributable to the receivables purchase interest of any other
Receivables Purchaser. Notwithstanding any other provision herein or in any
other agreement or instrument, the Agent, on behalf of each Purchaser and each
Bank, confirms that it and each Purchaser and each Bank have no interest in and
will make no claim on, or otherwise interfere with, distributions of Collections
allocated to any Investor Certificates or attributable to any other Receivables
Purchasers under the Pooling and Servicing Agreement, any Supplement or any
other receivables purchase agreement.
7.14.2. Notwithstanding any claim that any Purchaser, any Bank or the
Agent may have hereunder, no such claim shall be payable from any Collections
other than those attributable to the Receivables Purchase Interest pursuant to
Section 2.01 and, as to all claims that any Purchaser, any Bank or the Agent may
have hereunder against the Trust, no such claim shall be payable other than from
Allocable Finance Charge Collections, Allocable Principal Collections and the
Allocation Percentage of Recoveries of Pool Receivables attributable to the
Receivables Purchase Interest pursuant to Section 2.01. Nothing contained in
this Section, however, shall limit or affect any claim that any Purchaser, any
Bank or the Agent may have hereunder against the Owner, the Originator or the
Servicer for any obligations under this Agreement which are direct obligations
of the Owner, the Originator or the Servicer.
7.14.3. By way of clarification of certain provisions contained in
Section 6.16(a) and 12.1(c) of the Pooling and Servicing Agreement, the parties
hereto confirm and agree that the reference in the last sentence of Section
6.16(a) to "equally and ratably" and the reference in the second sentence of
Section 12.1(c) to "pro rata" means that the applicable benefits and payments
will be allocated among the different Series in accordance with the
"Investor/Purchaser Percentages" of the relevant Series (which, in the case of
the Series
49
created by this Agreement, is the Allocation Percentage) and among the
Receivables Purchasers within each Receivable Purchase Series in
accordance with the priorities set forth in the receivables purchase
agreement for such Series.
SECTION 7.15. LIMITATION ON RIGHTS OF PURCHASERS AND BANKS. It
is understood and intended, and upon the purchase of each Purchaser Receivable
Interest the Agent, each Purchaser and each Bank shall be deemed to have
expressly covenanted and agreed with every other Receivables Purchaser and
holder of an Investor Certificate and the Trustee, that the Purchaser Receivable
Interests and the Investor Certificates shall rank pari passu among one another
and amongst themselves (except for any Enhancement that may apply to only the
Purchaser Receivable Interests or one series of Investor Certificates) and
neither the Agent nor any Purchaser or Bank shall have any right hereunder or
under the Pooling and Servicing Agreement (i) to surrender, waive, impair,
disturb or prejudice the rights of any other Receivables Purchasers or the
holders of the Investor Certificates, (ii) to obtain or seek to obtain priority
over or preference to any other Receivables Purchaser or holder of an Investor
Certificate or (iii) to enforce any right under this Agreement or the Pooling
and Servicing Agreement against the Seller, except in the manner provided in the
Pooling and Servicing Agreement and for the equal, ratable and common benefit of
all Receivables Purchasers and holders of Investor Certificates and except (x)
as otherwise expressly provided in the Pooling and Servicing Agreement or (y) to
the extent this Agreement creates independent and non-duplicative rights against
the Seller. For the protection and enforcement of the provisions of this
Section, each and every Receivables Purchaser and holder of an Investor
Certificate and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
SECTION 7.16. THE CO ESCROW ACCOUNT.
7.16.1. Establishment. If at any time the Quarterly Charge-Off
Ratio shall exceed 12%, the Agent shall establish an account (the "CO
Escrow Account") in the name and under the control of the Agent with an
Eligible Institution (which may be Citibank) titled "Citicorp North
America, Inc., as Agent, pursuant to the Amended and Restated
Receivables Purchase Agreement dated as of November 25, 1997, as
amended, among Spirit of America National Bank, as Owner and Servicer,
the Agent and certain other parties (CO Escrow Account)". The CO Escrow
Account shall be a fully segregated trust account, unless the Escrow
Bank shall be (i) an Eligible Institution having short-term debt
ratings from S&P and Xxxxx'x no lower
50
than A-1/P-1 or (ii) Citibank. The CO Escrow Account shall be under the sole
dominion and control of the Agent, and neither the Subordinated Purchaser, nor
any Person claiming by, through or under the Subordinated Purchaser shall have
any right, title or interest in, or any right to withdraw any amount from, the
CO Escrow Account.
7.16.2. Taxation. The taxpayer identification number associated with
the CO Escrow Account shall be that of the Subordinated Purchaser and the
Subordinated Purchaser will report for federal, state and local income tax
purposes the income, if any, earned on funds in the CO Escrow Account.
7.16.3. Investments. The Subordinated Purchaser is hereby appointed as
the investment agent, which appointment the Subordinated Purchaser hereby
accepts, to act on behalf of the Agent for determining investments of cash at
any time on deposit in the CO Escrow Account. All funds on deposit in the CO
Escrow Account shall be invested in Eligible Investments (as shall be specified
by the Subordinated Purchaser, as investment agent, in writing to the Escrow
Bank and the Agent; provided, that if the Subordinated Purchaser shall fail to
specify such Eligible Investments in a timely manner, the Agent may specify such
Eligible Investments) which shall mature not later than the Business Day
preceding the next Distribution Date and shall be held to maturity. All such
investments shall be made in the name of the Escrow Bank, as agent, and held by
the Escrow Bank, or its nominee, for the benefit of the Agent. The Escrow Bank
shall not be liable for any loss incurred in connection with any investment in
the CO Escrow Account, except for losses in respect of investments in any
investment issued or guaranteed by the Escrow Bank. Income earned on funds
deposited to the CO Escrow Account, if any, shall be considered a part of the CO
Escrow Account.
7.16.4. New CO Escrow Account. In the event the Escrow Bank ceases to
be an Eligible Institution, the Agent shall, within ten days after learning
thereof, establish a new CO Escrow Account (and transfer any balance and
investments then in the CO Escrow Account to such new CO Escrow Account) at
another Eligible Institution.
7.16.5. Statements for CO Escrow Account. On a monthly basis, the
Escrow Bank shall provide the Agent with a written statement with respect to the
preceding calendar month regarding the CO Escrow Account in a form customary for
statements provided by the Escrow Bank for other accounts held by it, which
statement shall include, at a minimum, the amount on deposit in the CO Escrow
Account, and the dates and amounts
51
of all deposits, withdrawals and investment earnings with respect to the CO
Escrow Account. The Escrow Bank shall promptly deliver a copy of each such
statement to the Subordinated Purchaser and to the Servicer.
7.16.6. Payments to CO Escrow Account. On each Distribution Date,
commencing on any Distribution Date on which the Quarterly Charge-Off Ratio
shall exceed 12% and continuing until the earlier of (i) the second Distribution
Date thereafter on which the Quarterly Charge-Off Ratio shall be less than 12%
and (ii) the Termination Date, the Subordinated Purchaser shall pay into the CO
Escrow Account an amount such that, after giving effect to such payment, the
aggregate funds on deposit in the CO Escrow Account shall at least be equal to
an amount (the "Required CO Escrow Amount") equal to the product of (x) the
aggregate outstanding Purchaser Capital multiplied by (y) a percentage equal to
the excess, if any, of the higher of the Quarterly Charge-Off Ratios for the two
Due Periods preceding such Distribution Date minus 12%.
7.16.7. Payments from CO Escrow Account. On each Distribution Date
preceding the Termination Date on which the funds on deposit in the CO Escrow
Account exceed the Required CO Escrow Amount, the Agent agrees to notify the
Escrow Bank to pay such excess to the Subordinated Purchaser. On the second
Business Day preceding each Distribution Date, the Servicer will determine
whether any Purchaser Charge-Offs will arise with respect to the related Due
Period pursuant to Section 2.05(d) or Section 2.07(a) and will give the Agent
notice of the amount thereof (such amount, the "New Purchaser Charge-Offs"). By
1:00 P.M. New York City time on the Business Day prior to each Distribution Date
on which the amount of the New Purchaser Charge-Offs is greater than zero or on
which any unreimbursed Purchaser Charge-Offs exist, the Agent on behalf of the
Owners shall notify the Escrow Bank requesting payment thereof. To the extent
funds are available in the CO Escrow Account, the Escrow Bank shall pay the
amount requested to the Agent by noon New York City time on such Distribution
Date, and the Agent shall distribute such funds to the Purchasers and the Banks.
Such payment and distribution of funds from the CO Escrow Account shall not
result in any reduction of Purchaser Capital.
7.16.8. Pledge. The Subordinated Purchaser hereby pledges and assigns
to the Agent for the benefit of the Purchasers and the Banks, and hereby grants
to the Agent for the benefit of the Purchasers and the Banks, a security
interest in, all of the Subordinated Purchaser's right, title
52
and interest in and to the CO Escrow Account, including, without
limitation, all funds on deposit therein, all investments arising out
of such funds, all interest and any other income arising therefrom, all
claims thereunder or in connection therewith, and all cash,
instruments, securities, rights and other property at any time and from
time to time received, receivable or otherwise distributed in respect
of such account, such funds or such investments, and all money at any
time in the possession or under the control of, or in transit to such
account, or any bailee, nominee, agent or custodian of the Escrow Bank,
and all proceeds and products of any of the foregoing. Except as
provided in the preceding sentence, the Subordinated Purchaser may not
assign, transfer or otherwise convey its rights under this Agreement to
receive any amounts from the CO Escrow Account.
7.16.9. Termination of CO Escrow Account. Unless the balance
in the CO Escrow Account has been sooner reduced to zero pursuant to
paragraph (g) of this Section 7.16, on the date occurring on or
immediately after the date on which the Adjusted Purchaser Capital is
reduced to zero, all funds then on deposit in the CO Escrow Account
shall be paid to the Subordinated Purchaser, and the CO Escrow Account
shall be closed.
If, on the Distribution Date immediately following the second
anniversary of the commencement of the Amortization Period, the CO Escrow
Account shall not have been closed in accordance with the preceding sentence,
then on such Distribution Date, all funds then on deposit in the CO Escrow
Account shall be applied as follows: first, such funds, in an amount not in
excess of the Adjusted Purchaser Capital for such Distribution Date, shall be
paid to the Agent, and upon receipt of such funds, the Agent shall distribute
such funds to the Purchasers and the Banks; and second, the balance, if any,
shall be paid to the Subordinated Purchaser. Upon the making of all payments
described in the preceding sentence, the CO Escrow Account shall be closed.
53
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
SELLER: FIRST UNION NATIONAL BANK,
not in its individual capacity but
solely as the Trustee for CHARMING
SHOPPES MASTER TRUST
By:
Title: Vice President
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Corporate Trust Services
Facsimile Number: (000) 000-0000
with copies to:
Pepper, Xxxxxxxx & Xxxxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
Facsimile Number: (000) 000-0000
SUBORDINATED
PURCHASER/OWNER: CHARMING SHOPPES RECEIVABLES CORP.
By:
Title: Vice President
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
54
Attention: Xxxx X. Xxxxx
Facsimile Number: (000) 000-0000
SERVICER/
ORIGINATOR: SPIRIT OF AMERICA NATIONAL BANK
By:
Title: Vice President
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxx
Facsimile No. (000) 000-0000
with copies to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
Facsimile Number: (000) 000-0000
Xxxxx Xxxxx, Esq.,
General Counsel
Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
CRC: CORPORATE RECEIVABLES CORPORATION
By: Citicorp North America,
Inc., as Attorney-in-Fact
By:
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: U.S. Securitization
Facsimile No. (000) 000-0000
55
BANK: CITIBANK, N.A.
By: Citicorp North America, Inc.,
As Attorney-in-Fact
By:
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: U.S. Securitization
Facsimile No.: (000) 000-0000
Commitment: $50,000,000
Percentage Interest: 100%
AGENT: CITICORP NORTH AMERICA, INC.,
as Agent
By:
Vice President
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: U.S. Securitization
Facsimile No.: (000) 000-0000
56
EXHIBIT I
DEFINITIONS
1. Certain Defined Terms. As used in the Agreement (including its
Exhibits), the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):
"APA" means an asset purchase agreement entered into by a bank or other
financial institution and the Agent pursuant to which such bank or other
financial institution agrees to purchase Purchaser Receivables Interests or
interests therein from CRC.
"Account" means each Spirit of America National Bank revolving credit
card account (including, without limitation, accounts which have been written
off as uncollectible) issued to an Obligor pursuant to a Cardholder Agreement
between the Originator and any Person, which account is an Eligible Account on
the initial Cut Off Date (or, in the case of Additional Accounts, as of the
applicable Addition Cut Off Date), and which is identified by account number,
Obligor name, Obligor address and Receivable balance as of the applicable Cut
Off Date (or, in the case of Additional Accounts, as of the applicable Addition
Cut Off Date) in each computer file or microfiche list delivered to the Trustee
by the Servicer pursuant to Section 2.1 or Section 2.6 of the Pooling and
Servicing Agreement. The term "Account" shall include each Renumbered Account.
The term "Account" shall be deemed to refer to an Additional Account only from
and after the Addition Date with respect thereto, and the term "Account" shall
be deemed to refer to any Removed Account only prior to the Removal Date with
respect thereto.
"Addition Cut Off Date" has the meaning set forth in Section 1.1 of the
Pooling and Servicing Agreement.
"Addition Date" means each date as of which Additional Accounts will be
included as Accounts for purposes of the Pooling and Servicing Agreement
pursuant to Section 2.6 thereof.
"Additional Account" means each revolving credit card account
established pursuant to a Cardholder Agreement, which account is designated
pursuant to Section 2.6 of the Pooling and Servicing Agreement to be included as
an Account under the Pooling and Servicing Agreement and is identified in a
computer file, microfiche or written list delivered to the Trustee by the
Servicer pursuant to Sections 2.1 and 2.6 thereof.
"Adjusted Purchaser Capital" means, as of any date, an amount equal to
(a) the aggregate Purchaser Capital of all
I-1
57
Purchaser Receivable Interests as of such date, plus (b) the aggregate amount of
all unreimbursed Purchaser Charge-Offs as of such date, minus (c) the total
amount of payments made to the Purchasers from the CO Escrow Account prior to
such date.
"Administrative Servicer" means, initially, Alliance Data Services,
Inc. (formerly known as BSI Business Services, Inc.), a Delaware corporation,
and shall also include any other Person who succeeds to the functions performed
by the Administrative Servicer, as provided in the Administrative Servicer
Agreement, and/or such other Administrative Servicer, including Spirit, as the
Agent and the Owner shall reasonably and mutually agree upon.
"Administrative Servicer Agreement" means the Credit Processing
Agreement effective as of July 8, 1988, as amended as of July 26, 1991, between
Spirit of America National Bank and the Administrative Servicer, and any other
agreement with the same or any successor Administrative Servicer regarding the
performance of servicing functions for the Receivables, and all agreements,
instruments and documents attached thereto or delivered in connection therewith,
as any of the same may from time to time be hereafter amended, supplemented, or
otherwise modified in accordance with the terms of the Agreement.
"Adverse Claim" means a lien, security interest or other charge or
encumbrance, or any other type of preferential arrangement.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" another Person if
such other Person possesses, directly or indirectly, power either to (a) vote
10% or more of the securities having ordinary voting power for the election of
directors of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agent's Account" means the special account (account number 4060-0094)
of the Agent maintained at the office of Citibank at 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx. The Agent's Account is the "Series Account" referred to in the Pooling
and Servicing Agreement for the Receivables Purchase Series arising in
connection with the Agreement.
"Allocable Finance Charge Collections" means, for any Due Period, the
product of (a) the Allocation Percentage for such
I-2
58
Due Period and (b) the amount of Collections of Finance Charge Receivables with
respect to such Due Period.
"Allocable Principal Collections" means, for any Due Period, the
product of (a) the Allocation Percentage for such Due Period and (b) the amount
of Collections of Principal Receivables with respect to such Due Period.
"Allocated Finance Charges" means amounts allocated pursuant to Section
2.02(a)(i) of the Agreement.
"Allocated Interchange" has the meaning set forth in Section 1.1 of the
Pooling and Servicing Agreement.
"Allocated Loss Amount" means, with respect to any Due Period, an
amount equal to the product of (a) the Allocation Percentage for such Due Period
and (b) the Loss Amount with respect to such Due Period.
"Allocation Percentage" means:
(i) for the initial Due Period, the ratio (expressed as
percentage) computed as of the date of the initial purchase under the
Agreement by dividing (A) the sum of (1) the initial Purchaser Capital,
(2) the initial Subordinated Purchaser Capital and (3) the Minimum
Seller Capital, in each case as of such date by (B) the Outstanding
Balance of all Pool Receivables on the initial Cut Off Date;
(ii) for any subsequent Due Period during the Revolving
Period, the ratio (expressed as percentage) computed as of the last day
of the immediately preceding Due Period by dividing (A) the sum of (1)
the Purchaser Capital, (2) the Subordinated Purchaser Capital and (3)
the Minimum Seller Capital, in each case as of such last day by (B) the
greater of (1) the Outstanding Balance of all Pool Receivables as of
such last day minus the total amount of Discount Option Receivables (if
any) on such last day and (2) the sum of the numerators used to
calculate the Investor/Purchaser Percentages for such subsequent Due
Period for all Certificate Series and Receivables Purchase Series
outstanding; and
(iii) for any subsequent Due Period during the Amortization
Period, the ratio (expressed as percentage) computed as of the last day
of the immediately preceding Due Period by dividing (A) the sum of (1)
the Purchaser Capital, (2) the Subordinated Purchaser Capital and (3)
the Unallocated Receivables Balance, in each case as of such last day
by (B) the greater of (i) the Outstanding Balance
I-3
59
of all Pool Receivables as of such last day minus the total amount of
Discount Option Receivables (if any) on such last day and (2) the sum
of the numerators used to calculate the Investor/Purchaser Percentages
for such subsequent Due Period for all Certificate Series and
Receivables Purchase Series outstanding.
Notwithstanding the foregoing, with respect to any Due Period
in which an Addition Date or Removal Date occurs, the amount in (ii)(B)(1) and
(iii)(B)(1) above shall be (1) for the period from and including the first day
of such Due Period to but excluding the related Addition Date or Removal Date,
the Outstanding Balance of all Pool Receivables as of the last day of the
immediately preceding Due Period, minus the total amount of Discount Option
Receivables (if any) on such last day, and (2) for the period from and including
the related Addition Date or Removal Date to and including the last day of such
Due Period, the Outstanding Balance of all Pool Receivables at the end of the
day on the related Addition Date or Removal Date, minus the total amount of
Discount Option Receivables (if any) at the end of the day on such Addition Date
or Removal Date; provided further, that with respect to any Due Period in which
an Addition Date or Removal Date occurs and the Servicer need not make daily
deposits of Collections into the Collection Account, the amount in (ii)(B)(1)
and (iii)(B)(1) above shall be the Average Principal Balance for such Due
Period.
For purposes of this definition, "Investor/Purchaser Percentages" and
"Certificate Series" have the meanings attributed to them in the Pooling and
Servicing Agreement, and "Unallocated Receivables Balance" on any day means the
lesser of (1) the Outstanding Balance of the Pool Receivables not allocated to
the Purchaser Receivable Interests or the Subordinated Receivable Interests
pursuant to the Agreement and not allocated to any other Person other than the
Holder of the Exchangeable Seller Certificate pursuant to a supplement to the
Pooling and Servicing Agreement or pursuant to any other receivables purchase
agreement that is subject to the Pooling and Servicing Agreement and (2) the
Minimum Seller Capital as of such day. The Allocation Percentage may never be
greater than 100%. The Allocation Percentage is the "Investor/Purchaser
Percentage" referred to in the Pooling and Servicing Agreement for the
Receivables Purchase Series arising in connection with the Agreement, and for
purposes of clauses (ii)(B)(2) and (iii)(B)(2) above, the numerator used to
calculate the Investor/Purchaser Percentage for the Receivables Purchase Series
arising in connection with the Agreement is the amount set forth in clauses
(ii)(A) and (iii)(A), respectively.
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"Alternate Base Rate" means a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall be at all times
equal to the interest rate per annum determined using the applicable spread
specified in the Fee Letter plus the highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time as
Citibank's base rate;
(b) 1/2 of one percent above the latest three-week
moving average of secondary market morning offering rates in
the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving
average being determined weekly on each Monday (or, if such
day is not a Business Day, on the next succeeding Business
Day) for the three-week period ending on the previous Friday
by Citibank on the basis of such rates reported by certificate
of deposit dealers to and published by the Federal Reserve
Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received
by Citibank from three New York certificate of deposit dealers
of recognized standing selected by Citibank, in either case
adjusted to the nearest 1/4 of one percent or, if there is no
nearest 1/4 of one percent, to the next higher 1/4 of one
percent; and
(c) the Federal Funds Rate.
"Amortization Period" means the period commencing at the close
of business of the Agent on the Business Day immediately preceding the
Termination Date and ending on the Final Distribution Date.
"Assignee Rate" for any Fixed Period for any Purchaser
Receivable Interest means an interest rate per annum determined using the
applicable spread specified in the Fee Letter plus the Eurodollar Rate for such
Fixed Period; provided, however, that in the case of
(i) any Fixed Period beginning on or after the first
day of which a Purchaser or Bank shall have notified the Agent
that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or
any central bank or other governmental authority asserts that
it is unlawful, for such Purchaser or Bank to fund such
Purchaser Receivable Interest at the Assignee Rate set
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forth above (and such Purchaser or Bank shall not have subsequently
notified the Agent that such circumstances no longer exist),
(ii) any Fixed Period of one to (and including) 29 days,
(iii) any Fixed Period as to which the Agent does not receive
notice, by no later than 12:00 noon (New York City time) on the third
Business Day preceding the first day of such Fixed Period, that the
related Purchaser Receivable Interest will not be funded by issuance of
commercial paper, or
(iv) any Fixed Period for a Purchaser Receivable Interest the
Purchaser Capital of which is less than $500,000,
the "Assignee Rate" for each such Fixed Period shall be an interest rate per
annum equal to the Alternate Base Rate in effect on the first day of such Fixed
Period; provided further that the Agent and the Owner may agree in writing from
time to time upon a different "Assignee Rate".
"Assignment and Acceptance" means an assignment and acceptance
agreement entered into by a Bank, an Eligible Assignee and the Agent, pursuant
to which such Eligible Assignee may become a party to the Agreement, in
substantially the form of Annex H hereto.
"Average Principal Balance" shall mean, for a Due Period in
which an Addition Date or Removal Date occurs, the weighted average of (i) the
Outstanding Balance of all Pool Receivables at the end of the day on the last
day of the prior Due Period minus the total amount of Discount Option
Receivables (if any) on such last day and (ii) the Outstanding Balance of all
Pool Receivables at the end of the day on the related Addition Date or Removal
Date minus the total amount of Discount Option Receivables (if any) at the end
of the day on such Addition Date or Removal Date, weighted, respectively, by a
fraction, the numerator of which is the number of days from and including the
first day of such Due Period to but excluding the related Addition Date or
Removal Date, and the denominator of which is the number of days in such Due
Period, and by a fraction, the numerator of which is the number of days from and
including the related Addition Date or Removal Date to and including the last
day of such Due Period, and the denominator of which is the number of days in
such Due period.
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"Bank Commitment" of any Bank means, (a) with respect to
Citibank, $50,000,000 or such amount as reduced by any Assignment and Acceptance
entered into between Citibank and other Banks; (b) with respect to a Bank that
has entered into an Assignment and Acceptance, the amount set forth therein as
such Bank's Bank Commitment or such amount as reduced by an Assignment and
Acceptance entered into between such bank and an Eligible Assignee, in each case
as reduced (or terminated) pursuant to the next sentence. Any reduction (or
termination) of the Purchase Limit pursuant to the terms of the Agreement shall
reduce ratably (or terminate) each Bank's Bank Commitment.
"Banks" means Citibank and each Eligible Assignee that shall
become as party to the Agreement pursuant to Section 7.03(b).
"Business Day" means any day on which (i) banks are not
authorized or required to close in New York City, Philadelphia, Pennsylvania or
Milford, Ohio and (ii) if this definition of "Business Day" is utilized in
connection with the Eurodollar Rate, dealings are carried out in the London
interbank market.
"Cardholder Agreement" means the agreement (and the related
application) for any Account, as such agreement may be amended, modified or
otherwise changed from time to time in accordance with the terms thereof. The
"related Cardholder Agreement" means, when used with respect to any Receivable,
the Cardholder Agreement under which such Receivable arose.
"Cardholder Guidelines" means the Originator's policies and
procedures relating to the operation of its credit card business in effect on
the date of the Agreement, including, without limitation, the policies and
procedures for determining the creditworthiness of potential and existing credit
card customers, and relating to the maintenance of credit card accounts and
collection of credit card receivables, as such policies and procedures may be
amended from time to time in accordance with the Agreement.
"Charming Shoppes" means Charming Shoppes, Inc., a
Pennsylvania corporation.
"Citibank" means Citibank, N.A., a national banking
association.
"Collection" means any payment by or on behalf of Obligors
received by the Originator, the Seller, the Servicer or the Trustee in respect
of the Pool Receivables, in the form of cash, checks, wire transfers, electronic
transfers, ATM transfers
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or any other form of payment on any Pool Receivables, including, without
limitation, (x) all Recoveries, (y) all payments made with respect to Principal
Receivables by deposit into the Collection Account pursuant to Section 4.3(d) of
the Pooling and Servicing Agreement or Section 2.07(b) of the Agreement and (z)
payments by the Owner with respect to the reassignment of ineligible Receivables
or the reassignment of Receivables following the breach of certain
representations, made by deposit into the Collection Account pursuant to Section
2.4(d)(iii) or 2.4(e) of the Pooling and Servicing Agreement or pursuant to
Section 4.03(b) of the Agreement. The term "Collection" shall include Insurance
Proceeds generally, but shall exclude Insurance Proceeds and other amounts
constituting Recoveries of Pool Receivables to the extent the aggregate
Insurance Proceeds received in respect of the Pool Receivables during any Due
Period exceed the Loss Amount for such Due Period and any prior Due Periods. A
Collection processed on an Account in excess of the amount of Receivables in
such Account as of the date of receipt by the Originator, the Seller, the
Servicer or the Trustee of such Collection shall be deemed to be a payment in
respect of Principal Receivables to the extent of such excess. The term
"Collection" shall also include all benefits of the Owner or FSC under and all
monies due or to become due to the Owner or FSC under the Interest Rate
Agreements, and any such monies received shall be deemed a Collection of Finance
Charge Receivables and shall be considered a Collection with respect to Pool
Receivables. Notwithstanding any other provision of the Agreement to the
contrary, Collections constituting payments in respect of the Interest Rate
Agreements shall be allocated entirely to the Receivables Purchase Interest
under the Agreement, and Collections described in clauses (y) and (z) above (to
the extent allocable to the Receivables Purchase Series arising in connection
with the Agreement) shall be allocated entirely to the Receivables Purchase
Interest under the Agreement.
"Collection Account" means the segregated account established
by the Trustee pursuant to Section 4.2(a) of the Pooling and Servicing
Agreement.
"Commitment Termination Date" means the earliest of (a)
October 30, 1998, (b) the Facility Termination Date, (c) the date determined
pursuant to Section 3.02, and (d) the date the Purchase Limit
reduces to zero.
"Company" means each of FSC and Charming Shoppes.
"Company Agreement" means an agreement, dated as of the date
hereof, made by each of FSC and Charming Shoppes in favor of
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the Purchasers, the Banks and the Agent, in form and substance satisfactory to
the Agent, as the same may, from time to time, be amended, restated, modified or
supplemented.
"Congress Facility" means (i) the Amended and Restated Loan
and Security Agreement dated as of February 28, 1997 among Charming Shoppes,
certain subsidiaries of Charming Shoppes and Congress Financial Corporation, as
such agreement may be amended or modified and then in effect or (ii) if the
agreement described in clause (i) is no longer in effect, any other credit
agreement with Congress Financial Corporation executed by Charming Shoppes and
its subsidiaries in substitution for such agreement.
"CRC" means Corporate Receivables Corporation, a California
corporation, and any successor or assignee of CRC that is a receivables
investment company which in the ordinary course of its business issues
commercial paper or other securities to fund its acquisition and maintenance of
receivables.
"Credit Facility" means (i) the Congress Facility or (ii) any
other credit facility to which Charming Shoppes and/or its Affiliates are
parties.
"Cut Off Date" means the close of business of the Owner on
February 29, 1996, or, in the case of Additional Accounts, the applicable
Addition Cut Off Date.
"Cycle" means each billing cycle used by the Originator to
xxxx Obligors of the Receivables.
"Cycle Closing Date", in respect of any Account, means the
last day of each Cycle applicable to such Account.
"Defaulted Receivable" means a Principal Receivable:
(i) in respect of which the related Obligor has
failed to make the minimum monthly payment required under the
terms of the related Cardholder Agreement and such failure has
continued for 180 days or seven consecutive Cycles (whichever
is less) after the due date of such payment;
(ii) as to which the Obligor thereof or any other
Person obligated thereon has taken any action, or suffered any
event to occur, of the type described in paragraph (g) of
Exhibit VI; or
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(iii) which, consistent with the Cardholder
Guidelines, would be written off the Seller's books as
uncollectible.
"Delinquency Ratio" means the ratio (expressed as a
percentage) computed as of the last day of any Due Period by dividing (i) the
average of the aggregate Outstanding Balances of all Pool Receivables that were
Delinquent Receivables on such last day and on the last day of the two
immediately preceding Due Periods by (ii) the aggregate Outstanding Balance of
all Pool Receivables on such last day.
"Delinquent Receivable" means a Receivable that is not a
Defaulted Receivable and:
(i) in respect of which the related Obligor has
failed to make the minimum monthly payment required under the
terms of the related Cardholder Agreement and such failure has
continued for 90 days or four consecutive Cycles (whichever is
less) after the due date of such payment; or
(ii) which, consistent with the Cardholder
Guidelines, would be classified as delinquent by the Servicer.
"Depositary Agreement" means an agreement, in substantially
the form of Annex B, from the Seller to any Depositary Bank.
"Depositary Bank" means any of the banks holding one or more
Initial Depositary Accounts.
"Discount Option Receivable" has the meaning set forth in the
Pooling and Servicing Agreement.
"Distribution Date" means the fifteenth day of each month, or
if such day is not a Business Day, the next succeeding Business Day.
Notwithstanding the foregoing, in the event a Total Systems Failure exists on
any Distribution Date, the date of such Distribution Date shall mean the fourth
Business Day after the date on which the Seller or the Servicer delivers a
Servicer Report; provided, that in no event shall a Distribution Date be
postponed more than 10 Business Days due to a Total Systems Failure.
"Due Period" means, initially, the period from the close of
business on the Cut-Off Date to the close of business on the Last Cycle Closing
Date for the month of March 1996, and
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thereafter, the period from the close of business on the last day of the prior
Due Period to the close of business of the next Last Cycle Closing Date.
"Early Amortization Event" has the meaning set forth in
Exhibit VI.
"Effective Date" means November 25, 1997.
"Eligible Account" has the meaning set forth in Section 1.1 of
the Pooling and Servicing Agreement.
"Eligible Assignee" means CNAI, any of its Affiliates, any
Person managed by Citibank, CNAI or any of their Affiliates, or any financial or
other institution acceptable to the Agent.
"Eligible Institution" means any depository institution (which
may not be the Originator or its successors or assigns, or any affiliate of the
Originator, or its successors or assigns), organized under the laws of the
United States or any state, having capital and surplus in excess of $50,000,000,
the deposits of which are insured to the full extent permitted by law by the
Federal Deposit Insurance Corporation and which is subject to supervision and
examination by federal or state banking authorities; provided that such
institution also must have a rating of Baa or higher with respect to long-term
deposit obligations from Moody's and BBB or higher with respect to long-term
deposit obligations from S&P. If such depository institution publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
"Eligible Investments" means any "Permitted Investments" (as
defined in the Pooling and Servicing Agreement); provided, however, that
Eligible Investments shall not include any demand or time deposit or certificate
of deposit of the Originator.
"Eligible Receivable" has the meaning set forth in Section 1.1
of the Pooling and Servicing Agreement.
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"Eligible RPA Receivable" means, at any time, an Eligible
Receivable:
(i) the Obligor of which, at the time of the initial
creation of an interest therein under the Agreement, has not
failed to make, at the time of the sale of the goods or
services giving rise to such Receivable, at least the minimum
monthly payment required in order to entitle such Obligor to
further extensions of credit under the terms of the Cardholder
Guidelines;
(ii) the Obligor of which, at the time of the initial
creation of an interest therein under the Agreement, has not
failed to make any such required payments for any period of
two consecutive Cycles (including the Cycle ending on the most
recent Cycle Closing Date under the related Cardholder
Agreement to occur 10 Business Days or more prior to the date
of such creation); provided, however, that this clause (ii)
shall not apply to determine the eligibility of a Receivable
on the date of its purchase under the Agreement;
(iii) [Intentionally omitted]
(iv) which is a "general intangible" or an "account"
within the meaning of Section 9-106 of the UCC of each
jurisdiction whose law governs the perfection of the interest
created by a Purchaser Receivable Interest;
(v) which is (A) denominated and payable only in
United States dollars in the United States, and (B) required
to be paid either by means of a check sent to the Initial
Depositary Account or, until the date on which the Store
Payment Notice is delivered to the Store managers pursuant to
paragraph 2(b)(ii) of Exhibit V to the Agreement, by means of
a Store Payment;
(vi) which:
(A) arises under a Cardholder Agreement
which, together with such Receivable, is in full
force and effect and constitutes the legal, valid and
binding obligation of the Obligor of such Receivable,
except as such enforceability may be limited by any
applicable bankruptcy, insolvency,
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reorganization, moratorium or similar law affecting creditors' rights generally
or by general principles of equity (whether considered in a proceeding in equity
or at law),
(B) arises under a Cardholder Agreement the terms of which require
minimum monthly payments such that such Receivable is scheduled to be paid in
full within 5 years from the date of its creation,
(C) arises from a Cardholder Agreement and either (x) has been billed
to the related Obligor on such Obligor's Statement in accordance with the terms
of such Cardholder Agreement, or (y) will be billed to the related Obligor on
such Obligor's Statement rendered no later than the third Cycle Closing Date
after such Receivable is incurred in accordance with the terms of such
Cardholder Agreement; provided, however, that an Eligible Receivable satisfying
the requirements of this clause (y) and all other requirements of this
definition of "Eligible RPA Receivable" (but not satisfying the preceding clause
(x)) shall be considered an Eligible RPA Receivable only to the extent that the
Outstanding Balance thereof at the time of the initial creation of an interest
therein under the Agreement, when aggregated with the Outstanding Balance of all
other Eligible Receivables satisfying the requirements of the preceding clause
(y) and all other requirements of this definition of "Eligible RPA Receivable"
(but not satisfying the preceding clause (x)), does not exceed 10% of the then
Outstanding Balance of all Eligible Receivables,
(D) is not subject to any dispute, offset, counterclaim or defense
whatsoever (except the potential discharge in bankruptcy of such Obligor),
(E) has not been purchased by the Owner pursuant to Section 2.4(d)(iii)
or 2.4(e) of the Pooling and Servicing Agreement,
(F) at the time of the initial creation of an interest therein under
the Agreement is not a Defaulted Receivable,
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(G) does not arise under an Account which the Owner
has classified on its electronic records as counterfeit,
cancelled or fraudulent, or which has been identified as an
Account with respect to which the related card has been lost
or stolen, and
(H) has not otherwise been charged off as
uncollectible pursuant to the Cardholder Guidelines;
(vii) which, together with the Cardholder Agreement related
thereto, does not contravene in any material respect any local, state
or federal laws, rules or regulations applicable thereto (including,
without limitation, Regulation Z of the Board of Governors of the
Federal Reserve System, the Federal Consumer Protection Act (including,
without limitation, the Federal Truth in Lending Act), the Fair Credit
Billing Act, and all other laws, rules and regulations relating to
usury, consumer protection, truth in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no party to the
Cardholder Agreement related thereto is in violation of any such law,
rule or regulation in any material respect;
(viii) which satisfies all applicable requirements of the
Cardholder Guidelines;
(ix) which was not originated in or subject to the laws of a
jurisdiction whose laws would make such Receivable, the related
Cardholder Agreement or the sale of such Receivable to a Purchaser or a
Bank under the Agreement unlawful, invalid or unenforceable; and
(x) which is owned solely by the Seller free and clear of all
Adverse Claims, except for (1) the interests created therein pursuant
to the Pooling and Servicing Agreement (which interests are pari passu
with the Purchasers' and the Banks' interests therein), and (2) the
interests therein created under the Agreement.
"Escrow Bank" means the Eligible Institution then holding the CO Escrow
Account pursuant to Section 7.16 of the Agreement.
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"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Rate" means, for any Fixed Period, an interest
rate per annum equal to the rate per annum at which deposits in U.S. dollars are
offered by the principal office of Citibank in London, England to prime banks in
the London interbank market at 11:00 A.M. (London time) two Business Days before
the first day of such Fixed Period in an amount substantially equal to the
Purchaser Capital associated with such Fixed Period on such first day and for a
period equal to such Fixed Period.
"Eurodollar Rate Reserve Percentage" of any Purchaser or Bank
for any Fixed Period in respect of which Yield is computed by reference to the
Eurodollar Rate means the reserve percentage applicable two Business Days before
the first day of such Fixed Period under regulations issued from time to time by
the Board of Governors of the Federal Reserve System (or any successor) (or if
more than one such percentage shall be applicable, the daily average of such
percentages for those days in such Fixed Period during which any such percentage
shall be so applicable) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Purchaser or Bank with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to which
the interest rate on Eurocurrency Liabilities is determined) having a term equal
to such Fixed Period.
"Excess Finance Charge Collections" has the meaning set forth
in Section 2.04 of the Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Facility Termination Date" means the earliest of (i) October
30, 1998 (or such later date as the Seller, the Subordinated Purchaser, the
Owner, the Originator, the Servicer and the Agent may mutually agree in
writing), (ii) the date determined pursuant to Section 3.02 and (iii) the date
the Purchase Limit reduces to zero pursuant to Section 1.01(c).
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight
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Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by it.
"Fee Letter" has the meaning set forth in Section 1.03 of the
Agreement.
"Final Distribution Date" means the date on which (i) the
Purchaser Capital of all Purchaser Receivable Interests and Yield thereon have
been paid in full, (ii) all other amounts payable hereunder to the Purchasers,
the Banks or the Agent with respect thereto are paid in full, (iii) the
Subordinated Purchaser Capital of all Subordinated Receivable Interests have
been paid in full, and (iv) the aggregate amount of all unreimbursed Purchaser
Charge-Offs with respect thereto have been reimbursed; provided, that the Final
Distribution Date shall in any event occur one year after all amounts payable
pursuant to clauses (i), (ii) and (iii) above have been paid in full even if all
unreimbursed Purchaser Charge-Offs with respect thereto have not been
reimbursed; this is the "Series Termination Date" referred to in the Pooling and
Servicing Agreement.
"Finance Charge Receivables" means (i) all amounts billed to
the Obligors on any Account in the ordinary course of the Originator's business
in respect of (a) periodic rate finance charges, (b) late payment fees, (c)
annual fees, if any, with respect to the Accounts (excluding any fees payable
with respect to the "Fashion Bug Gold Club" which fees shall be deemed to be
Principal Receivables), (d) returned check charges, and (e) any other fees with
respect to the Accounts designated by the Seller by notice to the Trustee and
the Agent at any time and from time to time to be included as Finance Charge
Receivables and (ii) all amounts paid to the Originator in respect of Allocated
Interchange. Notwithstanding their treatment under the Pooling and Servicing
Agreement, Discount Option Receivables, shall, for the purposes of the
Agreement, be treated as Principal Receivables and not as Finance Charge
Receivables, except as otherwise expressly provided in the Agreement.
"Fixed Allocation Percentage" means, for each Due Period with
respect to the Amortization Period, the ratio (expressed as a percentage) (which
shall not be in excess of 100%) computed as at the close of business of the
Agent on the Business Day immediately preceding the Termination Date, by
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dividing (a) the sum of the Purchaser Capital and the Subordinated Purchaser
Capital on such Business Day by (b) the product of (i) the Allocation Percentage
for such Due Period and (ii) the total amount of Principal Receivables on the
last day of the immediately preceding Due Period minus the total amount of
Discount Option Receivables (if any) on such last day.
"Fixed Period" means, with respect to any Purchaser Receivable
Interest which is not funded through the issuance of commercial paper:
(a) initially the period commencing on the date on
which such Purchaser Receivable Interest is first funded other
than by the issuance of commercial paper and ending such
number of days as the Servicer shall select and the Agent
shall approve pursuant to the proviso below; and
(b) thereafter each period commencing on the last day
of the immediately preceding Fixed Period for such Purchaser
Receivable Interest and ending such number of days as the
Servicer shall select and the Agent shall approve pursuant to
the proviso below;
provided, that
(i) such Fixed Period shall be a period from one to
and including 29 days, or a period of one, two or three
months, as the Servicer may select and the agent shall approve
on notice received by the Agent (including notice by
telephone, confirmed in writing) not later than 11:00 A.M. on
(A) the third Business Day before the first day of such Fixed
Period (in the case of Fixed Periods of one, two or three
months) or (B) the first day of such Fixed Period (in the case
of Fixed Periods of one to 29 days);
(ii) any Fixed Period (other than of one day) which
would otherwise end on a day which is not a Business Day shall
be extended to the next succeeding Business Day (provided,
however, if Yield in respect of such Fixed Period is computed
by reference to the Eurodollar Rate, and such Fixed Period
would otherwise end on a day which is not a Business Day, and
there is no subsequent Business Day in the same calendar month
as such day, such Fixed Period shall end on the next preceding
Business Day);
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(iii) in the case of any Fixed Period of one day, (A)
if such Fixed Period is the initial Fixed Period for a
Purchaser Receivable Interest, such Fixed Period shall be the
day of purchase of such Purchaser Receivable Interest; (B) any
subsequently occurring Fixed Period which is one day shall, if
the immediately preceding Fixed Period is more than one day,
be the last day of such immediately preceding Fixed Period,
and, if the immediately preceding Fixed Period is one day, be
the day next following such immediately preceding Fixed
Period; and (C) if such Fixed Period occurs on a day
immediately preceding a day which is not a Business Day, such
Fixed Period shall be extended to the next succeeding Business
Day; and
(iv) in the case of any Fixed Period for any
Purchaser Receivable Interest which commences before the
Termination Date for such Purchaser Receivable Interest and
would otherwise end on a date occurring after such Termination
Date, such Fixed Period shall end on such Termination Date and
the duration of each Fixed Period which commences on or after
the Termination Date for such Purchaser Receivable Interest
shall be of such duration as shall be selected by the Agent.
"Floating Allocation Percentage" means, for each Due Period,
the ratio (expressed as a percentage) (which shall not be in excess of 100%)
computed as of the last day of the immediately preceding Due Period by dividing
(a) the sum of the Purchaser Capital and the Subordinated Purchaser Capital as
of such last day by (b) the product of (i) the Allocation Percentage for such
Due Period and (ii) the total amount of Principal Receivables on such last day
minus the total amount of Discount Option Receivables (if any) on such day;
provided, however, that during the initial Due Period, the Floating Allocation
Percentage will be equal to the ratio (expressed as a percentage) computed by
dividing (x) the sum of the initial Purchaser Capital and the initial
Subordinated Purchaser Capital by (y) the product of (i) the Allocation
Percentage for such initial Due Period and (ii) the total amount of Principal
Receivables on the initial Cut-Off Date.
"FSC" means Fashion Service Corp., a Delaware corporation.
"Funding Rate" for any Settlement Period means (a) the rate
per annum equivalent to the weighted average of the per annum rates paid or
payable by CRC from time to time as interest
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on, or otherwise (by means of interest rate xxxxxx or otherwise) in respect of,
that commercial paper issued by CRC and which is allocated, in whole or in part,
by the Agent (on behalf of CRC) to fund its purchase or maintenance of such
Purchaser Receivable Interest during such Settlement Period, as determined by
the Agent (on behalf of CRC) and reported to the Owner and the Servicer, which
rates shall reflect and give effect to the commissions of placement agents and
dealers in respect of such commercial paper, to the extent such commissions are
allocated, in whole or in part, to such commercial paper by the Agent (on behalf
of CRC); provided, however, that if any component of such rate is a discount
rate, in calculating the "Funding Rate" for such Settlement Period, the Agent
shall for such component use the rate resulting from converting such discount
rate to an interest bearing equivalent rate per annum; provided further, that if
the Agent so requests and the Servicer consents thereto, the "Funding Rate" for
any Settlement Period of one day shall be the Assignee Rate for such period or
(b) such other rate as the Agent and the Servicer shall agree to in writing.
"GAAP" means generally accepted accounting principles in the
United States of America, applied on a consistent basis and applied to both
classification of items and amounts, and shall include but not be limited to the
official interpretations thereof by the Financial Accounting Standards Board,
its predecessors and successors.
"Holder of the Exchangeable Seller Certificate" shall have the
meaning ascribed to that term in the Pooling and Servicing Agreement.
"Initial Depositary Account" means the "Initial Depositary
Account" under the Pooling and Servicing Agreement.
"Insurance Proceeds" means any amounts received pursuant to
any credit life insurance policies, credit disability or unemployment insurance
policies covering any Obligor with respect to Pool Receivables under such
Obligor's Account to the extent such amounts are used to make payments on such
Account.
"Interest Rate Agreements" mean one or more interest rate cap
or interest rate swap agreements which shall (i) in the case of a cap agreement,
provide for payments to the Owner or FSC or the Seller in the event the Funding
Rate shall exceed 9.0% per annum, (ii) in the case of a swap agreement, provide
for payments to the Owner or FSC at the Funding Rate in exchange for payments by
the Owner or FSC at a fixed interest rate not in excess of 9.0% per annum, (iii)
cover in the aggregate (x) a notional balance of at least $50,000,000 through
the Facility Termination
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Date, which notional balance shall either (A) remain at least at $50,000,000
during the ten months immediately following the Facility Termination Date or (B)
amortize on a straight-line basis to zero over not less than 10 months
immediately following the Facility Termination Date and (iv) be with such
counter-parties and contain such other terms and provisions as shall be
satisfactory to the Agent. The Interest Rate Agreements, which are limited to
those agreements specified in the Owner's officer's certificate in the form of
Annex G delivered from time to time in accordance with the Agreement, are the
"Enhancement" referred to in the Pooling and Servicing Agreement for the
Receivables Purchase Series arising in connection with the Agreement.
"Investor Certificate" has the meaning set forth in Section
1.1 of the Pooling and Servicing Agreement.
"Last Cycle Closing Date" means, for any month, the
latest-occurring Cycle Closing Date for all Cardholder Agreements in such month.
"Liquidation Fee" means, for the Settlement Period or Fixed
Period during which the Termination Date occurs, the amount, if any, by which
(i) the additional Yield (calculated without taking into account any Liquidation
Fee or any shortened duration of such Settlement Period or Fixed Period due to
the occurrence of the Termination Date) which would have accrued during such
Settlement Period or Fixed Period on the reductions of Purchaser Capital of the
Purchaser Receivable Interests had such reductions remained as Purchaser
Capital, exceeds (ii) the income, if any, received by the Purchasers' investing
the proceeds of such reductions of Purchaser Capital.
"Loss Amount" for any Due Period means an amount (which shall
not be less than zero) equal to (a) the principal balance of any Account, or any
portion thereof, that has been written off or, consistent with the Cardholder
Guidelines, should have been written off the Originator's books as uncollectible
during such Due Period, minus (b) the amount of Recoveries received in such Due
Period with respect to Pool Receivables previously charged off as uncollectible.
"Majority Banks" means at any time Banks holding Purchaser
Receivable Interests having Purchaser Capital equal to more than 66- % of the
aggregate outstanding Purchaser Capital of all Purchaser Receivable Interests
owned by the Banks or, if no such Purchaser Capital is then outstanding, Banks
having more than 66- % of the Purchase Limit.
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"Market" means (i) an "established securities market" within
the meaning of Section 7704(b)(1) of the Internal Revenue Code and any proposed,
temporary or final treasury regulation thereunder, including, without
limitation, an over-the-counter market or an interdealer quotation system that
regularly disseminates firm buy or sell quotations or (ii) a "secondary market"
or "substantial equivalent thereof" within the meaning of Section 7704(b)(2) of
the Internal Revenue Code and any proposed, temporary or final treasury
regulation thereunder, including a market wherein interests in the Trust are
regularly quoted by any Person making a market in such interests and a market
wherein any Person regularly makes available bid or offer quotes with respect to
interests in the Trust and stands ready to effect buy or sell transactions at
the quoted prices for itself or on behalf of others.
"Master Trust Documents" means the Pooling and Servicing
Agreement, the Purchase Agreement, the Security Agreement and each other
agreement, instrument or other document (other than any "supplement" or
"receivables purchase agreement" (in each case, as defined therein)) delivered
in connection with the Pooling and Servicing Agreement, in each case as the same
may be amended, modified or supplemented in accordance with the terms thereof.
"Minimum Seller Capital" means, on any date of determination,
an aggregate Outstanding Balance of Principal Receivables that are Eligible
Receivables in the Receivables Pool on such date of determination equal to (i)
during the Revolving Period and during the Amortization Period (but only so long
during the Amortization Period as neither the Facility Termination Date nor the
Commitment Termination Date has occurred and the Seller has not designated the
Termination Date), the product of (a) 2.0% and (b) the amount of the Purchaser
Capital on such date of determination and (ii) during the Amortization Period
(and following the occurrence of the Facility Termination Date or the Commitment
Termination Date or the designation of the Termination Date by the Seller), an
amount equal to (a) 102% of the amount of the Purchaser Capital at the close of
business of the Agent on the Business Day (the "MSC Fix Date") immediately
preceding the earliest to occur of the Facility Termination Date, the Commitment
Termination Date and the designation of the Termination Date by the Seller,
minus (b) the sum of (1) the amount of the Purchaser Capital on such date of
determination and (2) the aggregate reductions, if any, in the amount of
Subordinated Purchaser Capital from the MSC Fix Date to such date of
determination.
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"Minimum Seller Interest" means, on any date of determination,
an aggregate Outstanding Balance of Principal Receivables that are Eligible
Receivables in the Receivables Pool on such date of determination equal to (i)
during the Revolving Period, the product of (a) 2.0% and (b) the amount of the
Purchaser Capital on such date of determination and (ii) during the Amortization
Period, an amount equal to the product of (a) 2.0% and (b) the amount of the
Purchaser Capital at the close of business of the Agent on the Business Day
immediately preceding the Termination Date.
"Monthly Charge-Off Ratio" for any Due Period means the ratio
(expressed as a percentage) computed as of the last day of such Due Period by
dividing (i) an amount equal to twelve times the remainder of (x) the aggregate
Outstanding Balance of all Pool Receivables written off the Seller's books, or
which should have been written off the Seller's books during such Due Period
minus (y) the aggregate amount of Collections of Principal Receivables in the
Receivables Pool actually received during such Due Period in respect of Pool
Receivables that had been written off the Seller's books during a prior Due
Period by (ii) the Outstanding Balance of the Receivables in the Receivables
Pool as of the first day of such Due Period.
"Moody's" means Xxxxx'x Investors Service, Inc. or any
successor thereto.
"Net Excess Spread" means, as of the last day of each Due
Period, the Portfolio Yield for such Due Period minus the sum of (A) the
weighted average Yield Rate for such Due Period, (B) the Servicer Fee Rate for
such Due Period, (C) the fees payable under the Fee Letter for such Due Period
(each expressed as a percentage rate per annum) and (D) the Monthly Charge-Off
Ratio for such Due Period.
"Net Receivables Pool Balance" means, at any time, the
Outstanding Balance of all Eligible Receivables then in the Receivables Pool.
For the purpose of this definition, if any Receivable in any Account shall
constitute a Defaulted Receivable, the Outstanding Balance of all Receivables in
the same Account shall be deemed to be zero.
"Obligor" means, with respect to any Account, the Person or
Persons obligated to make payments with respect to such Account pursuant to a
Cardholder Agreement, including any guarantor thereof.
"Opinion of Counsel" has the meaning set forth in Section 1.1
of the Pooling and Servicing Agreement.
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"Original Agreements" has the meaning set forth in the third
Preliminary Statement to the Agreement.
"Original PPC" has the meaning set forth in the third
Preliminary Statement to the Agreement.
"Original RPA" has the meaning set forth in the second
Preliminary Statement to the Agreement.
"Originator" means Spirit of America National Bank in its
capacity as the originator of the Receivables prior to the sale thereof to the
Owner pursuant to the Purchase Agreement.
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof.
"Owner" means Charming Shoppes Receivables Corp. in its
capacity as the seller of Receivables to the Seller pursuant to the Pooling and
Servicing Agreement.
"Payment Ratio" means the ratio (expressed as a percentage)
computed as of the last day of any Due Period by dividing (i) the aggregate
Collections received during such Due Period (excluding Collections constituting
payments in respect of the Interest Rate Agreements) by (ii) the aggregate
Outstanding Balance of all Pool Receivables at the close of business of the Due
Period immediately preceding such Due Period.
"Percentage" of any Bank means, (a) with respect to Citibank,
the percentage set forth on the signature page to the Agreement, or such amount
as reduced by any Assignment and Acceptance entered into with an Eligible
Assignee, or (b) with respect to a Bank that has entered into an Assignment and
Acceptance, the amount set forth therein as such Bank's Percentage, or such
amount as reduced by an Assignment and Acceptance entered into between such Bank
and an Eligible Assignee.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity, or a
government or any political subdivision or agency thereof.
"Pool Index File" means the file on the Originator's computer
system that identifies revolving credit card accounts of the Originator, which
file is designated by the Originator as its "Pool Index File".
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"Pool Receivables" means all Receivables existing on the
initial Cut-Off Date and all Receivables arising in the Accounts from time to
time after the applicable Cut Off Date until the Final Distribution Date.
"Pooling and Servicing Agreement" means the Second Amended and
Restated Pooling and Servicing Agreement dated as of November 25, 1997 among the
Owner, as the seller, Spirit, as the Servicer, and First Union National Bank, as
the Trustee, as the same may from time to time be amended, restated, modified or
supplemented.
"Portfolio Yield" means, with respect to any Due Period, the
annualized percentage equivalent to the amount computed as of the last day of
such Due Period by dividing (i) the amount of Collections of Finance Charge
Receivables during such Due Period calculated on a cash basis by (ii) the total
amount of the Principal Receivables in the Receivables Pool as of the first day
of such Due Period.
"Principal Receivables" means (a) all amounts (other than
amounts which represent Finance Charge Receivables) billed to the Obligor on any
Account, including, without limitation, amounts billed in the ordinary course of
the Originator's business in respect of purchases of merchandise or services or
credit insurance premiums and (b) all other fees (other than Finance Charge
Receivables) billed to Obligors on the Accounts. Notwithstanding their treatment
under the Pooling and Servicing Agreement, Discount Option Receivables, shall,
for the purposes of the Agreement, be treated as Principal Receivables and not
as Finance Charge Receivables, except as otherwise expressly provided in the
Agreement.
"Prior PSA" means the Amended and Restated Pooling and
Servicing Agreement dated as of December 24, 1992 as amended and restated as of
May 4, 1994, and as amended by Amendment No. 1 dated as of December 22, 1995 and
Amendment No. 2 dated as of March 22, 1996, among Spirit, as the seller and the
Servicer and First Union National Bank, as the Trustee.
"Private Holder" means each holder of a right to receive
interest or principal in respect of any direct or indirect interest in the
Trust, including any financial instrument or contract the value of which is
determined in whole or part by reference to the Trust (including the Trust's
assets, income of the Trust or distributions made by the Trust), excluding any
interest in the Trust represented by any Series, Class of Certificates,
Receivables Purchase Interest (as defined
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in the Pooling and Servicing Agreement) or any other interests as to which the
Trustee has received an Opinion of Counsel to the effect that such Series,
Class, Receivables Purchase Interest or other interest will be treated as debt
or otherwise not as an equity interest in either the Trust or the Receivables
for federal income tax purposes (unless such interest is convertible or
exchangeable into an interest in the Trust or the Trust's income or such
interest provides for payment of equivalent value). Notwithstanding the
immediately preceding sentence, "Private Holder" shall also include any other
Person that the Seller determines is a "partner" within the meaning of Section
1.7704-1(h)(1)(ii) of the U.S. Treasury Regulations (including by reason of
Section 1.7704-1(h)(3) or any successor provision of law. Any Person holding
more than one interest in the Trust, each of which separately would cause such
Person to be a Private Holder, shall be treated as a single Private Holder. Each
holder of an interest in a Private Holder which is a partnership, S corporation
or a grantor trust under the Internal Revenue Code shall be treated as a Private
Holder unless excepted with the consent of the Seller (which consent shall be
based on an Opinion of Counsel generally to the effect that the action taken
pursuant to the consent will not cause the Trust to become a publicly traded
partnership treated as a corporation). Notwithstanding anything to the contrary
herein, each Person designated as a "Private Holder" in any Supplement or
Receivables Purchase Agreement as defined in the Pooling and Servicing Agreement
shall be considered to be a Private Holder.
"Purchase Agreement" means that certain Purchase and Sale
Agreement, dated as of November 25, 1997, between Spirit of America National
Bank, as seller and Charming Shoppes Receivables Corp., as purchaser, as the
same may, from time to time, be amended, restated, modified or supplemented.
"Purchase Limit" means $50,000,000, as such amount may be
reduced pursuant to Section 1.01(c) of the Agreement.
"Purchaser" means CRC and all other owners by assignment or
otherwise (other than the Banks) of a Purchaser Receivable Interest and, to the
extent of the undivided interests so purchased, shall include any participants.
"Purchaser Capital" for any date means an amount equal to (a)
the aggregate initial Purchaser Capital of all Purchaser Receivable Interests
purchased by the Purchasers or the Banks under the Agreement prior to such date
(including pursuant to reinvestments under Section 2.06(a) of the Agreement)
minus (b) the amount of distributions on account of Purchaser Capital made to
the Purchasers and the Banks prior to such date and minus
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(c) the excess, if any, of the aggregate amount of Purchaser Charge-Offs for all
Distribution Dates preceding such date over the aggregate amount of Purchaser
Charge-Offs reimbursed prior to such date; provided, however, that if Purchaser
Capital shall have been reduced by any distribution and thereafter all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason, such Purchaser Capital shall be increased by the amount of such
rescinded or returned distribution, as though it had not been made.
"Purchaser Charge-Off" means any amount designated as such in
Section 2.05(d) or 2.07(a) of the Agreement.
"Purchaser Loss Amount" means, with respect to any
Distribution Date, the product of (a) the Floating Allocation Percentage of the
Allocated Loss Amount for the preceding Due Period and (b) the Purchaser
Percentage.
"Purchaser Percentage" means, with respect to any Distribution
Date, a fraction, the numerator of which is equal to the Purchaser Capital as of
the close of business on the last day of the second preceding Due Period and the
denominator of which is equal to the sum of the Purchaser Capital and the
Subordinated Purchaser Capital as of the close of business on such day.
"Purchaser Principal Collections" has the meaning set forth in
Section 2.06(b) of the Agreement.
"Purchaser Receivable Interest" means, at any time, the
undivided percentage ownership interests purchased by CRC, the Banks or their
respective successors and assigns, under the Agreement, which shall represent an
undivided percentage ownership interest in all outstanding Pool Receivables then
existing or thereafter arising and all Collections with respect to, and other
proceeds of, such Pool Receivables (including, without limitation, Insurance
Proceeds and other amounts constituting Recoveries of Pool Receivables and
payments in respect of the Interest Rate Agreements).
"Purchaser Representative" means, initially, CNAI, as the
Purchaser Representative pursuant to Section 6.01 of the Agreement, and each
other Person who shall succeed to the functions of CNAI as the Purchaser
Representative pursuant to Section 6.01(c) of the Agreement.
"Purchaser Servicer Fee", with respect to any Distribution
Date, means an amount equal to one-twelfth of the product of (a) the Servicing
Fee Rate and (b) the Purchaser
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Capital as of the last day of the Due Period second preceding such Distribution
Date.
"Quarterly Charge-Off Ratio" as of the last day of any Due
Period means the ratio (expressed as a percentage) computed by averaging the
Monthly Charge-Off Ratio for such Due Period with the two immediately preceding
Monthly Charge-Off Ratios.
"Receivable" means Principal Receivables and Finance Charge
Receivables.
"Receivable Interest" has the meaning set forth in the eighth
Preliminary Statement to the Agreement.
"Receivables Pool" means at any time the aggregation of each
then outstanding Pool Receivable.
"Receivables Purchase Interest" and "Receivables Purchase
Series Interest" mean, collectively, the Purchaser Receivable Interests and the
Subordinated Receivable Interests.
"Receivables Purchase Series" has the meaning attributed
thereto in the Pooling and Servicing Agreement.
"Receivables Purchaser" has the meaning attributed thereto in
the Pooling and Servicing Agreement.
"Records" means correspondence, memoranda, computer programs,
tapes, discs, papers, books or other documents or transcribed information of any
type whether expressed in ordinary or machine readable language.
"Recoveries" means all amounts received (net of out-of-pocket
costs of collection) with respect to Pool Receivables which were previously
charged off as uncollectible and all Insurance Proceeds.
"Register" has the meaning set forth in Section 7.03(b)(iii).
"Removal Date" has the meaning set forth in Section 1.1 of the
Pooling and Servicing Agreement.
"Removed Accounts" means Accounts designated by the Owner for
deletion and removal from the Trust for purposes of the Pooling and Servicing
Agreement pursuant to Section 2.7 thereof.
"Renumbered Account" means an Account with respect to which a
new credit account number has been issued by the Servicer
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or the Originator under circumstances resulting from a lost or stolen credit
card, from the transfer from one group to another group, from the transfer from
one Obligor to another Obligor or from the addition of any Obligor and not
requiring standard application and credit evaluation procedures under the
Cardholder Guidelines; and which in any case can be traced or identified by
reference to or by way of the computer files or microfiche or written lists
delivered to the Trustee pursuant to Section 2.1, 2.6(d)(ii) or 2.7(b)(ii)(B) of
the Pooling and Servicing Agreement as an Account which has been renumbered.
"Required Amount" has the meaning set forth in Section 2.05(a)
of the Agreement.
"Requirements of Law" means any law, treaty, rule or
regulation, or determination of an arbitrator or of the United States of
America, any state or other political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, whether federal, state or local
(including any usury law, the Federal Truth-in-Lending Act and Regulation Z of
the Board of Governors of the Federal Reserve System), and, when used with
respect to any Person, the certificate of incorporation and by-laws or other
charter or other governing documents of such Person.
"Responsible Officer" of the Seller, the Owner, the
Originator, the Servicer, FSC or Charming Shoppes, as the case may be, means the
chief executive officer, chief financial officer or controller thereof, and in
addition, with respect to FSC, any Vice President.
"Revolving Period" means the period beginning on the date of
the Agreement and ending at the close of business of the Agent on the Business
Day immediately preceding the Termination Date.
"S&P" means Standard & Poor's Corporation or any successor
thereto.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means that certain Security Agreement,
dated as of November 25, 1997, between Spirit of America National Bank and First
Union National Bank, as trustee, as the same may, from time to time, be amended,
restated, modified or supplemented.
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"Seller Account" means, initially, the account (account number
033009128001) of the Seller maintained at the office of the Trustee located at
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxxx, Pennsylvania, or, upon 10 Business Days'
written notice from the Seller to the Agent, any other account established by
the Seller with a financial institution in New York, New York or Philadelphia,
Pennsylvania for the purpose of receiving amounts allocated and distributed by
the Servicer in respect of the Seller Interest.
"Seller Interest" has the meaning set forth in Section 1.1 of
the Pooling and Servicing Agreement.
"Series" has the meaning set forth in Section 1.1 of the
Pooling and Servicing Agreement.
"Servicer" means at any time the Person then authorized
pursuant to the Agreement and the Pooling and Servicing Agreement to administer
and collect Pool Receivables.
"Servicer Fee" has the meaning set forth in Section 5.03 of
the Agreement; this is the "Receivables Purchaser Monthly Servicing Fee"
referred to in the Pooling and Servicing Agreement.
"Servicer Report" means a report, in substantially the form of
Annex A hereto, furnished by the Servicer to the Agent pursuant to paragraph
1(f) of Exhibit V.
"Servicing Fee Rate" has the meaning set forth in Section 5.03
of the Agreement; this is the "Series Servicing Fee Percentage" referred to in
the Pooling and Servicing Agreement.
"Settlement Period" means (a) initially, the period from and
including the date of the Agreement to but excluding the next following
Distribution Date and (b) thereafter, the period from and including a
Distribution Date to but excluding the next following Distribution Date.
"Statement" means, in respect of any Cardholder Agreement, the
periodic written notice to the related Obligor setting forth the previous
balance, payments and credits, finance charge, charges (including sales and
other charges), new balance, and minimum payment.
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"Store" means:
(i) each retail location of the Originator or any
Affiliate of the Originator that is part of the "Fashion Bug"
or "Fashion Bug Plus" chain of women's retail apparel stores,
(ii) each other retail location of a chain of women's
retail apparel stores established de novo by the Originator or
any Affiliate of the Originator the primary business of which
is the retail sale of moderately priced women's apparel, and
(iii) any other retail location the primary business
of which is the retail sale of moderately priced women's
apparel that is consented to by the Agent.
"Store Account" means each account established by a Store for
the purpose of collecting Store Payments.
"Store Payment" means any payment by an Obligor of a Pool
Receivable made by means of cash or a check delivered in person by or on behalf
of such Obligor at any Store.
"Store Payment Notice" has the meaning set forth in paragraph
1(b)(xxi) of Exhibit II to the Agreement.
"Subject Instrument" means any Certificate or Receivables
Purchase Interest (as defined in the Pooling and Servicing Agreement) issued by
the Trust with respect to which the Seller shall not have received an Opinion of
Counsel to the effect that such Certificate or Receivables Purchase Interest
will be treated as debt for Federal income tax purposes.
"Subordinated Principal Collections" means, with respect to
each Distribution Date, (a) the product of (1) the Floating Allocation
Percentage, with respect to the Revolving Period, or the Fixed Allocation
Percentage, with respect to the Amortization Period, of Allocable Principal
Collections for the related Due Period (or any partial Due Period which occurs
as the first Due Period during the Amortization Period) and (2) the Subordinated
Purchaser Percentage for such Distribution Date, minus (b) the aggregate amount
(if any) of Total Principal Collections reinvested with the Seller on behalf of
the Subordinated Purchaser during such Due Period pursuant to Section 2.06(a) of
the Agreement; provided, that in no event shall Subordinated Principal
Collections be less than zero.
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"Subordinated Purchaser Account" means the special account
(account number 033009128002) of the Subordinated Purchaser maintained at First
Union National Bank, or, upon 10 Business Days' written notice from the
Subordinated Purchaser to the Agent, any other account established by the
Subordinated Purchaser with a financial institution in New York, New York or
Philadelphia, Pennsylvania for the purpose of receiving amounts allocated and
distributed by the Servicer in respect of the Subordinated Receivable Interest.
"Subordinated Purchaser Capital" for any date means an amount
equal to (a) the aggregate initial Subordinated Purchaser Capital of all
Subordinated Receivable Interests conveyed and allocated to the Subordinated
Purchaser under the Agreement prior to such date (including pursuant to
reinvestments under Section 2.06(a) of the Agreement), minus (b) the amount of
Total Principal Collections allocated to the Subordinated Purchaser on account
of Subordinated Purchaser Capital which are, prior to such date, distributed to
the Subordinated Purchaser pursuant to Section 2.06(a) of the Agreement, minus
(c) an amount equal to the aggregate amount by which the Subordinated Purchaser
Capital has been reduced as a result of Subordinated Principal Collections for
prior Distribution Dates having been used to fund the Required Amount with
respect to such Distribution Dates pursuant to Section 2.05(c) of the Agreement,
minus (d) an amount equal to the aggregate amount by which the Subordinated
Purchaser Capital has been reduced to fund the Purchaser Loss Amount on all
prior Distribution Dates pursuant to Section 2.05(d) of the Agreement, minus (e)
an amount equal to the aggregate amount by which Subordinated Purchaser Capital
has been reduced on all prior Distribution Dates pursuant to Section 2.07(a) of
the Agreement, and plus (f) the aggregate amount of Excess Finance Charge
Collections applied on all prior Distribution Dates for the purposes of
reimbursing amounts deducted pursuant to the foregoing clauses (c), (d) and (e).
"Subordinated Purchaser Loss Amount" means, with respect to
any Distribution Date, the product of (a) the Floating Allocation Percentage of
the Allocated Loss Amount for the preceding Due Period and (b) the Subordinated
Purchaser Percentage as of such Distribution Date.
"Subordinated Purchaser Percentage" means, with respect to any
Distribution Date, a fraction, the numerator of which is equal to the
Subordinated Purchaser Capital as of the close of business on the last day of
the second preceding Due Period and the denominator of which is equal to the sum
of the Purchaser Capital and the Subordinated Purchaser Capital at the close of
business on such day.
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"Subordinated Purchaser Rate" means, for any period, a per
annum rate equal to the Yield Rate for such period plus 0.25%.
"Subordinated Purchaser Servicer Fee", with respect to any
Distribution Date, means an amount equal to one-twelfth of the product of (a)
the Servicing Fee Rate and (b) the Subordinated Purchaser Capital as of the last
day of the Due Period second preceding such Distribution Date.
"Subordinated Purchaser Yield" means, for each Subordinated
Receivable Interest for any Settlement Period,
SPR x SPC x ED
---
360
where:
SPR = the Subordinated Purchaser Rate for such
Subordinated Receivable Interest for such
Settlement Period
SPC = the Subordinated Purchaser Capital of the
Subordinated Receivable Interests during
such Settlement Period
ED = the actual number of days elapsed during
such Settlement Period;
provided that no provision of the Agreement shall require the payment or permit
the collection of Subordinated Purchaser Yield in excess of the maximum
permitted by applicable law; and provided, further that Subordinated Purchaser
Yield for any Subordinated Receivable Interest shall not be considered paid by
any distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason.
"Subordinated Receivable Interest" means, at any time, the
undivided percentage ownership interests conveyed and allocated to the
Subordinated Purchaser under the Agreement, which shall represent an undivided
percentage ownership interest, subordinated (to the extent set forth in Article
II of the Agreement) to the Purchaser Receivable Interests, in all outstanding
Pool Receivables then existing or thereafter arising and all Collections with
respect to, and other proceeds of, such Pool Receivables (including, without
limitation, Insurance Proceeds and other amounts constituting Recoveries of Pool
Receivables and payments in respect of the Interest Rate Agreements).
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"Termination Date" means (i) in the case of a Purchaser
Receivable Interest owned by the Purchaser, the earlier of (a) the Business Day
which the Seller or the Agent so designates by notice to the other (with a copy
to the Servicer) at least one Business Day in advance (including any date on
which the Agent terminates the reinvestment of Collections pursuant to paragraph
2(b)(iii) of Exhibit II to the Agreement) and (b) the Facility Termination Date,
and (ii) in the case of a Purchaser Receivable Interest owned by a Bank, the
earlier of (a) the Business Day which the Seller so designates by notice to the
Agent (with a copy to the Servicer) at least one Business Day in advance and (b)
the Commitment Termination Date.
"Total Principal Collections" has the meaning set forth in
Section 2.02(b) of the Agreement.
"Total Systems Failure" means, in respect of any Distribution
Date, a total failure of the computer system (including but not limited to
off-site backup systems) of the Servicer or the Administrative Servicer which
contain Records relating to the Pool Receivables, the effect of which would make
it impossible or impracticable for the Servicer or the Administrative Servicer
to perform the acts required to be performed hereunder on or in anticipation of
such Distribution Date.
"Trust" means the trust created by the Pooling and Servicing
Agreement.
"Trustee" means, initially, First Union National Bank
(formerly known as First Fidelity Bank, National Association, and prior to that
known as First Fidelity Bank, N.A., Pennsylvania, and prior to that known as
Fidelity Bank, National Association), a national banking association, as the
trustee under the Pooling and Servicing Agreement, and each other Person who
shall succeed to the functions of First Union National Bank pursuant to the
terms of the Pooling and Servicing Agreement.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"Unallocated Net Receivables Pool Balance" means, at any time,
the Outstanding Balance of Principal Receivables that are Eligible Receivables
in the Receivables Pool that is not allocated to the Purchaser Receivable
Interests or the Subordinated Receivable Interests pursuant to the Agreement and
not allocated to any other Person other than the Holder of the Exchangeable
Seller Certificate pursuant to a supplement to the
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Pooling and Servicing Agreement or pursuant to any other receivables purchase
agreement that is subject to the Pooling and Servicing Agreement.
"Yield" means:
(i) for each Purchaser Receivable Interest for any
Settlement Period to the extent the Purchaser will be funding
such Purchaser Receivable Interest on the first day of such
Settlement Period through the issuance of commercial paper,
FR x C x ED + LF
---
360
(ii) for each Purchaser Receivable Interest for any
Fixed Period to the extent (x) the Purchaser will not be
funding such Purchaser Receivable Interest on the first day of
such Fixed Period through the issuance of commercial paper or
(y) the Banks will be funding such Purchaser Receivable
Interest,
AR x C x ED
---
360
where:
AR = the Assignee Rate for such
Purchaser Receivable Interest for
the applicable Fixed Period
C = the Purchaser Capital of the
Purchaser Receivable Interests
during the applicable Settlement
Period or Fixed Period
FR = the Funding Rate for the
applicable Settlement Period
ED = the actual number of days elapsed
during the applicable Settlement
Period or Fixed Period
LF = the Liquidation Fee, if any, for
such Settlement Period;
provided that no provision of the Agreement shall require the payment or permit
the collection of Yield in excess of the maximum permitted by applicable law;
and provided, further that
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Yield for any Purchaser Receivable Interest shall not be considered paid by any
distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason.
"Yield Rate" means, at any time, the Assignee Rate or the
Funding Rate with regard to which Yield is calculated at such time.
- - - - - -
2. Defined Terms from the Pooling and Servicing Agreement. For
purposes of the Pooling and Servicing Agreement:
"Enhancement" means the Interest Rate Agreements and any
additional interest rate caps purchased pursuant to Section 5.04(h).
"interest" at any time means the sum of the Yield and the
Subordinated Purchaser Yield at such time.
"Investor/Purchaser Percentage" means the Allocation
Percentage.
"principal" at any time means the sum of the Purchaser Capital
and the Subordinated Purchaser Capital at such time.
"Receivables Purchaser Monthly Servicing Fee" means the
Servicer Fee.
"Series Servicing Fee Percentage" means the Servicing Fee
Rate.
"Series Termination Date" means the Final Distribution Date.
3. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined herein, are
used herein as defined in such Article 9.
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EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to the Effectiveness of the Amendment and
Restatement. The effectiveness of the amendment and restatement of the Original
Agreements on the terms set forth in the Agreement is subject to the conditions
precedent that:
7.16.10. on or before the date of such effectiveness, the
Owner shall have (i) indicated in the Pool Index File maintained in its
computer files that interests in the Receivables created in connection
with the Accounts have been sold by the Seller to the Purchasers
pursuant to the Agreement and (ii) delivered to the Trustee, pursuant
to Section 2.1 of the Pooling and Servicing Agreement, a computer file
or microfiche or written list containing a true and complete list of
all Accounts, identified by account number, Obligor name and Obligor
address and setting forth the Receivable balance as of the applicable
Cut Off Date; and
7.16.11. the Agent shall have received on or before the date
of such effectiveness the following, each (unless otherwise indicated)
dated such date, in form and substance satisfactory to the Agent:
7.16.11.1. Certified copies of any necessary
corporate action of the Trustee approving the Agreement and
certified copies of all documents evidencing other necessary
governmental approvals, if any, with respect to the Agreement.
7.16.11.2. A copy of (A) the Subordinated Purchaser's
Certificate of Incorporation, certified (as of a date
reasonably near the date of the effectiveness hereof) by the
Secretary of State of the State of Delaware as being a true
and correct copy thereof, (B) the Subordinated Purchaser's
By-Laws as in effect on the date of such effectiveness,
certified by the Subordinated Purchaser's President or a Vice
President and the Secretary or any Assistant Secretary of the
Subordinated Purchaser as being a true and correct copy
thereof, (C) the resolutions adopted by the Board of Directors
of the Subordinated Purchaser authorizing the Subordinated
Purchaser's officers to enter into, and to perform all
necessary actions in connection with, transactions of the type
contemplated by the Agreement, certified by the Subordinated
Purchaser's Secretary or Assistant Secretary and (D) a
certificate of the Secretary or Assistant Secretary of the
Subordinated Purchaser certifying the names and true
signatures of the
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officers of the Subordinated Purchaser authorized to sign the
Agreement on behalf of the Subordinated Purchaser and the
other documents to be delivered by the Subordinated Purchaser
thereunder.
7.16.11.3. Certified copies of the resolutions of the
Board of Directors of the Servicer and the Originator
approving the Agreement and certified copies of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Agreement.
7.16.11.4. Certified copies of the resolutions of the
Board of Directors of each of FSC and Charming Shoppes
approving the Company Agreement and certified copies of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to the Company
Agreement.
7.16.11.5. A certificate of the Secretary or
Assistant Secretary of the Trustee certifying the names and
true signatures of the officers of the Trustee authorized to
sign the Agreement on behalf of the Seller and the other
documents to be delivered by the Seller thereunder.
7.16.11.6. A certificate of the Secretary or
Assistant Secretary of the Servicer, the Originator and the
Owner, certifying the names and true signatures of the
officers of the Servicer, the Originator or the Owner, as the
case may be, authorized to sign the Agreement and the other
documents to be delivered by it thereunder.
7.16.11.7. A certificate of the Secretary or
Assistant Secretary of each of FSC and Charming Shoppes
certifying the names and true signatures of the officers
thereof authorized to sign the Company Agreement and the other
documents to be delivered by it thereunder.
7.16.11.8. Executed copies of proper financing
statements or amendments thereto, duly filed on or before the
date of such initial purchase under the UCC of all
jurisdictions that the Agent may deem necessary or desirable
in order to perfect the ownership interests contemplated by
the Agreement.
7.16.11.9. Executed copies of proper financing
statements, if any, necessary to release all security
interests and other rights of any Person in the Receivables or
Cardholder Agreements previously granted by the
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Originator, the Owner or the Seller (other than Adverse Claims
expressly permitted under the Agreement).
7.16.11.10. Completed requests for information, dated
as of a date reasonably near the date of such effectiveness
listing all effective financing statements (other than the
financing statements referred to in subsection (viii) above)
filed in the jurisdictions referred to in subsection (viii)
above (other than Philadelphia County, Pennsylvania) that name
the Seller as debtor, together with copies of such other
financing statements (none of which shall cover any
Receivables or Cardholder Agreements).
7.16.11.11. A copy of each Depositary Agreement with
each Depositary Bank, duly executed by the Servicer and duly
acknowledged by such Depositary Bank, and a notice to each
Depositary Bank instructing such Depositary Bank to make all
payments to the Collection Account and informing them of the
intermediate sale of Receivables to the Owner.
7.16.11.12. An instruction letter or letters to the
Administrative Servicer, duly executed and delivered by the
Owner and duly acknowledged by the Administrative Servicer,
directing the Administrative Servicer to process Collections
in accordance with the Trustee's instructions and informing
them of the intermediate sale of Receivables to the Owner.
7.16.11.13. The Company Agreement, duly executed and
delivered by each of FSC and Charming Shoppes.
7.16.11.14. The Fee Letter, duly executed and
delivered by the Seller.
7.16.11.15. Certified copies or executed originals of
(A) the Pooling and Servicing Agreement and the Purchase
Agreement, duly executed and delivered by each party thereto,
and evidence satisfactory to the Agent that each of the
conditions to the effectiveness thereof shall have been
satisfied (including, without limitation, the filing of all
appropriate UCC financing statements) and that the conveyances
contemplated therein have occurred and (B) the Security
Agreement and each other agreement, document and opinion
delivered pursuant to the Pooling and Servicing Agreement.
7.16.11.16. A copy of the Cardholder Guidelines,
certified by a Responsible Officer of the Originator as being
complete and accurate in all material respects.
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7.16.11.17. A favorable opinion of Pepper, Xxxxxxxx & Xxxxxxx,
counsel for the Trustee, substantially in the form of Annex C hereto
and as to such other matters as the Agent may reasonably request.
7.16.11.18. A favorable opinion of:
(1) Xxxxx, Xxxxx & Xxxxx, counsel for each of the
Servicer, the Originator, the Owner, the Subordinated
Purchaser, Charming Shoppes and FSC, as to certain corporate
and security interest matters substantially in the form of
Annex D-1 hereto,
(2) Xxxxx, Xxxxx & Xxxxx, counsel for the Originator
and the Servicer, as to certain bank regulatory matters
substantially in the form of Annex D-2 hereto,
(3) Xxxxx Xxxxx, Esq., General Counsel for each of
the Servicer, the Originator, the Owner and the Subordinated
Purchaser, substantially in the form of Annex D-3, and
(4) Xxxxx, Xxxxx & Xxxxx, counsel for each of the
Subordinated Purchaser, Charming Shoppes and FSC, as to
certain Federal Bankruptcy Code matters substantially in the
form of Annex D-4 hereto.
7.16.11.19. A favorable opinion of Xxxxx Xxxxx, Esq., General
Counsel for each of FSC and Charming Shoppes, substantially in the form
of Annex E hereto.
7.16.11.20. A favorable opinion of Xxxx, Scholer, Fierman,
Xxxx & Handler, LLP, counsel for the Agent, as the Agent may reasonably
request.
7.16.11.21. An undated notice (the "Store Payment Notice"),
duly executed by each of the Owner and the Originator, to the manager
of each Store, in substantially the form of Annex F hereto.
7.16.11.22. Assignments to the Seller of the benefits under
each of the Interest Rate Agreements in effect on the Effective Date,
together with any necessary consents by the counterparties to such
Interest Rate Agreements.
7.16.11.23. Copies of each of the Interest Rate Agreements in
effect on the Effective Date, together with a
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summary thereof in the form of Annex G hereto, in each case certified
by a Responsible Officer of the Owner as being complete and correct.
7.16.11.24. [Intentionally omitted].
7.16.11.25. Copies of each of the Credit Facilities as in
effect on the Effective Date, certified by an officer of Charming
Shoppes as being complete and correct, accompanied by a certificate of
an officer of Charming Shoppes that (x) Charming Shoppes has duly
executed and delivered each of the Credit Facilities, (y) all
conditions precedent to the obligations of the lenders under the Credit
Facilities have been satisfied and the Credit Facilities are in full
force and effect as of the date of the initial purchase and (z) no
event or condition of the type described in paragraph (l) of Exhibit VI
has occurred and is continuing.
7.16.11.26. Copies of the Consumer Credit Plan Agreement
between Charming Shoppes of Delaware, Inc. and FSC, the Consumer Credit
Plan Operations Agreement between FSC and Spirit and the Cardholder
Agreement, each as in effect on the Effective Date, certified by a
Responsible Officer of FSC or the Owner as being complete and correct.
7.16.11.27. A copy of the Administrative Servicing Agreement
or a summary prepared by the Servicer of the provisions of the
Administrative Servicing Agreement relating to the termination thereof
by either party and the assignability thereof by the Administrative
Servicer.
7.16.11.28. [Intentionally omitted]
(xxix) A letter agreement between Charming Shoppes of
Delaware, Inc. and the Trustee, in form and substance satisfactory to
the Agent, duly executed and delivered by Charming Shoppes of Delaware,
Inc. and the Trustee, setting forth certain instructions with respect
to the flow of funds arising out of Store Payments and the agreement of
Charming Shoppes of Delaware, Inc. not to assert setoffs against such
funds.
(xxx) Copies of good standing certificates for Spirit from the
Office of the Comptroller of the Currency and the Federal Deposit
Insurance Corporation.
2. Conditions Precedent to All Purchases and Reinvestments. Each
purchase (including the initial purchase) of
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Purchaser Receivable Interests by the Purchaser or the Banks, as the case may
be, under the Agreement and each reinvestment pursuant to Section 2.06(a) of the
Agreement shall be subject to the further conditions precedent that:
(a) in the case of each purchase, the Servicer shall have delivered (i)
to the Trustee, on or prior to such purchase, the then most recent computer file
or microfiche or written list of Accounts required pursuant to Section 2.1 or
2.6(d)(ii) of the Pooling and Servicing Agreement, and (ii) to the Agent, on or
prior to such purchase, in form and substance satisfactory to the Agent, a
completed Servicer Report dated within 31 days prior to the date of such
purchase together with such additional information as may reasonably be
requested by the Agent,
(b) on the date of such purchase or reinvestment the following
statements shall be true, except that the statement in clause (iii) below is
required to be true only if such purchase or reinvestment is by the Purchaser
(and acceptance of the proceeds of such purchase or reinvestment shall be deemed
a representation and warranty by the Seller that such statements are then true):
(i) The representations and warranties contained in
Exhibit III are correct on and as of the date of such purchase
or reinvestment as though made on and as of such date, and
(ii) No event has occurred and is continuing, or
would result from such purchase or reinvestment, that
constitutes an Early Amortization Event or that would
constitute an Early Amortization Event but for the requirement
that notice be given or time elapse or both, and
(iii) The Agent shall not have given the Seller and
the Servicer at least one Business Day's notice that the
Purchaser has terminated the reinvestment of Collections in
Purchaser Receivable Interests, and
7.16.12. the Agent shall have received such other approvals,
opinions or documents as it may reasonably request.
3. Additional Conditions Precedent to Each Purchase by the Purchaser
and the Banks. Each purchase (including the initial purchase) of a Purchaser
Receivable Interest by the Purchaser and the Banks under the Agreement is
subject to the additional conditions precedent that, after giving effect to such
purchase and any concurrent allocation of a Subordinated Receivable Interest
pursuant to Section 1.02(f) of the Agreement:
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7.16.13. the representation and warranty contained in paragraph 2(n) of
Exhibit III shall be correct; and
7.16.14. the Unallocated Net Receivables Pool Balance shall be equal to
or exceed the Minimum Seller Capital.
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EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. Representations and Warranties of the Trustee. The Trustee, not in
its individual capacity but solely as the trustee for the Charming Shoppes
Master Trust, represents and warrants as follows:
7.16.15. The Trustee is a national banking association duly
organized, validly existing and in good standing under the federal law
of the United States of America with full corporate trust power and
authority to enter into and perform its obligations under the
Agreement, the Pooling and Servicing Agreement and each other Master
Trust Document to which the Trustee will be a party.
7.16.16. The execution and delivery by the Trustee of, and the
performance by the Trustee of the transactions contemplated by, the
Agreement, the Pooling and Servicing Agreement and each other Master
Trust Document to which the Trustee is a party, including the Trustee's
use of the proceeds of purchases and reinvestments, are within the
Trustee's corporate trust powers, have been duly authorized by all
necessary corporate action of the Trustee, and (a) do not contravene
(i) the Trustee's charter or by-laws or (ii) any existing federal or
applicable state law governing the trust powers of the Trustee.
7.16.17. Each of the Agreement, the Pooling and Servicing
Agreement and each other Master Trust Document to which the Trustee is
a party has been duly executed and delivered by the Trustee, as the
trustee for Charming Shoppes Master Trust pursuant to the Pooling and
Servicing Agreement, and constitutes a legal, valid and binding
obligation of the Trustee, enforceable against the Trustee in
accordance with its terms, subject to bankruptcy, insolvency or other
similar laws affecting creditors' rights generally and to general
principles of equity (whether considered in a proceeding in equity or
at law).
7.16.18. No authorization or approval or other action by and
no notice to or filing with, any governmental authority or regulatory
body under any existing federal or Pennsylvania law governing the trust
powers of the Trustee, except such as have been obtained, made or
taken, is required for the due execution and delivery by the Trustee
of, and the consummation of any of the transactions by the Trustee
contemplated by, the Agreement, the Pooling and Servicing Agreement or
each other Master Trust Document to which the Trustee is a party or for
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the perfection of or the exercise by the Agent or the Purchasers of
their respective rights and remedies under the Agreement.
7.16.19. There are no actions or proceedings pending or, to
the best knowledge of the Trustee, threatened against the Trustee
before any court, regulatory body, administrative agency or other
tribunal, governmental instrumentality or arbitrator seeking to prevent
the consummation of any of the transactions contemplated by the
Agreement, the Pooling and Servicing Agreement or any other Master
Trust Document, or seeking and determination or ruling that, would
materially and adversely affect the performance by the Trustee of its
obligations under the Agreement, the Pooling and Servicing Agreement or
any other Master Trust Document to which the Trustee is a party, or
seeking any determination or ruling that would materially and adversely
affect the legality, validity or enforceability of the Agreement, the
Pooling and Servicing Agreement or any other Master Trust Document.
7.16.20. The principal place of business and chief executive
office of the Trustee and the office where the Trustee keeps its
records concerning the Pool Receivables are located at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000; the address of the Trustee
where notices and demands to or upon the Trustee in respect of the Pool
Receivables, the Agreement or the Pooling and Servicing Agreement may
be served is First Union National Bank, 000 X. Xxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Corporate Trust
Services.
7.16.21. All representations and warranties of the Trustee set
forth in the Pooling and Servicing Agreement and each other Master
Trust Document to which the Trustee is a party are true and correct in
all material respects (unless any such representation or warranty
speaks as of a particular date, in which case it is true and correct in
all materials respects as of each such date).
2. Representations and Warranties of the Owner. The Owner represents
and warrants as follows:
7.16.22. The Owner is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware,
and is duly qualified to do business, and is in good standing, in every
jurisdiction where the nature of its business requires it to be so
qualified.
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7.16.23. The execution, delivery and performance by the Owner of the
Agreement and each Master Trust Document to which it is or will be a party, (i)
are within the Owner's corporate powers, (ii) have been duly authorized by all
necessary corporate action, (iii) do not contravene (1) the Owner's charter or
by-laws, (2) any Requirement of Law applicable to the Owner, (3) any indenture,
contract, agreement, mortgage, deed of trust or other instrument to which the
Owner is a party or by which it is bound (including, without limitation, the
Pooling and Servicing Agreement and any other Master Trust Document to which the
Owner is or will be a party), or (4) any order, writ, judgment, award,
injunction or decree binding on or affecting the Owner or its property, and do
not result in or require the creation of any lien, security interest or other
charge or encumbrance upon or with respect to any of its properties (other than
the interests created by the Pooling and Servicing Agreement and the Agreement).
Each of the Agreement, and each Master Trust Document to which the Owner is or
will be a party has been or will be duly executed and delivered by the Owner.
7.16.24. No authorization or approval or other action by, and, except
for the filing of financing statements to be filed pursuant to the Pooling and
Servicing Agreement and pursuant to the Agreement, no notice to or filing with,
any governmental authority or regulatory body is required for the due execution,
delivery and performance by the Owner of the Agreement or any Master Trust
Document to which the Owner is or will be a party.
7.16.25. Each of the Agreement and each Master Trust Document to which
the Owner is or will be a party constitutes, or upon due execution and delivery
by the Owner will constitute, the legal, valid and binding obligation of the
Owner enforceable against the Owner in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally
or by general principles of equity (whether considered in a proceeding in equity
or at law).
7.16.26. There are no actions or proceedings pending or, to the best
knowledge of the Owner, threatened against the Owner before any court,
regulatory body, administrative agency or other tribunal, governmental
instrumentality or arbitrator seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any Master Trust Document, or
seeking any determination or ruling that, in the reasonable judgment of the
Owner, would materially and adversely affect
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the performance by the Owner of its obligations under this Agreement or any
Master Trust Document to which it is or will be a party, or seeking any
determination or ruling that would materially and adversely affect the legality,
validity or enforceability of this Agreement or any Master Trust Document.
7.16.27. Since February 1, 1997, (i) there has been no material adverse
change in the business, operations, property or financial or other condition of
the Owner which may materially adversely affect the Owner's ability to collect
Pool Receivables pursuant to the Agreement or the Pooling and Servicing
Agreement or otherwise perform its obligations under the Agreement or the Master
Trust Documents to which it is or will be a party and (ii) there has not
occurred any event which may materially adversely affect the collectibility or
value of the Receivables Pool.
7.16.28. (i) Immediately prior to the purchase by the Seller
of an interest therein under the Pooling and Servicing Agreement, the
Owner is the legal and beneficial owner of each Pool Receivable free
and clear of any Adverse Claims except for the interests therein
created pursuant to the Security Agreement;
(ii) upon each purchase by the Trustee under the Pooling and
Servicing Agreement, the Trustee will acquire a valid and perfected
first priority ownership interest in the Pool Receivables and
Collections with respect thereto;
(iii) immediately prior to the purchase by each Purchaser or
Bank of an interest therein under the Agreement, the Trustee will be
the legal and beneficial owner of each Pool Receivable free and clear
of any Adverse Claims, except for the interests created therein
pursuant to the Pooling and Servicing Agreement (which interests will
be pari passu with the Purchasers' or Banks' interests therein);
(iv) upon each purchase by a Purchaser or a Bank and each
reinvestment on behalf of a Purchaser or a Bank under the Agreement,
such Purchaser or Bank, as the case may be, will acquire a valid and
perfected first priority undivided percentage ownership interest to the
extent of the pertinent Purchaser Receivable Interest in the Pool
Receivables and in the Collections with respect thereto, subject to the
interests therein referred to clause (iii) above;
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(v) no effective financing statement or other instrument
similar in effect covering any Cardholder Agreement or any Pool
Receivable or Collections with respect thereto is on file in any
recording office, except those filed pursuant to the Pooling and
Servicing Agreement and those filed pursuant to the Agreement; and
(vi) except for any credit life insurance policies, credit
disability or unemployment insurance policies covering an Obligor with
respect to Pool Receivables under such Obligor's Account, there are no
guaranties, insurance, or other agreements, and no security interests
or liens, supporting or securing or purporting to support or secure
payment of any Receivable.
7.16.29. The principal place of business and chief executive office of
the Owner and the office where the Owner keeps its records concerning the Pool
Receivables are located at the address or addresses referred to in paragraph
2(b) of Exhibit IV.
7.16.30. The names and addresses of all the Depositary Banks, together
with the account numbers of the Initial Depositary Accounts of the Seller at
such Depositary Banks, are specified in Schedule II hereto (or at such other
Depositary Banks and/or with such other Initial Depositary Accounts as have been
notified to the Agent in accordance with the Agreement).
7.16.31. The facts and assumptions contained in paragraph (p) on page
10 of the opinion of Xxxxx, Xxxxx & Xxxxx delivered pursuant to paragraph
1(b(xviii)(4) of Exhibit II to the Agreement are true and correct as of the time
specified therein.
7.16.32. All representations and warranties of the Owner set forth in
the Pooling and Servicing Agreement and each other Master Trust Document to
which the Owner is a party are true and correct in all material respects (unless
any such representation or warranty speaks as of a particular date, in which
case it is true and correct in all material respects as of each such date).
7.16.33. The Trust is not an "investment company" required to be
registered under the Investment Company Act of 1940, as amended.
7.16.34. As of the applicable Cut Off Date, Schedule 1 to the Pooling
and Servicing Agreement and the related
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computer file or microfiche or written list referred to in paragraph 1(a) of
Exhibit II to the Agreement is an accurate and complete listing in all material
respects of all the Accounts, 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 such Cut Off Date.
7.16.35. On the date of each purchase of Purchaser Receivable Interests
by the Purchaser or a Bank under the Agreement, after giving effect to the
purchase to be made by the Purchaser or Bank on such date and any allocation of
a Subordinated Receivable Interest to the Subordinated Purchaser on such date,
the Net Receivables Pool Balance minus the sum of (A) the aggregate "Investor
Interests" (as defined in the Pooling and Servicing Agreement) for all
Certificate Series issued pursuant to one or more supplements to the Pooling and
Servicing Agreement, (B) the aggregate "Receivables Purchase Interests" (as
defined in the Pooling and Servicing Agreement) for all Receivables Purchase
Series issued pursuant to any receivables purchase agreement that is subject to
the Pooling and Servicing Agreement (other than the Agreement), (C) the
Subordinated Purchaser Capital, (D) the Minimum Seller Capital, and (E) the
total amount of Discount Option Receivables, if any, will be equal to or exceed
the sum of the aggregate outstanding Purchaser Capital of all Purchaser
Receivable Interests under the Agreement; and the Floating Allocation Percentage
as of such day shall be less than or equal to 98.305%.
7.16.36. No proceeds of any purchase or reinvestment will be used by
the Owner or the Seller to acquire any equity security of a class which is
registered pursuant to Section 12 of the Exchange Act.
7.16.37. After giving effect to the Pooling and Servicing Agreement and
each purchase of Receivables from the Owner by the Trustee under the Pooling and
Servicing Agreement and the use of proceeds of each Purchase by the Owner, (i)
the Owner will have sufficient presently saleable assets, and sufficient cash
flow, to enable it to meet its debts as they mature (in each case as such
concepts are defined in applicable bankruptcy and related laws), and (ii) the
Owner does not have unreasonably small capital.
7.16.38. The Owner is not entering into, and has not caused any other
Person to enter into, any of the transactions contemplated by the Pooling and
Servicing Agreement or the
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Agreement with the intent to hinder, delay or defraud the creditors of
the Owner.
7.16.39. Each computer file or microfiche list which has been
delivered to the Trustee by the Owner pursuant to Section 2.1 or
Section 2.6 of the Pooling and Servicing Agreement contains a complete
and accurate list of Accounts identified by account number, Obligor
name, Obligor address and Receivable balance as of the applicable Cut
Off Date.
7.16.40. The Trustee is not an insider or Affiliate of the
Owner.
3. Representations and Warranties of the Servicer. The Servicer
represents and warrants as follows:
7.16.41. The Servicer is a national banking association, duly
organized, validly existing and in good standing under the laws of the
United States of America, and is duly qualified to do business, and is
in good standing, in every jurisdiction where the nature of its
business requires it to be so qualified.
7.16.42. The execution, delivery and performance by the
Servicer of the Agreement and each Master Trust Document to which it is
or will be a party and the other documents to be delivered by it
thereunder, (i) are within the Servicer's corporate powers, (ii) have
been duly authorized by all necessary corporate action, (iii) do not
contravene (1) the Servicer's charter or by-laws, (2) any Requirement
of Law applicable to the Servicer, (3) any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which the
Servicer is a party or by which it is bound (including, without
limitation, the Pooling and Servicing Agreement and any other Master
Trust Document to which the Servicer is or will be a party), or (4) any
order, writ, judgment, award, injunction or decree binding on or
affecting the Servicer or its property, and do not result in or require
the creation of any lien, security interest or other charge or
encumbrance upon or with respect to any of its properties (other than
the interests created by the Master Trust Documents and the Agreement).
Each of the Agreement and each Master Trust Document to which the
Servicer is or will be a party has been or will be duly executed and
delivered by the Servicer.
7.16.43. No authorization or approval or other action by, and
no notice to or filing with, any governmental
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authority or regulatory body is required for the due execution,
delivery and performance by the Servicer of the Agreement or any Master
Trust Document to which the Servicer is or will be party or any other
document to be delivered thereunder.
7.16.44. Each of the Agreement and each Master Trust Document
to which the Servicer is or will be party constitutes, or upon due
execution and delivery by the Servicer will constitute, the legal,
valid and binding obligation of the Servicer enforceable against the
Servicer in accordance with its terms, except as such enforceability
may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights
generally or by general principles of equity (whether considered in a
proceeding in equity or at law).
7.16.45. There are no actions or proceedings pending or, to
the best knowledge of the Servicer, threatened against the Servicer
before any court, regulatory body, administrative agency or other
tribunal, governmental instrumentality or arbitrator seeking to prevent
the consummation of any of the transactions contemplated by the
Agreement or any Master Trust Document, or seeking any determination or
ruling that, in the reasonable judgment of the Servicer, would
materially and adversely affect the performance by the Servicer of its
obligations under the Agreement or any Master Trust Document to which
it is or will be a party, or seeking any determination or ruling that
would materially and adversely affect the legality, validity or
enforceability of the Agreement or any Master Trust Document.
7.16.46. The principal place of business and chief executive
office of the Servicer and the office where the Servicer keeps its
records concerning the Pool Receivables are located at the address or
addresses referred to in paragraph 3(b) of Exhibit IV.
7.16.47. All representations and warranties of the Servicer
set forth in the Pooling and Servicing Agreement and each other Master
Trust Document to which the Servicer is a party are true and correct in
all material respects (unless any such representation or warranty
speaks as of a particular date, in which case it is true and correct in
all materials respects as of each such date).
4. Representations and Warranties of the Originator. The Originator
represents and warrants as follows:
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7.16.48. The Originator is a national banking association duly
organized, validly existing and in good standing under the laws of the United
States of America, and is duly qualified to do business, and is in good
standing, in every jurisdiction where the nature of its business requires it to
be so qualified.
7.16.49. The execution, delivery and performance by the Originator of
the Agreement and each Master Trust Document to which the Originator is a party
and the other documents to be delivered by it thereunder, (i) are within the
Originator's corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) do not contravene (1) the Originator's charter or
by-laws, (2) any Requirement of Law applicable to the Originator, (3) any
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which the Originator is a party or by which it is bound or (4) any order, writ,
judgment, award, injunction or decree binding on or affecting the Originator or
its property, and do not result in or require the creation of any lien, security
interest or other charge or encumbrance upon or with respect to any of its
properties. The Agreement and each Master Trust Document to which the Originator
is a party has been duly executed and delivered by the Originator.
7.16.50. No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Originator of the Agreement,
any Master Trust Document to which the Originator is a party or any other
document to be delivered thereunder.
7.16.51. The Agreement and each Master Trust Document to which the
Originator is a party constitutes the legal, valid and binding obligation of the
Originator enforceable against the Originator in accordance with its terms,
except as such enforceability may be limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting creditors'
rights generally or by general principles of equity (whether considered in a
proceeding in equity or at law).
7.16.52. There are no actions or proceedings pending or, to the best
knowledge of the Originator, threatened against the Originator before any court,
regulatory body, administrative agency or other tribunal, governmental
instrumentality or arbitrator seeking to prevent the consummation of any of the
transactions contemplated by the Agreement or any Master Trust Document, or
seeking any
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determination or ruling that, in the reasonable judgment of the Originator,
would materially and adversely affect the performance by the Originator of its
obligations under the Agreement or any Master Trust Document to which it is or
will be a party, or seeking any determination or ruling that would materially
and adversely affect the legality, validity or enforceability of the Agreement
or any Master Trust Document.
7.16.53. The Originator is in compliance with its regulatory capital
requirements under applicable rules and regulations of the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation, the
Board of Governors of the Federal Reserve System or other appropriate
governmental authorities.
7.16.54. The Originator did not (i) execute the Purchase Agreement, the
Agreement or any other Master Trust Document, (ii) convey the assets described
in Section 1.1 of the Agreement or in the Security Agreement, (iii) cause,
permit, or suffer the perfection or attachment of an interest in such assets, or
(iv) otherwise effectuate or consummate any transfer pursuant to the Purchase
Agreement or the Agreement, in each case:
7.16.54.0.1. in contemplation of insolvency;
7.16.54.0.2. with a view to preferring one creditor over
another or to preventing the application of its assets in the manner
required by applicable law or regulations;
7.16.54.0.3. after committing an act of insolvency; or
7.16.54.0.4. with any intent to hinder, delay, or defraud
itself or its creditors.
7.16.55. All representations and warranties of the Originator set forth
in the Purchase Agreement and each other Master Trust Document to which the
Originator is a party are true and correct in all material respects (unless any
such representation or warranty speaks as of a particular date, in which case it
is true and correct in all materials respects as of each such date).
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EXHIBIT IV
COVENANTS
1. Covenants of the Trustee. The Trustee, not in its individual
capacity but solely as the trustee for the Charming Shoppes Master Trust, agrees
that, until the latest of (x) the Facility Termination Date, (y) the Commitment
Termination Date or (z) the Final Distribution Date:
7.16.56. Compliance with Laws, Etc. The Trustee will comply in
all material respects with all applicable laws, rules, regulations and
orders and preserve and maintain its existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so
to comply with such laws, rules and regulations or the failure so to
preserve and maintain such existence, rights, franchises,
qualifications, and privileges would not materially adversely affect
the collectibility of the Receivables Pool or the ability of the
Trustee to perform its obligations under the Agreement or the Master
Trust Documents.
7.16.57. Offices, Records and Books of Account. The Trustee
will keep its principal place of business and chief executive office
and the office where it keeps its records concerning the Pool
Receivables at 000 Xxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 or,
upon 30 days' prior written notice to the Agent, at any other locations
in jurisdictions where all actions reasonably requested by the Agent to
protect and perfect the interest in the Pool Receivables have been
taken and completed. The Trustee shall maintain in the City of Newark,
New Jersey, an office or offices where notices and demands to or upon
the Trustee in respect of the Pool Receivables, the Agreement or the
Pooling and Servicing Agreement may be served.
7.16.58. Further Assurances. The Trustee shall, from time to
time, at the Servicer's expense, promptly execute and deliver all
further instruments and documents, and take all further actions, that
may be necessary or desirable, or that the Agent may reasonably
request, to perfect, protect or more fully evidence the Receivable
Interests purchased under the Agreement, or to enable the Purchasers,
the Banks or the Agent to exercise and enforce their respective rights
and remedies under the Agreement. Without limiting the foregoing, the
Trustee:
7.16.58.1. will upon the request of the Agent (x)
execute and file such financing or continuation statements, or
amendments thereto, and such other
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instruments and documents, that may be necessary or desirable,
or that the Agent may reasonably request, to perfect, protect
or evidence such Receivable Interests; (y) ensure that all
Records evidencing Pool Receivables and related Cardholder
Agreements in its possession are marked conspicuously with a
legend, acceptable to the Agent, evidencing that Receivable
Interests therein have been sold in accordance with the
Agreement; and (z) ensure that any data processing records
evidencing such Pool Receivables and related Cardholder
Agreements in its possession are marked with such a legend;
and
7.16.58.2. authorizes the Agent to file financing or
continuation statements, and amendments thereto, relating to
such Receivable Interests without the signature of the Trustee
where permitted by law and agrees that a photocopy or other
reproduction of the Agreement shall be sufficient as a
financing statement where permitted by law.
Notwithstanding the foregoing, so long as any Investor Certificates shall be
outstanding, the Trustee and the Agent shall not file any financing statements
pursuant to this Section (other than continuation statements, amendments
reflecting name changes or changes of office location or financing statements
relating solely to an Enhancement for the benefit of the Receivables Purchase
Series arising in connection with the Agreement) unless the Agent shall have
obtained and delivered to the Trustee an Opinion of Counsel to the effect that
such filing shall not materially and adversely affect the interests of the
holders of the Investor Certificates.
7.16.59. Interest Rate Agreements. The Trustee shall not
consent to any modification or amendment of the Interest Rate
Agreements without the prior written consent of the Agent in each
instance, which consent shall not be unreasonably withheld by the
Agent.
7.16.60. Store Payment Notice. If the Trustee shall be
notified by any Person (other than the Agent) to deliver the Store
Payment Notice, the Trustee shall promptly notify the Agent thereof.
7.16.61. Books and Records. The Trustee will xxxx its books
and records to indicate that interests in the Pool Receivables have
been conveyed to the Purchasers, the Banks and the Subordinated
Purchaser and to evidence the interest of the Purchasers, the Banks and
the Subordinated Purchaser in the Pool Receivables.
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7.16.62. Store Payment Agreements. The Trustee shall not
consent to any modification, amendment or termination of the letter
agreements delivered pursuant to clause (xxix) of Section 1(b) of
Exhibit II of the Agreement without the prior written consent of the
Agent in each instance.
2. Covenants of the Owner. Until the latest of (x) the Facility
Termination Date, (y) the Commitment Termination Date or (z) the Final
Distribution Date:
7.16.63. Compliance with Laws, Etc. The Owner will comply in
all material respects with all applicable laws, rules, regulations and
orders and preserve and maintain its corporate existence, rights,
franchises, qualifications, and privileges except to the extent that
the failure so to comply with such laws, rules and regulations or the
failure so to preserve and maintain such existence, rights, franchises,
qualifications, and privileges would not materially adversely affect
the collectibility of the Receivables Pool or its ability to perform
its obligations under the Agreement or the Master Trust Documents.
7.16.64. Offices, Records and Books of Account. The Owner will
keep its principal place of business and chief executive office or the
office where it keeps its records concerning the Pool Receivables at
000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxx 00000, 0000 Xxxxxxxxxx Xxxx, 000
Xxxxxx Xxxx., Xxxxxxxxxx, Xxxxxxxx 00000 and 000 Xxxxx Xxxx, Xxxxxxxx,
Xxxxxxxxxxxx 00000, or, upon 30 days' prior written notice to the
Agent, at any other locations in jurisdictions where all actions
reasonably requested by the Agent to protect and perfect the interest
in the Pool Receivables have been taken and completed. The Owner also
will maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records
evidencing Pool Receivables and related Cardholder Agreements 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 Pool Receivables
(including, without limitation, records adequate to permit the daily
identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable).
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7.16.65. [Intentionally omitted].
7.16.66. Sales, Liens, Etc. The Owner will not, prior to the
Final Distribution Date, (i) suffer to exist any Adverse Claim upon or
with respect to any portion of the Minimum Seller Capital, except for
the interests therein created pursuant to the Security Agreement, or
(ii) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Adverse Claim upon or with
respect to, any of the Accounts or (iii) assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to any account to which any
Collections of any Pool Receivable are sent, or assign any right to
receive income in respect thereof, other than pursuant to the Pooling
and Servicing Agreement.
7.16.67. Interest Rate Hedging. The Owner shall maintain, or
cause to be maintained, the Interest Rate Agreements in full force and
effect and shall obtain, or cause to be obtained, extensions to or
replacements for the Interest Rate Agreements from time to time so that
the then effective Interest Rate Agreements are at all times in
compliance with the first sentence of the definition of "Interest Rate
Agreements." Whenever the Owner shall obtain, or cause to be obtained,
an extension to or replacement for any Interest Rate Agreement, the
Owner shall immediately furnish the Agent with an updated Annex G
incorporating such extension or replacement and a copy of such
extension or replacement, in each case certified by a Responsible
Officer of the Owner as being complete and correct. With respect to
each Interest Rate Agreement to which the Seller is not a party, the
Owner shall cause all monies due or to become due to the Owner (or, if
applicable, FSC) under such Interest Rate Agreement to be assigned to
the Seller.
7.16.68. [Intentionally omitted]
7.16.69. Information. The Owner shall provide to (i) the
Servicer (if other than Spirit) on a timely basis all information
needed for the administration of the Pool Receivables, including notice
of the commencement of the Amortization Period and (ii) to the Agent,
as soon as possible and in any event within two Business Days after
receipt thereof, copies of all notices, reports, information,
documents, instruments and records delivered to the Trustee which
relate to the Pool Receivables or the Pooling and Servicing Agreement.
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7.16.70. Further Assurances. The Owner shall, from time to
time, at its expense, promptly execute and deliver all further
instruments and documents, and take all further actions, that may be
necessary or desirable, or that the Agent may reasonably request, to
perfect, protect or more fully evidence the Receivable Interests
purchased under the Agreement, or to enable the Purchasers, the Banks
or the Agent to exercise and enforce their respective rights and
remedies under the Agreement. Without limiting the foregoing, the
Owner:
7.16.70.1. will upon the request of the Agent (x)
execute and file such financing or continuation statements, or
amendments thereto, and such other instruments and documents,
that may be necessary or desirable, or that the Agent may
reasonably request, to perfect, protect or evidence such
Receivable Interests; (y) xxxx conspicuously the Records
evidencing each Pool Receivable and the related Cardholder
Agreement with a legend, acceptable to the Agent, evidencing
that Receivable Interests therein have been sold in accordance
with the Agreement; and (z) xxxx its master data processing
records evidencing such Pool Receivables and related
Cardholder Agreements with such a legend; and
7.16.70.2. authorizes the Agent to file financing or
continuation statements (solely with respect to the
Agreement), and amendments thereto, relating to such
Receivable Interests without the signature of the Owner where
permitted by law and agrees that a photocopy or other
reproduction of the Agreement shall be sufficient as a
financing statement where permitted by law.
Notwithstanding the foregoing, so long as any Investor Certificates shall be
outstanding, the Owner and the Agent shall not file any financing statements
pursuant to this Section (other than continuation statements, amendments
reflecting name changes or changes of office location or financing statements
relating solely to an Enhancement for the benefit of the Receivables Purchase
Series arising in connection with the Agreement) unless the Agent shall have
obtained and delivered to the Trustee an Opinion of Counsel to the effect that
such filing shall not materially and adversely affect the interests of the
holders of the Investor Certificates.
7.16.71. Annual Compliance Certificate. The Owner will provide
to the Agent, as soon as possible and in any event within 30 days after
the close of each fiscal year of the Owner, a certificate signed by the
President or a Vice
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President of the Owner, stating that a review of the activities of the Owner and
its subsidiaries during the fiscal year in respect of which such statement was
delivered has been made under his or her supervision and that no Early
Amortization Event or condition or event which, with notice or lapse of time or
both, would constitute an Early Amortization Event has occurred, or, if such has
occurred, specifying the nature and status thereof.
7.16.72. No Alteration of File Designation. The Owner shall not alter
the file designation referenced in clause (i) of paragraph 1(a) of Exhibit II to
the Agreement during the term of this Agreement for any Account unless and until
such Account becomes a Removed Account.
7.16.73. Pool Receivables Not to Be Evidenced by Instruments, Etc. The
Owner will not take any action to cause any Pool Receivable to be evidenced by
any instrument (as defined in the UCC as in effect in each of the States of New
York, Ohio, Pennsylvania and Delaware). Each Pool Receivable shall be payable
pursuant to a contract which does not create a lien on any goods purchased
thereunder. The Owner will not take any action to cause any Pool Receivable to
be anything other than an "account", or a "general intangible" or the "proceeds"
of either for purposes of the UCC as in effect in each of the States of New
York, Ohio, Pennsylvania and Delaware.
7.16.74. Addition of Accounts or Accounts from Additional Programs. (i)
The Owner will not, without the prior written consent of the Agent, add to the
Trust pursuant to Section 2.6 of the Pooling and Servicing Agreement Eligible
Accounts which have been acquired by the Owner from third parties (as
distinguished from Accounts originated by the Owner or an Affiliate of the
Owner) ("Third-Party Accounts") to the extent that:
(A) the number of such Third-Party Accounts plus the total
number of all Third- Party Accounts theretofore added to the Trust in
the same calendar year shall exceed 5% of the total number of Accounts
in the Trust as of the end of the prior calendar year; or
(B) the sum of the Outstanding Balance of the Receivables in
such Third-Party Accounts as of the Addition Date plus the Outstanding
Balance of the Receivables in all other Third-Party Accounts
theretofore added to the Trust in the same calendar year shall exceed
5% of the Outstanding Balance of all
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Receivables in the Receivables Pool as of the end of
the prior calendar year.
(ii) The Owner will not, without the prior written consent of the
Agent, add to the Trust Accounts arising from programs other than the Private
Label Program (as defined in the Pooling and Servicing Agreement).
7.16.75. Merger, Consolidation, Etc. The Owner will not
consolidate with or merge into any other Person or convey or transfer
its properties and assets substantially as an entirety to any Person,
unless:
(i) the Person formed by such consolidation or into
which the Owner is merged or which acquires by conveyance or
transfer the properties of the Owner substantially as an
entirety shall be a special purpose bankruptcy-remote entity
(and its certificate of incorporation shall have provisions
similar to those of the Owner) and, if the Owner is not the
surviving entity, shall expressly assume, by an agreement
executed and delivered to the Agent and in form and substance
satisfactory to the Agent, the performance of every covenant
and obligation of the Owner hereunder;
(ii) the Owner shall have delivered to the Agent (A)
an officer's certificate of a Responsible Officer of the Owner
certifying that such consolidation, merger, conveyance or
transfer and such agreement comply with this paragraph (m) and
that all conditions precedent herein provided for relating to
such transaction have been complied with and (B) an opinion of
counsel, from counsel reasonably acceptable to the Agent and
addressed to the Agent, that such agreement is legal, valid
and binding with respect to the Owner and the surviving entity
and that the surviving entity would not be substantively
consolidated, in connection with any bankruptcy proceeding,
with any shareholder or other equity owner of such surviving
entity;
(iii) the Owner shall have given at least 10 Business
Days' prior notice to the Agent of such consolidation, merger,
conveyance or transfer; and
(iv) the Agent shall have consented to such
consolidation, merger, conveyance or transfer in writing (such
consent not to be unreasonably withheld).
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7.16.76. List of Stores. On or prior to May 31 of each year,
the Owner shall furnish to the Agent a complete and accurate list of
the names and addresses of all of the Stores.
7.16.77. [Intentionally omitted]
7.16.78. Limit on Certain Holders. The Owner shall not allow
(i) to be outstanding over 100 Private Holders of Subject Instruments,
or (ii) any Subject Instruments to be traded on a Market, registered
under the Securities Act or offered or sold pursuant to Regulation S
(17 CFR 230.901 through 230.904 or any successor thereto) if such
offering or sale would have been required to be registered under the
Securities Act if the interests so offered or sold had been offered and
sold within the United States.
3. Covenants of the Servicer. In addition to the duties of the Servicer
set forth in Exhibit V hereto, until the latest of (x) the Facility Termination
Date, (y) the Commitment Termination Date or (z) the Final Distribution Date:
7.16.79. Compliance with Laws, Etc. The Servicer will comply
in all material respects with all applicable laws, rules, regulations
and orders and preserve and maintain its corporate existence, rights,
franchises, qualifications, and privileges except to the extent that
the failure so to comply with such laws, rules and regulations or the
failure so to preserve and maintain such existence, rights, franchises,
qualifications, and privileges would not materially adversely affect
the collectibility of the Receivables Pool or the ability of the
Servicer to perform its obligations under the Agreement, the Pooling
and Servicing Agreement or the other Master Trust Documents.
7.16.80. Offices, Records and Books of Account. The Servicer
will keep its principal place of business and chief executive office
and the office where it keeps its records concerning the Pool
Receivables at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxx 00000 or, upon 30 days'
prior written notice to the Agent, at any other locations in
jurisdictions where all actions reasonably requested by the Agent to
protect and perfect the interest in the Pool Receivables have been
taken and completed. The Servicer also will maintain and implement
administrative and operating procedures (including, without limitation,
an ability to recreate records evidencing Pool Receivables and related
Cardholder Agreements 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
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Pool Receivables (including, without limitation, records adequate to permit the
daily identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable).
7.16.81. Further Assurances. The Servicer shall, from time to time, at
its expense, promptly execute and deliver all further instruments and documents,
and take all further actions, that may be necessary or desirable, or that the
Agent may reasonably request, to perfect, protect or more fully evidence the
Receivable Interests purchased under the Agreement, or to enable the Purchasers,
the Banks or the Agent to exercise and enforce their respective rights and
remedies under the Agreement. Without limiting the foregoing, the Servicer will
upon the request of the Agent (x) execute such instruments and documents that
may be necessary or desirable, or that the Agent may reasonably request, to
perfect, protect or evidence the Receivable Interests purchased under the
Agreement; (y) xxxx conspicuously the Records evidencing each Pool Receivable
and the related Cardholder Agreement with a legend, acceptable to the Agent,
evidencing that Receivable Interests therein have been sold in accordance with
the Agreement; and (z) xxxx its master data processing records evidencing such
Pool Receivables and related Cardholder Agreements with such a legend.
Notwithstanding the foregoing, so long as any Investor Certificates shall be
outstanding, the Servicer and the Agent shall not file any financing statements
pursuant to this Section (other than continuation statements, amendments
reflecting name changes or changes of office location or financing statements
relating solely to an Enhancement for the benefit of the Receivables Purchase
Series arising in connection with the Agreement) unless the Agent shall have
obtained and delivered to the Trustee an Opinion of Counsel to the effect that
such filing shall not materially and adversely affect the interests of the
holders of the Investor Certificates.
7.16.82. Servicer Will Not Resign. The Servicer shall not resign from
the obligations and duties imposed by it under the Agreement except as permitted
pursuant to Section 8.5 of the Pooling and Servicing Agreement.
7.16.83. Merger, Consolidation, Etc. The Servicer will not consolidate
with or merge into any other Person or convey or transfer its properties and
assets substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into which the
Servicer is merged or which acquires by
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conveyance or transfer the properties of the Servicer
substantially as an entirety shall be a state or national
banking or savings association or other entity which is not
subject to the bankruptcy laws of the United States of America
and, if the Servicer is not the surviving entity, shall
expressly assume, by an agreement executed and delivered to
the Agent and in form and substance satisfactory to the Agent,
the performance of every covenant and obligation of the
Servicer hereunder;
(ii) the Servicer shall have delivered to the Agent
(A) an officer's certificate of a Responsible Officer of the
Servicer certifying that such consolidation, merger,
conveyance or transfer and such agreement comply with this
paragraph (e) and that all conditions precedent herein
provided for relating to such transaction have been complied
with and (B) an opinion of counsel, from counsel reasonably
acceptable to the Agent and addressed to the Agent, that such
agreement is legal, valid and binding with respect to the
Servicer and the surviving entity;
(iii) the Servicer shall have given at least 10
Business Days' prior notice to the Agent of such
consolidation, merger, conveyance or transfer; and
(iv) the Agent shall have consented to such
consolidation, merger, conveyance or transfer in writing (such
consent not to be unreasonably withheld).
4. Covenants of the Subordinated Purchaser. Until the latest of (x) the
Facility Termination Date, (y) the Commitment Termination Date or (z) the Final
Distribution Date:
7.16.84. Sale, Liens, Etc. The Subordinated Purchaser shall
not sell, assign (by operation of law or otherwise) or otherwise
dispose of, or create or suffer to exist any Adverse Claim upon or with
respect to, any Subordinated Receivable Interest, or assign any right
to receive income in respect thereof, without the prior written consent
of the Agent.
7.16.85. Observance of Corporate Procedures, Etc. The
Subordinated Purchaser (i) shall observe the corporate procedures
required by its certificate of incorporation, its by-laws and the
corporate law of the State of Delaware, including, without limitation,
holding separate director and shareholder meetings from those of any
other Person and otherwise ensure at all times that it is maintained as
a separate corporate entity from any other Person and (ii) shall not
amend or modify any provision of its Certificate of
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Incorporation or by-laws without the prior written consent of the Agent (such
consent not to be unreasonably withheld).
7.16.86. Board of Directors' Authorization, Etc. The Subordinated
Purchaser shall (i) ensure that its Board of Directors duly authorizes all of
its corporate actions, and (ii) keep correct and complete books and records of
account separate from those of any other Person, and correct and complete
minutes of the meetings and other proceedings of its stockholders and Board of
Directors, and (iii) where necessary, obtain proper authorization from its
directors or stockholders, as appropriate, for corporate action.
7.16.87. Operating Expenses; Separate Accounts. The Subordinated
Purchaser shall provide for its operating expenses and liabilities from its own
funds and maintain deposit accounts and other bank accounts separate from those
of the Servicer or the Seller, or any of their respective Affiliates.
7.16.88. Corporate Action. The Subordinated Purchaser shall act solely
in its corporate name and through its duly authorized officers or agents in the
conduct of its business and ensure that neither the Originator nor the Servicer
nor any of their respective Affiliates controls any corporate decisions made by
it.
7.16.89. Arm's-Length Transactions. To the extent it obtains any
services from the Originator or the Servicer or any of their respective
Affiliates, the Subordinated Purchaser shall ensure that the terms of such
arrangements are comparable to those that would be obtained in an arm's-length
transaction.
7.16.90. No Commingling. The Subordinated Purchaser shall ensure that
its assets are not commingled with those of the Originator, the Servicer, the
Seller or any other Person.
7.16.91. Separate Records. The Subordinated Purchaser shall maintain
separate corporate records and books of account from those of the Originator,
the Servicer or any other Person.
7.16.92. Conduct of Business. The Subordinated Purchaser shall not
conduct any business or engage in any activities other than (i) the ownership of
the Subordinated Receivable Interest, (ii) the performance of its obligations
under the Agreement and the Master Trust Document to which it is a party, (iii)
the ownership of the "Seller Interest" under
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the Pooling and Servicing Agreement, and (iv) the ownership of a
"subordinated receivable interest" and the performance of its
obligations under any receivables purchase agreement that is subject to
the Pooling and Servicing Agreement.
7.16.93. Separate Existence, Etc. The Subordinated Purchaser
(i) shall not hold itself out, or permit itself to be held out, as
having agreed to pay, or as being liable for, the debts of the
Originator, the Servicer, or any other Person; (ii) shall maintain an
arm's-length relationship with the Originator and the Servicer and
their respective Affiliates with respect to any transactions between
itself and such other Person; and (iii) shall comply with (and cause to
be true and correct) each of the facts and assumptions contained in
paragraphs (a) through (k),(m) and (o) on pages 8 to 10 of the opinion
of Xxxxx, Xxxxx & Xxxxx delivered pursuant to paragraph 1(b)(xviii)(4)
of Exhibit II to the Agreement.
7.16.94. Independent Director. The Subordinated Purchaser
shall select and at all times maintain as its Independent Director a
Person who meets the following qualifications (which qualifications are
in addition to those set forth in the Subordinated Purchaser's
certificate of incorporation): the Independent Director shall have (i)
prior experience as an independent director for a corporation whose
charter documents require the unanimous written consent of all
independent directors thereof before such corporation could consent to
the institution of bankruptcy or insolvency proceedings against it or
could file a petition seeking relief under any applicable federal or
state law relating to bankruptcy, and (ii) at least three years of
employment experience with one or more entities that provide, in the
ordinary course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities.
5. Covenants of the Originator. In addition to the duties of the
Servicer set forth in Exhibit V hereto, until the latest of (x) the Facility
Termination Date, (y) the Commitment Termination Date or (z) the Final
Distribution Date:
7.16.95. Compliance with Laws, Etc. The Originator will comply
in all material respects with all applicable laws, rules, regulations
and orders and preserve and maintain its corporate existence, rights,
franchises, qualifications, and privileges except to the extent that
the failure so to comply with such laws, rules and regulations or the
failure so to preserve and maintain such existence, rights, franchises,
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qualifications, and privileges would not materially adversely affect
the collectibility of the Receivables Pool or its ability to perform
its obligations under the Agreement or the Master Trust Documents.
7.16.96. Change in Cardholder Guidelines, Etc.
7.16.96.1. Except (x) as otherwise required by any
Requirements of Law or (y) as is deemed by the Originator to
be necessary in order for it to maintain its credit card
business on a competitive basis based on a good faith
assessment by it of the nature of the competition in the
credit card business and only if the change giving rise to
such reduction is made applicable to the comparable segment of
revolving credit card accounts owned or serviced by it which
have characteristics similar to the Accounts which are the
subject of such change, the Originator shall not at any time
permit the Portfolio Yield to be less than the Funding Rate;
and
7.16.96.2. unless the Agent consents in writing, the
Originator shall not otherwise alter the Cardholder Guidelines
in any manner which the Originator reasonably believes might
have a material adverse effect on the collectibility or value
of Pool Receivables and shall apply its Cardholder Guidelines
to each of the Pool Receivables; provided, however, that if
any such alteration made without the Agent's consent is later
determined by the Agent or the Originator to have had an
adverse effect on the collectibility or value of Pool
Receivables, then the Originator shall promptly revise the
Cardholder Guidelines in order to prevent any such adverse
effect from occurring thereafter and any loss suffered by the
Purchasers or the Banks as a result of such alteration shall
be subject to Section 4.01 of the Agreement;
provided, however, that the Originator shall, within 10 Business Days following
any material change to the Cardholder Guidelines, give the Agent written notice
of such change; and provided, further, that the Originator (x) shall not make
any material adverse change in the minimum monthly payment required to be made
by an Obligor in respect of any Pool Receivable without the prior written
consent of the Agent (which consent will not be unreasonably withheld), (y)
shall not make any change in the duration of the Cycles used to xxxx Obligors of
the Receivables such that any such Cycle is more than 32 days and (z) shall
ensure that the entire principal balance of any Account any portion of which
remains unpaid for 180 days or more is written off the Seller's books as
uncollectible.
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7.16.97. Administrative Servicer.
7.16.97.1. Unless the Agent consents in writing, the
Originator will not amend, modify or supplement the Administrative
Servicer Agreement in any manner which the Originator reasonably
believes might have a material adverse effect on the collectibility or
value of Pool Receivables; provided, however, that if any amendment,
modification or amendment made without the Agent's consent is later
determined by the Agent or the Originator to have had an adverse effect
on the collectibility or value of Pool Receivables, then the Originator
shall use its best efforts to promptly amend, modify or supplement the
Administrative Servicer Agreement in order to prevent any such adverse
effect from occurring thereafter and any loss suffered by the
Purchasers or the Banks as a result of such amendment, modification or
supplement shall be subject to Section 4.01 of the Agreement; and
provided, however, that the Originator shall, within 10 Business Days
following any amendment, modification or supplement to the
Administrative Servicer Agreement, give the Agent written notice
thereof such change.
7.16.97.2. The Originator will not replace the Administrative
Servicer without the prior written consent of the Agent, which consent
will not be unreasonably withheld.
7.16.97.3. The Originator will provide to the Agent, as
promptly as possible, and in any event within two Business Days, after
receiving any notice from the Administrative Servicer of the
Administrative Servicer's intention to terminate the Administrative
Servicer Agreement for any reason, a statement setting forth the
details of such termination (including the reasons given by the
Administrative Servicer for taking such action) and the action that the
Originator proposes to take with respect thereto.
7.16.98. Information. The Originator shall provide to (i) the Servicer
(if other than Spirit) on a timely basis all information needed for the
administration of the Pool Receivables, including notice of the commencement of
the Amortization Period and (ii) to the Agent, as soon as possible and in any
event within two Business Days after receipt thereof, copies of all notices,
reports, information, documents, instruments and records delivered to the
Trustee
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which relate to the Pool Receivables or the Pooling and Servicing Agreement.
7.16.99. Annual Compliance Certificate. The Originator will provide to
the Agent, as soon as possible and in any event within 30 days after the close
of each fiscal year of the Originator, a certificate signed by the President or
a Vice President of the Originator, stating that the Originator is in compliance
with its regulatory capital requirements under applicable rules and regulations
of the Office of the Comptroller of the Currency, the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System or other
appropriate governmental authorities.
7.16.100. No Alteration of File Designation. The Originator shall not
alter the file designation referenced in clause (i) of paragraph 1(a) of Exhibit
II to the Agreement during the term of this Agreement for any Account unless and
until such Account becomes a Removed Account.
7.16.101. Pool Receivables Not to Be Evidenced by Instruments, Etc. The
Originator will not take any action to cause any Pool Receivable to be evidenced
by any instrument (as defined in the UCC as in effect in each of the States of
New York, Ohio, Pennsylvania and Delaware). Each Pool Receivable shall be
payable pursuant to a contract which does not create a lien on any goods
purchased thereunder. The Originator will not take any action to cause any Pool
Receivable to be anything other than an "account", or a "general intangible" or
the "proceeds" of either for purposes of the UCC as in effect in each of the
States of New York, Ohio, Pennsylvania and Delaware.
7.16.102. Approval; Official Record. Each Master Trust Document to
which the Originator is a party and the Agreement (i) was approved by the board
of directors of the Originator and such approval has been, and will be,
reflected continuously in the minutes of the Originator's board of directors,
and (ii) has been, and will be, an official record of the Originator
continuously from the time of its execution.
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EXHIBIT V
ADMINISTRATION AND COLLECTION
OF POOL RECEIVABLES
1. Duties of the Servicer. Until the latest of (x) the Facility
Termination Date, (y) the Commitment Termination Date or (z) the Final
Distribution Date:
7.16.103. In General. The Servicer shall take or cause to be
taken all such actions as may be necessary or advisable to service and
administer the Pool Receivables and collect all payments due under the
Pool Receivables from time to time in accordance with its customary and
usual servicing procedures for servicing credit card receivables
comparable to the Pool Receivables and in accordance with applicable
laws, rules and regulations, with reasonable care and diligence, and in
accordance with the Cardholder Guidelines, the Agreement and the
Pooling and Servicing Agreement. The Servicer shall not be obligated to
use separate servicing procedures, offices, employees or accounts for
servicing the Pool Receivables from the procedures, offices, employees
and accounts used by the Servicer in connection with servicing other
credit card receivables.
7.16.104. Audits. At any reasonable time and from time to time
at the Agent's reasonable request upon reasonable notice to the
Servicer and, if applicable, the Administrative Servicer, the Servicer
shall permit the Agent or its agents or representatives, to visit the
offices and properties of the Servicer for the purpose of examining
Records relating to the Servicer's credit card-related operations
and/or the Pool Receivables, internal controls and procedures
maintained by the Administrative Servicer (including, without
limitation, all Files, File Extracts and Masterfiles, as such terms are
defined in the Administrative Servicing Agreement in effect from time
to time) and to take copies and extracts therefrom, and to discuss the
Servicer's affairs with its officers, employees and independent
accountants.
7.16.105. Change in Payment Instructions to Obligors. The
Servicer will not add or terminate any bank as a Depositary Bank from
those listed in Schedule II to the Agreement, or, except
as requested by the Trustee pursuant to the Pooling and Servicing Agreement,
make any change in its instructions to Obligors
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regarding the method by which payments are to be made in respect of Pool
Receivables, unless the Agent shall have received notice of such addition,
termination or change and the Trustee shall have received copies of Depositary
Agreements with each new Depositary Bank, duly executed by the Seller and duly
acknowledged by such Depositary Bank, or such other notice or acknowledgments as
the Trustee may reasonably request.
7.16.106. Reporting Requirements. The Servicer will provide to
the Agent (in multiple copies, if requested by the Agent) the
following:
7.16.106.1. as soon as possible and in any event
within five days after the occurrence of each Early
Amortization Event or event which, with the giving of notice
or lapse of time, or both, would constitute an Early
Amortization Event, a statement of the chief financial officer
of the Servicer setting forth details of such Early
Amortization Event or event and the action that the Servicer
has taken and proposes to take with respect thereto;
7.16.106.2. within 30 days after the end of each
calendar year, a certificate of a Responsible Officer of the
Servicer to the effect that no Early Amortization Event
(including, without limitation, an Early Amortization Event
described in paragraph (m) of Exhibit VI), or event which,
with the giving of notice or lapse of time, or both, would
constitute an Early Amortization Event, has occurred and is
continuing;
7.16.106.3. at least 10 Business Days prior to any
change in the Seller's name or the Servicer's name, a notice
setting forth the new name and the effective date thereof; and
7.16.106.4. such other information respecting the
Pool Receivables or the condition or operations, financial or
otherwise, of the Seller, the Servicer or any of their
respective Affiliates required to be delivered to the
"Receivables Purchasers" under the Pooling and Servicing
Agreement or as the Agent may from time to time reasonably
request.
7.16.107. Calculation of Allocated Amounts. The Servicer
shall, from time to time at the reasonable request of the Agent,
furnish to the Agent (promptly after any such request) a calculation of
the amounts set aside for the
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Purchasers and the Banks pursuant to Article II of the Agreement.
7.16.108. Delivery of Servicer Reports. The Servicer shall prepare and
forward to the Agent, at least 2 Business Days prior to each Distribution Date,
a Servicer Report relating to the Purchaser Receivable Interests outstanding on
the last day of the immediately preceding Due Period, together with an analysis
of the aging of the Pool Receivables outstanding on such last day, and each such
Servicer Report will be accurate in all material respects as of its date.
7.16.109. Total Systems Failure. The Servicer shall promptly notify the
Agent of any Total Systems Failure and shall advise the Agent of the estimated
time required in order to remedy such Total Systems Failure and of the estimated
date on which a Servicer Report can be delivered. Until a Total Systems Failure
is remedied, the Servicer will (i) furnish to the Agent such periodic status
reports and other information relating to such Total Systems Failure as the
Agent may reasonably request and (ii) promptly notify the Agent if the Servicer
believes that such Total Systems Failure cannot be remedied by the estimated
date, which notice shall include a description of the circumstances which gave
rise to such delay, and the action proposed to be taken in response thereto, and
a revised estimate of the date on which a Servicer Report can be delivered. The
Servicer shall promptly notify the Agent when a Total Systems Failure has been
remedied.
7.16.110. Servicer Remains Liable. The exercise by the Agent and by any
Purchaser or any Bank of their rights under the Agreement shall not release the
Servicer, the Originator or the Owner from any of their duties or obligations
with respect to any Pool Receivables or under the related Cardholder Agreements.
Neither the Agent nor any Purchaser nor any Bank shall have any obligation or
liability with respect to any Pool Receivables or related Cardholder Agreements,
nor shall any of them be obligated to perform the obligations of any party
thereunder.
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2. Certain Rights of the Agent.
7.16.111. Notification of Obligors. The Agent may at any time following
the termination or transfer of the rights and obligations of both the Servicer
under the Pooling and Servicing Agreement and the Administrative Servicer under
the Administrative Servicer Agreement, upon ten days prior written notice to the
Owner and the Servicer, instruct the Trustee to, and upon such instruction the
Trustee shall, direct the Servicer to notify the Obligors of Pool Receivables,
at the Servicer's expense (if the Servicer is then Spirit, the Seller or a
designee of either of them), of the Agent's security interest in the Pool
Receivables pursuant to the Agreement, such notification to be made (i) by means
of statement to the foregoing effect contained in or enclosed with the monthly
billing statement sent by the Servicer to the Obligors of Pool Receivables and
(ii) within the next 32 days. If the Servicer fails to notify Obligors as
required pursuant to the foregoing sentence, then the Agent itself may, by any
means reasonably determined by the Agent to be consistent with market practice
and otherwise desirable to accomplish the purpose of this subsection and at the
Servicer's expense (if the Servicer is then Spirit, the Seller or a designee of
either of them), so notify such Obligors.
7.16.112. Store Payment Notice, Etc.
(i) At any time following the institution of insolvency
proceedings by or against any Store or Charming Shoppes or Charming
Shoppes of Delaware, Inc., the Agent is authorized to instruct the
Trustee to, and upon such instruction the Trustee shall, at the
Servicer's expense, date and deliver the Store Payment Notice to the
manager of each Store by or against which such a proceeding has been
instituted, or in the case of such a proceeding by or against Charming
Shoppes or Charming Shoppes of Delaware, Inc., to the managers of all
Stores.
(ii) Each of the Trustee, the Seller, the Servicer, the Owner,
the Originator, CNAI, the Purchasers and the Banks hereby authorizes
the Agent, if appointed Successor Servicer under the Pooling and
Servicing Agreement, to take any and all steps in the Trustee's name
and on behalf of the Trustee, the Purchasers and the Banks that are
necessary or desirable, in the determination of the Agent, to collect
amounts due under the Pool Receivables,
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including, without limitation, indorsing the name of the Originator, the Owner
or the Seller, as appropriate, on checks and other instruments representing
Collections of Pool Receivables and enforcing the Pool Receivables and the
related Cardholder Agreements.
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EXHIBIT VI
EARLY AMORTIZATION EVENTS
Each of the following (whether occurring before or after the
commencement of the Amortization Period) shall be an "Early Amortization Event":
7.16.113. (i) The Servicer shall fail to perform or observe
any term, covenant or agreement on its part to be performed or observed
under the Agreement (other than as referred to in clause (ii) below)
and such failure shall remain unremedied for 10 Business Days after
written notice thereof shall have been given to the Servicer by the
Agent; or (ii) the Servicer shall fail to make when due any payment or
deposit to be made by it under the Agreement and such failure shall
remain unremedied for 1 Business Day after written notice thereof shall
have been given to the Servicer by the Agent; or
7.16.114. (i) The Owner shall fail to make any deposit into
the Collection Account or the Agent's Account pursuant to Section
2.4(d) or 2.4(e) of the Pooling and Servicing Agreement or pursuant to
Section 2.07 or 4.03(b) of the Agreement, or (ii) the Seller shall fail
to make any other payment required under the Agreement; and, in the
case of either clause (i) or clause (ii) of this subsection (b), such
failure shall remain unremedied for one Business Day after written
notice thereof shall have been given to the Owner or the Seller, as the
case may be, by the Agent; or
7.16.115. Any representation or warranty made or deemed made
by the Seller, the Owner, the Originator, the Servicer, FSC or Charming
Shoppes (or any of their respective officers) under or in connection
with the Agreement, any Master Trust Document or the Company Agreement
or any information or report (other than any Servicer Report) delivered
by the Seller, the Owner, the Originator, the Servicer, FSC or Charming
Shoppes pursuant to the Agreement, any Master Trust Document or the
Company Agreement shall prove to have been incorrect or untrue in any
material respect when made or deemed made or delivered; or
7.16.116. The Seller, the Owner, the Originator, FSC or
Charming Shoppes shall fail to perform or observe any other term,
covenant or agreement contained in the Agreement, any Master Trust
Document or the Company Agreement on its part to be performed or
observed and any such failure shall remain
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unremedied for 10 continuous Business Days after written notice thereof shall
have been given to the Seller, the Owner, the Originator, FSC or Charming
Shoppes, as the case may be, by the Agent; or
7.16.117. (i) Spirit, in its capacity as the Servicer under the Pooling
and Servicing Agreement or Spirit or any Affiliate of Spirit, in any capacity
under any other Master Trust Document, shall fail to perform or observe any
term, covenant or agreement contained in the Pooling and Servicing Agreement or
such other Master Trust Document, on its part to be performed or observed and
(A) any such failure shall continue for 10 Business Days after written notice
thereof shall have been given to the Servicer by the Trustee or any Purchaser
Representative (as defined in the Pooling and Servicing Agreement) or (B) any
such failure under the Pooling and Servicing Agreement or other Master Trust
Document shall constitute an "early amortization event" or similar event under
any Certificate Series or Receivables Purchase Series (as defined in the Pooling
and Servicing Agreement), or
(ii) any "Servicer Default" shall occur under the Pooling and
Servicing Agreement, or
(iii) any other event shall occur or condition shall exist
under the Pooling and Servicing Agreement or other Master Trust
Document that constitutes an "Amortization Event" or a "Trust Early
Amortization Event" thereunder or would constitute an "Amortization
Event" or a "Trust Early Amortization Event" thereunder but for the
requirement that notice be given or time elapse or both; or
7.16.118. Any purchase or any reinvestment pursuant to the Agreement
shall for any reason (other than pursuant to the terms hereof) cease to create,
or any Purchaser Receivable Interest shall for any reason cease to be, a valid
and perfected first priority undivided percentage ownership interest to the
extent of the pertinent Purchaser Receivable Interest in each applicable Pool
Receivable and the Collections with respect thereto; or
7.16.119. The Seller, the Owner, the Originator, FSC or Charming
Shoppes shall generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against the Seller, the Owner, the
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Originator, FSC or Charming Shoppes seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, conservatorship or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors (including any law relating to the conservatorship or
liquidation of national banking associations), or seeking the entry of an order
for relief or the appointment of a receiver, trustee, custodian, conservator,
sequestrator or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it), either such proceeding shall remain undismissed or unstayed
for a period of 30 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian, conservator, sequestrator or
other similar official for, it or for any substantial part of its property)
shall occur; or the Seller, the Owner, the Originator, FSC or Charming Shoppes
shall take any corporate action to authorize any of the actions set forth above
in this paragraph (g); or
7.16.120. As of the last day of any Due Period, either the Delinquency
Ratio shall exceed 10% or the Quarterly Charge-Off Ratio shall exceed 15%; or
7.16.121. The Net Receivables Pool Balance minus the sum of (A) the
aggregate "Investor Interests" (as defined in the Pooling and Servicing
Agreement) for all Certificate Series issued pursuant to any supplement to the
Pooling and Servicing Agreement, (B) the aggregate "Receivables Purchase
Interests" (as defined in the Pooling and Servicing Agreement) for all
Receivables Purchase Series issued pursuant to any receivables purchase
agreement that is subject to the Pooling and Servicing Agreement (other than the
Agreement), (C) the Subordinated Purchaser Capital, (D) the Minimum Seller
Capital, and (E) the total amount of Discount Option Receivables, if any, shall,
as of the last day of any Due Period, be less than the sum of the aggregate
outstanding Purchaser Capital of all Purchaser Receivable Interests under the
Agreement; or the Floating Allocation Percentage as of the last day of any Due
Period shall be greater than 98.305%; and, in either case, such condition shall
continue until the first Distribution Date immediately following such day; or
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7.16.122. Charming Shoppes shall cease to own, directly or indirectly,
all shares of each class of the issued and outstanding shares of capital stock
of FSC; or FSC shall cease to own, directly or indirectly, all shares of each
class of the issued and outstanding shares of capital stock of Spirit; or
7.16.123. The Net Excess Spread (averaged over any three consecutive
Due Periods) shall be less than 2.5%; or
7.16.124. (i) Charming Shoppes or any of its subsidiaries shall fail to
pay any principal of or premium or interest on any indebtedness arising under
any Credit Facility when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such indebtedness (regardless of whether
such failure shall have been waived by the other parties to such Credit
Facility); or (ii) any event or condition listed in Schedule I as a "material
provision" shall occur or exist under any Credit Facility and shall continue
after the applicable grace period, if any, specified therein (regardless of
whether such event or condition shall have been waived by the other parties to
such Credit Facility); or (iii) any other event shall occur or condition shall
exist (which is not referred to in clause (i) or (ii) of this paragraph) under
any Credit Facility or any agreement or instrument relating to any such
indebtedness and shall (A) continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such indebtedness and (B) continue without waiver by the other parties to such
Credit Facility after the earliest to occur of (x) acceleration of the maturity
of such indebtedness, (y) in the case of the Congress Facility, the refusal of
the lenders thereunder to make further revolving loans or letter of credit
accommodations to Charming Shoppes and its Affiliates after a request therefor
and (z) the passage of ten Business Days following the last day of the
applicable grace period, if any; or (iv) any such indebtedness shall be declared
to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), redeemed, purchased or defeased, or an offer to
repay, redeem, purchase or defease such indebtedness shall be required to be
made, in each case prior to the stated maturity thereof; or
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7.16.125. Spirit shall not be in compliance with its regulatory capital
requirements under applicable rules and regulations of the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation, the
Board of Governors of the Federal Reserve System or other appropriate
governmental authorities; or
7.16.126. The Company Agreement shall cease to be in full force and
effect.
VI-5
133
Schedule I
Material Provision
1. Material Provision: adjusted net worth covenant.
I-
134
Schedule II
Depositary Banks
NationsBank:
ABA # 11 000 025
Account # 375-0000000
II-
135
ANNEX G
Summary of Interest Rate Agreements as of [Date]
Reference Date
No. or Type Fixed Amortization
Date of (Swap Notional Rate or Effective of Notional Termination
Counterparty Confirmation or Cap) Amount Cap Rate Date Amount Begins Date
------------ ------------ ------- -------- -------- --------- ------------- -----------
The [Owner/FSC] is a party to each of the above Agreements.
The Index for floating rate payments for each of the above Agreements is
["USD-CP-H.15"] for one month maturities.
II-
