EXHIBIT 10.1.22
EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 28, 1999
Among
CHARMING SHOPPES STREET, INC.
as Seller
and
SPIRIT OF AMERICA, INC.
as Servicer
and
CLIPPER RECEIVABLES CORPORATION
as Purchaser
and
STATE STREET CAPITAL CORPORATION
as Administrator
and
STATE STREET BANK & TRUST COMPANY
as Relationship Bank
TABLE OF CONTENTS
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.01. Commitments to Purchase; Limits on Purchaser's Obligations 2
SECTION 1.02. Purchase Procedures; Assignment of Purchaser's Interests 2
SECTION 1.03.Reinvestments of Certain Collections; Payment of Remaining Collections 2
SECTION 1.04. Asset Interest 4
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01. Computation of Purchaser's Total Investment. 4
SECTION 2.02. Computation of Earned Discount 5
SECTION 2.03. Estimates of Earned Discount Rate, Fees, etc 5
ARTICLE III
SETTLEMENTS
SECTION 3.01. Settlement Procedures 5
SECTION 3.02. Deemed Collections; Reduction of Purchaser's Total Investment, Etc 8
SECTION 3.03. Payments and Computations, Etc. 10
SECTION 3.04. Treatment of Collections and Deemed Collections 10
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees 12
SECTION 4.02. Yield Protection 12
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01. Conditions Precedent to Initial Purchase 14
SECTION 5.02. Conditions Precedent to All Purchases and Reinvestments 16
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Seller 17
SECTION 6.02. Representations and Warranties of Servicer 20
ARTICLE VII
GENERAL COVENANTS OF SELLER AND SERVICER
SECTION 7.01. Affirmative Covenants of Seller and Servicer 22
SECTION 7.02. Reporting Requirements of Seller 23
SECTION 7.03. Negative Covenants of Seller 24
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer 28
SECTION 8.02. Duties of Servicer 29
SECTION 8.03. Rights of the Administrator 30
SECTION 8.04. Responsibilities of Seller 31
SECTION 8.05. Further Action Evidencing Purchases and Reinvestments 31
SECTION 8.06. Application of Collections 32
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest 32
SECTION 9.02. Further Assurances 33
SECTION 9.03. Remedies 33
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.01. Liquidation Events 33
SECTION 10.02. Remedies 35
ARTICLE XI
THE ADMINISTRATOR; RELATIONSHIP BANK
SECTION 11.01. Authorization and Action 36
SECTION 11.02. Administrator's and Relationship Bank's Reliance, Etc 36
SECTION 11.03. Xxxxx Xxxxxx Xxxxxxx xxx Xxxxx Xxxxxx Xxxx and Affiliates 36
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. Restrictions on Assignments 37
SECTION 12.02. Rights of Assignee 38
SECTION 12.03. Evidence of Assignment 38
SECTION 12.04. Rights of the Banks and Collateral Agent 38
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities by Seller 38
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc 40
SECTION 14.02. Notices, Etc. 41
SECTION 14.03. No Waiver; Remedies 41
SECTION 14.04. Binding Effect; Survival 41
SECTION 14.05. Costs, Expenses and Taxes 42
SECTION 14.06. No Proceedings 42
SECTION 14.07. Confidentiality of Program Information 42
SECTION 14.08. Confidentiality of Seller Information 44
SECTION 14.09. Captions and Cross References 45
SECTION 14.10. Integration 45
SECTION 14.11. Governing Law 45
SECTION 14.12. Waiver Of Jury Trial 46
SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities 46
SECTION 14.14. Execution in Counterparts 46
SECTION 14.15. No Recourse Against Other Parties 46
SECTION 14.16. State Street Business Combination 47
APPENDICES
APPENDIX A Definitions
SCHEDULES
SCHEDULE 5.01(h) Description of Opinions
SCHEDULE 6.01(j) Description of Litigation
SCHEDULE 6.01(n) List of Offices of Seller where Records Are
Kept
SCHEDULE 7.01(g) Description of Credit and Collection Policy
EXHIBITS
EXHIBIT 3.01(a) Information Package to be Provided as of Cut-Off
Date
EXHIBIT 14.02 Addresses
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RECEIVABLES PURCHASE AGREEMENT
Dated as of May 28, 1999
THIS IS A RECEIVABLES PURCHASE AGREEMENT, among CHARMING SHOPPES
STREET, INC., a Delaware corporation ("Seller"), SPIRIT OF AMERICA, INC., a
Delaware corporation as Servicer ("Servicer") CLIPPER RECEIVABLES
CORPORATION, a Delaware corporation ("Purchaser"), STATE STREET CAPITAL
CORPORATION, a Massachusetts corporation ("State Street Capital"), as
administrator for Purchaser under the Program Administration Agreement (in
such capacity, the "Administrator") and STATE STREET BANK & TRUST COMPANY,
a national banking association, as a referral agent for Purchaser under the
Relationship Bank Agreement (in such capacity, together with any successors
thereto in such capacity, the "Relationship Bank" and in its individual
capacity, "State Street Bank"). Unless otherwise indicated, capitalized
terms used in this Agreement are defined in Appendix A.
Background
1. Seller is engaged in the business of purchasing receivables
originated by Spirit of America National Bank under Mastercard(R) and
VISA(R) cards.
2. Seller has, and expects to have, Pool Receivables in which Seller
intends to sell an undivided interest. Seller has requested Purchaser, and
Purchaser has agreed, subject to the terms and conditions contained in this
Agreement, to purchase such undivided interest, referred to herein as the
Asset Interest, from Seller from time to time during the term of this
Agreement.
3. Seller and Purchaser desire that, subject to the terms and
conditions of this Agreement, certain of the daily Collections in respect
of the Asset Interest be reinvested in Pool Receivables, which reinvestment
shall constitute part of the Asset Interest.
4. State Street Capital has been requested, and is willing, to act
as the Administrator.
5. State Street Bank has been requested, and is willing, to act as
the Relationship Bank.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto, intending to be legally
bound hereby, agree as follows:
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.01. Commitments to Purchase; Limits on Purchaser's
Obligations. Upon the terms and subject to the conditions of this
Agreement, from time to time prior to the Termination Date, Seller may
request that Purchaser purchase from Seller ownership interests in the Pool
Assets (each being a "Purchase") and Purchaser shall make such Purchase;
provided that no Purchase shall be made by Purchaser to the extent that,
after giving effect thereto, either (a) the then Purchaser's Total
Investment would exceed the lesser of (i) the Utilization Cap Amount, or
(ii) $20,000,000 or such larger amount as may be mutually agreed to in
writing by the parties hereto (the "Purchase Limit"), or (b) the Asset
Interest would exceed the Allocation Limit; and provided further that each
Purchase made pursuant to this Section 1.01 shall have a Purchase Price of
at least $100,000 and shall be in integral multiples of $100,000.
SECTION 1.02. Purchase Procedures; Assignment of Purchaser's
Interests.
(a) Notice of Purchase. Each Purchase from Seller by Purchaser
shall be made on notice from Seller to the Administrator received by the
Administrator not later than 11:00 a.m. (New York City time) on the
Business Day before the date of such proposed Purchase. Each such notice
of a proposed Purchase shall specify the desired amount and date of such
Purchase. The "Purchase Price" for each Purchase shall be the lesser of
(i) the amount requested by Seller pursuant to this Section 1.02(a) and
(ii) the amount permitted pursuant to Section 1.01.
(b) Funding of Purchase. On the date of each Purchase,
Purchaser shall, upon satisfaction of the applicable conditions set forth
in Article V, make available to the Administrator at the Administrator's
Office (or to such account as designated by the Administrator) the amount
of its Purchase in same day funds, and after receipt by the Administrator
of such funds, the Administrator will make such funds immediately available
to Seller at such office or to such account as Seller shall designate in
writing to the Administrator on or prior to the date hereof (or such other
office or account as Seller shall designate from time to time).
(c) Assignment of Asset Interests. Seller hereby sells, assigns
and transfers to Purchaser, effective on and as of the date of each
Purchase by the Purchaser hereunder, the Asset Interest in the Pool Assets.
SECTION 1.03. Reinvestments of Certain Collections; Payment of
Remaining Collections. (a) On the close of business on each Business Day
during the period from the date hereof to the Final Payout Date, Servicer
shall, out of all Collections received on such day from Pool Receivables:
(i) determine the portion of such Collections attributable
on such day to the Asset Interest by multiplying (x) the
amount of such Collections times (y) the Asset Interest
(expressed as a percentage of Net Pool Balance);
(ii) out of the portion of such Collections allocated to
the Asset Interest pursuant to clause (i), set aside and hold
in trust for Purchaser an amount at least equal to the sum of
the estimated amount of Earned Discount accrued in respect of
the Purchaser's Total Investment (based on rate information
provided by the Administrator pursuant to Section 2.03), all
other amounts due to Purchaser, the Administrator or the
Relationship Bank hereunder and the Servicer's Fee (in each
case, accrued through such day) and an amount equal to any
Cash Collateral Shortfall and any Spread Account Shortfall not
so previously set aside; provided that unless the
Administrator or the Relationship Bank shall request it to do
so in writing (which writing shall set forth the reason for
such request), Servicer shall not be required to hold
Collections that have been set aside in a separate deposit
account containing only such Collections but shall, to the
extent any amount is set aside for any Cash Collateral
Shortfall or any Spread Account Shortfall deposit such amount
in the RPA Cash Collateral Account or Spread Account, as
applicable;
(iii) apply the Collections allocated to the Asset Interest
pursuant to clause (i) and not required to be set aside
pursuant to clause (ii) to the purchase from Seller of
ownership interests in Pool Assets (each such purchase being a
"Reinvestment"); provided that (A) if the then Asset Interest,
expressed as a percentage of Net Pool Balance, would exceed
the Allocation Limit, then, Servicer shall not reinvest, but
shall set aside and hold for the benefit of Purchaser, a
portion of such Collections which, together with other
Collections previously set aside and then so held, shall equal
the amount necessary to reduce the Asset Interest to the
Allocation Limit; (B) if the conditions precedent to
Reinvestment in Section 5.02 are not satisfied then Servicer
shall not reinvest, but shall set aside and hold for the
benefit of Purchaser, any of such remaining Collections; and
(C) if the Seller shall have requested a reduction in the
Purchaser's Total Investment, then, during the times specified
in Section 3.02(b)(ii), Servicer shall not reinvest, but shall
set aside and hold for the benefit of Purchaser, a portion of
such Collections until the amount thereof not so reinvested
shall equal the amount of such reduction; and
(iv) pay to Seller (A) the portion of such Collections not
allocated to the Asset Interest pursuant to clause (i) and (B)
the Collections applied to Reinvestment pursuant to clause
(iii).
(b) Unreinvested Collections. Servicer shall set aside and hold in
trust for the benefit of Purchaser all Collections which pursuant to clause
(iii) of Section 1.03(a), may not be reinvested in Pool Assets; provided
that unless the Administrator or the Relationship Bank shall request it to
do so in writing (which writing shall set forth the reason for such
request), Servicer shall not be required to hold Collections that have been
set aside in a separate deposit account containing only such Collections.
If, prior to the date when such Collections are required to be paid to the
Administrator for the benefit of Purchaser pursuant to Section 3.01, the
amount of Collections so set aside exceeds the amount, if any, necessary to
reduce the Asset Interest to the Allocation Limit, and the conditions
precedent to Reinvestment set forth in Section 5.02 are satisfied, then the
Servicer shall apply such Collections (or, if less, a portion of such
Collections equal to the amount of such excess) to the making of a
Reinvestment.
(c) Reduction of Purchaser's Total Investment. The Purchaser's Total
Investment shall not be reduced by the amount of Collections set aside
pursuant to this Section unless and until such Collections are actually
delivered to the Administrator pursuant hereto.
SECTION 1.04. Asset Interest. (a) Components of Asset Interest. On
any date the Asset Interest will represent Purchaser's combined undivided
percentage ownership interest in (i) all then outstanding Pool Receivables,
(ii) related Contracts, (iii) all Related Security with respect to such
Pool Receivables, (iv) the Accounts, (v) all Collections with respect to,
and other proceeds of, such Pool Receivables, Contracts and Related
Security as at such date, (vi) all rights of Seller (directly or as
assignee of Parent) under the First Tier Agreement, the Second Tier
Agreement, the ES Agreement and the Cap Agreements, (vii) all books and
records evidencing or related to the foregoing, and (viii) all proceeds of
the foregoing (collectively, the "Pool Assets").
(b) Computation of Asset Interest. On any date, the Asset Interest
shall be equal to a fraction (expressed as a percentage), the numerator of
which is the Purchaser's Total Investment and the denominator of which is
the Net Pool Balance, each as of such day; provided, however, that during
the Liquidation Period, the Asset Interest shall be the Asset Interest
computed as of the day immediately preceding the commencement of the
Liquidation Period; provided, further, that the Asset Interest shall not
exceed 100%.
(c) Frequency of Computation. The Asset Interest shall be computed
as of the Cut-Off Date for each Settlement Period. In addition, the
Administrator may require Servicer to provide an Information Package for
purposes of computing the Asset Interest as of any other date, utilizing
the then most recently available information, and the Servicer agrees to do
so within three Business Days of its receipt of the Administrator's written
request.
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01. Computation of Purchaser's Total Investment. In making
any determination of Purchaser's Total Investment, the following rules
shall apply:
(a) Purchaser's Total Investment shall not be considered
reduced by any allocation, setting aside or distribution of
any portion of Collections unless such Collections shall have
been actually delivered to the Administrator pursuant hereto;
and
(b) Purchaser's Total Investment shall not be considered
reduced by any distribution of any portion of Collections if
at any time such distribution is rescinded or otherwise
returned for any reason.
SECTION 2.02. Computation of Earned Discount. In making any
determination of Earned Discount, the following rules shall apply:
(a) the Administrator shall determine the Earned Discount
accruing with respect to the Purchaser's Total Investment, in
accordance with the definition of Earned Discount;
(b) no provision of this Agreement shall require the
payment or permit the collection of Earned Discount in excess
of the maximum permitted by applicable law; and
(c) Earned Discount shall not be considered paid by any
distribution if at any time such distribution is rescinded or
otherwise returned for any reason.
SECTION 2.03. Estimates of Earned Discount Rate, Fees, etc. For
purposes of determining the amounts required to be set aside by Servicer
pursuant to Section 1.03, the Administrator shall notify Servicer from time
to time of the Earned Discount Rate applicable to the Purchaser's Total
Investment and the rates at which fees and other amounts are accruing
hereunder. It is understood and agreed that (i) the Earned Discount Rate
may change from time to time, (ii) certain rate information provided by the
Administrator to Servicer shall be based upon the Administrator's good
faith estimate, (iii) the amount of Earned Discount actually accrued with
respect to any Settlement Period may exceed, or be less than, the amount
set aside with respect thereto by Servicer, and (iv) the amount of fees or
other payables accrued hereunder with respect to any Settlement Period may
exceed, or be less than, the amount set aside with respect thereto by
Servicer. Failure to set aside any amount so accrued shall not relieve
Servicer of its obligation to remit Collections to the Administrator with
respect to such accrued amount, as and to the extent provided in Section
3.01.
ARTICLE III
SETTLEMENTS
SECTION 3.01. Settlement Procedures.
The parties hereto will take the following actions with respect to
each Settlement Period:
(a) Information Package. On the seventh Business Day
following the Cut-Off Date for such Settlement Period or as
otherwise may be requested pursuant to Section 1.04(c),
Servicer shall deliver to the Relationship Bank and the
Administrator a diskette containing the information described
in Exhibit 3.01(a) (each, an "Information Package").
(b) Earned Discount; Other Amounts Due. On the first
Business Day following such Cut-Off Date, the Administrator
shall notify Servicer of (i) the amount of Earned Discount
that will have accrued in respect of the Purchaser's Total
Investment during such Settlement Period, and (ii) all fees
and other amounts accrued and payable by Seller under this
Agreement (other than Purchaser's Total Investment).
(c) Settlement Date Procedure - Reinvestment Period. On
the fifteenth day of each month, or if such day is not a
Business Day, the next succeeding Business Day (each, a
"Settlement Date") prior to the Termination Date, the Servicer
shall distribute, from Available Funds for such Settlement
Date, the following amounts in the following order:
(1) to the Administrator, an amount equal to the
Earned Discount accrued during such Settlement Period,
plus any previously accrued Earned Discount not paid on a
prior Settlement Date, which amount shall be distributed
by the Administrator to the Purchaser for application to
such Earned Discount;
(2) to the Administrator, an amount equal to the
Program Fee and the Commitment Fee accrued during such
Settlement Period, plus any previously accrued Program
Fee and Commitment Fee not paid on a prior Settlement
Date;
(3) to the Servicer, if the Servicer is not Seller or
one of its Affiliates, an amount equal to the Servicer's
Fee accrued during such Settlement Period, to the extent
that such Servicer's Fee does not exceed the Servicer's
Fee that would have accrued if such Servicer's Fee had
been calculated using a Servicer's Fee Rate of 2%;
(4) to the Administrator, an amount equal to the
amount, if any, necessary to reduce the Asset Interest to
the Allocation Limit and to reduce the Purchaser's Total
Investment in accordance with Section 3.02(b), which
amount shall be distributed by the Administrator to the
Purchaser for application to the Purchaser's Total
Investment;
(5) to the Administrator, all other amounts then due
under this Agreement to the Administrator, the
Relationship Bank, the Purchaser, the Affected Parties or
the Indemnified Parties;
(6) to the Servicer, an amount equal to the Servicer's
Fee accrued during such Settlement Period to the extent
not paid pursuant to subparagraph (3) above, plus any
previously accrued Servicer's Fee not paid on a prior
Settlement Date;
(7) to the RPA Cash Collateral Account, to the extent
necessary to cause funds on deposit therein to equal the
RPA Required Cash Collateral Amount;
(8) to the Spread Account, to the extent required
under the terms of the Spread Account Agreement; and
(9) to the Seller, any remaining amounts; provided,
however, that if the Seller shall so instruct the
Administrator, funds that would otherwise be paid to the
Seller under this clause shall be deposited in the RPA
Cash Collateral Account.
(d) Settlement Date Procedure - Liquidation Period. On
each Settlement Date during the Liquidation Period, the
Servicer shall distribute, from Available Funds for such
Settlement Date, the following amounts in the following order:
(1) to the Administrator, an amount equal to the
Earned Discount accrued during such Settlement Period,
plus any previously accrued Earned Discount not paid on a
prior Settlement Date, which amount shall be distributed
by the Administrator to the Purchaser for application to
such Earned Discount;
(2) to the Administrator, an amount equal to the
Program Fee and Commitment Fee accrued during such
Settlement Period, plus any previously accrued Program
Fee and Commitment Fee not paid on a prior Settlement
Date;
(3) to the Servicer, if the Servicer is not Seller or
one of its Affiliates, an amount equal to the Servicer's
Fee accrued during such preceding Settlement Period, to
the extent that such Servicer's Fee does not exceed the
Servicer's Fee that would have accrued if such Servicer's
Fee had been calculated using a Servicer's Fee Rate of
2%;
(4) to the Administrator, an amount equal to any
remaining Purchaser's Share of Collections until the
Purchaser's Total Investment is reduced to zero, which
amount shall be distributed by the Administrator to the
Purchaser for application to the Purchaser's Total
Investment;
(5) to the Administrator, all other amounts then due
under this Agreement to the Administrator, the
Relationship Bank, the Purchaser, the Affected Parties or
the Indemnified Parties;
(6) to the Servicer, an amount equal to the Servicer's
Fee accrued during such Settlement Period, to the extent
not paid pursuant to subparagraph (3) above, plus any
previously accrued Servicer's Fee not paid on a prior
Settlement Date; and
(7) to the Seller, any remaining amounts.
(e) Order of Application of Purchaser's Total Investment.
Upon receipt by the Administrator of funds distributed
pursuant to this Section 3.01 with respect to any Settlement
Period on account of Purchaser's Total Investment, the
Administrator shall apply them to the items specified in the
subclauses below, in the order of priority of such subclauses:
(i) to that portion of the Purchaser's Total
Investment funded by Liquidity Fundings until such
portion has been reduced to zero;
(ii) to that portion of the Purchaser's Total
Investment funded by Commercial Paper Notes until such
portion has been reduced to zero; and
(iii) to the remaining portion of the Purchaser's Total
Investment until the Purchaser's Total Investment has
been reduced to zero.
(f) Non-Distribution of Servicer's Fee. Unless the
Administrator gives written notice to the contrary to Servicer
(which notice may be given at any time), from and after the
date on which the amounts (if any) set aside pursuant to
Section 1.03 for any Settlement Period in respect of payments
required to be made prior to the payment of the Servicer's Fee
on the related Settlement Date are sufficient to make such
payments, the amounts (if any) set aside pursuant to Section
1.03 in respect of the Servicer's Fee may be paid to Servicer,
in which case no distribution shall be made in respect of
Servicer's Fee pursuant to clause (c) or (d) above.
(g) Delayed Payment. If on any day described in this
Section 3.01 because Collections during the relevant
Settlement Period were less than the aggregate amounts
payable, Servicer shall not make any payment otherwise
required, the next available Collections in respect of the
Asset Interest shall be applied to such payment, and no
Reinvestment shall be permitted hereunder until such amount
payable has been paid in full.
SECTION 3.02. Deemed Collections; Reduction of Purchaser's Total
Investment, Etc.
(a) Deemed Collections. If on any day
(i) the Unpaid Balance of any Pool Receivable is
(A) reduced as a result of any defective, rejected or
returned merchandise or services, any cash discount, or
any incorrect billing or other adjustment by Seller or
any Affiliate of Seller,
(B) reduced or canceled as a result of a setoff in
respect of any claim by the Obligor thereof against
Seller or any Affiliate of Seller or any other Person
(whether such claim arises out of the same or a related
or an unrelated transaction), or
(C) reduced on account of the obligation of Seller to
pay to the related Obligor any rebate or refund, or
(D) less than the amount included in calculating the
Net Pool Balance for purposes of any Information Package,
or
(ii) any of the representations or warranties of Seller set
forth in Section 6.01(l) or (p) were not true when made with
respect to any Pool Receivable, or any of the representations
or warranties of Seller set forth in Section 6.01(l) are no
longer true with respect to any Pool Receivable,
then, on such day, Seller shall be deemed to have received a Collection of
such Pool Receivable
(I) in the case of clause (i) above, in the amount of
such reduction or cancellation or the difference between
the actual Unpaid Balance and the amount included in
calculating such Net Pool Balance, as applicable; and
(II) in the case of clause (ii) above, in the amount
of the Unpaid Balance of such Pool Receivable.
(b) Seller's Optional Reduction of Purchaser's Total Investment.
Seller may at any time elect to reduce the Purchaser's Total Investment as
follows:
(i) Seller shall give the Administrator at least three
Business Days' prior written notice of such reduction
(including the amount of such proposed reduction and the
proposed date on which such reduction will commence),
(ii) on the proposed date of commencement of such reduction
and on each day thereafter, Servicer shall refrain from
reinvesting Collections pursuant to Section 1.03 until the
amount thereof not so reinvested shall equal the amount of
such reduction, and
(iii) Servicer shall hold such Collections in trust for
Purchaser, pending payment to the Administrator, as provided
in Section 3.01;
provided that,
(A) the amount of any such reduction shall be not less
than $100,000 and the Purchaser's Total Investment after
giving effect to such reduction shall be not less than
$100,000 (unless such reduction reduces Purchaser's Total
Investment to zero), and
(B) Seller shall use reasonable efforts to attempt to
choose a reduction amount, and the date of commencement
thereof, so that such reduction shall commence and
conclude in the same Settlement Period to the extent
possible.
SECTION 3.03. Payments and Computations, Etc.
(a) Payments. All amounts to be paid or deposited by Seller or
Servicer to the Administrator or any other Person hereunder (other than
amounts payable under Section 4.02) shall be paid or deposited in
accordance with the terms hereof no later than 11:00 a.m. (New York City
time) on the day when due in lawful money of the United States of America
in same day funds (i) in the case of amounts to be paid or deposited in
respect of accrued and unpaid Earned Discount or in reduction of
Purchaser's Total Investment, to the Collateral Agent at First National
Bank of Chicago, Chicago, Illinois, for credit to such account as the
Administrator shall specify and (ii) in the case of all fees, expenses and
other amounts (other than amounts payable under Section 4.02), to the
Administrator at Xxxxx Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxxx, for credit to
such account as the Administrator shall specify.
(b) Late Payments. Seller or Servicer, as applicable, shall, to the
extent permitted by law, pay to Purchaser interest on all amounts not paid
or deposited when due hereunder at 1% per annum above the Alternate Base
Rate, payable on demand, provided, however, that such interest rate shall
not at any time exceed the maximum rate permitted by applicable law.
(c) Method of Computation. All computations of interest, Earned
Discount, any fees payable under Sections 4.01(a) and (b) and any other
fees payable by Seller to Purchaser, the Administrator or the Relationship
Bank in connection with Purchases or the Asset Interest hereunder shall be
made on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) elapsed.
SECTION 3.04. Treatment of Collections and Deemed Collections.
Seller shall forthwith deliver to Servicer all Collections deemed received
by Seller pursuant to Section 3.02(a), and Servicer shall hold or
distribute such Collections as Earned Discount, accrued Servicer's Fee,
repayment of Purchaser's Total Investment, etc. to the same extent as if
such Collections had actually been received on the date of such delivery to
Servicer. If Collections are then being paid to the Collateral Agent, or
lock boxes or accounts directly or indirectly owned or controlled by the
Collateral Agent, Servicer shall forthwith cause such deemed Collections to
be paid to the Collateral Agent or to such lock boxes or accounts, as
applicable, or as the Collateral Agent shall request in writing. So long
as Seller shall hold any Collections or deemed Collections required to be
paid to Servicer, the Administrator or Collateral Agent, it shall hold such
Collections in trust and shall clearly xxxx its records to reflect such
trust; provided that unless the Administrator or the Relationship Bank
shall request it to do so in writing, Seller shall not be required to hold
such Collections in a separate deposit account containing only such
Collections.
SECTION 3.05. Establishment of RPA Cash Collateral Account.
(a) The Administrator, for the benefit of the Purchaser and the
Liquidity Banks, shall establish and maintain an account (the "RPA Cash
Collateral Account"). The RPA Cash Collateral Account shall be under the
sole dominion and control of the Administrator. The Servicer shall from
time to time deposit in the RPA Cash Collateral Account (i) a portion of
the proceeds of fundings under this Agreement, and (ii) funds otherwise
payable to the Seller under Section 3.01(c) (7) and (9).
(b) Funds on deposit in the RPA Cash Collateral Account shall be
invested by the Administrator in Permitted Investments at the direction of
Seller. Such investments made at any time will mature so that funds will
be available for withdrawal no later than the following Settlement Date.
All earnings on such investment during any such Settlement Period shall be
deemed to be Collections for such Settlement Period.
(c) The Administrator shall maintain investments in the RPA Cash
Collateral Account in such manner as will maintain the perfection and
priority of the Administrator's lien thereon.
(d) If on any Settlement Date, a Shortfall shall exist, the
Administrator shall withdraw from the RPA Cash Collateral Account (in an
amount equal to the lesser of such Shortfall or the amount on deposit in
the RPA Cash Collateral Account) and apply such withdrawing funds in the
same manner as Collections pursuant to Section 3.01.
(e) If on any Settlement Date the funds on deposit in the RPA Cash
Collateral Account (exclusive of earnings on the investment of such funds)
shall exceed the RPA Required Cash Collateral Amount, the Administrator
shall withdraw such excess and pay such excess to Seller.
SECTION 3.06. Spread Account. If, on any Settlement Date, a
Shortfall shall remain after giving effect to any applications from the RPA
Cash Collateral Account pursuant to Section 3.05(d), the Servicer shall
cause funds to be withdrawn from the Spread Account (to the extent
available under the terms of the Spread Account Agreement) in the amount of
such remaining Shortfall and applied in the same manner as Collections
pursuant to Section 3.01.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees.
(a) Arrangement Fee. Seller shall pay to the Relationship Bank, an
arrangement fee ("Arrangement Fee") payable on such dates and in such
amounts as are set forth in the letter dated the date hereof from the
Relationship Bank to Seller.
(b) Other Fees. Seller shall pay to Purchaser certain fees, payable
on such dates and in such amounts as are set forth in the letter dated the
date hereof from the Relationship Bank to Seller (as amended from time to
time, the "Fee Letter").
SECTION 4.02. Yield Protection.
(a) If (i) Regulation D or (ii) any Regulatory Change occurring after
the date hereof:
(A) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the
Federal Reserve Board, but excluding any reserve included in
the determination of Earned Discount), special deposit or
similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any
Affected Party or with or for the account of any affiliate (or
entity deemed by the Federal Reserve Board to be an affiliate)
of any Affected Party, or credit extended by any Affected
Party; or
(B) shall change the amount of capital maintained or
required or requested or directed to be maintained by any
Affected Party;
(C) shall impose any other condition affecting any Asset
Interest owned or funded in whole or in part by any Affected
Party, or its obligations or rights, if any, to make Purchases
or Reinvestments or to provide funding therefor; or
(D) shall change the rate for, or the manner in which the
Federal Deposit Insurance Corporation (or a successor thereto)
assesses, deposit insurance premiums or similar charges;
and the result of any of the foregoing is or would be:
(x) to increase the cost to (or in the case of Regulation D
referred to above, to impose a cost on) an Affected Party
funding or making or maintaining any Purchases or
Reinvestments, any purchases, reinvestments, or loans or other
extensions of credit under the Liquidity Agreement, or any
Credit Draw, or any commitment of such Affected Party with
respect to any of the foregoing,
(y) to reduce the amount of any sum received or receivable
by an Affected Party under this Agreement, or under the
Liquidity Agreement or the Credit Agreement with respect
thereto, or
(z) in the reasonable determination of such Affected Party,
to reduce the rate of return on the capital of an Affected
Party as a consequence of its obligations hereunder or arising
in connection herewith to a level below that which such
Affected Party could otherwise have achieved but for
Regulation D or such Regulatory Change,
then within thirty days after demand by such Affected Party (which demand
shall be accompanied by a statement setting forth the basis of such
demand), Seller shall pay directly to such Affected Party such additional
amount or amounts as will compensate such Affected Party for such
additional or increased cost or such reduction. This Section 4.02(a) shall
not apply to taxes.
(b) Each Affected Party will promptly notify Seller and the
Administrator of any event of which it has knowledge which will entitle
such Affected Party to compensation pursuant to this Section 4.02;
provided, however, no failure to give or delay in giving such notification
shall adversely affect the rights of any Affected Party to such
compensation.
(c) In determining any amount provided for or referred to in this
Section 4.02, an Affected Party may use any reasonable averaging and
attribution methods that it (in its sole discretion) shall deem applicable.
Any Affected Party when making a claim under this Section 4.02 shall submit
to Seller a statement as to such increased cost or reduced return
(including calculation thereof in reasonable detail), which statement
shall, in the absence of demonstrable error, be conclusive and binding upon
Seller.
(d) Purchaser agrees that it shall use its reasonable best efforts
to take any action that will avoid the need to pay, or reduce the amount
of, any increased amounts referred to in paragraph (a); provided that
Purchaser shall not be obligated to take any actions that would, in the
reasonable opinion of Purchaser, be disadvantageous to Purchaser.
(e) Subject to Section 4.02(g), any and all payments made under this
Agreement shall be made free and clear of, and without deduction for, any
and all present or future Taxes. If any amount of Taxes shall be required
by law to be deducted from or in respect of any sum payable hereunder to
any Foreign assignee or participant of Purchaser, (i) the sum payable shall
be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section 4.02(e)), such Foreign assignee or participant of
Purchaser, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) Seller shall make such
deductions and (iii) Seller shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law.
(f) Each Foreign assignee or participant of Purchaser, on or prior to
the date pursuant to which it becomes an assignee or participant of
Purchaser, and from time to time thereafter if requested in writing by
Seller (unless such Foreign assignee or participant of Purchaser can no
longer lawfully do so due to a change in law subsequent to the date it
became an assignee or participant of Purchaser hereunder), shall provide
Seller with Internal Revenue Service Form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service, certifying
that such Foreign assignee or participant of Purchaser is entitled to
benefits under an income tax treaty to which the United States is a party
which reduces the rate of withholding tax on payments of interest to zero
or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(g) For any period with respect to which a Foreign assignee or
participant of Purchaser has failed to provide the Seller with the
appropriate form described in Section 4.02(f) (other than if such failure
is due to a change in law occurring subsequent to the date on which a form
originally was required to be provided), such Foreign assignee or
participant of Purchaser shall not be entitled to payments of additional
amounts under Section 4.02(e).
SECTION 4.03. Funding Losses. In the event that the Purchaser or any
Liquidity Bank shall incur any loss or expense (including any loss or
expense incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by the Purchaser or such Liquidity Bank to make any
Purchase or Liquidity Funding or maintain any Purchase or Liquidity
Funding) as a result of (i) any settlement with respect to any portion of
Purchaser's Total Investment being made on any day other than a Settlement
Date, or (ii) any Purchase not being made in accordance with a request
therefore under Section 1.02 (other than by reason of (a) a default by the
Purchaser or such Liquidity Bank, (b) Purchaser's failure to make available
to the Administrator the required funds as set forth in Section 1.02(b) or
(c) the Administrator's failure to make available the required funds to
Seller as set forth in Section 1.02(b)), then, upon written notice from the
Administrator to Seller and Servicer, Seller shall pay to Servicer, and
Servicer shall pay to the Administrator for the account of the Purchaser or
such Liquidity Bank, the amount of such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in
the absence of manifest error, be conclusive and binding upon the Seller
and Servicer.
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01. Conditions Precedent to Initial Purchase. The initial
Purchase hereunder is subject to the condition precedent that the
Administrator shall have received, on or before the Initial Funding Date,
the following, each (unless otherwise indicated) dated such date and in
form and substance satisfactory to the Administrator:
(a) A copy of the resolutions of the Board of Directors of
each Transferor approving the Transaction Documents to be
delivered by it and the transactions contemplated thereby,
certified by its Secretary or Assistant Secretary;
(b) A good standing certificate for each Transferor issued
by the jurisdiction of its formation.
(c) A certificate of the Secretary or Assistant Secretary
of each Transferor certifying the names and true signatures of
the officers authorized on its behalf to sign the Transaction
Documents to be delivered by it (on which certificate the
Administrator and Purchaser may conclusively rely until such
time as the Administrator shall receive from Seller a revised
certificate meeting the requirements of this subsection (c));
(d) The organizational documents of each Transferor, duly
certified by its Secretary or Assistant Secretary;
(e) Such proper financing statements (Form UCC-1), to be
filed against the Transferors, as may be necessary or, in the
opinion of the Administrator, desirable under the UCC or any
comparable law of all appropriate jurisdictions to perfect
Purchaser's interests in the Pool Assets;
(f) A search report provided in writing to the
Administrator, listing all effective financing statements that
name a Transferor as debtor and that are filed in the
jurisdictions in which filings were made pursuant to
subsection (e) above and in such other jurisdictions that
Administrator shall reasonably request, together with copies
of such financing statements (none of which shall cover any
Pool Assets);
(g) A list of the Lock-Box Banks, and duly executed copies
of Lock-Box Agreements with each of the Lock-Box Banks;
(h) Favorable opinions of counsel to the Transferors, in
form and substance reasonably satisfactory to the
Administrator and with respect to such matters as are set
forth in Schedule 5.01(h);
(i) Such powers of attorney as the Administrator shall
reasonably request to enable the Administrator to collect all
amounts due under any and all Pool Receivables;
(j) A pro forma Information Package, prepared in respect of
the proposed initial Purchase, assuming a Cut-Off Date of no
more than 3 Business Days prior to the Initial Funding Date;
(k) Fully executed copies of the First Tier Agreement, the
Second Tier Agreement, the Spread Account Agreement, the ES
Agreement, the SA Bank Security Agreement and the Specified
Supplement, each of which agreements shall be in form and
substance reasonably satisfactory to the Administrator;
(l) The Liquidity Agreements, each duly executed by
Purchaser, the Liquidity Agent and each Liquidity Bank;
(m) Written approval by the Credit Bank of this Agreement
and the transactions contemplated hereby;
(n) Letters from the rating agencies then rating the
Commercial Paper Notes, confirming in effect that the existing
ratings of the Commercial Paper Notes will remain in effect
after giving effect to the transactions contemplated hereby;
and
(o) The Fee Letter, duly executed by Seller.
SECTION 5.02. Conditions Precedent to All Purchases and
Reinvestments. Each Purchase (including the initial Purchase) and each
Reinvestment hereunder shall be subject to the further conditions precedent
that on the date of such Purchase or Reinvestment the following statements
shall be true (and Seller by accepting the amount of such Purchase or by
receiving the proceeds of such Reinvestment shall be deemed to have
certified that):
(a) the representations and warranties contained in Section
6.01 are correct in all material respects on and as of such
day as though made on and as of such day and shall be deemed
to have been made on such day,
(b) no event has occurred and is continuing, or would
result from such Purchase or Reinvestment, that constitutes a
Liquidation Event or Unmatured Liquidation Event,
(c) after giving effect to each proposed Purchase or
Reinvestment, (i) Purchaser's Total Investment will not exceed
the Purchase Limit, and (ii) the Asset Interest, expressed as
a percentage of Net Pool Balance, will not exceed the
Allocation Limit,
(d) the Termination Date shall not have occurred,
(e) the aggregate amount on deposit in the RPA Cash
Collateral Account (after giving effect to such Purchase or
Reinvestment and any deposit to the RPA Cash Collateral
Account but excluding any earnings on the investment of such
amount), shall not be less than the RPA Required Cash
Collateral Amount; and
(f) the Spread Account Amount (after giving effect to such
Purchase or Reinvestment and any deposit to the Spread Account
Amount) shall not be less than the Required Spread Account
Amount,
provided, however, the absence of the occurrence and continuance of an
Unmatured Liquidation Event shall not be a condition precedent to any
Reinvestment or any Purchase which does not cause the Purchaser's Total
Investment, after giving effect to such Reinvestment or Purchase, to exceed
the Purchaser's Total Investment as of the opening of business of the day
of such Reinvestment or Purchase.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Seller. Seller
represents and warrants as follows:
(a) Organization and Good Standing. Seller has been duly
organized and is validly existing as a corporation in good
standing under the laws of Delaware, with power and authority
to own its properties and to conduct its business as such
properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, all
necessary power, authority, and legal right to acquire and own
the Pool Receivables.
(b) Due Qualification. Seller is duly qualified to do
business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the failure to so qualify or obtain
such licenses or approvals would have a Material Adverse
Effect.
(c) Power and Authority; Due Authorization. Seller (i) has
all necessary power, authority and legal right to (A) execute
and deliver the Transaction Documents to which it is a party,
(B) carry out the terms of the Transaction Documents to which
it is a party, and (C) sell and assign the Asset Interest on
the terms and conditions herein provided and (ii) has duly
authorized by all necessary corporate action the execution,
delivery and performance of the Transaction Documents to which
it is a party and the sale and assignment of the Asset
Interest on the terms and conditions herein provided.
(d) Valid Sale; Binding Obligations. This Agreement
constitutes a valid sale, transfer, and assignment of the
Asset Interest to Purchaser, enforceable against creditors of,
and purchasers from, Seller; and this Agreement constitutes,
and each other Transaction Document to be executed by Seller
when duly executed and delivered will constitute, a legal,
valid and binding obligation of Seller enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in
equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by the Transaction Documents and the fulfillment
of the terms thereof will not (i) conflict with, result in any
breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default
under, (A) the articles of incorporation or by-laws of Seller,
or (B) in any material respect, any indenture, loan agreement,
receivables purchase agreement, mortgage, deed of trust, or
other agreement or instrument to which Seller is a party or by
which it or any of its properties is bound, (ii) result in the
creation or imposition of any Lien upon any of Seller's
properties pursuant to the terms of any such indenture, loan
agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument, other than the
Transaction Documents, or (iii) violate any law or any order,
rule, or regulation applicable to Seller of any court or of
any federal or state regulatory body, administrative agency,
or other governmental instrumentality having jurisdiction over
Seller or any of its properties.
(f) No Proceedings. There are no proceedings or
investigations pending, or, to Seller's knowledge, threatened,
before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting
the invalidity of any Transaction Document to which Seller is
a party, (ii) seeking to prevent the sale and assignment of
any Asset Interest or the consummation of any of the other
transactions contemplated by any Transaction Document to which
Seller is a party, or (iii) seeking any determination or
ruling that might have a Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
(h) Government Approvals. 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 Seller of this
Agreement or any other Transaction Document, except for the
filing of the UCC financing statements referred to in Article
V, all of which, at the time required in Article V, shall have
been duly made and shall be in full force and effect.
(i) Financial Condition. (x) The pro forma balance sheets
of Seller prepared as of the month end prior to the Closing
Date, a copy of which has been furnished to the Administrator,
fairly present the consolidated financial condition of Seller
as at such date in accordance with generally accepted
accounting principles.
(j) Litigation. No injunction, decree or other decision
has been issued or made by any court, governmental agency or
instrumentality thereof that prevents, and no threat by any
person has been made to attempt to obtain any such decision
that would prevent, Seller from conducting a material part of
its business operations, except as described in Schedule
6.01(j).
(k) Margin Regulations. The use of all funds obtained by
Seller under this Agreement will not conflict with or
contravene any of Regulations G, T, U and X promulgated by the
Board of Governors of the Federal Reserve System from time to
time.
(l) Quality of Title. Each Pool Receivable, together with
each other Pool Asset, is owned by Seller free and clear of
any Lien (other than any Lien arising solely as the result of
any action taken by Purchaser (or any assignee thereof) or by
the Administrator); when Purchaser makes a Purchase or
Reinvestment, it shall have acquired and shall at all times
thereafter continuously maintain a valid and perfected first
priority undivided percentage ownership interest to the extent
of the Asset Interest in each Pool Receivable, and each other
Pool Asset, free and clear of any Lien (other than any Lien
arising solely as the result of any action taken by Purchaser
(or any assignee thereof) or by the Administrator); and no
financing statement or other instrument similar in effect
covering any Pool Receivable, or any other Pool Asset is on
file in any recording office except such as may be filed (i)
in favor of Purchaser or the Administrator in accordance with
this Agreement or in connection with any Lien arising solely
as the result of any action taken by Purchaser (or any
assignee thereof) or by the Administrator, or (ii) in favor of
the Collateral Agent.
(m) Accurate Reports. No Information Package (if prepared
by Seller or its Affiliate, or to the extent information
therein was supplied by Seller or its Affiliate) or other
information, exhibit, financial statement, document, book,
record or report furnished or to be furnished by or on behalf
of Seller or its Affiliates to the Administrator, Purchaser or
the Relationship Bank in connection with this Agreement was or
will be inaccurate in any material respect as of the date it
was or will be dated or (except as otherwise disclosed to the
Administrator, Purchaser, and the Relationship Bank at such
time) as of the date so furnished, or contained or will
contain any material misstatement of fact or omitted or will
omit to state a material fact or any fact necessary to make
the statements contained therein not materially misleading.
(n) Offices. The chief place of business and chief
executive office of Seller are located at the address of
Seller referred to in Section 14.02, and the offices where
Seller keeps all its books, records and documents evidencing
Pool Receivables, the related Accounts and Contracts and all
other agreements related to such Pool Receivables are located
at the addresses specified in Schedule 6.01(n) (or at such
other locations, notified to the Administrator in accordance
with Section 7.01(f), in jurisdictions where all action
required by Section 8.05 has been taken and completed).
(o) Lock-Box Accounts. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the lock-
box accounts of Seller at such Lock-Box Banks, have been
notified to the Administrator and the Relationship Bank on the
Initial Funding Date, or later, in accordance with Section
7.03(d)).
(p) Eligible Receivables. Each Receivable included in the
Net Pool Balance as an Eligible Receivable on the date of any
Purchase, Reinvestment or other calculation of the Net Pool
Balance shall be an Eligible Receivable on such date.
(q) Servicing Programs. No license or approval is required
for the Administrator's use of any Software program used by
Servicer in the servicing of the Receivables, other than those
which have been obtained and are in full force and effect.
SECTION 6.02. Representations and Warranties of Servicer. Servicer
represents and warrants as follows:
(a) Organization and Good Standing. Servicer has been duly
organized and is validly existing as a corporation in good
standing under the laws of Delaware, with power and authority
to own its properties and to conduct its business as such
properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, all
necessary power, authority, and legal right to service the
Pool Receivables.
(b) Due Qualification. Servicer is duly qualified to do
business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the failure to so qualify or obtain
such licenses or approvals would have a Material Adverse
Effect.
(c) Power and Authority; Due Authorization. Servicer (i)
has all necessary power, authority and legal right to (A)
execute and deliver the Transaction Documents to which it is a
party, and (B) carry out the terms of the Transaction
Documents to which it is a party and (ii) has duly authorized
by all necessary corporate action the execution, delivery and
performance of the Transaction Documents to which it is a
party.
(d) Valid Sale; Binding Obligations. This Agreement and
each other Transaction Document to be executed by Servicer
when duly executed and delivered will constitute, a legal,
valid and binding obligation of Servicer enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in
equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by the Transaction Documents and the fulfillment
of the terms thereof will not (i) conflict with, result in any
breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default
under, (A) the articles of incorporation or by-laws of
Servicer, or (B) in any material respect, any indenture, loan
agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument to which Servicer is a
party or by which it or any of its properties is bound, (ii)
result in the creation or imposition of any Lien upon any of
Servicer's properties pursuant to the terms of any such
indenture, loan agreement, receivables purchase agreement,
mortgage, deed of trust, or other agreement or instrument,
other than the Transaction Documents, or (iii) violate any law
or any order, rule, or regulation applicable to Servicer of
any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality
having jurisdiction over Servicer or any of its properties.
(f) No Proceedings. There are no proceedings or
investigations pending, or, to Servicer's knowledge,
threatened, before any court, regulatory body, administrative
agency, or other tribunal or governmental instrumentality (i)
asserting the invalidity of any Transaction Document to which
Servicer is a party or (ii) seeking any determination or
ruling that might have a Material Adverse Effect.
(g) Government Approvals. 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 Servicer of this
Agreement or any other Transaction Document;
(h) Litigation. No injunction, decree or other decision
has been issued or made by any court, governmental agency or
instrumentality thereof that prevents, and no threat by any
person has been made to attempt to obtain any such decision
that would prevent, Servicer from conducting a material part
of its business operations, except as described in Schedule
6.01(j).
(i) Accurate Reports. No Information Package (if prepared
by Servicer or its Affiliate, or to the extent information
therein was supplied by Servicer or its Affiliate) or other
information, exhibit, financial statement, document, book,
record or report furnished or to be furnished by or on behalf
of Servicer or its Affiliates to the Administrator, Purchaser
or the Relationship Bank in connection with this Agreement was
or will be inaccurate in any material respect as of the date
it was or will be dated or (except as otherwise disclosed to
the Administrator, Purchaser, and the Relationship Bank at
such time) as of the date so furnished, or contained or will
contain any material misstatement of fact or omitted or will
omit to state a material fact or any fact necessary to make
the statements contained therein not materially misleading.
(j) Servicing Programs. No license or approval is required
for Administrator's use of any software program used by
Servicer in the servicing of the Receivables, other than those
which have been obtained and are in full force and effect.
ARTICLE VII
GENERAL COVENANTS OF SELLER AND SERVICER
SECTION 7.01. Affirmative Covenants of Seller and Servicer. From the
date hereof until the Final Payout Date, Seller and Servicer will, unless
the Administrator shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material
respects with all applicable laws, rules, regulations and
orders, including those with respect to the Pool Receivables
and related Accounts and Contracts.
(b) Preservation of Corporate Existence. Preserve and
maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and
qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges
and qualification would have a Material Adverse Effect.
(c) Audits. (i) At any time and from time to time during
regular business hours, permit the Administrator, the
Relationship Bank or any of their agents or representatives,
upon at least two Business Days' prior notice (A) to examine
and make copies of and abstracts from all books, records and
documents (including, without limitation, computer tapes and
disks) in the possession or under the control of Seller or of
Servicer relating to Pool Receivables, including, without
limitation, the related Accounts and Contracts and other
agreements, and (B) to visit the offices and properties of
Seller or of Servicer for the purpose of examining such
materials described in clause (i)(A) next above, and to
discuss matters relating to Pool Receivables or Seller's or
Servicer's performance hereunder with any of the officers or
employees of Seller or of Servicer having knowledge of such
matters; and (ii) without limiting the provisions of clause
(i) next above, from time to time on request of Administrator
or the Relationship Bank, permit internal auditors or other
employees of the Relationship Bank to conduct a review of
Seller's or of Servicer's books and records; provided,
however, that, unless a Liquidation Event is continuing, no
more than one such review shall be conducted during each
fiscal year of Seller and the cost thereof payable by Seller
and Servicer in connection therewith shall not exceed $20,000.
(d) Keeping of Records and Books of Account. Maintain and
implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing
Pool Receivables in the event of the destruction of the
originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or
advisable for the collection of all Pool Receivables
(including, without limitation, records adequate to permit the
daily identification of each new Pool Receivable and all
Collections of and adjustments to each existing Pool
Receivable).
(e) Performance and Compliance with Receivables and
Contracts. At its expense timely and fully perform and comply
with all provisions, covenants and other promises required to
be observed by it under the Contracts related to the Pool
Receivables and all other agreements related to such Pool
Receivables, except insofar as the failure to perform and
comply would not materially and adversely affect the rights of
Purchaser hereunder or the collectibility of such Pool
Receivables.
(f) Location of Records. Keep its chief place of business
and chief executive office, and the offices where it keeps its
records concerning the Pool Receivables, all related Accounts
and Contracts and all other agreements related to such Pool
Receivables (and all original documents relating thereto), at
the address(es) of Seller referred to in Section 6.01(n) or,
upon 30 days' prior written notice to the Administrator, at
such other locations in jurisdictions where all action
required by Section 8.05 shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all material
respects with its Credit and Collection Policy in regard to
each Pool Receivable and the related Contract.
(h) Collections. Instruct all Obligors to cause all
payments with respect to Pool Receivables to be deposited
directly with a Lock-Box Bank. From and after the occurrence
of a Liquidation Event, deposit all collections received in
stores of an Affiliate of the Seller or otherwise received by
Seller into an account at a Lock-Box Bank within two Business
Days of receipt.
SECTION 7.02. Reporting Requirements of Seller. From the date hereof
until the Final Payout Date, Seller shall, unless the Administrator and the
Relationship Bank shall otherwise consent in writing, furnish to the
Administrator and the Relationship Bank:
(a) Quarterly Financial Statements. As soon as available
and in any event within 75 days after the end of each of the
first three quarters of each fiscal year of Charming Shoppes,
copies of the financial statements of Charming Shoppes and its
Subsidiaries, and of Seller, prepared on a consolidated basis
in conformity with generally accepted accounting principles,
duly certified by the chief financial officer of Charming
Shoppes;
(b) Annual Financial Statements. As soon as available and
in any event within 120 days after the end of each fiscal year
of Charming Shoppes, copies of the financial statements (i) of
Charming Shoppes and its Subsidiaries, prepared on a
consolidated basis in conformity with generally accepted
accounting principles and duly certified by independent
certified public accountants of recognized standing selected
by Charming Shoppes and (ii) of Seller, prepared in conformity
with generally accepted accounting principles and duly
certified by an officer of the Seller;
(c) Liquidation Events. As soon as possible and in any
event within three Business Days after the occurrence of each
Liquidation Event and each Unmatured Liquidation Event, a
written statement of the Chairman, President, Treasurer or any
Vice President of Seller setting forth details of such event
and the action that Seller proposes to take with respect
thereto;
(d) Litigation. As soon as possible and in any event
within three Business Days of Seller's knowledge thereof,
notice of (i) any litigation, investigation or proceeding
which could have a Material Adverse Effect and (ii) any
material adverse development in previously disclosed
litigation;
(e) Change in Credit and Collection Policy. Prior to its
effective date, notice of (i) any material change in the
character of Seller's business or (ii) any material change in
the Credit and Collection Policy; and
(f) Other. Promptly, from time to time, such other
information, documents, records or reports respecting the
Receivables or the condition or operations, financial or
otherwise, of the Transferors as the Administrator or the
Relationship Bank may from time to time reasonably request in
order to protect the interests of the Administrator or
Purchaser under this Agreement.
SECTION 7.03. Negative Covenants of Seller. From the date hereof
until the Final Payout Date, Seller shall not, without the prior written
consent of the Administrator:
(a) Sales, Liens, Etc. Except as otherwise provided
herein, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Lien
upon or with respect to, any Pool Receivable or related
Account or Contract or Related Security, or any interest
therein, or any lock-box account to which any Collections of
any Pool Receivable are sent, or any right to receive income
or proceeds from or in respect of any of the foregoing.
(b) Extension or Amendment of Pool Receivables. Except as
otherwise permitted in Section 8.02 or as ordered by a court
of competent jurisdiction, extend, amend or otherwise modify
the terms of any Pool Receivable, or amend, modify or waive
any term or condition of any Contract related thereto.
(c) Change in Business or Credit and Collection Policy.
Make any change in the character of its business or in the
Credit and Collection Policy, which change would, in either
case, materially impair the collectibility of any Pool
Receivable or otherwise materially and adversely affect the
interests or remedies of Purchaser under this Agreement or any
other Transaction Document.
(d) Change in Payment Instructions to Obligors. Add or
terminate any bank as a Lock-Box Bank from the list provided
to the Administrator and the Relationship Bank on the Initial
Funding Date or make any change in its instructions to
Obligors regarding payments to be made to Seller or Servicer
or payments to be made to any Lock-Box Bank, unless the
Administrator and the Relationship Bank shall have received
notice of such addition, termination or change and duly
executed copies of Lock-Box Agreements with each new Lock-Box
Bank and shall have consented the identity of such Lock-Box
Bank (which consent shall not be unreasonably withheld).
(e) Mergers, Sales, Etc. Be a party to any merger or
consolidation, or, except in the ordinary course of its
business, sell, transfer, convey or lease all or substantially
all of its assets, or sell or assign with or without recourse
any Pool Receivables or any interest therein (other than
pursuant hereto).
(f) Deposits to Special Accounts. Deposit or otherwise
credit, or cause or permit to be so deposited or credited, to
any Lock-Box Account cash or cash proceeds other than
Collections.
SECTION 7.04. Negative Covenants of the Servicer. From the date
hereof until the Final Payout Date, Servicer shall not, without the prior
written consent of the Administrator:
(a) Extension or Amendment of Pool Receivables. Except as
otherwise permitted in Section 8.02 or as ordered by a court
of competent jurisdiction, extend, amend or otherwise modify
the terms of any Pool Receivable, or amend, modify or waive
any term or condition of any Contract related thereto.
(b) Change in Business or Credit and Collection Policy.
Make any change in the character of its business or in the
Credit and Collection Policy, which change would, in either
case, materially impair the collectibility of any Pool
Receivable or otherwise materially and adversely affect the
interests or remedies of Purchaser under this Agreement or any
other Transaction Document.
(c) Change in Payment Instructions to Obligors. Add or
terminate any bank as a Lock-Box Bank from the list provided
to the Administrator and the Relationship Bank on the Initial
Funding Date or make any change in its instructions to
Obligors regarding payments to be made to Seller or Servicer
or payments to be made to any Lock-Box Bank, unless the
Administrator and the Relationship Bank shall have received
notice of such addition, termination or change and duly
executed copies of Lock-Box Agreements with each new Lock-Box
Bank and shall have consented the identity of such Lock-Box
Bank (which consent shall not be unreasonably withheld).
(d) Mergers, Sales, Etc. Be a party to any merger or
consolidation, or, except in the ordinary course of its
business, sell, transfer, convey or lease all or substantially
all of its assets, or sell or assign with or without recourse
any Pool Receivables or any interest therein (other than
pursuant hereto).
(e) Deposits to Special Accounts. Deposit or otherwise
credit, or cause or permit to be so deposited or credited, to
any Lock-Box Account cash or cash proceeds other than
Collections.
SECTION 7.05. Separate Corporate Existence. Seller hereby
acknowledges that Purchaser, the Liquidity Banks and the Administrator, are
entering into the transactions contemplated by the Transaction Documents in
reliance upon Seller's identity as a legal entity separate from Parent.
Therefore, from and after the date hereof, Seller shall take all steps
specifically required by this Agreement or by the Purchaser or
Administrator to continue Seller's identity as a separate legal entity and
to make it apparent to third Persons that Seller is an entity with assets
and liabilities distinct from those of Parent and any other Person, and is
not a division of Parent or any other Person. Without limiting the
generality of the foregoing and in addition to and consistent with the
other covenants set forth herein, Seller shall take such actions as shall
be required in order that:
(a) Seller will be a limited purpose corporation whose
primary activities are restricted in its certificate of
incorporation to purchasing or otherwise acquiring from
Parent, and owning, holding, granting security interests, or
selling interests, in Pool Assets, entering into agreements
for the servicing and financing of Pool Assets, entering into
interest rate agreements, spread account agreements and
similar documents and conducting such other activities as it
deems necessary or appropriate to carry out its primary
activities.
(b) Not less than one member of Seller's Board of Directors
(the "Independent Director") shall be an individual who is not
a direct, indirect or beneficial stockholder, officer,
director, employee, affiliate, associate, or supplier of
Seller or any of its Affiliates, except that the Independent
Director may be an independent director on the Board of
Directors of a direct or indirect "bankruptcy remote"
subsidiary of Charming Shoppes. The certificate of
incorporation of Seller shall provide that (i) Seller's Board
of Directors shall not approve, or take any other action to
cause the filing of, a voluntary bankruptcy petition with
respect to Seller unless the Independent Director shall
approve the taking of such action in writing prior to the
taking of such action and (ii) such provision cannot be
amended without the prior written consent of the Independent
Director.
(c) The Independent Director shall not at any time serve as
a trustee in bankruptcy for Seller, Parent or any Affiliate
thereof.
(d) Any employee, consultant or agent of Seller will be
compensated from Seller's funds for services provided to
Seller. Seller will engage no agents other than its
attorneys, auditors and other professionals, and a servicer
for Pool Assets, which servicer will be fully compensated for
its services by payment of the Servicer's Fee.
(e) Seller will contract with Servicer to perform for
Seller all operations required on a daily basis to service the
Pool Assets. Seller will pay Servicer the Servicer's Fee
pursuant hereto. Seller will not incur any material indirect
or overhead expenses for items shared between Seller and
Parent (or any other Affiliate thereof) which are not
reflected in the Servicer's Fee. To the extent, if any, that
Seller and Parent (or any other Affiliate thereof) share items
of expenses not reflected in the Servicer's Fee, such as
legal, auditing and other professional services, such expenses
will be allocated to the extent practical on the basis of
actual use or the value of services rendered, and otherwise on
a basis reasonably related to the actual use or the value of
services rendered, it being understood that Parent shall pay
all expenses relating to the preparation, negotiation,
execution and delivery of the Transaction Documents,
including, without limitation, legal, agency and other fees.
(f) Seller will pay its own operating expenses.
(g) Seller will have its own separate post office box and
stationery.
(h) Seller's books and records will be maintained
separately from those of Parent and any other Affiliate
thereof.
(i) All financial statements of Parent or any Affiliate
thereof that are consolidated to include Seller will contain
detailed notes clearly stating that (A) all of Seller's assets
are owned by Seller, and (B) Seller is a separate corporate
entity with creditors who have received security interests in
Seller's assets.
(j) Seller's assets will be maintained in a manner that
facilitates their identification and segregation from those of
Parent or any Affiliate thereof.
(k) Seller will strictly observe corporate formalities in
its dealings with Parent or any Affiliate thereof, and funds
or other assets of Seller will not be commingled with those of
Parent or any Affiliate thereof. Seller shall not maintain
joint bank accounts or other depository accounts to which
Parent or any Affiliate thereof (other than Parent in its
capacity as Servicer) has independent access.
(l) Seller will maintain arm's-length relationships with
Parent (and any Affiliate thereof). Any Person that renders
or otherwise furnishes services to Seller will be compensated
by Seller at market rates for such services it renders or
otherwise furnishes to Seller. Except as contemplated in the
Transaction Documents neither Seller nor Parent will be or
will hold itself out to be responsible for the debts of the
other or the decisions or actions respecting the daily
business and affairs of the other.
SECTION 7.06. Transaction Documents. Neither Seller nor Servicer
shall amend, modify, waive or provide consent under the provisions of any
agreement expressly referenced in the definition of "Transaction Document"
to which it is a party unless (x) the Administrator shall have given its
prior written consent, and (y) for any amendment which may reasonably be
expected to adversely affect the interests of the Commercial Paper Holders,
the Rating Agency Condition is satisfied.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer.
(a) Appointment of Servicer. The servicing, administering and
collection of the Pool Receivables shall be conducted by the Person
designated as Servicer hereunder ("Servicer") from time to time in
accordance with this Section 8.01. Until the Administrator or the
Relationship Bank gives to Seller and to Servicer a Successor Notice (as
defined in Section 8.01(b)), Spirit of America, Inc. is hereby designated
as, and hereby agrees to perform the duties and obligations of, Servicer
pursuant to the terms hereof.
(b) Successor Notice; Liquidation Events. Upon Servicer's receipt of
a notice from the Administrator or Relationship Bank of the Administrator's
or Relationship Bank's designation of a new Servicer (a "Successor
Notice"), Servicer agrees that it will terminate its activities as Servicer
hereunder in a manner that the Administrator reasonably believes will
facilitate the transition of the performance of such activities to the new
Servicer, and the Administrator (or its designee) shall assume each and all
of Seller's obligations to service and administer such Receivables, on the
terms and subject to the conditions herein set forth, and Servicer shall
use its best efforts to assist the Administrator (or its designee) in
assuming such obligations. The Administrator and Relationship Bank agree
not to give Servicer a Successor Notice until after the occurrence of a
Replacement Event, in which case such Successor Notice may be given at any
time in the Administrator's or the Relationship Bank's discretion. If
Servicer disputes the occurrence of a Liquidation Event, Servicer may take
appropriate action to resolve such dispute; provided that Servicer must
terminate its activities hereunder as Servicer and allow the newly
designated Servicer to perform such activities on the date provided by the
Administrator or Relationship Bank as described above, notwithstanding the
commencement or continuation of any proceeding to resolve the
aforementioned dispute; provided, further that in the event that such
dispute is resolved in favor of Servicer and no other Liquidation Event has
occurred and is continuing, at Seller's written request, Servicer shall be
reinstated as Servicer.
(c) Subcontracts. Servicer may, with the prior consent of the
Administrator, subcontract with any other person for servicing,
administering or collecting the Pool Receivables, provided that (i)
Servicer shall remain liable for the performance of the duties and
obligations of Servicer pursuant to the terms hereof and (ii) such
subcontract provides for termination upon the occurrence of a Liquidation
Event. The Administrator hereby acknowledges and consents to the
continuation of Total Systems Services, Inc. as the Administrative
Servicer.
(d) Servicer's Fee. Seller shall be responsible for the payment of
(and, if paid by Purchaser or Administrator, shall on demand reimburse
Purchaser or the Administrator for) Seller's Portion of the Servicing Fee.
"Seller's Portion of the Servicing Fee" for any Settlement Period means an
amount equal to (i) the Servicer's Fee Rate times (ii) (x) the aggregate
Unpaid Balance of the Pool Receivables as of the first day of such
Settlement Period minus (y) the Purchaser's Total Investment on that
Settlement Date times (iii) 1/360 times (iv) the number of days in such
Settlement Period.
SECTION 8.02. Duties of Servicer.
(a) Appointment; Duties in General. Each of Seller, Purchaser and
the Administrator hereby appoints as its agent Servicer, as from time to
time designated pursuant to Section 8.01, to enforce its rights and
interests in and under the Pool Receivables, the Related Security and the
related Contracts. Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Pool Receivable
from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.
(b) Allocation of Collections; Segregation. Servicer shall set aside
for the account of Seller and Purchaser their respective allocable shares
of the Collections of Pool Receivables in accordance with Section 1.03 but
shall not be required (unless otherwise requested by the Administrator or
the Relationship Bank) to segregate the funds constituting such portions of
such Collections prior to the remittance thereof in accordance with said
Section. If instructed by the Administrator or the Relationship Bank,
Servicer shall segregate and deposit with a bank designated by the
Relationship Bank, with the approval of the Administrator, Purchaser's
Share of Collections of Pool Receivables, set aside for Purchaser on the
first Business Day following receipt by Servicer of such Collections in
immediately available funds.
(c) Modification of Receivables. So long as no Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing,
Servicer, may, in accordance with the Credit and Collection Policy, (i)
extend the maturity or adjust the Unpaid Balance of, or defer payment of,
or otherwise modify the terms of any Receivable as Seller may determine to
be appropriate to maximize Collections thereof; provided that, after giving
effect to such extension of maturity or such adjustment, the Asset
Interest, expressed as a percentage of Net Pool Balance, will not exceed
the Allocation Limit, and (ii) adjust the Unpaid Balance of any Receivable
to reflect the reductions or cancellations described in the first sentence
of Section 3.02(a).
(d) Documents and Records. Seller shall deliver to Servicer, and
Servicer shall hold in trust for Seller and Purchaser in accordance with
their respective interests, all documents, instruments and records
(including, without limitation, computer tapes or disks) that evidence or
relate to Pool Receivables.
(e) Certain Duties to Seller. Servicer shall, as soon as practicable
following receipt, turn over to Seller (i) that portion of Collections of
Pool Receivables representing Seller's undivided interest therein, and (ii)
the Collections of any Receivable which is not a Pool Receivable.
Servicer, if other than Seller, shall, as soon as practicable upon demand,
deliver to Seller all documents, instruments and records in its possession
that evidence or relate to Receivables of Seller other than Pool
Receivables, and copies of documents, instruments and records in its
possession that evidence or relate to Pool Receivables.
(f) Termination. Servicer's authorization under this Agreement shall
terminate upon the Final Payout Date.
(g) Power of Attorney. Seller hereby grants to Servicer an
irrevocable power of attorney, with full power of substitution, coupled
with an interest, to take in the name of Seller all steps which are
necessary or advisable to endorse, negotiate or otherwise realize on any
writing or other right of any kind held or transmitted by Seller or
transmitted or received by Purchaser (whether or not from Seller) in
connection with any Receivable.
SECTION 8.03. Rights of the Administrator.
(a) Notice to Obligors. At any time during the continuance of a
Liquidation Event, the Administrator may notify the Obligors of Pool
Receivables, or any of them, of the ownership of Asset Interests by
Purchaser.
(b) Notice to Lock-Box Banks. At any time following the earliest to
occur of (i) the occurrence of a Liquidation Event, (ii) the commencement
of the Liquidation Period, and (iii) the warranty in Section 6.01(i) shall
no longer be true, the Administrator is hereby authorized to give notice to
the Lock-Box Banks, as provided in the Lock-Box Agreements, of the transfer
to the Administrator of dominion and control over the lock-boxes and
related accounts to which the Obligors of Pool Receivables make payments.
Seller hereby transfers to the Administrator, effective when the
Administrator shall give notice to the Lock-Box Banks as provided in the
Lock-Box Agreements, the exclusive dominion and control over such lock-
boxes and accounts, and shall take any further action that the
Administrator may reasonably request to assist with such transfer.
(c) Rights on Liquidation Event. At any time following the
designation of a Servicer other than Seller pursuant to Section 8.01:
(i) The Administrator may direct the Obligors of Pool
Receivables, or any of them, to pay all amounts payable under
any Pool Receivable directly to the Collateral Agent.
(ii) Seller shall, at the Administrator's or Relationship
Bank's request and at Seller's expense, give notice of the
ownership of the Pool Receivables by Purchaser to each said
Obligor and direct that payments be made directly to the
Collateral Agent.
(iii) Seller shall, at the Administrator's or Relationship
Bank's request, (A) assemble all of the documents, instruments
and other records (including, without limitation, computer
programs, tapes and disks) which evidence the Pool
Receivables, and the related Accounts and Contracts and
Related Security, or which are otherwise reasonably necessary
or desirable to service such Pool Receivables, and make the
same available to the Administrator at a place selected by the
Administrator or the Relationship Bank, and (B) segregate all
cash, checks and other instruments received by it from time to
time constituting Collections of Pool Receivables in a manner
reasonably acceptable to the Administrator and promptly upon
receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the
Collateral Agent.
(iv) Each of Seller and Purchaser hereby authorizes the
Administrator, and grants to the Administrator an irrevocable
power of attorney, to take any and all steps in Seller's name
and on behalf of Seller and Purchaser which are reasonably
necessary or desirable, in the determination of the
Administrator, to collect all amounts due under any and all
Pool Receivables, including, without limitation, endorsing
Seller's name on checks and other instruments representing
Collections and enforcing such Pool Receivables and the
related Contracts; provided that the Administrator shall not
exercise its rights under such Power of Attorney unless a
Liquidation Event shall have occurred and be continuing.
SECTION 8.04. Responsibilities of Seller. Anything herein to the
contrary notwithstanding:
(a) Contracts. Seller shall perform all of its obligations under the
Contracts related to the Pool Receivables and under other agreements
related thereto to the same extent as if the Asset Interest had not been
sold hereunder, and the exercise by the Administrator or its designee of
its rights hereunder shall not relieve Seller from such obligations.
(b) Limitation of Liability. The Administrator, the Relationship
Bank and Purchaser shall not have any obligation or liability with respect
to any Pool Receivables, Contracts or Accounts related thereto or any other
related agreements, nor shall any of them be obligated to perform any of
the obligations of Seller thereunder.
SECTION 8.05. Further Action Evidencing Purchases and Reinvestments.
(a) Further Assurances. Seller agrees to xxxx its master data
processing records evidencing such Pool Receivables and the related
Contracts with a legend, acceptable to the Administrator, evidencing that
the Asset Interest has been sold in accordance with this Agreement. Seller
agrees that from time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all further action
that the Administrator or its designee may reasonably request in order to
perfect, protect or more fully evidence the Purchases hereunder and the
resulting Asset Interest, or to enable Purchaser or the Administrator or
its designee to exercise or enforce any of their respective rights
hereunder or under any Transaction Document. Without limiting the
generality of the foregoing, Seller will upon the request of the
Administrator or its designee execute and file such financing or
continuation statements, or amendments thereto or assignments thereof, and
such other instruments or notices, as may be necessary or appropriate.
(b) Additional Financing Statements; Performance by Administrator.
Seller hereby authorizes the Administrator or its designee to file one or
more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Pool Assets now existing
or hereafter arising in the name of Seller. If Seller fails to perform any
of its agreements or obligations under this Agreement, the Administrator or
its designee may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the reasonable expenses
of the Administrator or its designee incurred in connection therewith shall
be payable by Seller as provided in Section 14.05.
(c) Continuation Statements; Opinion. Without limiting the
generality of subsection (a), Seller shall, not earlier than six (6) months
and not later than three (3) months prior to the fifth anniversary of the
date of filing of the financing statement referred to in Section 5.01(e) or
any other financing statement filed pursuant to this Agreement or in
connection with any Purchase hereunder, unless the Final Payout Date shall
have occurred:
(i) execute and deliver and file or cause to be filed an
appropriate continuation statement with respect to such
financing statement; and
(ii) deliver or cause to be delivered to the Administrator
an opinion of the counsel for Seller referred to in Section
5.01(h) (or other counsel for Seller reasonably satisfactory
to the Administrator), in form and substance reasonably
satisfactory to the Administrator, confirming and updating the
opinion delivered pursuant to Section 5.01(h) to the effect
that Purchaser's Total Interest hereunder continues to be a
valid and perfected ownership or security interest, subject to
no other Liens of record except as provided herein or
otherwise permitted hereunder.
SECTION 8.06. Application of Collections. Any payment by an Obligor
in respect of any indebtedness owed by it to Seller shall, except as
otherwise specified by such Obligor, as required by the underlying Contract
or law or unless the Administrator instructs otherwise, be applied, first,
as a Collection of any Pool Receivable or Receivables then outstanding of
such Obligor in the order of the age of such Pool Receivables, starting
with the oldest of such Pool Receivable and, second, to any other
indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest. To secure all obligations
of Seller and Servicer arising in connection with this Agreement and each
other Transaction Document to which either of them is a party, whether now
or hereafter existing, due or to become due, direct or indirect, or
absolute or contingent, including, without limitation, all Indemnified
Amounts, payments on account of Collections and fees, in each case pro rata
according to the respective amounts thereof, Seller hereby assigns and
grants to Purchaser, for the benefit of the Secured Parties, a security
interest in all of Seller's right, title and interest (including
specifically any undivided interest retained by Seller hereunder) now or
hereafter existing in, to and under all the Pool Assets and proceeds
thereof.
SECTION 9.02. Further Assurances. The provisions of Section 8.05
shall apply to the security interest granted under Section 9.01 as well as
to the Purchases, Reinvestments and all the Asset Interests hereunder.
SECTION 9.03. Remedies. Upon the occurrence of a Liquidation Event,
Purchaser shall have, with respect to the collateral granted pursuant to
Section 9.01, and in addition to all other rights and remedies available to
Purchaser or the Administrator under this Agreement or other applicable
law, all the rights and remedies of a secured party upon default under the
UCC.
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.01. Liquidation Events. The following events shall be
"Liquidation Events" hereunder:
(a) (i) Servicer (if Seller or its Affiliate is Servicer)
shall fail to deliver to Administrator an Information Package
for any Settlement Period on or before 12:00, noon (New York
City time) of the related Settlement Date or (ii) Servicer (if
Seller or its Affiliate is Servicer) shall fail to perform or
observe in any material respect any other term, covenant or
agreement that is an obligation of Servicer hereunder (other
than as referred to in clause (iii) next following) and such
failure shall remain unremedied for five Business Days after
(1) written notice thereof shall have been given by the
Administrator to Seller or (2) Seller has actual knowledge
thereof or (iii) Servicer (if Seller or its Affiliate is
Servicer) shall fail to make any payment or deposit to be made
by it hereunder when due and such failure shall remain
unremedied for more than three Business Days; or
(b) Any representation or warranty made or deemed to be
made by a Transferor or the Servicer, if Seller or its
Affiliate is Servicer, (or any of their officers) under a
Transaction Document or Information Package or other
information or report delivered pursuant hereto shall prove to
have been incorrect in any material respect when made and
shall continue to be incorrect for a period of thirty-five
days (or, with respect to Section 6.01(l), fifteen Business
Days) after (i) written notice thereof shall have been given
by the Administrator to the Seller or the Servicer (if Seller
or its Affiliate is Servicer) or (ii) Seller or the Servicer
(if Seller or its Affiliate is Servicer) has actual knowledge
thereof; provided, that with respect to the breach of the
representations or warranties set forth in Section 6.01(l) or
(p), compliance by Seller with the provisions of Section 3.02
in respect thereof shall be deemed to cure such breach; or
(c) A Transferor shall fail to perform or observe in any
material respect any other term, covenant or agreement
contained in any of the Transaction Documents to which it is a
party on its part to be performed or observed and any such
failure shall remain unremedied for thirty days after (i)
written notice thereof shall have been given by the
Administrator to Seller or (ii) Seller has actual knowledge
thereof; or
(d) (i) A default shall have occurred and be continuing
under any Credit Facility of Charming Shoppes or any of its
Affiliates with respect to a payment of principal of or
premium or interest in excess of $1,000,000 (or $5,000,000, in
the case of Charming Shoppes), which default if unremedied,
uncured, or unwaived (with or without the passage of time or
the giving of notice or both) would permit acceleration of the
maturity of such indebtedness and such default shall have
continued unremedied, uncured or unwaived for a period long
enough to permit such acceleration, and (x) any notice of
default required to permit acceleration shall have been given
and ten days shall have passed without such default having
been cured or waived or (y) an acceleration shall have
occurred; or (ii) any default under any agreement or
instrument relating to the purchase of receivables of Seller
or any other Transferor shall occur and shall continue after
the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default is to
permit the termination of the commitment of any party to such
agreement or instrument to purchase receivables or the right
of Seller to reinvest in receivables the principal amount paid
by any party to such agreement or instrument for interest in
receivables (provided that such default is not related to
failure of the obligors on such purchased receivables to pay
due to credit problems of such obligors or other portfolio
tests with respect to such receivables), and (x) any notice of
such event required to permit such termination shall have been
delivered and ten days shall have passed without such default
having been cured or waived or (y) termination shall have
occurred; or
(e) An Event of Bankruptcy shall have occurred and remain
continuing with respect to a Transferor, Servicer, Charming
Shoppes or CSRC; or
(f) (i) Any litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental
proceedings not disclosed in writing by Seller to the
Administrator and Purchaser prior to the date of execution and
delivery of this Agreement is pending against a Transferor,
Servicer, Charming Shoppes or CSRC, or (ii) any material
development not so disclosed has occurred in any litigation
(including, without limitation, derivative actions),
arbitration proceedings or governmental proceedings so
disclosed, which, in the case of clause (i) or (ii), in the
reasonable opinion of the Administrator, has a reasonable
likelihood of having a Material Adverse Effect; or
(g) The funds on deposit in the RPA Cash Collateral
Account shall be less than the RPA Required Cash Collateral
Amount, and such condition shall continue for ten days; or any
amount required to be deposited in the Spread Account under
the terms of the Spread Account Agreement shall not have been
so deposited and such condition shall continue for ten days;
(h) On any Settlement Date, after giving effect to the
payments made under Section 3.01(c), the Asset Interest
exceeds the Allocation Limit or the Purchaser's Total
Investment exceeds the Purchase Limit; or
(i) An "Early Amortization Event" has occurred under the
Specified Supplement and is continuing; or
(j) A Transferor, Servicer (if Servicer is Seller or its
Affiliate) or Charming Shoppes is subject to a Change in
Control; or
(k) The Internal Revenue Service shall file notice of a
lien pursuant to Section 6323 of the Internal Revenue Code
with regard to any of the assets of Seller and such lien shall
not have been released within 5 Business Days, or the Pension
Benefit Guaranty Corporation shall, or shall indicate its
intention to, file notice of a lien pursuant to Section 4068
of ERISA with regard to any of the assets of Seller or any of
its Affiliates; or
(l) Fashion Service Corp. shall fail to perform its
obligations under the Cap Agreements, and such failure shall
continue for three Business Days; or a Termination Event (as
defined in the Cap Agreements) shall occur with respect to
Fashion Service Corp.; or
(m) The CB Excess Yield Percentage is less than 0% for
three consecutive Settlement Periods.
SECTION 10.02. Remedies.
(a) Optional Liquidation. Upon the occurrence of a Liquidation Event
(other than a Liquidation Event described in subsection (e), (g), (h), (l)
or (m) of Section 10.01), the Administrator shall, at the request, or may
with the consent, of Purchaser, by notice to Seller declare the Purchase
Termination Date to have occurred and the Liquidation Period to have
commenced.
(b) Automatic Liquidation. Upon the occurrence of a Liquidation
Event described in subsection (e), (g), (h), (l) or (m) of Section 10.01,
the Purchase Termination Date shall occur and the Liquidation Period shall
commence automatically.
(c) Additional Remedies. Upon any Purchase Termination Date pursuant
to this Section 10.02, no Purchases or Reinvestments thereafter will be
made, and the Administrator, Purchaser and the Relationship Bank shall
have, in addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC of each
applicable jurisdiction and other applicable laws, which rights shall be
cumulative.
ARTICLE XI
THE ADMINISTRATOR; RELATIONSHIP BANK
SECTION 11.01. Authorization and Action. Pursuant to the Program
Administration Agreement and the Relationship Bank Agreement, Purchaser has
appointed and authorized the Administrator and the Relationship Bank (or
their respective designees) to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the
Administrator or the Relationship Bank by the terms hereof, together with
such powers as are reasonably incidental thereto.
SECTION 11.02. Administrator's and Relationship Bank's Reliance, Etc.
The Administrator, the Relationship Bank and their directors, officers,
agents or employees shall not be liable for any action taken or omitted to
be taken by it or them under or in connection with the Transaction
Documents (including, without limitation, the servicing, administering or
collecting of Pool Receivables as Servicer pursuant to Section 8.01),
except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, each of the Administrator
and the Relationship Bank: (a) may consult with legal counsel (including
counsel for Seller), independent certified 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; (b) makes no warranty or
representation to Purchaser or any other holder of any interest in Pool
Receivables and shall not be responsible to Purchaser or any such other
holder for any statements, warranties or representations made in or in
connection with any Transaction Document; (c) 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 any Transaction Document on the part of
Seller or to inspect the property (including the books and records) of
Seller; (d) shall not be responsible to Purchaser or any other holder of
any interest in Pool Receivables for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Transaction
Document; and (e) shall incur no liability under or in respect of this
Agreement by acting upon any notice (including notice by telephone),
consent, certificate or other instrument or writing (which may be by
facsimile or telex) reasonably believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 11.03. Xxxxx Xxxxxx Xxxxxxx xxx Xxxxx Xxxxxx Xxxx and
Affiliates. Xxxxx Xxxxxx Xxxxxxx xxx Xxxxx Xxxxxx Xxxx and any of their
respective Affiliates may generally engage in any kind of business with
Seller or any Obligor, any of their respective Affiliates and any Person
who may do business with or own securities of Seller or any Obligor or any
of their respective Affiliates, all as if Xxxxx Xxxxxx Xxxxxxx xxx Xxxxx
Xxxxxx Xxxx were not the Administrator and the Relationship Bank,
respectively, and without any duty to account therefor to Purchaser or any
other holder of an interest in Pool Receivables.
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. Restrictions on Assignments.
(a) Except as provided in the next sentence, none of Seller, Servicer
or State Street Bank, individually or as the Relationship Bank (except as
otherwise provided in the Relationship Bank Agreement), may assign its
rights, or delegate its duties hereunder or any interest herein without the
prior written consent of the Administrator. Servicer may assign its rights
as Servicer under this Agreement to any of its Affiliates without prior
written consent of the Administrator, provided that Servicer shall have
given the Administrator ten days' prior written notice thereof. Purchaser
may not assign its rights hereunder (although it may delegate its duties
hereunder as expressly indicated herein) or the Asset Interest (or any
portion thereof) to any Person without the prior written consent of Seller,
which shall not be unreasonably withheld (it being recognized and
understood by all parties hereto that all parties hereto shall deem it
reasonable for Seller to withhold such consent if any such proposed
assignment would, in the reasonable determination of Seller, cause Seller
to be required to pay to any Affected Party any of the amounts referred to
in Section 4.02); provided, however, that
(i) Purchaser may assign all of its rights and interests in
the Transaction Documents, together with all its interest in
the Asset Interest, to State Street Capital or State Street
Bank, or both, or any Affiliate of either of them, or to any
"bankruptcy remote" special purpose entity, the business of
which is administered by State Street Capital or any Affiliate
of State Street Capital provided, that such assignment shall
not cause a material increase in the Earned Discount Rate; and
(ii) Purchaser may assign and grant a security interest in
all of its rights in the Transaction Documents, together with
all of its rights and interest in the Asset Interest, to the
Collateral Agent, to secure Purchaser's obligations under or
in connection with the Commercial Paper Notes, the Liquidity
Agreement, the Credit Agreement and any letter of credit
issued thereunder, and certain other obligations of Purchaser
incurred in connection with the funding of the Purchases and
Reinvestments hereunder, which assignment and grant of a
security interest (and any subsequent assignment by the
Collateral Agent) shall not be considered an "assignment" for
purposes of this Section 12.01 or, prior to the enforcement of
such security interest, for purposes of any other provision of
this Agreement.
(b) Seller agrees to advise the Administrator within five Business
Days after notice to Seller of any proposed assignment by Purchaser of the
Asset Interest (or any portion thereof), not otherwise permitted under
subsection (a), of Seller's consent or non-consent to such assignment and,
if it does not consent, the reasons therefor. If Seller does not consent
to such assignment, Purchaser may immediately assign such Asset Interest
(or portion thereof) to Xxxxx Xxxxxx Xxxxxxx, Xxxxx Xxxxxx Bank or any
Affiliate of Xxxxx Xxxxxx Xxxxxxx xx Xxxxx Xxxxxx Xxxx. All of the
aforementioned assignments shall be upon such terms and conditions as
Purchaser and the assignee may mutually agree.
SECTION 12.02. Rights of Assignee. Upon the assignment by Purchaser
in accordance with this Article XII, the assignee receiving such assignment
shall have all of the rights of Purchaser with respect to the Transaction
Documents and the Asset Interest (or such portion thereof as has been
assigned).
SECTION 12.03. Evidence of Assignment. Any assignment of the Asset
Interest (or any portion thereof) to any Person may be evidenced by such
instrument(s) or document(s) as may be reasonably satisfactory to
Purchaser, the Administrator and the assignee.
SECTION 12.04. Rights of the Banks and Collateral Agent. Seller
hereby agrees that, upon notice to Seller, the Collateral Agent may
exercise all the rights of the Administrator hereunder, with respect to the
Asset Interest (or any portions thereof), and Collections with respect
thereto, which are owned by Purchaser, and all other rights and interests
of Purchaser in, to or under this Agreement or any other Transaction
Document. Without limiting the foregoing, upon such notice Collateral
Agent may request Servicer to segregate Purchaser's allocable shares of
Collections from Seller's allocable share, may give a Successor Notice
pursuant to Section 8.01(a), may give or require the Administrator or
Relationship Bank to give notice to the Lock-Box Banks as referred to in
Section 8.03(b) and may direct the Obligors of Pool Receivables to make
payments in respect thereof directly to an account designated by them, in
each case, to the same extent as the Administrator might have done.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities by Seller.
(a) General Indemnity. Without limiting any other rights which any
such Person may have hereunder or under applicable law, Seller hereby
agrees to indemnify each of the Administrator, Purchaser, the Liquidity
Banks, the Credit Bank, the Relationship Bank, the Liquidity Agent, each of
their respective Affiliates, and all successors, transferees, participants
and assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each an "Indemnified Party"),
forthwith on demand, from and against any and all damages, losses, claims,
liabilities and related costs and expenses, including reasonable attorneys'
fees and disbursements (all of the foregoing being collectively referred to
as "Indemnified Amounts") awarded against or incurred by any of them
arising out of or relating to the Transaction Documents or the ownership or
funding of the Asset Interest or in respect of any Receivable or Account or
any Contract, excluding, however, (a) Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of any
such Indemnified Party, (b) recourse (except as otherwise specifically
provided in this Agreement) for any Receivable that is not paid as a result
of credit related issues and (c) any tax based upon or measured by net
income. Without limiting the foregoing, Seller shall indemnify each
Indemnified Party for Indemnified Amounts arising out of or relating to:
(i) the transfer by Seller of any interest in any
Receivable other than the transfer of an Asset Interest to
Purchaser pursuant to this Agreement and the grant of a
security interest to Purchaser pursuant to Section 9.01;
(ii) any representation or warranty made by Seller or
Servicer (or any of its officers) under or in connection with
any Transaction Document, any Information Package or any other
information or report delivered by or on behalf of Seller
pursuant hereto, which shall have been false, incorrect or
misleading in any material respect when made or deemed made;
(iii) the failure by Seller or Servicer to comply with any
applicable law, rule or regulation with respect to any Pool
Receivable or the related Account or Contract, or the
nonconformity of any Pool Receivable or the related Contract
with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in Purchaser
an undivided percentage ownership interest, to the extent of
the Asset Interest, in the Receivables in, or purporting to be
in, the Receivables Pool, free and clear of any Lien, other
than a Lien arising solely as a result of an act of Purchaser,
the Administrator or the Relationship Bank, whether existing
at the time of any Purchase or Reinvestment of such Asset
Interest or at any time thereafter, unless such failure is the
result of the failure of Purchaser to execute any necessary
financing statements;
(v) the failure to file, 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 Receivables Pool, whether at the time of any Purchase or
Reinvestment or at any time thereafter;
(vi) 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's or the related Contract's 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;
(vii) any failure of Seller or Servicer to perform its
duties or obligations in accordance with the provisions of
Article VIII;
(viii) any products liability claim arising out of or in
connection with merchandise or services that are the subject
of any Pool Receivable; or
(ix) any tax or governmental fee or charge (but not
including taxes upon or measured by net income), all interest
and penalties thereon or with respect thereto, and all out-of-
pocket costs and expenses, including the reasonable fees and
expenses of counsel in defending against the same, which may
arise by reason of the purchase or ownership of any Asset
Interest, or any other interest in the Pool Receivables or in
any goods which secure any such Pool Receivables.
(b) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party
shall have notice of any attempt to impose or collect any tax or
governmental fee or charge for which indemnification will be sought from
Seller under Section 13.01(a)(ix), such Indemnified Party shall give prompt
and timely notice of such attempt to Seller and Seller shall have the
right, at its expense, to participate in any proceedings resisting or
objecting to the imposition or collection of any such tax, governmental fee
or charge. Indemnification hereunder shall be in an amount necessary to
make the Indemnified Party whole after taking into account any tax
consequences to the Indemnified Party of the payment of any of the
aforesaid taxes and the receipt of the indemnity provided hereunder or of
any refund of any such tax previously indemnified hereunder, including the
effect of such tax or refund on the amount of tax measured by net income or
profits which is or was payable by the Indemnified Party.
(c) Contribution. If for any reason the indemnification provided
above in this Section 13.01 is unavailable to an Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then Seller shall
contribute to the amount paid or payable by such Indemnified Party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by such
Indemnified Party on the one hand and Seller on the other hand but also the
relative fault of such Indemnified Party as well as any other relevant
equitable considerations.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by Seller
therefrom shall in any event be effective unless the same shall be in
writing and signed by (a) Seller, the Administrator and Purchaser (with
respect to an amendment), provided that no amendment shall become effective
without the signature of the Relationship Bank, if such amendment
materially increases the obligations or liabilities of the Relationship
Bank, in either its individual or agent capacity hereunder, or materially
reduces any amount payable to it hereunder or (b) the Administrator and
Purchaser (with respect to a waiver or consent by them) or Seller (with
respect to a waiver or consent by it), as the case may be, and then such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. The parties acknowledge that, before
entering into such an amendment or granting such a waiver or consent,
Purchaser may also be required to obtain the approval of some or all of the
Liquidity Banks or the Credit Bank or to satisfy the Rating Agency
Condition with respect to such amendment, waiver or consent. The parties
acknowledge that the effect of any waiver of a Liquidation Event hereunder
shall be to negate any effect of the continuation of such Liquidation Event
under the Spread Account Agreement.
SECTION 14.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or
sent by express mail or courier or by certified mail, postage prepaid, or
by facsimile, to the intended party at the address or facsimile number of
such party set forth in Exhibit 14.02 or at such other address or facsimile
number as shall be designated by such party in a written notice to the
other parties hereto. All such notices and communications shall be
effective, (a) if personally delivered or sent by express mail or courier
or if sent by certified mail, when received, and (b) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means.
SECTION 14.03. No Waiver; Remedies. No failure on the part of the
Administrator, the Relationship Bank, any Affected Party, any Indemnified
Party, Purchaser or any other holder of the Asset Interest (or any portion
thereof) 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. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law. Without limiting the
foregoing, each of State Street Capital, individually and as Administrator,
State Street Bank, individually and as Relationship Bank, the Collateral
Agent, the Credit Bank and each Liquidity Bank is hereby authorized by
Seller at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at
any time owing by State Street Capital, the Collateral Agent and such
Liquidity Bank to or for the credit or the account of Seller, now or
hereafter existing under this Agreement, to the Administrator, any Affected
Party, any Indemnified Party or Purchaser, or their respective successors
and assigns.
SECTION 14.04. Binding Effect; Survival. This Agreement shall be
binding upon and inure to the benefit of Seller, the Administrator, the
Relationship Bank, Purchaser and their respective successors and assigns,
and the provisions of Section 4.02 and Article XIII shall inure to the
benefit of the Affected Parties and the Indemnified Parties, respectively,
and their respective successors and assigns; provided, however, nothing in
the foregoing shall be deemed to authorize any assignment not permitted by
Section 12.01. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall
remain in full force and effect until the Final Payout Date. The rights
and remedies with respect to any breach of any representation and warranty
made by Seller pursuant to Article VI and the indemnification and payment
provisions of Article XIII and Sections 4.02, 14.05, 14.06, 14.07, 14.08
and 14.15 shall be continuing and shall survive any termination of this
Agreement.
SECTION 14.05. Costs, Expenses and Taxes. In addition to its
obligations under Article XIII, Seller agrees to pay on demand:
(a) all reasonable costs and expenses incurred by the
Administrator, the Relationship Bank, the Credit Bank, the
Collateral Agent and the Purchaser and their respective
Affiliates in connection with the negotiation, preparation,
execution and delivery, the administration (including periodic
auditing) or the enforcement of, or any actual or claimed
breach of, this Agreement and the other Transaction Documents,
including, without limitation (i) the reasonable fees and
expenses of counsel to any of such Persons incurred in
connection with any of the foregoing or in advising such
Persons as to their respective rights and remedies under any
of the Transaction Documents, and (ii) all reasonable out-of-
pocket expenses (including reasonable fees and expenses of
independent accountants), incurred in connection with any
review of Seller's books and records either prior to the
execution and delivery hereof or pursuant to Section 7.01(c);
and
(b) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement or the other
Transaction Documents, and agrees to indemnify each
Indemnified Party against any liabilities with respect to or
resulting from any delay in paying or omission to pay such
taxes and fees.
SECTION 14.06. No Proceedings. Seller, Servicer, State Street
Capital (individually and as Administrator) and State Street Bank
(individually and as Relationship Bank) each hereby agrees that it will not
institute against Purchaser, or join any other Person in instituting
against Purchaser, any insolvency proceeding (namely, any proceeding of the
type referred to in the definition of Event of Bankruptcy) so long as any
Commercial Paper Notes issued by Purchaser shall be outstanding or there
shall not have elapsed one year plus one day since the last day on which
any such Commercial Paper Notes shall have been outstanding. The foregoing
shall not limit Seller's right to file any claim in or otherwise take any
action with respect to any insolvency proceeding that was instituted by any
Person other than Seller.
SECTION 14.07. Confidentiality of Program Information.
(a) Confidential Information. Each party hereto acknowledges that
State Street Capital regards the structure of the transactions contemplated
by this Agreement to be proprietary, and each such party severally agrees
that:
(i) it will not disclose without the prior written consent
of State Street Capital (other than to the directors,
employees, auditors, counsel or affiliates (collectively,
"representatives" of such party, each of whom shall be
informed by such party of the confidential nature of the
Program Information (as defined below) and of the terms of
this Section 14.07), (A) any information regarding the pricing
in, or copies of, this Agreement or any transaction
contemplated hereby, (B) any information regarding the
organization, business or operations of Purchaser generally or
the services performed by the Administrator or the
Relationship Bank for Purchaser, or (C) any information which
is furnished by State Street Capital to such party and which
is designated by State Street Capital to such party as
confidential or not otherwise available to the general public
(the information referred to in clauses (A), (B) and (C) is
collectively referred to as the "Program Information");
provided, however, that such party may disclose any such
Program Information (I) to any other party to this Agreement
for the purposes contemplated hereby, (II) as may be required
by any municipal, state, federal or other regulatory body
having or claiming to have jurisdiction over such party, (III)
in order to comply with any law, order, regulation, regulatory
request or ruling applicable to such party, (IV) subject to
subsection (c), in the event such party is legally compelled
(by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to
disclose any such Program Information; or (V) specifically,
Seller or one of its affiliates may file this executed
agreement as an exhibit to any annual or quarterly report it
files with the United States Securities and Exchange
Commission; and
(ii) it will use the Program Information solely for the
purposes of evaluating, administering and enforcing the
transactions contemplated by this Agreement and making any
necessary business judgments with respect thereto;
(b) Availability of Confidential Information. This Section 14.07
shall be inoperative as to such portions of the Program Information which
are or become generally available to the public or such party on a
nonconfidential basis from a source other than State Street Capital or were
known to such party on a nonconfidential basis prior to its disclosure by
State Street Capital.
(c) Legal Compulsion to Disclose. In the event that any party or
anyone to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand
or similar process) to disclose any of the Program Information, such party
will:
(i) provide State Street Capital with prompt written notice
so that State Street Capital may seek a protective order or
other appropriate remedy and/or waive compliance with the
provisions of this Section 14.07; and
(ii) unless State Street Capital waives compliance by such
party with the provisions of this Section 14.07, make a timely
objection to the request or confirmation to provide such
Program Information on the basis that such Program Information
is confidential and subject to the agreements contained in
this Section 14.07.
In the event that such protective order or other remedy is not obtained, or
State Street Capital waives compliance with the provisions of this Section
14.07, such party will furnish only that portion of the Program Information
which (in such party's good faith judgment) is legally required to be
furnished and will exercise reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded the Program Information.
(d) Survival. This Section 14.07 shall survive termination of this
Agreement.
SECTION 14.08. Confidentiality of Seller Information.
(a) Confidential Information. Each party hereto acknowledges that
Seller regards certain financial and portfolio information to be
confidential, and each such party severally agrees that:
(i) it will not disclose without the prior written consent
of Seller (other than to the directors, employees, auditors,
counsel or affiliates (collectively, "representatives" of such
party, each of whom shall be informed by such party of the
confidential nature of the Seller Information (as defined
below) and of the terms of this Section 14.08), (A) any
financial information regarding Seller, (B) any pricing
information of Seller, or (C) any information which is
furnished by Seller to such party and which is designated by
Seller to such party as confidential or not otherwise
available to the general public (the information referred to
in clauses (A), (B) and (C) is collectively referred to as the
"Seller Information"); provided, however, that such party may
disclose any such Seller Information (I) to any other party to
this Agreement for the purposes contemplated hereby, (II) as
may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over
such party, (III) in order to comply with any law, order,
regulation, regulatory request or ruling applicable to such
party, (IV) subject to subsection (c), in the event such party
is legally compelled (by interrogatories, requests for
information or copies, subpoena, civil investigative demand or
similar process) to disclose any such Seller Information, and
(V) to the Credit Bank, the Liquidity Banks, any assignee or
participant or potential assignee or participant of the Credit
Bank or any Liquidity Bank, the rating agencies rating the
Commercial Paper Notes, and the investors in and dealers of
the Commercial Paper Notes; and
(ii) it will use the Seller Information solely for the
purposes of evaluating, administering and enforcing the
transactions contemplated by this Agreement and making any
necessary business judgments with respect thereto.
(b) Availability of Confidential Information. This Section 14.08
shall be inoperative as to such portions of the Seller Information which
are or become generally available to the public or such party on a
nonconfidential basis from a source other than Seller or were known to such
party on a nonconfidential basis prior to its disclosure by Seller.
(c) Legal Compulsion to Disclose. In the event that any party or
anyone to whom such party or its representatives transmits the Seller
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand
or similar process) to disclose any of the Seller Information, such party
will
(i) provide Seller with prompt written notice so that
Seller may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Section
14.08; and
(ii) unless Seller waives compliance by such party with the
provisions of this Section 14.08, make a timely objection to
the request or confirmation to provide such Seller Information
on the basis that such Seller Information is confidential and
subject to the agreements contained in this Section 14.08.
In the event that such protective order or other remedy is not obtained, or
Seller waives compliance with the provisions of this Section 14.08, such
party will furnish only that portion of the Seller Information which (in
such party's good faith judgment) is legally required to be furnished and
will exercise reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded the Seller Information.
(d) Survival. This Section 14.08 shall survive termination of this
Agreement.
SECTION 14.09. Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement
are provided solely for convenience of reference and shall not affect the
meaning or interpretation of any provision of this Agreement. Unless
otherwise indicated, references in this Agreement to any Section, Appendix,
Schedule or Exhibit are to such Section of or Appendix, Schedule or Exhibit
to this Agreement, as the case may be, and references in any Section,
subsection, or clause to any subsection, clause or subclause are to such
subsection, clause or subclause of such Section, subsection or clause.
SECTION 14.10. Integration. This Agreement, together with the letter
referenced in Section 4.01(a), contains a final and complete integration of
all prior expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the entire understanding among the
parties hereto with respect to the subject matter hereof, superseding all
prior oral or written understandings.
SECTION 14.11. Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS
AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE
EXTENT THAT THE PERFECTION OF THE INTERESTS OF PURCHASER IN THE RECEIVABLES
IS GOVERNED BY THE LAWS OF THE JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
SECTION 14.12. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT A JURY TRIAL.
SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities. EACH
OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IT IRREVOCABLY (i)
SUBMITS TO THE JURISDICTION, FIRST, OF ANY UNITED STATES FEDERAL COURT, AND
SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE
COURT, IN EITHER CASE SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, (ii) AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED ONLY IN SUCH NEW YORK STATE OR FEDERAL COURT AND NOT IN ANY
OTHER COURT, AND (iii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING.
SECTION 14.14. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties hereto
in separate 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 14.15. No Recourse Against Other Parties. No recourse under
any obligation, covenant or agreement of any of the Securitization Entities
contained in this Agreement shall be had against any incorporator,
stockholder, officer, director or employee of such Securitization Entity,
by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that this Agreement is solely a corporate obligation
of Purchaser, and that no personal liability whatever shall attach to or be
incurred by the incorporators, stockholders, officers, directors or
employees of such Securitization Entity, or any of them under or by reason
of any of the obligations, covenants or agreements of such Securitization
Entity contained in this Agreement, or implied therefrom, and that any and
all personal liability for breaches by such Securitization Entity of any of
such obligations, covenants or agreements either at common law or at
equity, or by statute or constitution, of every such incorporator,
stockholder, officer, director or employee is hereby expressly waived as a
condition of and in consideration for the execution of this Agreement;
provided, however, that nothing in this Section 14.15 shall relieve any of
the foregoing persons or entities from any liability arising from his, her
or its willful misconduct or intentional misrepresentations.
SECTION 14.16. State Street Business Combination. The parties hereto
recognize that State Street Capital is contemplating a business combination
whereby State Street Capital is to be combined with State Street Capital
Markets, L.L.C. ("SSCM"). Upon consummation of the transaction, SSCM shall
automatically become a party hereto, effective immediately upon such
combination. References herein to State Street Capital shall be deemed to
include references to SSCM.
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.
CHARMING SHOPPES STREET, INC.
as Seller
By:
Name:
Title:
SPIRIT OF AMERICA, INC., as Servicer
By:
Name:
Title:
CLIPPER RECEIVABLES CORPORATION,
as Purchaser
By:
Name:
Title:
STATE STREET
CAPITAL CORPORATION,
as Administrator
By:
Name:
Title:
STATE STREET
BANK & TRUST COMPANY,
as Relationship Bank
By:
Name:
Title:
Schedule 5.01(h)
to Receivables Purchase Agreement
Opinions to be Delivered Prior to Initial Funding
1. Opinions of Xxxxx, Xxxxx & Xxxxx ("MBP"), as special counsel to
the Transferors, substantially in the form attached to this Schedule.
2. Opinion of Xxxxx Xxxxx, Executive Vice President and General
Counsel of Charming Shoppes, with respect to (i) the organization of the
Transferors, (ii) the authorization by the Transferors of the Transaction
Documents, (iii) the absence of conflict with each Transferor's
organizational documents, material agreements and orders of courts and
regulatory bodies having jurisdiction over the Transferors, and (iv)
litigation matters. Such opinion shall be subject to such exceptions and
qualifications as are set forth in the opinion delivered by Xx. Xxxxx on
November 25, 1997 in connection with the issuance of Series 1997-1.
Schedule 6.01(j)
to Receivables Purchase Agreement
Description of Litigation
NONE
Schedule 6.01(n)
to Receivables Purchase Agreement
List of Offices Where Seller Records are Kept
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Schedule 7.01(g)
to Receivables Purchase Agreement
Description of Credit and Collection Policy
To be delivered by Servicer prior to the initial funding.
EXHIBIT 3.01(a)
Information Package
Exhibit 14.02
Addresses for Notices
Clipper Receivables Corporation
c/o State Street Capital Corporation,
as Administrator
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 02110
State Street Capital Corporation,
as Administrator
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 02110
State Street Bank & Trust Company,
as Relationship Bank
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Spirit of America, Inc.
c/o Spirit of American National Bank
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxx 00000
Charming Shoppes Street, Inc.
c/o Fashion Service Corp.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
