EXHIBIT 99.1
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AMENDED AND RESTATED CERTIFICATE PURCHASE AGREEMENT
among
WACHOVIA BANK, NATIONAL ASSOCIATION
as Trustee
CHARMING SHOPPES RECEIVABLES CORP.,
as Seller and as Initial Class D-1 Holder
SPIRIT OF AMERICA, INC.,
as Servicer
and
THE COVERED CLASS D-1 HOLDER DESCRIBED HEREIN
dated as of August 24, 2004
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Table of Contents
Page
ARTICLE I
Definitions
SECTION 1.1 Defined Terms..............................................................................1
SECTION 1.2 Other Definitional Provisions.............................................................10
ARTICLE II
Amount and Terms of Class D-1 Certificates
SECTION 2.1 Purchase..................................................................................11
SECTION 2.2 Distributions.............................................................................11
SECTION 2.3 Interest Rate; Payment Dates..............................................................13
SECTION 2.4 Payments..................................................................................14
SECTION 2.5 Allocation of Reductions to Class D-1 Investor Interest...................................14
SECTION 2.6 Nonrecourse and Recourse Obligations; Obligations Absolute................................14
SECTION 2.7 Indemnification...........................................................................14
SECTION 2.8 Payments from Class C Spread Account......................................................16
SECTION 2.9 Increased Cost, Reduced Return and Taxes..................................................16
SECTION 2.10 Specified Percentage......................................................................18
SECTION 2.11 Pre-Funding Account.......................................................................18
ARTICLE III
Required Transfers and Required Retransfers
SECTION 3.1 Transfers to Uncovered Class D-1 Holder...................................................18
SECTION 3.2 Transfers to Covered Class D-1 Holder.....................................................19
ARTICLE IV
Representations and Warranties of Seller and Servicer
SECTION 4.1 Representations and Warranties of the Servicer............................................20
SECTION 4.2 Representations and Warranties of the Seller..............................................22
ARTICLE V
Conditions Precedent
SECTION 5.1 Representations and Warranties............................................................24
SECTION 5.2 Certificate Issuance......................................................................24
SECTION 5.3 Additional Documents......................................................................24
ARTICLE VI
Covenants of the Seller and Servicer
SECTION 6.1 Certificates..............................................................................24
SECTION 6.2 Monthly Status Reports....................................................................25
SECTION 6.3 Servicer Default..........................................................................25
SECTION 6.4 Reassignment of Certificates..............................................................25
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Table of Contents
(continued)
SECTION 6.5 Rule 144A Information.....................................................................25
SECTION 6.6 Seller Financial Information; Other Information; Confidentiality..........................25
SECTION 6.7 Covered Class D-1 Holders' Identities.....................................................25
SECTION 6.8 Amendments and Modifications..............................................................26
SECTION 6.9 Trigger Increase Event....................................................................26
SECTION 6.10 Liens.....................................................................................27
SECTION 6.11 Discount Option Receivables...............................................................27
SECTION 6.12 Access....................................................................................27
SECTION 6.13 Performance of Agreements.................................................................27
SECTION 6.14 Payments..................................................................................27
SECTION 6.15 Further Actions...........................................................................27
SECTION 6.16 Class D Cancellation......................................................................28
ARTICLE VII
Representations, Warranties and Covenants of the Initial Covered
Class D-1 Holder and the Trustee
SECTION 7.1 Representations, Warranties and Covenants of the Covered Class D-1 Holder.................28
SECTION 7.2 Representations, Warranties and Covenants of the Trustee..................................29
ARTICLE VIII
Miscellaneous
SECTION 8.1 Amendments and Waivers....................................................................29
SECTION 8.2 Servicer Transfer.........................................................................30
SECTION 8.3 Fees and Expenses.........................................................................30
SECTION 8.4 Governing Law.............................................................................30
SECTION 8.5 No Waiver.................................................................................30
SECTION 8.6 Severability..............................................................................30
SECTION 8.7 Termination...............................................................................31
SECTION 8.8 Transfer Restrictions.....................................................................31
SECTION 8.9 Notices...................................................................................32
SECTION 8.10 Survival of Representations and Warranties................................................32
SECTION 8.11 Exclusive Benefit.........................................................................32
SECTION 8.12 Limitation of Remedies....................................................................33
SECTION 8.13 Counterparts..............................................................................33
SECTION 8.14 Entire Agreement..........................................................................33
SECTION 8.15 Headings..................................................................................33
SECTION 8.16 Nonpetition Agreement.....................................................................33
SECTION 8.17 Waiver of Jury Trial......................................................................34
SECTION 8.18 Amendment and Restatement.................................................................34
EXHIBIT A Form of Monthly Report
EXHIBIT B Form of Purchaser Representation Letter
AMENDED AND RESTATED CERTIFICATE PURCHASE AGREEMENT, dated as of August
24, 2004, among WACHOVIA BANK, NATIONAL ASSOCIATION, as trustee (together with
its successors and assigns, the "Trustee") for the Charming Shoppes Master Trust
(the "Trust"), SPIRIT OF AMERICA, INC., a Delaware corporation ("Spirit, Inc."),
as Servicer, CHARMING SHOPPES RECEIVABLES CORP., a Delaware corporation
("CSRC"), as Seller and as the Initial Class D-1 Holder, and CLIPPER RECEIVABLES
COMPANY LLC (the "Initial Covered Class D-1 Holder").
WHEREAS the Seller, the Servicer and the Trustee have entered into a
Second Amended and Restated Pooling and Servicing Agreement, dated as of
November 25, 1997 (as amended by amendments dated as of July 22, 1999, May 8,
2001 and August 5, 2004, and as the same may from time to time be further
amended, modified or otherwise supplemented, the "Pooling and Servicing
Agreement"), for the Trust and the Series 2004-1 Supplement, dated as of August
5, 2004 to the Pooling and Servicing Agreement (as the same may from time to
time be amended, modified or otherwise supplemented, the "Supplement"); and
WHEREAS, the Seller, Servicer and the Initial Class D-1 Holder have
entered into a Certificate Purchase Agreement dated as of August 5, 2004 (the
"Original Certificate Purchase Agreement") pursuant to which CSRC purchased the
Class D-1 Certificates;
WHEREAS the Initial Covered Class D-1 Holder has agreed to purchase the
Covered Class D-1 Certificates as provided herein;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and adequacy
of which are hereby expressly acknowledged, the parties hereto agree to amend
and restate the Original Certificate Purchase Agreement as follows:
ARTICLE I
Definitions
SECTION 1.1 Defined Terms. Unless otherwise defined herein, all terms
used herein which are defined in the Pooling and Servicing Agreement or the
Supplement shall have the meanings assigned thereto in the Pooling and Servicing
Agreement or the Supplement, as the case may be, and the following terms shall
have the following meanings:
"Act" shall mean the Securities Act of 1933, as amended.
"Administrator" shall mean State Street Global Markets, LLC and its
successors and assigns.
"Agreement" shall mean this Certificate Purchase Agreement, as amended,
supplemented or otherwise modified from time to time.
"APA Shortfall" shall mean, with respect to each Distribution Date, any
unfunded amount payable to the Covered Class D-1 Holders under subsection
2.2(b)(ii) after giving effect
to the distributions of Available Principal Amounts pursuant to subsection
2.2(b) on such Distribution Date.
"Available Amounts" shall mean, with respect to each Distribution Date,
sum of Available Interest Amounts, Available Principal Amounts and Available
Additional Amounts, in each case, as of such Distribution Date.
"Available Additional Amounts" shall mean, with respect to each
Distribution Date, the sum of (a) the amounts distributed by the Servicer or the
Trustee (acting in accordance with instructions of the Servicer) for application
under this Agreement pursuant to Section 4.11(s) of Article IV under Section 8
of the Supplement and (b) any Available Interest Amounts remaining after giving
effect to distributions thereof on such Distribution Date pursuant to Section
2.2(a).
"Available Interest Amounts" shall mean, with respect to each
Distribution Date, the sum of (a) the amounts distributed by the Servicer or the
Trustee (acting in accordance with instructions of the Servicer) for application
under this Agreement pursuant to Section 4.11(n) of Article IV under Section 8
of the Supplement plus (b) amounts available for distribution hereunder pursuant
to subsection 2.2(b)(vii) of the Class C Purchase Agreement.
"Available Principal Amounts" shall mean, with respect to each
Distribution Date, an amount equal to the amount distributed by the Servicer or
the Trustee (acting in accordance with instructions of the Servicer) for
application pursuant to Section 4.9(f)(i), 4.9(g)(v)or 4.9(g)(vi) of Article IV
under Section 8 of the Supplement.
"Catherines Portfolio" shall mean the accounts that CSRC expects to
acquire which arise under a portfolio of proprietary credit cards used at
Catherines Plus Sizes(R) stores and other stores operated by Catherines Stores
Corporation and its subsidiaries.
"Charming Shoppes" shall mean Charming Shoppes, Inc., a Pennsylvania
corporation.
"Charming Shoppes Trigger Event" shall mean the last day of a fiscal
quarter for Charming Shoppes on which (x) (i) if such fiscal quarter is the
third fiscal quarter for any Charming Shoppes fiscal year, Charming Shoppes and
its consolidated subsidiaries shall have sustained a net loss exceeding
$1,000,000 for the fiscal quarter ending on such day and (ii) otherwise,
Charming Shoppes and its consolidated subsidiaries shall have sustained a net
loss of any amount for the fiscal quarter ending on such day, (y) the Tangible
Net Worth of Charming Shoppes and its consolidated subsidiaries is less than
$228,000,000 or (z) Charming Shoppes' Debt to Tangible Net Worth Ratio is equal
to or greater than 100%.
"Class C Purchase Agreement" shall mean the Certificate Purchase
Agreement, dated as of August 5, 2004, among CSRC, the Servicer, the Trustee and
the Class C Certificateholders named therein, as amended, modified or otherwise
supplemented from time to time.
"Class C Spread Account" shall have the meaning assigned thereto in the
Class C Purchase Agreement.
"Class D-1 Certificate Rate" shall mean LIBOR plus the "Applicable
Spread" as defined in the Fee Letter.
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"Class D-1 Expected Final Payment Date" shall mean the March 2010
Distribution Date.
"Class D-1 Holders" shall mean the Covered Class D-1 Holders and the
Uncovered Class D-1 Holders.
"Class D-1 Reduction Amount" shall mean, on any day, the aggregate
unreimbursed amount by which the Class D-1 Investor Interest has been reduced
below the Class D-1 Initial Investor Interest for reasons other than the payment
of principal to the Class D-1 Certificateholders.
"Class D-1 Reduction Rate" shall mean, on any day, the Class D-1
Certificate Rate in effect on such Distribution Date plus the "Reduction Spread"
as defined in the Fee Letter.
"Class D-1 Transfer Amount" shall mean, with respect to each
Distribution Date, the lesser of (x) the Covered Class D-1 Investor Interest as
of such Distribution Date (after giving effect to all reductions thereto
pursuant to Section 2.5(a) and 2.2(b)(i) on such Distribution Date) and (y) the
excess, if any, of the Required Class D-1 Transfer Amount over the Net
Transferred Amount as of the preceding Distribution Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commercial Paper" shall mean the commercial paper promissory notes
issued by a Structured Holder in the commercial paper market.
"Commission" shall mean the Securities and Exchange Commission.
"Consent Date" shall mean, with respect to a request for consent made
by the Seller pursuant to Section 6.8(b)(2) relating to the Catherines
Portfolio, the latest of (A) five Business Days after the Rating Agencies
consent to the addition of Additional Accounts related to the Catherines
Portfolio pursuant to the terms of the Pooling and Servicing Agreement and (B)
ten Business Days after the receipt by the Covered Class D-1 Holders of the last
item of information that CSRC and/or the Servicer shall provide as required by
Section 6.8(b)(2)(B).
"Covered Class D-1 Additional Interest" shall mean, with respect to any
Distribution Date, an amount equal to the product of (i) a fraction, the
numerator of which is the Specified Days and the denominator of which is 360,
times (ii) the sum of the Class D-1 Certificate Rate and 1% per annum, times
(iii) any Covered Class D-1 Deficiency Amounts for the prior Distribution Date
(or the portion thereof theretofore not paid to the Covered Class D-1 Holders).
"Covered Class D-1 Certificates" means, at any time, Class D-1
Certificates then held by the Covered Class D-1 Holder; it being understood and
agreed that the portion of Class D-1 Certificates deemed to have been
transferred to the Uncovered Class D-1 Holder pursuant to Section 3.1 shall not
be considered to be so held.
"Covered D-1 Commitment Amount" shall mean, with respect to each
Distribution Date, an amount equal to the portion of Class D-1 Monthly Interest
and Class D-1 Deficiency Amount payable to the Uncovered Class D-1 Holder that
is attributable to the payment of the "Applicable Spread" component of the Class
D-1 Certificate Rate; it being understood that payments of Class
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D-1 Monthly Interest shall be allocated first to the payment of the "Applicable
Spread" component and then to the "LIBOR" component of the Class D-1 Certificate
Rate.
"Covered Class D-1 Deficiency Amount" shall mean, for any Distribution
Date, the portion of the Class D-1 Deficiency Amount owed to the Covered Class
D-1 Holders.
"Covered Class D-1 Holders" shall mean the Initial Covered Class D-1
Holder and each of its successors and permitted transferees other than CSRC.
"Covered Class D-1 Initial Investor Interest" shall mean the initial
principal amount of the Class D-1 Certificate purchased by the Initial Covered
Class D-1 Holder, which is $9,450,000.
"Covered Class D-1 Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Covered Class D-1 Initial Investor
Interest minus (b) the aggregate amount of principal payments made to the
Covered Class D-1 Holders prior to such date (other than any principal payments
made pursuant to Section 4.9(h) of Article IV of Section 8 of the Supplement)
minus (c) the Covered Class D-1 Reduction Amount minus (d) the amount of any
reduction to the Covered Class D-1 Investor Interest as a result of the purchase
by the Seller and subsequent cancellation of the Covered Class D-1 Certificates
pursuant to Section 4.16 of the Supplement minus (e) the Net Transferred Amount
on such date (after giving effect to any increases or decreases thereof on such
date) minus (f) the Covered Class D-1 Percentage of the Initial Total Pre-Funded
Amount plus (g) the Covered Class D-1 Percentage of any increases to the Series
Investor Interest pursuant to Section 4.21 of Article IV of Section 8 of the
Supplement during the Funding Period, plus (h) the aggregate Reimbursement
Amount for all prior Distribution Dates allocated to the Covered Class D-1
Investor Interest pursuant to Section 2.5(b); provided, however, that the
Covered Class D-1 Investor Interest may not be reduced below zero.
"Covered Class D-1 Percentage" shall mean, on any date of
determination, the Class D-1 Percentage times a fraction, the numerator of which
is (x) the Covered Class D-1 Investor Interest as of the preceding Distribution
Date less (y) any decreases in the Net Transferred Amount on such date plus (z)
any increases in the Net Transferred Amount on such date and the denominator of
which is the Investor Interest.
"Covered Class D-1 Reduction Amount" shall mean, on any date of
determination, the aggregate unreimbursed amount by which the Covered Class D-1
Investor Interest has been reduced below the Covered Class D-1 Initial Investor
Interest as a result of the allocation of the Class D-1 Reduction Amount,
pursuant to Section 2.5(a).
"Covered Shortfalls" shall mean, with respect to any Distribution Date,
the aggregate unfunded amounts pursuant to Section 2.2(c)(i) through (c)(iv) and
(c)(vi) for which the Covered Class D-1 Holder has received Redirected Payments.
"Credit Agreement" shall mean any agreement (other than the Liquidity
Agreement) now or hereafter entered into by a Structured Holder providing for
the issuance of one or more letters of credit for the account of such Structured
Holder, the making of loans to such Structured Holder or any other extensions of
credit to or for the account of such Structured Holder to
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support all or any part of such Structured Holder's payment obligations under
its Commercial Paper or to provide an alternate means of funding such Structured
Holder's investments in accounts receivable or other financial assets, in each
case as amended, supplemented or otherwise modified from time to time.
"CSRC" has the meaning assigned thereto in the preamble.
"Debt to Tangible Net Worth Ratio" shall mean, as of the end of any
fiscal quarter of Charming Shoppes, the ratio of (x) Funded Debt to (y) Tangible
Net Worth.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Excess Yield Percentage" shall mean, with respect to any Distribution
Date, the result (expressed as a percentage) of a fraction, the numerator of
which is the product of (a) the Excess Spread for such Distribution Date, minus
(i) the Shared Excess Finance Charge Collections from Series other than Series
2004-1 included in the calculation of Excess Spread for such Distribution Date
and (ii) the sum of (A) amounts required to be applied pursuant to Sections
4.11(a) through (q) of the Supplement (other than Section 4.11(l)) plus (B) the
amounts required to be applied pursuant to Sections 2.2(b)(ii)(B)(II) through
(2.2(b)(iv) of the Class C Purchase Agreement plus (C) the amounts required to
be applied pursuant to 2.2(c) (other than clauses (iv) through (viii) thereof)
of this Agreement times (b) twelve, and the denominator of which is the Series
Investor Interest for such Distribution Date.
"Fee Letter" shall mean the letter agreement, dated as of the date
hereof, among the Seller, the Servicer and the Covered Class D-1 Holder, as
amended or otherwise modified from time to time.
"Foreign" shall mean, with respect to any Funding Source that is an
assignee or participant of a Structured Holder, any Person not organized under
the laws of the United States, one of the states thereof, or the District of
Columbia.
"Funded Debt" shall mean, as at the end of any fiscal quarter of
Charming Shoppes, the sum (without duplication) of the following (computed on a
consolidated basis for Charming Shoppes and its consolidated subsidiaries): (a)
all indebtedness for borrowed money of, or guaranteed by, Charming Shoppes and
such subsidiaries, (b) all indebtedness secured by any Lien on any property
owned by Charming Shoppes or such subsidiaries, even though such Persons have
not assumed or become liable for the payment thereof, and (c) obligations of
Charming Shoppes or such subsidiaries under leases which have been or should be,
in accordance with GAAP, capitalized. For purposes of this definition, it is
understood and agreed that borrowed money shall be the amount of "Total
Long-Term Debt" and "Total Short-Term Debt" outstanding as reported in the notes
to the consolidated financial statements of Charming Shoppes (excluding such
amounts already identified in (b) above and excluding amounts of "Other
Long-Term Debt" as reported in such notes), and including the Letter of Credit
Amount as of the end of any fiscal quarter end.
"Funding Agreement" shall mean any agreement or instrument executed by
any Funding Source with or for the benefit of a Structured Holder.
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"Funding Source" shall mean any insurance company, bank or other
financial institution providing liquidity, credit enhancement or back-up
purchase support or facilities to a Structured Holder in respect of commercial
paper issued by such Structured Holder, the proceeds of which were used to fund
the Covered Class D-1 Investor Interest.
"GAAP" shall mean United States generally accepted accounting
principles.
"Indemnifying Party" shall have the meaning assigned thereto in Section
2.7(b) of this Agreement.
"Indemnitee" shall have the meaning assigned thereto in Section 2.7(a)
of this Agreement.
"Initial Class D-1 Holder" shall mean CSRC.
"Initial Covered Class D-1 Holder" shall have the meaning assigned
thereto in the preamble of this Agreement.
"Insolvency Event" shall mean, with respect to any Person, that any
proceeding shall be instituted by or against such Person seeking to adjudicate
it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, conservatorship or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian, conservator, sequestrator
or other similar official for it or for any substantial part of its property.
"Letter of Credit" means a letter of credit as to which Charming
Shoppes or its subsidiary is the account party obligated to reimburse the
issuing bank.
"Letter of Credit Amount" means, at any time, the aggregate amount of
outstanding Letters of Credit shown in the footnotes to the financial statements
of Charming Shoppes then most recently filed with the Securities and Exchange
Commission on Form 10-K or 10-Q.
"Liquidity Agreement" shall mean that certain Liquidity Asset Purchase
Agreement among the Initial Covered Class X-0 Xxxxxx, Xxxxx Xxxxxx Xxxx and
Trust Company, as Liquidity Agent, the Administrator and each of the purchasers
thereto, as amended from time to time.
"Monthly Principal Payment Percentage" shall mean, for any Due Period,
the percentage equivalent of a fraction, the numerator of which is an amount
equal to the aggregate Collections of Principal Receivables received during such
Due Period and the denominator of which is the aggregate Outstanding Balance of
all Principal Receivables as of the close of business on the last day of the
immediately preceding Due Period.
"Net Transferred Amount" shall mean, with respect to any Distribution
Date, an amount equal to the remainder of (x) the sum of (1) the aggregate
amount paid to the Covered Class D-1 Holders pursuant to subsections 2.2(b)(ii)
and (c)(vi) on all prior Distribution Dates plus (2) the aggregate amount of
Redirected Payments received by the Covered Class D-1 Holder pursuant to
subsection 2.2(d) in respect of any APA Shortfalls attributable to subsection
2.2(c)(vi) minus (y)
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aggregate amount paid to the Uncovered Class D-1 Holder pursuant to Section 3.2
on all prior Distribution Dates.
"Original Certificate Purchase Agreement" shall have the meaning
ascribed thereto in the preamble of this Agreement.
"Proposed Transfer" shall have the meaning assigned thereto in Section
8.8(c).
"Redirected Payments" shall mean the aggregate amount of payments to
the Uncovered Class D-1 Holder that have been (i) paid to the Covered Class D-1
Holder pursuant to Section 2.2(d).
"Regulation D" shall mean Regulation D of the Federal Reserve Board,
or any other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.
"Regulatory Change" shall mean, relative to any Funding Source:
(a) any change in (or the adoption, implementation, phase-in
or commencement of effectiveness of) any
(i) United States federal or state law or foreign law
applicable to such Funding Source;
(ii) regulation, interpretation, directive,
requirement or request (whether or not having the force of
law) applicable to such Funding Source of (A) any court,
government authority charged with the interpretation or
administration of any law referred to in clause (a)(i) or (B)
any fiscal, monetary or other authority having jurisdiction
over such Funding Source; or
(iii) generally accepted accounting principles or
regulatory accounting principles applicable to such Funding
Source and affecting the application to such Funding Source of
any law, regulation, interpretation, directive, requirement or
request referred to in clause (a)(i) or (a)(ii) above; or
(b) any change in the application to such Funding Source of
any existing law, regulation, interpretation, directive, requirement,
request or accounting principles referred to in clause (a)(i), (a)(ii)
or (a)(iii) above.
"Reimbursement Amount" shall mean, with respect to any Distribution
Date, the aggregate amount of Excess Spread and Shared Excess Finance Charge
Collections allocated and available on such Distribution Date pursuant to
Section 4.11(q) of Article IV under Section 8 of the Supplement for the purpose
of reimbursing Class D-1 Investor Charge-Offs and Class D-1 Reallocated
Principal Collections.
"Repayment Amount" shall mean, as of any date, amounts owed to the
Class D-1 Holders hereunder or under the Supplement.
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"Required Class C Spread Amount" shall have the meaning assigned
thereto in the Class C Purchase Agreement.
"Required Class D Holders" shall mean (1) until the later to occur of
(a) the day on which the Covered Class D-1 Investor Interest is reduced to zero
and (b) the Covered Class D-1 Holders are no longer obligated to make any
payments to the Uncovered Class D-1 Holders pursuant to Section 3.2(b), the
Covered Class D-1 Holders and (2) otherwise, the holders of Class D Certificates
representing more than 50% of the Class D Investor Interest.
"Required Class D-1 Transfer Amount" shall mean, with respect to any
Distribution Date, the product of (i) the greatest of the Required CS
Percentage, the Required EY Percentage and the Required MPP Percentage in effect
on such Distribution Date times (ii) the Initial Investor Interest.
"Required CS Percentage" shall mean, with respect to any Distribution
Date, (x) if a Charming Shoppes Trigger Event shall have occurred for the most
recently ended fiscal quarter of Charming Shoppes, 5.25% and (y) otherwise, 0%;
it being understood and agreed that if a Charming Shoppes Trigger Event shall
have occurred in one fiscal quarter but shall have not occurred or be continuing
in the next fiscal quarter, the Required CS Percentage for next quarter will be
0%.
"Required EY Percentage" shall mean, with respect to any Distribution
Date, (x) if the Three Month Excess Yield Percentage for such Distribution Date
is less than 3%, 5.25% and (y) otherwise, 0%. If the "Required EY Percentage" is
increased for any Distribution Date, the "Required EY Percentage" for any
succeeding Distribution Date shall not be decreased until the Three Month Excess
Yield Percentage falls within the range specified for a lower "Required EY
Percentage" for three consecutive Due Periods.
"Required MPP Percentage" shall mean, with respect to any Distribution
Date, the "Required MPP Percentage" set forth in the right column of the table
set forth below that corresponds to the applicable range for the Three Month MPP
Percentage in effect for such Distribution Date:
Three Month MPP Percentage Required MPP Percentage*
-------------------------- ------------------------
greater than or equal to 7.0% 0.0%
greater than or equal to 6.0%
but less than 7.0% 2.75%
less than 6.0% 5.25%
*If the "Required MPP Percentage" is increased for any Distribution
Date, the "Required MPP Percentage" for any succeeding Distribution Date shall
not be decreased until the Three Month MPP Percentage falls within the range
specified for a lower "Required MPP Percentage" for three consecutive Due
Periods.
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"Senior Certificate Purchase Agreement" shall mean the Certificate
Purchase Agreement dated as of July 21, 2004, among the Seller, the Servicer,
Fashion Service Corp., Barclays Capital Inc. and Bear, Xxxxxxx & Company Inc.,
relating to offer and sale of the Class A Certificates, the Class M Certificates
and the Class B Certificates.
"Shareholders Equity" shall mean, as of the end of any fiscal quarter
of Charming Shoppes, the amount which, in conformity with GAAP, would be set
forth opposite the caption "Shareholders Equity" (or any like caption) on a
consolidated balance sheet of Charming Shoppes and its consolidated subsidiaries
at such date.
"Spirit, Inc." has the meaning assigned thereto in the preamble.
"State Street Related Party" shall mean State Street Bank and Trust
Company, the Initial Covered Class D-1 Holder and any other Structured Holder
owned or administered by State Street Bank and Trust Company or the
Administrator.
"Structured Holder" shall mean the Initial Covered Class D-1 Holder and
any other Covered Class D-1 Holder the principal business of which consists of
issuing Commercial Paper to fund its acquisition and maintenance of receivables,
accounts, instruments, chattel paper, general intangibles and other similar
assets or interests therein and which is required by any nationally recognized
rating agency which is rating such Commercial Paper to obtain from its principal
debtors an agreement such as that set forth in Section 8.16(b) of this Agreement
in order to maintain such rating.
"Tangible Net Worth" shall mean as of the end of any fiscal quarter of
Charming Shoppes, an amount equal to (x) Shareholder's Equity at such date minus
(y) all licenses, franchises, patents, patent applications, trademarks, program
rights, good will, research and development expense and other like intangible
assets shown on the consolidated balance sheet of Charming Shoppes and its
consolidated subsidiaries.
"Taxes" shall mean, in the case of any Funding Source that is an
assignee or participant of a Structured Holder, taxes, levies, imposts,
deductions, charges, withholdings and liabilities, now or hereafter imposed,
levied, collected, withheld or assessed by any country (or any political
subdivision thereof), excluding income or franchise taxes imposed on it by (i)
the jurisdiction under the laws of which such Funding Source is organized (or by
any political subdivision thereof), (ii) any jurisdiction in which an office of
such Funding Source funding the Class D-1 Investor Interest is located (or any
political subdivision thereof), or (iii) any jurisdiction in which such Funding
Source is already subject to tax.
"Three Month Excess Yield Percentage" shall mean, with respect to any
Distribution Date, the average of the Excess Yield Percentages for the most
recent three Distribution Dates, including such Distribution Date, (or, if less
than three Distribution Dates have occurred since the Closing Date, for such
Distribution Dates as shall have occurred).
"Three Month MPP Percentage" shall mean, with respect to any
Distribution Date, the average of the Monthly Principal Payment Percentages for
the most recent three Distribution Dates, including such Distribution Date, (or,
if less than three Distribution Dates have occurred since the Closing Date, for
such Distribution Dates as shall have occurred).
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"Trigger Increase Event" shall have the meaning set forth in the Class
C Purchase Agreement.
"Trust" has the meaning assigned thereto in the preamble.
"Trustee" has the meaning assigned thereto in the preamble.
"Uncovered Class D-1 Deficiency Amount" shall mean, with respect to
each Distribution Date, the remainder of (1) the Class D-1 Deficiency Amount
payable to the Uncovered Class D-1 Holder on such Distribution Date minus (2)
the portion thereof included in the Covered D-1 Commitment Amount for such
Distribution Date.
"Uncovered Class D-1 Holder" shall mean CSRC, in its capacity as holder
of a Class D-1 Certificate, and its successors and permitted transferees in such
capacity.
"Uncovered Class D-1 Investor Interest" shall mean, on any date of
determination, an amount equal to (a) Net Transferred Amount on such date (after
giving effect to any increases or decreases thereof on such date) minus (b) the
aggregate amount of principal payments made to the Uncovered Class D-1 Holder
prior to such date minus (c) the aggregate amount of Class D-1 Reduction Amount
allocated to the Uncovered Class D-1 Investor Interest pursuant to Section
2.5(a) on all prior Distribution Dates minus (d) the amount of any reduction to
the Uncovered Class D-1 Investor Interest as a result of the purchase by the
Seller and subsequent cancellation of the Covered Class D-1 Certificates
pursuant to Section 4.16 of the Supplement minus (f) the Uncovered Class D-1
Percentage of the Initial Total Pre-Funded Amount, plus (g) the Uncovered Class
D-1 Percentage of any increases to the Series Investor Interest pursuant to
Section 4.21 of the Supplement during the Funding Period, plus (h) the aggregate
Reimbursement Amount for all prior Distribution Dates allocated to the Uncovered
Class D-1 Investor Interest pursuant to Section 2.5(b); provided, however, the
Uncovered Class D-1 Investor Interest may not be reduced below zero.
"Uncovered Class D-1 Monthly Interest" shall mean, with respect to each
Distribution Date, the remainder of (1) the Class D-1 Monthly Interest payable
to the Uncovered Class D-1 Holder on such Distribution Date minus (2) the
portion thereof included in the Covered D-1 Commitment Amount for such
Distribution Date.
"Uncovered Class D-1 Percentage" shall mean, on any date of
determination, 1 minus the Covered Class D-1 Percentage.
SECTION 1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.
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(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and Section, subsection,
Schedule, Attachment and Exhibit references are to this Agreement, unless
otherwise specified. The words "including" and "include" shall be deemed to be
followed by the words "without limitation."
ARTICLE II
Amount and Terms of Class D-1 Certificates
SECTION 2.1 Purchase.
(a) Subject to terms and conditions hereof, (x) the Initial Covered
Class D-1 Holder hereby agrees to purchase from the Initial Class D-1 Holder on
the date hereof, and the Initial Class D-1 Holder hereby sells and assigns all
of its right, title and interest in, to and under, to the Initial Covered Class
D-1 Holder, a Class D-1 Certificate in an initial principal amount equal to
$9,450,000 for a purchase price equal to 100% of such principal amount, and (y)
CSRC agrees to acquire a Class D-1 Certificate in an initial principal amount of
zero.
(b) Except as otherwise set forth herein, all rights of any Class D-1
Holder with respect to any Class D-1 Certificate shall be governed by the
Pooling and Servicing Agreement and the Supplement.
SECTION 2.2 Distributions. On each Distribution Date, the Trustee (at
the direction of the Servicer and upon receipt of the report substantially in
the form of Exhibit A hereto to be delivered to each Class D-1 Holder on the
related Determination Date) shall distribute the Available Amounts with respect
to such date to the following Persons in the order of priority listed below:
(a) The Available Interest Amount shall be distributed as follows:
(i) an amount equal to Class D-1 Monthly Interest, to the
extent payable to the Covered Class D-1 Holders, plus the Covered Class
D-1 Deficiency Amount for such Distribution Date shall be distributed
to the Covered Class D-1 Holders plus the Covered D-1 Commitment
Amount, if any, shall be distributed to the Covered Class D-1 Holders;
and
(ii) subject to paragraph (d) below, an amount equal to the
lesser of (A) any amounts remaining after the payment made pursuant to
clause (i) above and (B) an amount equal to the Uncovered Class D-1
Monthly Interest plus the Uncovered Class D-1 Deficiency Amount for
such Distribution Date shall be distributed to the Uncovered Class D-1
Holders.
(b) The Available Principal Amount shall be distributed as follows:
(i) an amount equal to the lesser of (A) the Covered Class D-1
Investor Interest and (B) the Class D-1 Monthly Principal, if any,
shall be distributed to the Covered Class D-1 Holders;
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(ii) an amount equal to the lesser of (A) any amounts
remaining after the payments made pursuant to clause (i) above and (B)
an amount equal to the Class D-1 Transfer Amount shall be distributed
to the Covered Class D-1 Holders;
(iii) an amount equal to the lesser of (A) any amounts
remaining after the payments made pursuant to clauses (i) and (ii)
above and (B) the lesser of (1) the Uncovered Class D-1 Investor
Interest (calculated after giving effect to any increases to the
Uncovered Class D-1 Investor Interest as a result of clause (ii) above)
and (2) Class D-1 Monthly Principal, if any, shall be distributed to
the Uncovered Class D-1 Holder.
(c) Available Additional Amounts shall be distributed as follows:
(i) an amount equal to any Covered Class D-1 Additional
Interest for such Distribution Date (and any Covered Class D-1
Additional Interest previously payable pursuant to this clause (i) but
not paid on a prior Distribution Date) shall be distributed to the
Covered Class D-1 Holders;
(ii) an amount equal to the lesser of (A) any amounts
remaining after the payments made pursuant to clause (i) above and (B)
an amount equal to the sum of any amounts owed to the Covered Class D-1
Holders or any Funding Source pursuant to the Fee Letter and Section
2.7, 2.9 or 8.3 hereof shall be distributed to the Covered Class D-1
Holders or such Funding Source, as applicable;
(iii) an amount equal to the lesser of (A) any amounts
remaining after the payments made pursuant to clauses (i) and (ii)
above and (B) an amount equal to the product of (x) the Covered Class
D-1 Reduction Amount times (y) the Class D-1 Reduction Rate times (z) a
fraction, the numerator of which is the Specified Days and the
denominator of which is 360, shall be distributed to the Covered Class
D-1 Holders;
(iv) an amount equal to the lesser of (A) any amounts
remaining after the payments made pursuant to clauses (i) through (iii)
above and (B) on any Distribution Date occurring during (1) the
Controlled Amortization Period after each of the Class A Investor
Interest, Class M Investor Interest, Class B Investor Interest and
Class C Investor Interest is reduced to zero, and (2) the Early
Amortization Period, an amount equal to the portion of any Covered
Class D-1 Reduction Amount then outstanding on such Distribution Date,
if any, shall be distributed to the Covered Class D-1 Holders, it being
understood that the aggregate amount distributed to the Covered Class
D-1 Holders pursuant to subsection 2.2(b) and this subclause (iv) shall
not exceed an amount equal to the sum of (w) payments of Class D-1
Monthly Principal made to the Covered Class D-1 Holders during the
Controlled Amortization Period plus (x) the Covered Class D-1 Investor
Interest as of the last day of the Controlled Amortization Period plus
(y) any unreimbursed Covered Class D-1 Reduction Amount minus (z) the
aggregate amount transferred to the Uncovered Class D-1 Investor
Interest during the Early Amortization Period;
(v) an amount equal to the lesser of (A) any amount remaining
after the payments made pursuant to clauses (i) through (iv) above and
(B) an amount equal to the
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excess, if any, of the Required Class C Spread Amount over the amount
on deposit in the Class C Spread Account after giving effect to any
deposits thereto pursuant to the Class C Purchase Agreement on such
Distribution Date shall be transferred to the Class C Spread Account;
(vi) an amount equal to the lesser of (A) any amount remaining
after the payments made pursuant to clauses (i) through (v) above and
(B) an amount equal to the APA Shortfall, if any, shall be distributed
to the Covered Class D-1 Holders;
(vii) an amount equal to the lesser of (A) any amount
remaining after the payments made pursuant to clauses (i) through (vi)
above and (B) an amount equal to any unreimbursed Covered Shortfalls
shall be distributed to the Uncovered Class D-1 Holder;
(viii) the balance, if any, shall be distributed to the Holder
of the Exchangeable Seller Certificate.
(d) If the aggregate amount available for distribution pursuant to
paragraph (c) is less than the aggregate amount required to be distributed
pursuant to clauses (i) through (vi) thereof, the Uncovered Class D-1 Holder
hereby instructs that the Servicer direct the Trustee to pay the amount of such
deficiency from amounts payable to the Uncovered Class D-1 Holder pursuant to
clause (ii) of paragraph (a) above, to the Covered Class D-1 Holders or to the
Class C Spread Account, as applicable. Such amounts shall be applied in
accordance with the priorities set forth in clauses (i) through (vi) of Section
2.2(c).
(e) Notwithstanding any reallocation of payments pursuant to this
Section 2.2 or the definitions of Covered Shortfalls and Covered Class D-1
Commitment Amount for purposes of determining amounts to be allocated pursuant
to the Supplement (x) the Uncovered Class D-1 Holders hereby agree that any
amounts allocated to them pursuant to the Supplement, whether actually received
by them or reallocated pursuant to such Section or definition, shall constitute
payment in full of such amounts by the Trust and (y) each of the Seller, the
Trustee and the Covered Class D-1 Holders hereby agree that any Covered
Shortfalls shall remain payable from allocations under the Supplement on future
Distribution Dates regardless of any payments received by the Covered Class D-1
Holders pursuant to such Section, but that such amounts shall be payable to the
Uncovered Class D-1 Holder pursuant to Section 2.2(c)(vii) rather than to the
Covered Class D-1 Holders.
(f) In order to effect the distributions required to be made under this
Section 2.2, this Agreement hereby requires that amounts be paid pursuant to
Sections 4.9(f)(i), 4.9(g)(vi) and 4.11(s) of Article IV under Section 8 of the
Supplement, in the each case to the extent funds are available for such payment
under the terms of the Supplement, to fund amounts described in Sections 2.2(b)
and (c), as applicable.
SECTION 2.3 Interest Rate; Payment Dates.
(a) The Class D-1 Investor Interest shall bear interest at the Class
D-1 Certificate Rate.
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(b) The Covered Class D-1 Reduction Amount shall bear interest at the
Class D-1 Reduction Rate.
(c) Class D-1 Monthly Interest, Class D-1 Deficiency Amounts, Class D-1
Additional Interest and Class D-1 Monthly Principal shall be payable on each
Distribution Date, as provided in Section 2.2 hereof and the Supplement.
SECTION 2.4 Payments. On or prior to 10:00 a.m., New York City time, on
each Distribution Date, the Servicer shall deliver instructions to the Trustee
regarding all payments to be made hereunder on such Distribution Date. All
payments to be made on behalf of the Trust hereunder, whether on account of
principal, interest, or otherwise, shall be made without setoff or counterclaim
and shall be made prior to 2:30 p.m., New York City time, on the due date
thereof, to each Class D-1 Holder in accordance with the terms of the Pooling
and Servicing Agreement and the Supplement.
SECTION 2.5 Allocation of Reductions to Class D-1 Investor Interest.
(a) On any Distribution Date on which there are Class D-1 Investor
Charge-Offs, the Uncovered Class D-1 Investor Interest will be reduced by the
amount of such Class D-1 Investor Charge-Offs. If such reduction would cause the
Uncovered Class D-1 Investor Interest to be a negative number, the Uncovered
Class D-1 Investor Interest will be reduced to zero, and the Covered Class D-1
Investor Interest will be reduced by the amount by which the Uncovered Class D-1
Investor Interest would have been reduced below zero (but for the proviso in the
definition thereof).
(b) On any Distribution Date on which there is a Reimbursement Amount,
the Covered Class D-1 Investor Interest will be increased by the amount of such
Reimbursement Amount, but not in excess of any unreimbursed Class D-1 Reduction
Amount previously allocated to the Covered Class D-1 Investor Interest. If any
Reimbursement Amount remains after reimbursing the Covered Class D-1 Investor
Interest, the Uncovered Class D-1 Investor Interest will be increased by the
amount of such remaining Reimbursement Amount, but not in excess of any
unreimbursed Class D-1 Reduction Amount allocated to the Uncovered Class D-1
Investor Interest.
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SECTION 2.6 Nonrecourse and Recourse Obligations; Obligations Absolute.
Except as provided in Section 2.7, notwithstanding any provision in any other
Section of this Agreement to the contrary, the obligation to pay the Repayment
Amount shall be without recourse to (i) the Seller, the Servicer, the Trustee,
any Certificateholder, any Certificate Owner, any Receivables Purchaser or any
Purchaser Representative or (ii) any affiliate, officer, director, employee or
agent of any Person described in clause (i), and the obligation to pay such
amounts hereunder shall be limited solely to the application of Available
Amounts, as described in Section 2.2 hereof, and withdrawals from the Class C
Spread Account as described in Section 2.8 hereof, in the Pooling and Servicing
Agreement and the Supplement, which amounts shall be subordinated to the rights
of other Investor Certificateholders as provided herein and in the Pooling and
Servicing Agreement and the Supplement.
SECTION 2.7 Indemnification.
(a) The Trust, acting through the Trustee (and at the direction of the
Servicer), but only to the extent funds are available therefor under Section 2.2
and Section 2.8, the Seller and the Servicer agree to indemnify and hold
harmless each Covered Class D-1 Holder and any director, officer, employee,
representative or agent of such Covered Class D-1 Holder (each such Person being
an "Indemnitee") from and against any and all claims, damages, losses,
liabilities, costs or expenses (including reasonable fees and expenses of
counsel) whatsoever (other than claims for payment of Class D-1 Monthly
Interest, Covered Class D-1 Additional Interest, Class D-1 Deficiency Amounts
and Class D-1 Monthly Principal) which the Indemnitee may incur (or which may be
claimed against the Indemnitee) by reason of or in connection with (i) the
execution and delivery of payment under, this Agreement or the Covered Class D-1
Investor Interest or (ii) the transactions contemplated hereby, except (A) to
the extent that any such claim, damage, loss, liability, cost or expense shall
be caused by the willful misconduct or gross negligence of the Indemnitee in
performing its obligations under this Agreement or a Class D-1 Certificate, (B)
to the extent that any such claim, damage, loss, liability, cost or expense
relates to any income or franchise tax based on the net income of such Covered
Class D-1 Holder or any other tax upon or measured by income, gross receipts,
assets or capital of such Covered Class D-1 Holder imposed by the United States
of America or by any state, locality or foreign jurisdiction in which such
Covered Class D-1 Holder maintains an office or permanent establishment or is
otherwise doing business or (C) as provided in Section 8.3 hereof. If an
Indemnitee has a claim for indemnification pursuant to this Section 2.7 arising
from (i) any representation and warranty of the Seller or the Servicer made
herein or in the Pooling and Servicing Agreement being incorrect in any material
respect when made, (ii) noncompliance by the Seller or the Servicer with the
terms and provisions of this Agreement, the Pooling and Servicing Agreement or
the Supplement or (iii) the amounts of any Class D-1 Reduction Amount, to the
extent such amounts represent amounts which the Seller or the Servicer failed to
deposit in the Collection Account in accordance with the Pooling and Servicing
Agreement, together with interest thereon, such claim, notwithstanding the terms
of Section 2.6, shall be with recourse to the Seller or the Servicer, as the
case may be, but not to any successor to the Servicer. Notwithstanding the
preceding sentence, the sole remedy against the Seller or the Servicer for a
breach of a representation, warranty or covenant made in the Pooling and
Servicing Agreement shall be limited to the right to remedies provided therein
and this Section 2.7 is not intended to create any claim against the Seller or
Servicer not otherwise created by the terms of the Pooling and Servicing
Agreement.
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(b) Promptly after the receipt by any Indemnitee of a notice of
commencement of any action, such Indemnitee will, if a claim in respect thereof
is to be made against the Trust, the Seller or the Servicer pursuant to Section
2.7(a) (the "Indemnifying Party"), notify such Indemnifying Party in writing of
the commencement thereof; but the omission so to notify such Indemnifying Party
will not relieve such Indemnifying Party from any liability which it may have to
such Indemnitee pursuant to Section 2.7(a) except and to the extent of any
prejudice to such Indemnifying Party arising from such failure to provide such
notice. In case any such action shall be brought against any Indemnitee and it
shall notify the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
Indemnitee (who shall not, except with the consent of such Indemnitee, be
counsel to the Indemnifying Party) with respect to such action, and it being
understood that the Indemnifying Party shall not, in connection with any one
such action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys for all such indemnified parties. Upon receipt of notice from an
Indemnifying Party to such Indemnitee of such Indemnifying Party's election so
to appoint counsel to assume the defense of such action and approval by such
Indemnitee of such counsel, such Indemnifying Party will not be liable to such
Indemnitee under this Section 2.7 for any legal or other expenses subsequently
incurred by such Indemnitee in connection with the defense thereof other than
reasonable costs of investigation. No Indemnifying Party shall, without the
prior written consent of the Indemnitee, effect any settlement of any pending or
threatened action in respect of which any Indemnitee is or could have been a
party and indemnity could have been sought hereunder by such Indemnitee unless
such settlement includes an unconditional release of such Indemnitee from all
liability on any claims that are the subject matter of such action. No
Indemnifying Party shall be liable under this section for any settlement of any
claim or action effected without their prior written consent, which shall not be
unreasonably withheld. Notwithstanding the foregoing, in case any action is
brought against an Indemnitee in which the Seller, the Servicer or the Trust is
a defendant, and such Indemnitee shall have concluded that there may be legal
defenses available to it that are different from or additional to those
available to the Seller, the Servicer or the Trust, such Indemnitee shall have
the right to select and, at its own expense, retain separate counsel to assert
such legal defenses and to otherwise participate in the defense.
SECTION 2.8 Payments from Class C Spread Account. If, on any
Distribution Date, the aggregate amount available for distribution pursuant to
Sections 2.2(a) and (c) and available for redirection pursuant to Section 2.2(d)
is less than the aggregate amount required to be distributed pursuant to Section
2.2(a)(i) and Sections 2.2(c)(i) through (iv), then the Servicer shall instruct
the Trustee to apply amounts withdrawn from the Class C Spread Account pursuant
to Section 2.5(c) of the Class C Purchase Agreement in the order of priority and
manner set forth in Section 2.2(a)(i) and then Sections 2.2(c)(i) through (iv)
of this Agreement.
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SECTION 2.9 Increased Cost, Reduced Return and Taxes.
(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), special deposit or similar requirement against assets
of any Funding Source, deposits or obligations with or for the account
of any Funding Source or with or for the account of any affiliate (or
entity deemed by the Federal Reserve Board to be an affiliate) of any
Funding Source, or credit extended by any Funding Source under any
Funding Agreement; or
(B) shall change the amount of capital maintained or required
or requested or directed to be maintained by any Funding Source; or
(C) shall impose any other condition affecting any Covered
Class D-1 Certificates owned or funded in whole or in part by any
Funding Source, or its obligations or rights, if any, to fund the
Covered Class D-1 Investor Interest;
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) a Funding Source funding the
Covered Class D-1 Investor Interest, any purchases, reinvestments, or
loans or other extensions of credit under the Liquidity Agreement, or
any Credit Agreement, or any commitment of such Funding Source with
respect to any of the foregoing,
(y) to reduce the amount of any sum received or receivable by
a Funding Source under the Liquidity Agreement or the Credit Agreement
with respect thereto, or
(z) in the reasonable determination of such Funding Source, to
reduce the rate of return on the capital of a Funding Source as a
consequence of its obligations arising in connection herewith to a
level below that which such Funding Source could otherwise have
achieved but for Regulation D or such Regulatory Change,
then within thirty days after demand by such Funding Source (which demand shall
be accompanied by a statement setting forth the basis of such demand), the Trust
shall pay to the applicable Structured Holder solely from Available Amounts
available therefor in accordance with Section 2.2(c) for the benefit of such
Funding Source, such amounts charged to such Funding Source or to compensate
such Funding Source for such reduction. This Section 2.9(a) shall not apply to
Taxes. For the avoidance of doubt, any interpretation of Accounting Research
Bulletin No. 51 by the Financial Accounting Standards Board (including
Interpretation No. 46: Consolidation of Variable Interest Entities) shall
constitute an adoption, change, request or directive subject to this Section
2.9(a).
(b) Each Funding Source will promptly notify the applicable Structured
Holder and the Seller of any event of which it has knowledge which will entitle
such Funding Source to
17
compensation pursuant to this Section 2.9; provided, however, no failure to give
or delay in giving such notification shall adversely affect the rights of any
Funding Source to such compensation.
(c) In determining any amount provided for or referred to in this
Section 2.9, a Funding Source may use any reasonable averaging and attribution
methods that it (in its sole discretion) shall deem applicable. Any Funding
Source when making a claim under this Section 2.9 shall submit to the applicable
Structured Holder and the 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) Each Structured Holder agrees that it shall use its reasonable best
efforts to take any action that will avoid the need to pay, or will reduce the
amount of, any increased amounts referred to in paragraph (a) and agrees that
the Servicer may require such Structured Holder to replace a Funding Source if
there arises any obligation to make any payments to such Funding Source pursuant
to this Section 2.9; provided that a Structured Holder shall not be obligated to
take any actions that would, in the reasonable opinion of such Structured
Holder, be disadvantageous to such Structured Holder and shall not be required
to replace any Funding Source unless such replacement Funding Source is
reasonably acceptable to such Structured Holder.
(e) Subject to Section 2.9(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
Funding Source that is an assignee or participant of a Structured Holder, (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 2.9(e)), such Foreign Funding Source receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Trustee shall make such deductions and (iii) the Trustee shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law solely from Available Amounts available therefor
in accordance with Section 2.2(c).
(f) Each Foreign Funding Source that is an assignee or participant of a
Structured Holder, on or prior to the date pursuant to which it becomes an
assignee or participant of the such Structured Holder, and from time to time
thereafter if requested in writing by the Seller (unless such Funding Source can
no longer lawfully do so due to a change in law subsequent to the date it became
an assignee or participant of such Structured Holder hereunder), shall provide
Seller and the Trustee with Internal Revenue Service Form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Funding Source 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 Funding Source that is a
Foreign assignee or participant of a Structured Holder has failed to provide the
Seller with the appropriate form
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described in Section 2.9(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 Funding Source shall not be entitled to payments of
additional amounts under Section 2.9(e).
SECTION 2.10 Specified Percentage. Reference is made to the definition
of Specified Percentage in the Class C Purchase Agreement. On any date, the
amount referred to in clause (y) of such definition shall be a fraction
(expressed as a percentage), (x) the numerator of which is the Covered Class D-1
Investor Interest on such date (after giving effect to all allocations and
transfers under Sections 2.2, 3.1 and 3.2 on such date, any (y) the denominator
of which is the Initial Invested Amount.
SECTION 2.11 Pre-Funding Account. If any amount is distributed by the
Servicer or the Trustee (acting in accordance with the instructions of the
Servicer) on a Distribution Date under Section 4.9(h) of Article IV under
Section 8 of the Supplement for application to the Class D-1 Certificates, such
amount shall be shared proportionately by the Holders of the Covered Class D-1
Certificates and the Holders of the Uncovered Class D-1 Certificates according
to the share of the Class D-1 Investor Interest represented by the Covered Class
D-1 Investor Interest or the Uncovered Class D-1 Investor Interest,
respectively.
ARTICLE III
Required Transfers and Required Retransfers
SECTION 3.1 Transfers to Uncovered Class D-1 Holder. On each
Distribution Date on which the Covered Class D-1 Holders receive payments of the
Class D-1 Transfer Amount pursuant to subsection 2.2(b)(ii) or (c)(vi), the
Covered Class D-1 Holder shall be deemed to have transferred a portion of the
Covered Class D-1 Investor Interest equal to the amount of such payments. In
connection with such deemed transfer, the Covered Class D-1 Investor Interest
shall be reduced by the amount of such payments and the Uncovered Class D-1
Investor Interest shall be increased by the amount of such payments.
SECTION 3.2 Transfers to Covered Class D-1 Holder. (a) Subject to the
requirements set forth in paragraph (b) below, on each Distribution Date on
which the Uncovered Class D-1 Investor Interest exceeds the Required Class D-1
Transfer Amount for such Distribution Date, the Covered Class D-1 Holder shall
be required to pay the amount of such excess to the Uncovered Class D-1 Holder.
In connection with such payment, the Uncovered Class D-1 Investor Interest shall
be reduced by the amount of such payments and the Covered Class D-1 Investor
Interest shall be increased by the amount of such payments.
(b) The Covered Class D-1 Holder will be obligated to make any payment
pursuant to paragraph (a) above on a Distribution Date only if each of the
following conditions is satisfied:
(i) each of the representations and warranties of the Seller
and the Servicer made in the Pooling and Servicing Agreement, the
Supplement and this Agreement shall be true and correct in all material
respects as of such Distribution Date (except to the extent they
expressly relate to an earlier or later time);
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(ii) the Seller and the Servicer shall be in compliance in all
material respects with all of their respective covenants contained in
the Pooling and Servicing Agreement, the Supplement and this Agreement;
(iii) no Early Amortization Event, Servicer Default or event
which with the giving of notice or passage of time or both could become
an Early Amortization Event or Servicer Default shall have occurred and
be continuing;
(iv) the amount on deposit in the Class C Spread Account shall
be at least equal to the Required Class C Spread Amount after giving
effect to (A) any deposits to, and withdrawals from, such the Class C
Spread Account on such Distribution Date, and (B) any increase in the
Covered Class D-1 Investor Interest as a result of such payment;
(v) at least one Business Day prior to such Distribution Date,
the Administrator and the Covered Class D-1 Holder shall have received
a completed Notice of Retransfer Funding substantially in the form of
Exhibit C hereto; and
(vi) no event shall have occurred that results in the Covered
Class D-1 Holder being unable to access the United States commercial
paper markets and the liquidity banks not being obligated to make a
purchase under the Liquidity Agreement.
(c) Notwithstanding any provisions contained in this Agreement
to the contrary, the Covered Class D-1 Holder, if a Structured Holder,
shall not, and shall not be obligated to, pay any amount pursuant to
this Agreement unless such Covered Class D-1 Holder has excess cash
flow from operations or has received funds with respect to such
obligation which may be used to make such payment and which funds or
excess cash flow are not required to repay Commercial Paper issued by
such Covered Class D-1 Holder. Any amount which such Covered Class D-1
Holder does not pay pursuant to the operation of the preceding sentence
shall not constitute a claim against the Covered Class D-1 Holder for
any such insufficiency unless and until the conditions described in the
preceding sentence are satisfied. Nothing described in this paragraph
shall be construed to forgive or cancel any obligations of the Covered
Class D-1 Holder hereunder.
ARTICLE IV
Representations and Warranties of Seller and Servicer
SECTION 4.1 Representations and Warranties of the Servicer. Spirit,
Inc., as Servicer, hereby represents and warrants to the Initial Covered Class
D-1 Holder as of the date hereof as follows:
(a) Organization and Good Standing. The Servicer is a corporation duly
organized and validly existing under the laws of the State of Delaware and has
full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its obligations under
this Agreement and each other Transaction Document to which it is a party.
20
(b) Due Qualification. The Servicer is duly qualified to do business
and is in good standing (or is exempt from such requirement) in any state
required in order to conduct its business, and has obtained all necessary
licenses and approvals with respect to the Servicer required under applicable
law, except in each case where the failure to do so would not individually or in
the aggregate have a material adverse effect on the Covered Class D-1
Certificates.
(c) Due Authorization. The execution and delivery by the Servicer of
this Agreement and each other Transaction Document to which it is a party and
the consummation of the transactions provided for hereunder and thereunder have
been duly authorized by the Servicer by all necessary corporate action on its
part and this Agreement and each other Transaction Document to which it is a
party will remain, from the time of its execution, an official record of the
Servicer.
(d) Enforceability. Each of this Agreement and each other Transaction
Document to which the Servicer is a party has been duly executed and delivered
by the Servicer and constitutes a legal, valid and binding obligation of the
Servicer, enforceable against the Servicer in accordance with its terms, except
as such enforceability may be limited by Debtor Relief Laws.
(e) No Conflict. The execution and delivery of this Agreement and each
other Transaction Document to which the Servicer is a party, the performance of
the transactions contemplated hereunder and thereunder and the fulfillment of
the terms hereof and thereof will not conflict with, result in any breach of any
of the material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a default under, any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which the Servicer is a party or
by which it or any of its properties are bound.
(f) No Violation. The execution and delivery of this Agreement and each
other Transaction Document to which the Servicer is a party, the performance of
the transactions contemplated hereunder and thereunder and the fulfillment of
the terms hereof and thereof will not conflict with or violate in any material
respect any Requirements of Law applicable to the Servicer.
(g) No Proceedings. There are no actions, investigations or proceedings
pending or, to the best knowledge of the Servicer, threatened against the
Servicer before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Agreement or any other Transaction Document to which it is a party, (ii) seeking
to prevent the consummation of any of the transactions contemplated by this
Agreement or any other Transaction Document, (iii) seeking any determination or
ruling that, in the reasonable judgment of the Servicer, would materially and
adversely affect the performance by the Servicer of its obligations under this
Agreement or any other Transaction Document to which it is a party, (iv) seeking
any determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement or any other Transaction Document
or (v) seeking to affect adversely the income tax attributes of the Trust.
21
(h) All Consents Required. All appraisals, authorizations, consents,
orders or other actions of any Person or of any governmental body or official
required in connection with the execution and delivery by the Servicer of this
Agreement and each other Transaction Document to which it is a party, the
performance of the transactions contemplated hereunder and thereunder and the
fulfillment of the terms hereof, have been obtained.
(i) Incorporated Representations and Warranties. Its representations
and warranties in Section 3.3 of the Pooling and Servicing Agreement are true
and correct in all material respects as of the dates they were so made.
(j) Financial Statements. The Servicer has delivered to the Initial
Covered Class D-1 Holder complete and correct copies of the audited consolidated
balance sheet and audited consolidated statement of income of Charming Shoppes
for the fiscal year ended January 31, 2004.
(k) No Adverse Change. There has not been any material adverse change
in the business, operations, financial condition, properties or assets of the
Servicer since the date of its formation.
(l) Trust Indenture Act; Investment Company Act. Neither the Pooling
and Servicing Agreement nor the Supplement is required to be qualified under the
Trust Indenture Act of 1939, and the Trust is not required to be registered
under the Investment Company Act of 1940, as amended.
(m) No Early Amortization Event, Insolvency Event or Servicer Default.
No Early Amortization Event with respect to the Series 2004-1 Certificates,
Insolvency Event, or Servicer Default has occurred and is continuing, and no
event, act or omission has occurred and is continuing which, with the lapse of
time, the giving of notice or both, would constitute such an Early Amortization
Event, Insolvency Event or Servicer Default.
(n) Reports. No report, statement, exhibit or other written information
required to be furnished by the Servicer or any of its Affiliates, agents or
representatives to the Covered Class D-1 Holders pursuant to this Agreement, the
Pooling and Servicing Agreement or the Supplement is or shall be inaccurate in
any material respect, or contains or shall contain any material misstatement of
fact, or omits or shall omit to state a material fact or any fact necessary to
make the statements contained therein not misleading, in each case, as of the
date it is or shall be dated or (except as otherwise disclosed to the Covered
Class D-1 Holders at such time) as of the date so furnished.
SECTION 4.2 Representations and Warranties of the Seller. CSRC, as
Seller, hereby represents and warrants to the Initial Covered Class D-1 Holder
as of the date hereof as follows:
(a) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing under the laws of the State of Delaware and has
full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its obligations under
this Agreement and each other Transaction Document to which it is a party.
22
(b) Due Qualification. The Seller is duly qualified to do business and
is in good standing (or is exempt from such requirement) in any state required
in order to conduct its business, and has obtained all necessary licenses and
approvals with respect to the Seller required under applicable law, except in
each case where the failure to do so would not individually or in the aggregate
have a material adverse effect on the Class D-1 Certificates.
(c) Due Authorization. The execution and delivery by the Seller of this
Agreement and each other Transaction Document to which it is a party and the
consummation of the transactions provided for hereunder and thereunder have been
duly authorized by the Seller by all necessary corporate action on its part and
this Agreement and each other Transaction Document to which it is a party will
remain, from the time of its execution, an official record of the Seller.
(d) Enforceability. Each of this Agreement and each other Transaction
Document to which the Seller is a party has been duly executed and delivered by
the Seller and constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as such
enforceability may be limited by Debtor Relief Laws.
(e) No Conflict. The execution and delivery of this Agreement and each
other Transaction Document to which the Seller is a party, the performance of
the transactions contemplated hereunder and thereunder and the fulfillment of
the terms hereof and thereof will not conflict with, result in any breach of any
of the material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a default under, any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which the Seller is a party or
by which it or any of its properties are bound.
(f) No Violation. The execution and delivery of this Agreement and each
other Transaction Document to which the Seller is a party, the performance of
the transactions contemplated hereunder and thereunder and the fulfillment of
the terms hereof and thereof will not conflict with or violate in any material
respect any Requirements of Law applicable to the Seller.
(g) No Proceedings. There are no actions, investigations or proceedings
pending or, to the best knowledge of the Seller, threatened against the Seller
before any court, regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of this Agreement or
any other Transaction Document to which it is a party, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this Agreement or
any other Transaction Document, (iii) seeking any determination or ruling that,
in the reasonable judgment of the Seller, would materially and adversely affect
the performance by the Seller of its obligations under this Agreement or any
other Transaction Document to which it is a party, (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement or any other Transaction Document or (v)
seeking to affect adversely the income tax attributes of the Trust.
(h) All Consents Required. All appraisals, authorizations, consents,
orders or other actions of any Person or of any governmental body or official
required in connection with the execution and delivery by the Seller of this
Agreement and each other Transaction Document to
23
which it is a party, the performance of the transactions contemplated hereunder
and thereunder and the fulfillment of the terms hereof, have been obtained.
(i) Incorporated Representations and Warranties. Its representations
and warranties in Sections 2.3 and 2.4 of the Pooling and Servicing Agreement
are true and correct in all material respects as of the dates they were so made.
(j) Trust Indenture Act; Investment Company Act. Neither the Pooling
and Servicing Agreement nor the Supplement is required to be qualified under the
Trust Indenture Act of 1939, and the Trust is not required to be registered
under the Investment Company Act of 1940, as amended.
(k) No Early Amortization Event, Insolvency Event or Servicer Default.
No Early Amortization Event with respect to the Series 2004-1 Certificates,
Insolvency Event or Servicer Default has occurred and is continuing, and no
event, act or omission has occurred and is continuing which, with the lapse of
time, the giving of notice or both, would constitute an Early Amortization
Event, Insolvency Event or Servicer Default.
(l) No Adverse Change. There has not been any material adverse change
in the business, operations, financial condition, properties or assets of the
Seller since the fiscal year ended January 30, 2004.
(m) Class D-1 Certificates. The Class D-1 Certificates have been duly
and validly authorized, and, when executed and authenticated in accordance with
the terms of the Pooling and Servicing Agreement and the Supplement and
delivered to and paid for in accordance with this Agreement, will be duly and
validly issued and outstanding, and will be entitled to the benefits of the
Pooling and Servicing Agreement, the Supplement and this Agreement.
(n) Securities Laws. Based upon, among other things, the
representations and warranties of the Initial Covered Class D-1 Holders
hereunder, the sale of the Class D-1 Certificates pursuant to the terms of this
Agreement, the Pooling and Servicing Agreement and the Supplement will not
require the registration of such Covered Class D-1 Certificates under the
Securities Act of 1933, as amended.
ARTICLE V
Conditions Precedent
Sections 5.1 through 5.3 constitute conditions precedent to the
obligation of the Initial Covered Class D-1 Holder to purchase the Covered Class
D-1 Certificates on the date hereof.
SECTION 5.1 Representations and Warranties. On the date hereof and
after giving effect to the issuance of the Series 2004-1 Certificates, all
representations and warranties of the Seller and the Servicer contained herein
or in the Purchase Agreement and the Pooling and Servicing Agreement or
otherwise made in writing pursuant to any of the provisions hereof or thereof
shall be true and correct in all material respects with the same force and
effect as though such representations and warranties had been made on and as of
such date (unless such representations and warranties specifically relate to an
earlier date).
24
SECTION 5.2 Certificate Issuance. On or prior to the date hereof, the
Covered Class D-1 Certificate shall have been delivered to the Initial Covered
Class D-1 Holder in accordance with the terms hereof.
SECTION 5.3 Additional Documents. The Initial Covered Class D-1 Holder
shall have received (i) authorization and enforceability opinions as to this
Agreement from counsel to the Seller, and (ii) such additional documents as it
or its counsel may reasonably request.
ARTICLE VI
Covenants of the Seller and Servicer
Each of the Seller and Servicer (and each Successor Servicer) covenants
and agrees that, until the Class D-1 Investor Interest is reduced to zero,
unless the Required Class D-1 Holders shall otherwise consent in writing, each
of the Seller and Servicer (and each Successor Servicer) will:
SECTION 6.1 Certificates. Furnish to the Covered Class D-1 Holders a
copy of each certificate, report, statement, notice or other communication
furnished by or on behalf of the Seller or the Servicer to the Trustee or to the
Rating Agencies concurrently therewith and furnish to the Covered Class D-1
Holders promptly after receipt thereof a copy of each notice, demand or other
communication received by or on behalf of Seller or Servicer with respect to the
Series 2004-1 Certificates, this Agreement, the Pooling and Servicing Agreement
or the Supplement.
SECTION 6.2 Monthly Status Reports. Furnish to each Covered Class D-1
Holder (or cause to be furnished to each Covered Class D-1 Holder), two Business
Days prior to each Distribution Date information relating to distributions of
Available Amounts in a certificate substantially in the form of Exhibit A
hereto, and such other information with respect to the Trust's property as the
Covered Class D-1 Holders may reasonably request.
SECTION 6.3 Servicer Default. Furnish to each Covered Class D-1 Holder,
promptly after the occurrence of any Servicer Default, a certificate of an
appropriate officer of the Servicer setting forth the circumstances of such
Servicer Default and any action taken or proposed to be taken by the Servicer
with respect thereto.
SECTION 6.4 Reassignment of Certificates. Not effect a reassignment of
the Series 2004-1 Certificates pursuant to Section 12.2 of the Pooling and
Servicing Agreement and Section 4 of the Supplement unless the Class D-1
Investor Interest and all other amounts owing to the Covered Class D-1 Holders
hereunder and under the Supplement shall have been paid in full.
SECTION 6.5 Rule 144A Information. The Seller will promptly furnish or
cause to be furnished to any Covered Class D-1 Holder and upon request of any
Covered Class D-1 Holder, to any prospective purchaser of any Covered Class D-1
Certificate, copies of the information required to be delivered to Covered Class
D-1 Holders and any prospective purchasers pursuant to Rule 144A(d)(4) under the
Act (or any successor provision thereto) in order to permit compliance with Rule
144A in connection with resales by such holders of the Covered Class D-1
Certificates. The Seller shall pay the expenses of printing and distributing all
such documents.
25
SECTION 6.6 Seller Financial Information; Other Information;
Confidentiality.
(a) Furnish to the Covered Class D-1 Holders (or in the case of clause
(ii) cause the Trustee to furnish) (i) no later than 45 days following the end
of each quarter, in the case of the Originator, its call report for such
quarterly period, and in any other case, such other publicly available financial
information, if any, as to the Originator, Spirit, Inc., Charming Shoppes, CSRC
or the Receivables as the Covered Class D-1 Holders may reasonably request, (ii)
a copy of each report prepared under Section 3.6(b) of the Pooling and Servicing
Agreement, and (iii) notice of the occurrence of any Early Amortization Event
with respect to the Series 2004-1 Certificates. All such information acquired by
a Covered Class D-1 Holder hereunder shall be kept confidential to the extent
provided in Section 7.1(b).
(b) Use reasonable efforts to cause all information provided to any
Covered Class D-1 Holder pursuant to this Agreement, the Pooling and Servicing
Agreement or the Supplement, or in connection with any action required or
permitted to be taken hereunder or thereunder, to be complete and accurate in
all material respects.
SECTION 6.7 Covered Class D-1 Holders' Identities. Maintain as
confidential and not disclose to any Person (other than any officer, employee,
agent, counsel, advisor, Rating Agency or representative of a party hereto or
any underwriter of the Series 2004-1 Certificates or its counsel) the pricing
terms of this Agreement or the identity of any Covered Class D-1 Holder, except
as such Covered Class D-1 Holder may have consented to in writing prior to any
proposed disclosure or except as the Servicer, CSRC or the Originator may have
been advised by counsel is (i) required by law, including, without limitation,
any securities or banking laws, rules, orders or regulations or (ii) reasonably
necessary or desirable in connection with any lawsuit or governmental
investigation or proceeding; provided, however, that in any such instance, the
Servicer or the Seller, as applicable, shall notify such Covered Class D-1
Holder of its intention to make any such disclosure prior to making such
disclosure.
SECTION 6.8 Amendments and Modifications.
(a) Not amend, waive or otherwise modify the provisions of the
Supplement or any Interest Rate Swap Agreement, or the performance of any of the
terms thereof, unless the Covered Class D-1 Holders have consented in writing to
such amendment, waiver or modification, which consent shall not be unreasonably
withheld or delayed.
(b) In addition to the requirements of Section 13.1 of the Pooling and
Servicing Agreement, not amend the Pooling and Servicing Agreement without the
prior written consent of the Covered Class D-1 Holders unless such amendment
shall not, as evidenced by an Opinion of Counsel for the Seller addressed to the
Trustee and the Covered Class D-1 Holders, adversely affect in any material
respect the interests of the Covered Class D-1 Holders. For the avoidance of
doubt, the following actions shall not require the consent of the Covered Class
D-1 Holders:
(1) the issuance of a new Series pursuant to and in accordance
with the terms of the Pooling and Servicing Agreement;
(2) the addition of Accounts, including Additional Accounts,
pursuant to Section 2.6 of the Pooling and Servicing
Agreement; provided that any designation of
26
Additional Accounts pursuant to Section 2.6(b) of the
Agreement shall require the written consent of the Covered
Class D-1 Holders, which consent shall not be unreasonably
withheld or delayed; provided further that only in connection
with the addition of Accounts from the Catherines Portfolio,
the Seller shall be entitled to repurchase the Covered Class
D-1 Certificates for a purchase price equal to the outstanding
principal amount thereof plus accrued interest thereon if (A)
the Seller shall have submitted a written request for such
consent to the Covered Class D-1 Holders, (B) the Seller shall
have provided the Covered Class D-1 Holders all information
that they provide to the Rating Agencies in connection with
such addition concurrently with (or promptly thereafter, but
in any event on the same day) the delivery of such information
to the Rating Agencies and (C) the Covered Class D-1 Holders
shall not have given such consent on or prior to the Consent
Date, and provided further, that if the Seller does not
provide the information required by part (B) above to the
Covered Class D-1 Holder on the same day as the information is
provided to the Rating Agencies, the Seller will notify the
Covered Class D-1 Holders of the duration of such delay and,
absent bad faith, the Covered Class D-1 Holder's sole remedy
for such delay shall be that the numbers in parts (A) and (B)
of the definition of "Consent Date" will each be increased by
the number of days which have passed between the date on which
the Seller delivers such information to the Rating Agencies
and the date on which such information is delivered to the
Covered Class D-1 Holders;
(3) the removal of Accounts pursuant to Section 2.7 of the Pooling
and Servicing Agreement; and
(4) the amendment of a supplement or receivables purchase
agreement other than the Supplement.
(c) Not increase the Series 2004-1 Investor Monthly Servicing Fee as
contemplated by Section 3 of the Supplement unless the Covered Class D-1 Holders
have consented thereto, which consent will not be unreasonably withheld or
delayed.
SECTION 6.9 Trigger Increase Event. Furnish to the Covered Class D-1
Holders, promptly after the occurrence of any Trigger Increase Event, a
certificate of an appropriate officer of the Servicer setting forth the
circumstances of such Trigger Increase Event and any action taken or proposed to
be taken by the Servicer, if any, with respect thereto and furnish to the
Covered Class D-1 Holders such other information with respect to any such
Trigger Increase Event as any Covered Class D-1 Holder may reasonably request.
SECTION 6.10 Liens. Not create, incur or otherwise permit to exist any
mortgage, pledge, lien or other encumbrance on the Class C Spread Account other
than any interests of the Class C Holders, the Covered Class D-1 Holders and the
Holder of the Exchangeable Seller Certificate; it being understood that the
interests in the Class C Spread Account of the Covered Class D-1 Holders are
subordinate to the interests of the Class C Holders and that the interests in
the Class C Spread Account of the Holder of the Exchangeable Seller's
Certificate are subordinate to the interests of the Class C Holders and of the
Covered Class D-1 Holders.
27
SECTION 6.11 Discount Option Receivables. In the event that the Seller
has given the Trustee notice of the designation of Discount Option Receivables,
not terminate or discontinue or reduce such amount without the written consent
of the Covered Class D-1 Holders unless, on or prior to the date of such
discontinuance or reduction, the amount on deposit in the Class C Spread Account
is equal to the Required Class C Spread Amount (determined as if no such
discount is in effect).
SECTION 6.12 Access. At such reasonable times as the Covered Class D-1
Holders may notify the Seller and the Servicer upon five Business Days' notice
in writing or by telephone during normal business hours and at the expense of
the Covered Class D-1 Holders, afford the Covered Class D-1 Holders reasonable
access to all records maintained by the Seller or the Servicer relating to the
Receivables for purposes of inspection, to which inspection the Trustee by its
acceptance of this Agreement hereby consents.
SECTION 6.13 Performance of Agreements. For the benefit of the Covered
Class D-1 Holders, perform each of their respective agreements, representations,
warranties, covenants and indemnities under, and comply in all material respects
with each of the respective terms and provisions applicable to it in, the
Pooling and Servicing Agreement and Supplement which are hereby incorporated by
reference into this Agreement as if set forth herein in full.
SECTION 6.14 Payments. Subject to Section 2.6, timely make all
payments, deposits or transfers and give all instruction to transfer when
required under the Pooling and Servicing Agreement and the Supplement.
SECTION 6.15 Further Actions. Execute and promptly deliver to the
Covered Class D-1 Holders all such documents and instruments and do all such
other acts and things as may be necessary or reasonably required by the Covered
Class D-1 Holders or the Trustee to enable the Trustee or the Covered Class D-1
Holders to exercise and enforce their respective rights under this Agreement,
the Pooling Agreement, the Supplement and to realize thereon, and the Seller
shall record and file and re-record and refile all such documents and
instruments, at such time or times, in such manner and at such place or places,
as may be necessary or reasonably required by the Trustee or the Covered Class
D-1 Holders to validate, preserve, perfect and protect the position of the
Trustee or the Covered Class D-1 Holders hereunder and under the Pooling and
Servicing Agreement and the Supplement and the Sellers and the Servicer shall
maintain each of such documents as part of its official records.
SECTION 6.16 Class D Cancellation. Not without consent of the Covered
Class D-1 Holders, cause any Uncovered Class D-1 Certificate or Class D-2
Certificate to be cancelled under Section 4.16 of the Supplement if, at the time
of such cancellation (or immediately after giving effect thereto) (a) the
Covered Class D-1 Investor Interest is greater than zero or (b) the Covered
Class D-1 Holders may be obligated to make any payments to the Uncovered Class
D-1 Holders pursuant to Section 3.2(b).
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ARTICLE VII
Representations, Warranties and Covenants of the Initial Covered
Class D-1 Holder and the Trustee
SECTION 7.1 Representations, Warranties and Covenants of the Covered
Class D-1 Holder.
(a) As of the date hereof, the Initial Covered Class D-1 Holder
represents and warrants (and each other Class D-1 Holder shall be deemed to
represent and warrant as of the date that its acquisition of any Class D-1
Certificate becomes effective) that:
(i) it is a "qualified institutional buyer" as that term is
defined under Rule 144A of the Act and it is not purchasing the Class
D-1 Certificate with a view to making a distribution thereof (within
the meaning of the Securities Act);
(ii) either (x) it is not acquiring such Class D-1 Certificate
with the assets of an "employee benefit plan" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") whether or not subject to ERISA, any "plan" described
in Section 4975(e)(1) of the Code or any entity deemed to hold "plan
assets" of any of the foregoing (each, a "Benefit Plan Investor") or
(y) it is an insurance company purchasing the Class D-1 Certificate
with assets of its general account, and at the time of acquisition and
throughout the period of holding, (a) it meets all of the requirements
of and is eligible for exemptive relief under Prohibited Transaction
Class Exemption 95-60; (b) less than 25% of the assets of such general
account are assets of Benefit Plan Investors; and (c) it is not a
servicer to the Trust or an affiliate of a servicer to the Trust, and
would not otherwise be excluded under 29 CFR Section 2510.3-101(f)(1);
(iii) no registration with consent or approval of or other
action by any federal, state or other governmental authority or
regulatory body having jurisdiction over it is required in connection
with the execution, delivery or performance by it of this Agreement;
and
(iv) such Class D-1 Holder is 1 Private Holder and is a U.S.
Person (as defined in Section 7701(a)(30) of the Code).
(b) Each Class D-1 Holder covenants and agrees to maintain as
confidential, not disclose to any Person (other than any officer, employee,
agent, counsel, advisor or representative of a party hereto), and not use for
any purpose other than in connection with this Agreement, all information
acquired by such Class D-1 Holder that is not publicly available relating to the
Trust, the Originator, the Seller or the Servicer which it obtained in
connection with the transactions contemplated hereby, except as the Trustee, the
Seller, the Originator, or the Servicer may have consented to in writing prior
to any proposed disclosure, except (x) if such Class D-1 Holder is a Structured
Holder, such information, excluding, unless otherwise consented by CSRC, any
information related to the Catherines Portfolio prior to the time that Accounts
relating to the Catherines Portfolio are included in the assets of the Trust,
may be
29
disclosed to persons that hold subordinated notes issued by such Structured
Holder, and (y) as it may have been advised by counsel is (i) required by law,
including, without limitation, any securities or banking laws, rules, orders or
regulations or (ii) reasonably necessary or desirable in connection with any
lawsuit or governmental investigation or proceeding; provided, however, that in
any such instance provided for in (y), above, such Class D-1 Holder will notify
the Seller and the Servicer of its intention to make any such disclosure prior
to making any such disclosure. Notwithstanding anything herein to the contrary,
(a) each of the parties to this Agreement (and each employee, representative or
other agent of such parties) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transaction
and all materials of any kind (including opinions or other tax analyses) that
are provided to such parties relating to such tax treatment and tax structure
and (b) any Class D-1 Holder may disclose information concerning the purchase or
sale of the Class D-1 Certificates by such Class D-1 Holder to any federal or
state regulatory authority having jurisdiction over such Class D-1 Holder and
the National Association of Insurance Commissioners or any similar organization,
or any nationally recognized rating agency that requires access to information
about such Class D-1 Holder's investment portfolio.
SECTION 7.2 Representations, Warranties and Covenants of the Trustee.
The Trustee represents, warrants and covenants to the Initial Covered Class D-1
Holder that:
(i) The Trustee is a national banking association duly
authorized to engage in the business of banking under the laws of the
United States of America;
(ii) The Trustee has full power and authority to deliver and
perform this Agreement, and has taken all necessary action to authorize
the execution, delivery and performance by it of this Agreement; and
(iii) This Agreement has been duly executed and delivered by
the Trustee and constitutes its legal, valid and binding obligation in
accordance with its terms.
(iv) The Trustee shall not amend, waive or otherwise modify
any provisions of any Interest Rate Swap Agreement unless the Covered
Class D-1 Holders have consented in writing thereto (such consent not
to be unreasonably withheld or delayed).
ARTICLE VIII
Miscellaneous
SECTION 8.1 Amendments and Waivers. This Agreement shall not be amended
or modified without the written consent of the Seller, the Trustee, the Servicer
and the Required Class D-1 Holders. No waiver of, or consent to the departure
from, any provision of this Agreement by any party hereto shall be effective
without the written consent of the Seller, the Servicer, the Trustee, and the
Required Class D-1 Holders; provided, however, that no amendment reducing the
amount or delaying any payment to be made to the Class D-1 Holders hereunder or
modifying the definition of Required Class D-1 Holders shall be effective
without the written consent of all Class D-1 Holders. The Servicer shall provide
to Xxxxx'x a copy of any amendment prior to the effectiveness thereof.
Additionally, to the extent that any Covered
30
Class D-1 Holder is a Structured Holder, no action otherwise permitted pursuant
to this Section 8.1 shall be permitted unless each rating agency then rating the
outstanding Commercial Paper issued by such Structured Holder shall have
provided prior written confirmation that such action would not cause such rating
agency to reduce or withdraw its then current rating of such Commercial Paper.
SECTION 8.2 Servicer Transfer. In the event that a transfer of
servicing occurs under Article X of the Pooling and Servicing Agreement, from
and after the effective date of such transfer, the Successor Servicer appointed
pursuant to the Pooling and Servicing Agreement, and not Spirit, Inc., shall be
responsible for the performance of all servicing functions to be performed by
the Servicer from and after such date, except as provided in the Pooling and
Servicing Agreement. Such transfer shall not affect any rights or obligations of
Spirit, Inc. which arose prior to the effective date of the transfer of
servicing or the rights or obligations of Spirit, Inc. under Sections 2.2,
Section 2.7 and Article VI (in the case of Sections 6.2 or 6.3 under Article VI,
excluding any documents received by any Successor Servicer and also excluding
any documents received by Spirit, Inc. from the Successor Servicer), or Section
8.3 of this Agreement, whether arising before or after such date.
SECTION 8.3 Fees and Expenses. Each party shall pay all fees and
expenses incurred by it in connection with preparing and entering into this
Agreement; provided, however, that the Seller will reimburse the Initial Covered
Class D-1 Holder for its out-of-pocket expenses and shall directly pay all
reasonable legal fees and expenses and disbursements of its counsel (including
fees, expenses and disbursements of such counsel incurred in connection with the
preparation and execution of this Agreement and the Class C Purchase Agreement)
in an aggregate amount not to exceed $20,000. The Trust through the Trustee
(acting in accordance with instructions of the Servicer), but solely to the
extent funds are available therefor under Section 2.2(c), and the Seller agree
to pay on demand all reasonable costs and expenses of the Covered Class D-1
Holders in connection with any amendment to, or any waiver requested under, this
Agreement, and of the Covered Class D-1 Holders in connection with the
"work-out" or enforcement of its rights under this Agreement or any of the other
documents delivered in connection herewith, including, without limitation, the
reasonable fees and out-of-pocket expenses of its legal counsel with respect
thereto.
SECTION 8.4 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ITS CONFLICTS OF LAW PROVISIONS.
SECTION 8.5 No Waiver. Neither any failure nor any delay on the part of
any party in exercising any right, power or privilege hereunder shall operate as
a waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise or the exercise of any other right, power or
privilege.
SECTION 8.6 Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
31
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 8.7 Termination. This Agreement shall remain in full force and
effect until the earlier of (i) the payment in full of the Class D-1 Investor
Interest and all other amounts payable to the Class D-1 Holders hereunder and
under the Supplement and (ii) the Series 2004-1 Termination Date; provided that
Sections 2.7, 2.9, 8.10, 8.12 and 8.16 shall survive the termination of this
Agreement.
SECTION 8.8 Transfer Restrictions.
(a) The Initial Covered Class D-1 Holder shall deliver, on or prior to
the date hereof, to the to the Seller and the Trustee a purchaser representation
letter substantially in the form attached hereto as Exhibit B for such Initial
Covered Class D-1 Holder and for each Funding Source executing the Liquidity
Agreement as a "Liquidity Bank" on such date. Additionally, for so long as any
Structured Holder is a Class D-1 Holder, such Structured Holder shall require
each Funding Source that executes a Credit Agreement or Liquidity Agreement
pursuant to which such Funding Source agrees to purchase an interest in all or a
portion of the Class D-1 Investor Interest from time to time to deliver to the
Seller and the Trustee a purchaser representation letter substantially in the
form attached hereto as Exhibit B for such Funding Source on or prior to the
execution of such Credit Agreement or Liquidity Agreement. No Class D-1
Certificate may be offered, sold or otherwise transferred to any Person (other
than the Seller or a State Street Related Party) unless (x) the Seller shall
have been given an opportunity to purchase such Class D-1 Certificate in
accordance with Section 8.8(c) and (y) if the Seller does not exercise its right
to purchase such Class D-1 Certificate, the Seller shall have given its prior
written approval to such offer, sale or transfer (which approval shall not be
unreasonably withheld). Each Class D-1 Holder further agrees that it will not
make any general solicitation or general advertising for the offer or sale of
its Class D-1 Certificate and will not transfer its Class D-1 Certificate (or
any portion thereof) to any Person except to a Person within the United States
which such Class D-1 Holder reasonably believes is a "qualified institutional
buyer" (as defined in Rule 144A under the Act) that is purchasing (1) for its
own account or (2) for the account of a "qualified institutional buyer" (as so
defined) that is, in either case, aware that such resale, pledge or transfer is
being made in reliance on an exemption from registration under the Act, and, in
either case, unless such Person is a U.S. Person (as defined in Section
7701(a)30 of the Code and shall have delivered to such Class D-1 Holder a
purchaser representation letter substantially in the form attached hereto as
Exhibit B. Each Class D-1 Holder further agrees to provide to any Person
purchasing a Class D-1 Certificate (or any portion thereof) from it a notice
advising such purchaser that resales of the Class D-1 Certificates are
restricted as stated above.
(b) Seller shall not execute, and (if given prior written notice by the
Servicer of the inability of the Seller to execute any Subject Instrument by
operation of this clause (b)) the Transfer Agent and Registrar shall not
register the transfer of, any Class D-1 Certificate unless (i) after giving
effect to the execution or transfer of such Class D-1 Certificate, there would
be no more than 5 Private Holders of Class D-1 Certificates and (ii) the other
conditions to transfer set forth in Section 6.3 of the Pooling Agreement and in
Section 16 of the Series 2004-1 Supplement to the Pooling Agreement have been
satisfied.
32
(c) Any Class D-1 Holder that intends to offer, sell or otherwise
transfer its Class D-1 Certificate to a Person other than the Seller or any
State Street Related Party (any such offering, sale or transfer being herein
called a "Proposed Transfer"), such Class D-1 Holder shall give the Seller not
less than ten days prior written notice of the Proposed Transfer. Such notice
shall include the proposed date of transfer, the Person or Persons to which such
transfer will be made, and all other material terms of the Proposed Transfer
(other than the purchase price). During the period of five Business Days
following the Seller's receipt of such notice, the Seller shall be entitled to
notify such Class D-1 Holder that the Seller will acquire such Class D-1
Certificate on the terms set forth in such notice and at a price acceptable to
such Class D-1 Holder in its sole discretion. Such acquisition will occur on or
before the date specified for the Proposed Transfer in such notice, and each
Class D-1 Holder hereby agrees, subject to acceptance of the purchase price
therefor, to transfer such Class D-1 Certificate to the Seller on the terms set
forth in any such notice sent by it. If the Seller does not notify such Class
D-1 Holder of its intent to acquire such Class D-1 Certificate within such five
Business Day period, it will be deemed to have elected not to so acquire such
Class D-1 Certificate.
SECTION 8.9 Notices.
(a) All notices and other communications provided for hereunder shall
be in writing (including telecopy) and, if to the Seller, the Servicer or the
Trustee either mailed, telecopied, couriered or delivered to it, addressed to it
at its address set forth in the Pooling and Servicing Agreement, or if to the
Initial Covered Class D-1 Holder, as set forth below:
Clipper Receivables LLC
c/o State Street Global Markets, LLC, as Program Administrator
0 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Structured Finance Group
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If such notice is to any other Class D-1 Holder, such notice shall be
given in accordance with the terms of the Pooling and Servicing Agreement.
All notices and other communications shall, when mailed, be effective
on the first Business Day after the date of receipt, addressed as aforesaid. Any
party hereto may change the address or telecopier number to which notices to it
are to be sent by notice given to the other parties hereto.
(b) Any notice or written direction given by a Class D-1 Holder to the
Trustee hereunder may conclusively be relied upon by the Trustee, absent
manifest error.
SECTION 8.10 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement.
SECTION 8.11 Exclusive Benefit. The rights and remedies of the Class
D-1 Holders specified herein are for the sole and exclusive benefit, use and
protection of the Class D-1
33
Holders, and the Class D-1 Holders are entitled, but shall have no duty or
obligation to the Seller, the Servicer, the Trustee, the other
Certificateholders or otherwise, to exercise or to refrain from exercising any
right or remedy reserved to the Class D-1 Holders hereunder or cause the Trustee
or any other party to exercise or to refrain from exercising any right or remedy
available to it. Notwithstanding the foregoing, the Class C Holders shall be
third-party beneficiaries of the provisions of Section 2.2(c) providing for
allocations in the Class C Spread Account.
SECTION 8.12 Limitation of Remedies.
(a) No Class D-1 Holder shall have the right to cause the Class D-1
Investor Interest or any portion thereof to become due and payable prior to any
Distribution Date or other date on which amounts are payable hereunder to such
Class D-1 Holder other than as set forth in Section 2.2 hereof and shall not
attempt to exercise any of its rights hereunder with respect to Available
Amounts prior to such due date or Distribution Date.
(b) The obligations of each Class D-1 Holder under this Agreement, or
any other agreement, instrument, document or certificate executed and delivered
by or issued by such Class D-1 Holder or any officer thereof are solely the
corporate obligations of such Class D-1 Holder. No recourse shall be had for
payment of any fee or other obligation or claim arising out of or relating to
this Agreement or any other agreement, instrument, document or certificate
executed and delivered or issued by such Class D-1 Holder or any officer thereof
in connection therewith, against any stockholder, employee, officer, director or
incorporator of such Class D-1 Holder.
SECTION 8.13 Counterparts. This Agreement may be executed in any number
of counterparts, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
SECTION 8.14 Entire Agreement. This Agreement constitutes the entire
agreement between the parties relative to the subject matter hereof. Any
previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 8.15 Headings. Article, Section and subsection headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 8.16 Nonpetition Agreement.
(a) Notwithstanding any prior termination of this Agreement, no Covered
Class D-1 Holder shall, prior to the date which is one year and one day after
the final payment of the Certificates, acquiesce, petition or otherwise invoke
or cause the Trust or the Seller to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case against the Trust
or the Seller under any federal or state bankruptcy, insolvency or similar law
or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar
34
official of the Trust or the Seller or any substantial part of its property or
ordering the winding up or liquidation of the affairs of the Trust or the
Seller.
(b) Notwithstanding any prior termination of this Agreement, none of
the Seller, the Servicer nor the Trustee shall acquiesce, petition or otherwise
invoke or cause any Structured Holder to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case against such
Structured Holder under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator of other similar official of such Structured Holder or any
substantial part of its property or ordering the winding up or liquidation of
the affairs of such Structured Holder until the date which is one year and one
day after the latest maturing Commercial Paper issued by such Structured Holder
have been paid.
SECTION 8.17 Waiver of Jury Trial. EACH OF, THE SELLER, THE SERVICER,
THE TRUSTEE, AND EACH CLASS D-1 HOLDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT, THE CLASS D-1 CERTIFICATES OR ANY OTHER DOCUMENTS AND
INSTRUMENTS EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE SELLER, THE
SERVICER, THE TRUSTEE, OR ANY CLASS D-1 HOLDER. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE CLASS D-1 HOLDERS PURCHASING THE CLASS D-1 CERTIFICATES
DESCRIBED HEREIN.
SECTION 8.18 Amendment and Restatement. Each of the Seller, the
Servicer, the Trustee and each Class D-1 Holder hereby agrees that this
Agreement amends and restates the Original Certificate Purchase Agreement in its
entirety. All references to the Original Certificate Purchase Agreement in any
other agreement or document shall be deemed to be a reference to this Agreement.
SECTION 8.19 Class C Agreement. Each of the Seller, the Servicer, the
Trustee, each Class D-1 Holder and the Class C Holder agree for as long as a
State Street Related Party is a Class C Holder, the reference in Section 2.5(c)
of the Class C Purchase Agreement to "Section 2.2(b)(i)" of this Agreement shall
be deemed to be a reference instead to "Sections 2.2(c)(i) through (iv)" of this
Agreement, solely for the purposes of Section 2.8 hereof.
35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
SPIRIT OF AMERICA, INC., as Servicer
By:
---------------------------------
Name:
Title:
CHARMING SHOPPES RECEIVABLES
CORP., as Seller and an Uncovered Class D-1 Holder
By:
---------------------------------
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee
By:
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
CLIPPER RECEIVABLES COMPANY, LLC,
as a Covered Class D-1 Holder
By:
---------------------------------
Name:
Title:
S-1
EXHIBIT A to Certificate Purchase Agreement
CHARMING SHOPPES MASTER TRUST SERIES 2004-1
DUE PERIOD ENDING ______________
[To be in a form agreed between the Initial Covered Class D-1
Holder and the Servicer.]
A-1
Exhibit B
to Certificate Purchase Agreement
FORM OF REPRESENTATION LETTER
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx, XX 1249
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Corporate Trust Administration
Charming Shoppes Receivables Corp.
c/o Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Re: Purchase of $[__________] principal amount of Charming Shoppes
Master Trust Series 2004-1 Floating Rate Asset Backed
Certificates, Class D-1
Ladies and Gentlemen:
Reference is made to that certain Class D-1 Certificate Purchase
Agreement, dated as of August 24, 2004 (the "Class D-1 CPA"), among Wachovia
Bank, National Association, as Trustee, Charming Shoppes Receivables Corp.
("CSRC"), as Seller, Spirit of America, Inc., as Servicer and the Class D-1
Holders described therein. In connection with our purchase of the above Asset
Backed Certificates (the "Certificates"), we (the "Purchaser") confirm that:
(1) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "1933 Act"),
and are being sold to us in a transaction that is exempt from
the registration requirements of the 1933 Act and of any
applicable state securities laws;
(2) any information we desire concerning the Certificates or any
other matter relevant to our decision to purchase the
Certificates is or has been made available to us;
(3) we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of an investment in the Certificates, and we (and any
account for which we are purchasing) are able to bear the
economic risk of an investment in the Certificates;
(4) we are a qualified institutional buyer as defined in Rule 144A
promulgated under the 1933 Act (a "QIB") that is purchasing
for its own account or for the account of a QIB and have
completed one of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2 (each, a "Certification
Form");
B-1
(5) we will not make any general solicitation or general
advertising for the offer or sale of our Certificates and will
not transfer our Certificates (or any portion thereof) to any
Person except to a U.S. Person (as defined in Section
7701(a)(30) of the Code) within the United States which we
reasonably believe is a QIB that is purchasing (i) for its own
account or (ii) for the account of a QIB, and, in such case,
unless such Person shall have delivered to us a purchaser
representation letter substantially in the form hereof;
(6) we are either (i) not acquiring such Certificates with the
assets of an "employee benefit plan" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") whether or not subject to ERISA,
any "plan" described in Section 4975(e)(1) of the Code or any
entity deemed to hold "plan assets" of any of the foregoing
(each, a "Benefit Plan Investor") or (ii) an insurance company
purchasing the Certificates with assets of our general
account, and at the time of acquisition and throughout the
period of holding, (a) we meet all of the requirements of and
are eligible for exemptive relief under Prohibited Transaction
Class Exemption 95-60; (b) less than 25% of the assets of such
general account are assets of Benefit Plan Investors; and (c)
we are not a servicer to the Trust or an affiliate of a
servicer to the Trust, and would not otherwise be excluded
under 29 CFR Section 2510.3-101(f)(1);
(7) no registration with, consent or approval of or other action
by any federal, state or other governmental authority or
regulatory body having jurisdiction over it is required in
connection with the execution, delivery or performance by it
of the Class D-1 CPA;
(8) we are each 1 Private Holder and a U.S. Person (as defined in
Section 7701(a)(30) of the Code);
(9) we covenant and agree to maintain as confidential, not
disclose to any Person (other than any officer, employee,
agent, counsel, advisor or representative of a party hereto),
and not use for any purpose other than in connection with this
Agreement, all information acquired by us that is not publicly
available relating to the Trust, the Seller, the Originator or
the Servicer which we obtained in connection with the
transactions contemplated hereby, except (A) as the Trustee,
the Seller or the Servicer may have consented to in writing
prior to any proposed disclosure, (B) as we have been advised
by counsel is (i) required by law, including, without
limitation, any securities or banking laws, rules, orders or
regulations or (ii) reasonably necessary or desirable in
connection with any lawsuit or governmental investigation or
proceeding, provided that in each such instance we will notify
the Seller and the Servicer of our intention to make any such
disclosure prior to making such disclosure; and provided
further that we may disclose to any and all persons the tax
treatment and tax structure of the transaction and all
materials of any kind (including opinions or other tax
analyses) that are provided to us relating to such tax
treatment and tax structure (C) except if we are a Structured
Holder, such information, excluding, unless otherwise
consented by CSRC, any information related to the Catherines
Portfolio prior to
B-2
the time that Accounts relating to the Catherines Portfolio
are included in the assets of the Trust, may be disclosed to
persons that hold subordinated notes issued by such Structured
Holder, and (D) such information concerning the purchase or
sale of the Class D-1 Certificates as we may be required to
disclose to any federal or state regulatory authority having
jurisdiction over us and the National Association of Insurance
Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information
about our investment portfolio;
(10) we understand that any sale or other transfer of the Class D-1
Certificates will be subject to the additional transfer
restrictions and the notice requirements as described in the
Class D-1 CPA and acknowledge that we have received a copy of
the Class D-1 CPA;
(11) we are not acquiring, and will not sell or otherwise transfer,
any Class D-1 Certificates through (i) an "established
securities market" within the meaning of section 7704(b)(1) of
the Code, and any proposed, temporary or final treasury
regulation thereunder, including, without limitation, an
over-the-counter-market or an interdealer quotations system
that regularly disseminates firm buy or sell quotations or
(ii) a "secondary market" or "substantial equivalent thereof"
within the meaning of section 7704(b)(1) of the Code, and any
proposed, temporary or final treasury regulation thereunder,
including a market wherein interests in the Trust are
regularly quoted by any person making a market in such
interests and a market wherein any person regularly makes
available bid or offer quotes with respect to interests in the
Trust and stands ready to effect buy or sell transactions at
the quoted prices for itself or on behalf of others;
(12) we are not a competitor of CSRC or any Affiliate of CSRC; it
being understood that for purposes of the foregoing
certification, a "competitor" means a Person, or Affiliate
thereof, engaged in any of the same businesses as the
businesses conducted by CSRC or its Affiliates; but
notwithstanding the foregoing, the term "competitor" shall not
include any bank, trust company, savings and loan association
or other financial institution, any investment company, any
insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form,
unless, in any such case, such Person, or affiliate thereof,
is engaged in the business of issuing and owning retail
private label credit card programs; and
(13) we understand that the Certificates will bear a legend to
substantially the following effect:
"THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY
BE SOLD ONLY PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE ACT OR AN
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER
OF THIS CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND
SERVICING
B-3
AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND SERVICING AGREEMENT WILL
BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN
REQUEST.
THIS CERTIFICATE, OR AN INTEREST HEREIN, MAY NOT BE ACQUIRED BY OR
FOR THE ACCOUNT OF ANY EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3)
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
WHETHER OR NOT SUBJECT TO ERISA, OR A PLAN THAT IS DESCRIBED IN SECTION
4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, INCLUDING AN INDIVIDUAL
RETIREMENT ACCOUNT (EACH, A "BENEFIT PLAN INVESTOR"), OR BY OR FOR THE ACCOUNT
OF ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE ANY BENEFIT PLAN ASSETS. BY
ACQUIRING THIS CERTIFICATE OR AN INTEREST HEREIN, THE PURCHASER THEREOF WILL BE
DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (I) IT IS NOT A BENEFIT
PLAN INVESTOR, AND THAT ITS ACQUISITION OF THIS CERTIFICATE OR AN INTEREST
HEREIN IS IN COMPLIANCE WITH THE FOREGOING RESTRICTIONS ON BENEFIT PLAN ASSETS
OR (II) IT IS AN INSURANCE COMPANY PURCHASING THIS CERTIFICATE OR INTEREST
HEREIN WITH ASSETS OF ITS GENERAL ACCOUNT, AND AT THE TIME OF ACQUISITION AND
THROUGHOUT THE PERIOD OF HOLDING, (A) IT MEETS ALL OF THE REQUIREMENTS OF AND IS
ELIGIBLE FOR EXEMPTIVE RELIEF UNDER PROHIBITED TRANSACTION CLASS EXEMPTION
95-60, (B) LESS THAN 25% OF THE ASSETS OF SUCH ACCOUNT ARE ASSETS OF A BENEFIT
PLAN INVESTOR AND (C) IT IS NOT A SERVICER TO THE TRUST OR AN AFFILIATE OF SUCH
SERVICER, AND WOULD NOT OTHERWISE BE EXCLUDED UNDER 29 CFR SECTION
2510.3-101(f)(1).
NEITHER THIS CERTIFICATE, NOR ANY PORTION OF THIS CERTIFICATE, MAY
BE TRANSFERRED (X) IF AFTER GIVING EFFECT TO THE EXECUTION OR TRANSFER OF SUCH
CERTIFICATE, THERE WOULD BE MORE THAN (I) 5 PRIVATE HOLDERS OF CLASS D-1
CERTIFICATES OR (II) 100 PRIVATE HOLDERS, OR (Y) ON OR THROUGH (I) AN
"ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(b)(1) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND ANY PROPOSED, TEMPORARY OR FINAL
TREASURY REGULATION THEREUNDER, INCLUDING, WITHOUT LIMITATION, AN
OVER-THE-COUNTER-MARKET OR AN INTERDEALER QUOTATIONS SYSTEM THAT REGULARLY
DISSEMINATES FIRM BUY OR SELL QUOTATIONS OR (II) "SECONDARY MARKET" OR
"SUBSTANTIAL EQUIVALENT THEREOF" WITHIN THE MEANING OF SECTION 7704(b)(1) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND ANY PROPOSED, TEMPORARY OR FINAL
TREASURY REGULATION THEREUNDER, INCLUDING A MARKET WHEREIN INTERESTS IN THE
TRUST ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN SUCH INTERESTS AND A
MARKET WHEREIN ANY PERSON REGULARLY MAKES AVAILABLE BID OR OFFER QUOTES WITH
RESPECT TO INTEREST IN THE TRUST AND STANDS READY TO EFFECT BUY OR SELL
TRANSACTIONS AT THE QUOTED PRICES FOR ITSELF OR ON BEHALF OF OTHERS. ANY
ATTEMPTED TRANSFER, ASSIGNMENT, CONVEYANCE, PARTICIPATION OR SUBDIVISION IN
CONTRAVENTION OF THE PRECEDING RESTRICTIONS, AS REASONABLY DETERMINED BY THE
SELLER, SHALL BE VOID
B-4
AB INITIO AND THE PURPORTED TRANSFEROR, SELLER, OR SUBDIVIDER OF SUCH
CERTIFICATE SHALL BE CONSTRUED TO BE TREATED AS THE CERTIFICATEHOLDER OF ANY
SUCH CERTIFICATE FOR ALL PURPOSES OF THE POOLING AND SERVICING AGREEMENT."
The Seller and the Trustee are entitled to rely upon this letter
and are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
B-5
Capitalized terms used but not defined herein shall have those
meanings set forth for such terms in the Class D-1 CPA.
Very truly yours,
[Name of Purchaser]
By:
--------------------------------
(Authorized Officer)
B-6
Annex 1 to Exhibit B
Qualified Institutional Buyer Status Under SEC Rule 144A
(Buyers other than investment companies)
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx, XX 1249
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Corporate Trust Administration
Charming Shoppes Receivables Corp.
c/o Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
[Transferring Class D-1 Holder]
Name of Buyer: _____________________________________ ("Buyer")
I hereby certify that as indicated below, I am the duly-authorized
President, Chief Financial Officer, Vice President or other executive officer of
Buyer.
In connection with purchases of securities by Buyer, I hereby
certify to you and, if you act as broker for one or more customers, to such
customers, that Buyer is a "qualified institutional buyer" as defined in Rule
144A under the Securities Act of 1933, as amended ("Rule 144A") because (i)
Buyer owned and/or invested on a discretionary basis $_______(1) in securities
(except for the excluded securities referred to below) as of the end of Buyer's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) Buyer satisfies the criteria in the category marked below:
______ Corporation, etc. Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code.
______ Bank. Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is
-------------------
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities of issuers that are not affiliated with the Buyer,
unless Buyer is a dealer, and, in that case, Buyer must own and/or invest on a
discretionary basis at least $10,000,000 in securities of issuers that are not
affiliated with the Buyer.
B-7
substantially confined to banking and is supervised by the State or
territorial banking commission or similar official or is a foreign bank
or equivalent institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements,
a copy of which is attached hereto.
______ Savings and Loan. Buyer (a) is a savings and loan association, building
and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institution or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is attached hereto.
______ Broker-dealer. Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
______ Insurance Company. Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of Columbia.
______ State or Local Plan. Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of
a State or its political subdivisions, for the benefit of its
employees.
______ Investment Advisor. Buyer is an investment advisor registered under the
Investment Advisers Act of 1940.
The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with Buyer, (ii) securities that are
part of an unsold allotment to or subscription by Buyer (if Buyer is a dealer),
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement, and (viii) currency, interest rate and commodity
swaps.
For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis, Buyer used the cost of such
securities to Buyer and did not include any of the securities referred to in the
preceding paragraph.
Further, in determining such aggregate amount, Buyer may have
included securities owned by subsidiaries of Buyer, but only if such
subsidiaries are consolidated with Buyer in its financial statements prepared in
accordance with generally accepted accounting principles and if the investments
of such subsidiaries are managed under Buyer's direction. However, such
securities were not included if Buyer is a majority-owned, consolidated
subsidiary of another enterprise and Buyer is not itself a reporting company
under the Securities Exchange Act of 1934.
B-8
[Buyer acknowledges that it is familiar with Rule 144A and
understands that you and your customers (if you act as a broker for one or more
customers) are and will continue to rely on the statements made herein because
one or more sales by you for your own account of your customer's account to
Buyer may be in reliance on Rule 144A.
Will Buyer be purchasing Rule 144A securities only for Buyer's own account?
___ ___
Yes No
If the answer to this question is "no", Buyer agrees that, in
connection with any purchase of securities sold to Buyer for the account of a
third party (including any separate account) in reliance on Rule 144A, Buyer
will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
Buyer agrees that Buyer will not purchase securities for a third party unless
Buyer has obtained a current representation letter from such third party or
taken other appropriate steps contemplated by Rule 144A to conclude that such
third party independently meets the definition of "qualified institutional
buyer" set forth in Rule 144A.](2)
Buyer agrees to notify you of any changes in the information and
conclusions herein. Until such notice is given to you, Buyer's purchase of
securities from you, or through you from your customers will constitute a
reaffirmation of the foregoing certifications and acknowledgments as of the date
of such purchase.
Further, if Buyer is a bank or savings and loan as provided above,
Buyer agrees that it will furnish you with updated annual financial statements
promptly after they become available.
Date:______________________
Very truly yours,
[Print Name of Buyer]
By:
---------------------------
Name:
Title:
-------------------
(2) Bracketed language to be included only in Certification Forms from
Buyers in connection with re-sales pursuant to Rule 144A.
B-9
Annex 2 to Exhibit B
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx, XX 1249
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Corporate Trust Administration
Charming Shoppes Receivables Corp.
c/o Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Name of Buyer: ____________________________________ ("Buyer")
Name of Investment Adviser: _________________________ ("Adviser")
I hereby certify that, as indicated below, I am the
duly-authorized President, Chief Financial Officer or Vice President of Buyer
or, if Buyer is a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), of Adviser.
In connection with purchases of securities by Buyer, I hereby
certify to you and, if you act as broker for one or more customers, to such
customers, that Buyer is a "qualified institutional buyer" as defined in Rule
144A because (i) Buyer is an investment company registered under the Investment
Company Act of 1940 and (ii) as marked below, Buyer alone, or Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of Buyer's most recent
fiscal year.
______ Buyer owned $________ in securities (other than the excluded securities
referred to below) as of the end of Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
______ Buyer is part of a Family of Investment Companies which owned in the
aggregate $_______ in securities (other than the excluded securities
referred to below) as of the end of Buyer's most recent fiscal year
(such amount being calculated in accordance with Rule 144A).
For purposes of determining the amount of securities owned by Buyer or Buyer's
Family of Investment Companies, I used the cost of such securities.
The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
B-10
The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with Buyer or are part of Buyer's
Family of Investment Companies, (ii) securities issued or guaranteed by the U.S.
or any instrumentality thereof, (iii) bank deposit notes and certificates of
deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities
owned but subject to a repurchase agreement and (vii) currency, interest rate
and commodity swaps.
[On behalf of Buyer, I acknowledge that Buyer is familiar with
Rule 144A and understands that you and your customers (if you act as a broker
for one or more customers) are and will continue to rely on the statements made
herein because one or more sales to Buyer by you for your own account or your
customer's account will be in reliance on Rule 144A. In addition, on behalf of
Buyer, I agree that, in connection with any purchase of securities sold by or
through you in reliance on Rule 144A, Buyer will only purchase for Buyer's own
account.](3)
Finally, on behalf of Buyer or Adviser (as appropriate), I also
agree to notify you of any changes in the information and conclusions herein.
Until such notice is given to you, Buyer's purchase of securities from you, or
through you from your customers, will constitute a reaffirmation of the
foregoing certifications and acknowledgments as of the date of such purchase.
Date:______________________
Very truly yours,
[Print Name of Buyer]
By:
---------------------------------
Name:
Title:
On behalf of:
[Name of Buyer/Adviser]
-------------------
(3) Bracketed language to be included only in Certification Forms from
Buyers in connection with re-sales pursuant to Rule 144A.
B-11
EXHIBIT C to Certificate Purchase Agreement
Form of Notice of Retransfer Funding
[------------ --, ----]
To: [Name of Covered Class D-1 Holder]
[Address]
[Contact: ]
[Telephone: ]
[Facsimile: ]
Reference is hereby made to the Amended and Restated Certificate
Purchase Agreement, dated as of August 24, 2004 (as amended, supplemented or
otherwise modified and in effect on the date hereof, the "Purchase Agreement"),
among Wachovia Bank, National Association, as Trustee, Charming Shoppes
Receivables Corp., as Seller, Spirit of America, Inc. and the Class D-1 Holders
referred to therein. Capitalized terms used in this Notice of Retransfer Funding
and not otherwise defined herein shall have the meanings assigned thereto in the
Purchase Agreement.
This letter constitutes a Notice of Retransfer Funding delivered
pursuant to Section 3.2 of the Purchase Agreement.
A. Distribution Date of required payment under Section 3.2 of
Class D Purchase Agreement: ___________
B. Amount of required
retransfer........................................$__________
C. Covered Class D-1 Investor Interest after giving effect to
required retransfer.............................. $__________
D. Class D-1 Initial Investor
Interest......................................... $__________
E. Remaining potential retransfer amount (D minus
C)............................................... $__________
Each of the Seller and Servicer hereby certifies as follows:
(i) the representations and warranties contained of it made in the
Pooling and Servicing Agreement, the Supplement and the Agreement
are true and correct in all material respects as of the date
hereof (except to the extent they expressly relate to an earlier
date or later time);
(ii) it is in compliance in all material respects with all of its
covenants contained in the Pooling and Servicing Agreement, the
Supplement and the Agreement;
C-1
(iii) no Early Amortization Event, Servicer Default or event which with
the giving of notice or passage of time or both could become an
Early Amortization Event or Servicer Default shall have occurred
and be continuing; and
(iv) all other conditions to such retransfer in Section 3.2(b) of the
Purchase Agreement are satisfied.
IN WITNESS WHEREOF, each of the undersigned has caused this Notice of
Retransfer Funding to be executed by its duly authorized officer as of the date
first above written.
SPIRIT OF AMERICA, INC.
By:
-----------------------------------------
Name Printed:
-------------------------------
Title:
--------------------------------------
CHARMING SHOPPES RECEIVABLES CORP.
By:
-----------------------------------------
Name Printed:
-------------------------------
Title:
--------------------------------------
C-2
