<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended January 28, 1995
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OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the transition period from to
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Commission file number 0-7258
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CHARMING SHOPPES, INC.
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
PENNSYLVANIA 23-1721355
- -------------------------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
450 Winks Lane, Bensalem, Pennsylvania 19020
- ---------------------------------------------- -----
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code (215) 245-9100
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common stock (par value $.10 per share)
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. /X/ YES / / NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. /X/
As of February 28, 1995, 102,902,521 common shares were outstanding. The
aggregate market value of the common shares (based upon the closing price on
February 28, 1995) held by non affiliates was approximately $590 million.
DOCUMENTS INCORPORATED BY REFERENCE: As stated in Part III of this annual
report, portions of the following document are incorporated herein by
reference:
Definitive proxy statement for annual shareholders meeting to be filed within
120 days after the end of the fiscal year covered by this annual report.
<PAGE> 2
CHARMING SHOPPES, INC.
1995 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
<TABLE>
PART I
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<S> <C> <C>
Item 1 Business
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Merchandising and Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Purchasing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Store Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trademarks and Servicemarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 3 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 4 Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . 8
Item 4a Executive Officers of the Registrant. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
PART II
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Item 5 Market for Registrant's Common Equity and Related Stockholders' Matters . . . . . . . . . . 9
Item 6 Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 7 Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 8 Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . 15
Item 9 Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
PART III
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Item 10 Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . 32
Item 11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Item 12 Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . 32
Item 13 Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . 32
PART IV
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Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K . . . . . . . . . . . . . 33
</TABLE>
1
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PART I
ITEM 1 BUSINESS
GENERAL
Charming Shoppes, Inc., a Pennsylvania corporation formed in 1969, operates,
through its subsidiary corporations, 1,428 women's specialty apparel stores in
46 states. Unless the context indicates otherwise, the term "Company" refers
to Charming Shoppes, Inc. and, where appropriate, one or more of its wholly
owned subsidiaries. The Company's "Fashion Bug" stores specialize in selling,
at moderate and popular prices, a wide variety of junior, misses, womens, girls
and large size sportswear, dresses, coats, suits, lingerie, accessories, and
casual footwear to women principally in the 15 to 45 year old age group. The
Company's "Fashion Bug Plus" stores sell similar merchandise primarily for the
large size woman. The Company also sells men's sportswear, accessories and
coats in the majority of its Fashion Bug stores.
The Company's stores sell both brand name merchandise and specially
manufactured garments under one of the Company's private labels. The Company's
policies of advertising, promotion and the offering of its chain-wide charge
card permit the Company to operate successfully in smaller malls and strip
shopping centers, as well as in regional malls.
MERCHANDISING AND MARKETING
The Company's policy is to stock each store with a broad selection and full
range of sizes of current fashions at moderate and popular prices. Rather than
a narrow assortment of high-fashion merchandise targeted at a single age group,
the stores offer a broad selection of contemporary and classic clothing which
appeals to a wide range of lower middle to middle income customers. Through
its merchandise information system, the Company constantly monitors the demands
of its customers for style and price in order to restock inventories with a
selection desirable to each particular store's customers. The Company has also
responded to demographic changes and consumer preferences by providing greater
fashion selection in misses and large sizes and better quality at attractive
prices.
Merchandise sold by the Company is produced by a large number of manufacturers
in the United States and abroad, and the Company constantly evaluates
merchandise that is offered in the world markets. Approximately 75% of the
merchandise sold is private label, primarily under the "Stefano" and "Maggie
Lawrence" labels. The private label program was developed as a result of
customer demand for better quality merchandise, comparable to certain national
brands, at lower prices. Our product developers use a computer-aided design
(CAD) system to design and continually update a wide variety of merchandise.
The Company then contracts directly with domestic and foreign manufacturers to
have goods manufactured to our specifications (construction, fabric, fit and
style), which are sold at attractive prices while providing higher-than-average
markup for the Company. Use of the private label program requires the Company
to contract for merchandise in advance of its intended selling season, thus
exposing the Company to markdowns of merchandise caused by changes in customer
preferences (see "Purchasing").
2
<PAGE> 4
The Company is promotionally oriented, utilizing an advertising program on
radio and in newspapers in the locale of the stores, and making extensive use
of direct mail. Pricing policies, displays, store promotions, convenient
locations and store hours are also used to attract customers. With the
assistance and planning of specialized home office personnel, each store
provides such displays and advertising as may be necessary to feature certain
merchandise or certain promotional selling prices from time to time.
The retail sale of women's apparel is a highly competitive business with
numerous competitors, including individual and chain fashion specialty stores
and department stores. The Company cannot estimate the number of competitors
or its relative competitive position, due to the large number of companies
selling women's apparel. The primary elements of competition are merchandise
style, size, selection, quality, display and price, as well as store location,
design, advertising and promotion and personalized service to the customers.
The Company believes that its strategy in specializing in fashionable
merchandise, for the misses, junior, girls and large size women customers, and
its ability to effect volume purchases to pass cost savings to its customers
are important elements in its operations.
The Company encourages credit sales on its private label charge card. The
private label charge program has approximately 3,500,000 active accounts which
account for 39% of retail sales. The Company believes that the charge card is
a promotional vehicle in itself, engendering customer loyalty, creating a
substantial base for direct mail promotion and encouraging incremental sales.
Since 1989, the Company has been purchasing portions of its credit card
receivables from various financial institutions. During October 1993, the
Company completed this acquisition and now controls and services its entire
private label credit card file. The Company has entered into various
agreements whereby it securitizes and sells substantially all of these
receivables. In each securitization, the receivables were transferred to a
trust which issued certificates representing ownership interests in the trust.
These agreements provide for the Company to continue to service the receivables
and control credit policies. This allows the Company to continue to fund
receivable growth, provide customer service and collect past-due accounts.
Accordingly, its relationship with its credit card customers is not affected by
the securitization agreements. The Company's charge card portfolio is
administered by Spirit of America National Bank, a national association and
wholly-owned subsidiary of the Company. Spirit of America National Bank
approves credit applications and a third party performs all billing and
collection activities. An increase in short-term interest rates could have an
adverse effect on credit costs. The Company uses interest rate caps and swaps
in an attempt to mitigate the effect of rising interest rates (see "Item 8,
Financial Statements and Supplementary Data; Notes to Financial Statements --
Derivative Financial Instruments Held For Purposes Other Than Trading" for a
complete discussion).
The Company's stores feature wall and selling-floor displays which coordinate
merchandise in order to promote multiple sales. The stores, which the Company
believes must constantly present a fresh, contemporary shopping environment,
are redecorated or fully remodeled as necessary to augment sales. The Company
is constantly testing and implementing new store designs and fixture packages
aimed at providing an effective merchandise presentation.
The Company emphasizes customer service, including the presence of salespeople
in the stores, rather than self-service; lay-away plans; and acceptance of
merchandise returns for cash or credit within a reasonable time period.
3
<PAGE> 5
PURCHASING
Purchasing is conducted on a departmental basis for each of the "Fashion Bug"
and "Fashion Bug Plus" merchandise groups by a staff of buyers supervised by
one or more merchandise managers. The Company believes that specialization of
buyers within their departments enhances their expertise in obtaining quality
merchandise at a cost which will permit attractive selling prices, while
obtaining the desired markup for the Company.
The merchandising staff obtains store and chain-wide inventory information
generated by a merchandise information system utilizing point-of-sale
terminals, through which merchandise can be followed from the placement of the
order to the actual sale. Based upon this data, the merchandise managers
compare budgeted to actual sales and make merchandising decisions, as
indicated, including re-order, markdowns and changes in the buying plans for
upcoming seasons.
The Company does not own or operate any significant manufacturing facilities.
During the fiscal year ended January 28, 1995, the Company purchased
merchandise from approximately 700 suppliers, none of which accounted for more
than 4% of its purchases. The Company's wholly-owned contracting and buying
subsidiaries are headquartered in Hong Kong. Through this office, the Company
conducts its sourcing operations in 23 countries with offices in 14 of these
countries. Sovereignty over Hong Kong will be transferred from the United
Kingdom to the Peoples Republic of China during fiscal 1998. Any event that
causes a sudden disruption in the flow of or significantly increases the cost
of imported merchandise could have a materially adverse effect on the
Company's operations.
DISTRIBUTION
The Company operates two distribution centers. One is located in Bensalem,
Pennsylvania, adjacent to the Company's corporate headquarters. This automated
facility, which also contains executive, administrative and buying offices,
occupies approximately 515,000 square feet. The second distribution facility
is located in Greencastle, Indiana. The 150 acre tract of land contains a
building of approximately 350,000 square feet. During fiscal 1996, the Company
will complete a 175,000 square foot expansion of this facility. Upon
completion of this expansion, the Company estimates that it will have the
ability to service over 2,000 stores from these two distribution centers.
The great majority of merchandise purchased by the Company is received at these
centers, where it is prepared for distribution to the stores. The functions
performed at these central facilities include quality control inspection,
receiving, ticketing, packing and shipping. The Company's automated sortation
system in its Bensalem, Pennsylvania distribution center has enhanced the flow
of merchandise from receipt to shipment. A similiar system will be implemented
in the Greencastle, Indiana facility during fiscal 1996. Shipments to each
store are made by trucks operated principally by common carriers. The Company
utilizes a computerized automated distribution model which has enhanced the
efficiency of the distribution department and enables that department to build
various attributes into each store's plan to determine not only the number of
units, but the type of unit to be distributed to each store.
The Company operates a program of shipping direct from the supplier certain
merchandise as a complement to its centralized distribution capability. Direct
shipping of certain merchandise increases the Company's flexibility and saves
time in the distribution of goods.
4
<PAGE> 6
STORES
Substantially all of the Company's 1,428 stores are located in enclosed
shopping malls and strip shopping centers which are situated primarily in
suburban metropolitan areas and smaller towns. The Company's extensive
promotional policies enable it to operate stores successfully in a variety of
shopping environments, whereas many of its competitors rely principally on
regional mall traffic (see "Merchandising and Marketing" above). Typically,
stores are open seven days per week, eleven hours per day Monday through
Saturday and seven hours on Sunday.
The Company experiences a normal seasonal sales pattern for the retail apparel
industry, with its peak sales occurring during the Christmas, Easter and
back-to-school seasons and the period preceding Mother's Day. The Company
generally builds inventory levels prior to these peak selling periods. To keep
inventory current and fashionable, the Company reduces the price of slow-moving
merchandise throughout the year. End-of-season sales are conducted with the
objective of carrying a minimal amount of seasonable merchandise over from one
season to another. Sales for the four quarters of the fiscal year ended
January 28, 1995, as a percent of total sales, were 23.4, 25.4 , 24.1 and 27.1,
respectively.
The "Fashion Bug" stores range in size, generally, from 6,000 square feet to
16,000 square feet, averaging approximately 9,500 square feet. The "Fashion
Bug Plus" stores range in size, generally, from 3,000 square feet to 5,000
square feet, averaging approximately 3,900 square feet. Total square feet of
leased space as of the fiscal year ended January 28, 1995, increased to
13,073,000 from 11,468,000 as of the fiscal year ended January 29, 1994, a 14%
increase.
The Company's store expansion policy over the past five fiscal years, is set
forth in the following tables:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------------------------------------
NUMBER OF FEB 2 FEB 1 JAN 30 JAN 29 JAN 28
STORES 1991 1992 1993 1994 1995
- ------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Open at beginning of period 1013 1058 1137 1220 1333
Opened during period 116 111 129 157 126
Closed or combined during period (71) (32) (46) (44) (31)
---- ---- ---- ---- -----
1058 1137 1220 1333 1428
---- ---- ---- ---- ----
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------------------------------------
FEB 2 FEB 1 JAN 30 JAN 29 JAN 28
STORE TYPE 1991 1992 1993 1994 1995
- ----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Fashion Bug 909 1011 1116 1248 1346
Fashion Bug Plus 149 126 104 85 82
--- --- ---- ---
1058 1137 1220 1333 1428
---- ---- ---- ---- ----
</TABLE>
5
<PAGE> 7
The Company plans to open approximately 60 new stores and close approximately
45 existing stores during the 1996 fiscal year. The Company also plans to
expand or remodel approximately 10 existing stores. The reduction in new
store openings in fiscal 1996 as compared to fiscal 1995 is primarily
attributable to the Company's efforts on improving existing stores and a
decision to focus store growth in its core markets in the Northeast,
Mid-Atlantic and Mid-Western states. The new and expanded stores will
average approximately 12,500 square feet in size while the stores being closed
average 7,500 square feet. This will result in a 4% increase in square feet of
leased space during fiscal 1996. The factors considered in locating new stores
and closing existing stores include the demographics of the surrounding area,
the availability of suitable locations, competition in the immediate area,
negotiation of satisfactory lease terms, the principal specialty and "anchor"
stores, expected customer traffic and the location of the Company's store
within the shopping center.
STORE MANAGEMENT AND EMPLOYEES
All stores are operated under the direct management of the Company. Each store
has a manager and an assistant manager who are in daily operational control.
The Company's 166 supervisors travel to all stores on a frequent basis, to
supervise store operations. Generally, store managers are appointed from the
group of assistant managers, and supervisors are appointed from the group of
existing store managers. It is a policy of the Company to motivate its store
personnel through promotion from within, with competitive wages and various
incentive, medical and retirement plans. Store operational and purchasing
policies are developed centrally, leaving individual store management with the
principal duties of display, selling and reporting through point-of-sale
terminals. As of January 28, 1995, the Company employed approximately 16,600
people, approximately 8,400 of whom were employed on a part-time basis. In
addition, a number of temporary employees are hired during the Christmas
season.
TRADEMARKS AND SERVICEMARKS
"Fashion Bug" (R), "Fashion Bug Plus" (R), "Glitter" (R), "Intimate Moments"
(R), "Sopre" (R),"Maggie Lawrence Collection" (R), "Stefano" (R), "Stefano Man"
(R), "Styles to Fit Every You" (R), "L.A. Blues" (R), "Fashion Bug Fits Your
Life" (R), "Details" (R) and several other trademarks and servicemarks of
lesser importance to the Company have been registered with the United States
Patent and Trademark Office and in other countries.
6
<PAGE> 8
ITEM 2 PROPERTIES
The Company primarily leases all store premises. During Fiscal 1995, seven
stores opened on premises which are owned by the Company which brings to eleven
the number of Company-owned stores. Typically, store leases have initial terms
of 5 to 20 years and contain provisions for renewal options, additional rentals
based on a percentage of sales and payment of real estate taxes and common area
charges. With respect to stores open as of January 28, 1995, the following
table shows the number of store leases expiring during the periods indicated,
assuming the exercise of the Company's renewal options:
<TABLE>
<CAPTION>
Number
of Leases
Period Expiring
------ --------
<S> <C>
1995 8
1996 - 2000 50
2001 - 2005 111
2006 - 2010 266
2011 - 2015 272
2016 - 2042 710
</TABLE>
The Company owns a 515,000 square foot distribution center in Bensalem,
Pennsylvania and a 350,000 square foot distribution center in Greencastle,
Indiana (see Item 1 "Business - Distribution").
The Company owns approximately 22 acres in two parcels across the street from
the Company's existing offices and distribution center. This 22 acre tract
contains a 110,000 square foot office building which houses the Company's data
processing facility and additional administrative offices. Spirit of America
National Bank, the Company's private label credit card operation, occupies
15,000 square feet of leased office space in Milford, Ohio. The Company owns
or leases a total of 100,000 square feet of office and warehouse space in Hong
Kong.
ITEM 3 LEGAL PROCEEDINGS
On December 10, 1993, the Company and a wholly owned subsidiary received
federal grand jury subpoenas seeking the production of certain leases to which
store operating subsidiaries of the Company ("Store Subsidiaries") are parties
and other related documents. The subpoenas were issued in conjunction with an
investigation by the United States Attorney in Philadelphia, Pennsylvania
concerning the Store Subsidiaries' claims for payment of "construction
allowances" from certain of their landlords. The allowances, which were
negotiated between the Store Subsidiaries and the landlords of certain of their
retail stores, relate to expenses incurred in altering and furnishing the
landlords' premises to make such space suitable for conducting the Store
Subsidiaries' retail operations. The Company provided information in response
to the subpoenas and cooperated with the office of the United States Attorney.
The Company has been advised that the investigation has been terminated and
that the United States Attorney has declined to prosecute the matter any
further.
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ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year.
ITEM 4A EXECUTIVE OFFICERS OF THE REGISTRANT
The following list contains certain information relative to Executive Officers
of the Company. There are no family relationships among any Executive
Officers, except that David V. Wachs is the father of Philip and Michael Wachs.
The term of each Executive Officer expires at the next annual meeting of the
Board of Directors following the Annual Meeting of Shareholders scheduled to be
held during June, 1995, or until their successors are duly elected and
qualified.
David V. Wachs, 69, has been Chairman of the Board since 1971 and Chief
Executive Officer since February, 1988. He also served as President of the
Company from January, 1989 until March, 1990 when he was succeeded as President
by Philip Wachs. Mr. Wachs' term as a Director expires in 1996.
Philip Wachs, 39, has been President and Chief Operating Officer since March,
1990 and Vice Chairman of the Board since June, 1989. Prior to his appointment
as President, he served as Executive Vice President - Real Estate for over five
years. Mr. Wachs' term as a Director expires in 1995.
Mordechay Kafry, 42, has served as a Director since January, 1990, and as
Executive Vice President - Merchandise Procurement for more than five years.
Mr. Kafry's term as a Director expires in 1997.
Samuel Sidewater, 57, has served as a Director since September, 1988. He has
served as Executive Vice President - New Business Development since August,
1990, and prior to that time he served as Executive Vice President -
Merchandising for more than five years. Mr. Sidewater's term as a Director
expires in 1996.
Anthony A. DeSabato, 46, has served as Executive Vice President and Corporate
Director of Human Resources for more than five years.
Elaine Lefkowith, 49, has served as Executive Vice President Merchandising
since May, 1994. Prior to that time, she was with The Limited, Inc. as
Executive Vice President and General Manager of the Cacique Division from
April, 1992 until April 1994 and as General Merchandise Manager of the Cacique
Division from October, 1987 to April, 1992.
Colin D. Stern, 46, has served as Executive Vice President and General Counsel
for more than five years.
Ivan M. Szeftel, 41, has served as Executive Vice President - Finance for more
than five years.
Michael Wachs, 35, has served as Executive Vice President - Real Estate since
April 1, 1993. Prior to that time, he served as Vice President - Real Estate.
Bernard Brodsky, 55, has served as Vice President, Treasurer and Secretary for
more than five years.
Terry Pritikin, 45, has served as Vice President of Store Operations since
November, 1994. Prior to that time, he served as President of Retail
Specialty, Tommy Hilfiger, USA, from March, 1994 until November, 1994 and as
Executive Vice President of Stores with the Lerner Division of The Limited,
Inc. from May, 1988 to March, 1994.
Eric Specter, 37, has served as Vice President - Corporate Controller for more
than five years.
8
<PAGE> 10
PART II
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDERS' MATTERS
(a) PRINCIPAL MARKET: The Company's Common Stock is traded on the
over-the-counter market and quoted on the NASDAQ National Market
System under the symbol CHRS.
(b) The following table sets forth the high and low closing sale prices
for the Company's Common Stock during the indicated periods, as
reported by NASDAQ, and the amount of cash dividend declared by the
Company on its Common Stock during the indicated periods.
<TABLE>
<CAPTION>
FISCAL 1995 FISCAL 1994 DIVIDENDS PER SHARE
HIGH LOW HIGH LOW 1994 1993
---- --- ---- --- ----- ----
<S> <C> <C> <C> <C> <C> <C>
1st Quarter $ 13 7/8 $ 10 1/4 $ 19 1/8 $ 13 3/4 $ .0225 $ .0225
2nd Quarter 10 5/8 8 15/16 18 1/4 12 1/4 .0225 .0225
3rd Quarter 9 3/8 7 1/4 14 7/8 11 1/2 .0225 .0225
4th Quarter 7 1/2 5 15/16 14 1/4 10 3/4 .0225 .0225
</TABLE>
On March 17, 1995, (first quarter of fiscal 1996), the Company declared a
quarterly dividend of $.0225 per share to shareholders of record on March 31,
1995.
(c) Approximate Number of Holders of Common Stock:
The approximate number of holders of record of the Company's Common
Stock as of February 28, 1995, was 4,165.
9
<PAGE> 11
ITEM 6 SELECTED FINANCIAL DATA
The following table presents selected financial data for the Company for each
of the five fiscal years ended, as of February 2, 1991 through January 28,
1995. All of the selected financial data are extracted from the Company's
audited financial statements and should be read in conjunction with the
financial statements and the notes thereto included under Item 8 of this Form
10-K.
CHARMING SHOPPES, INC. AND SUBSIDIARIES
(in thousands except per share amounts)
FIVE-YEAR COMPARATIVE SUMMARY
<TABLE>
<CAPTION>
Year Ended
------------------------------------------------------------------------------
January 28 January 29 January 30 February 1 February 2
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net sales $1,272,693 $1,254,122 $1,178,714 $1,020,656 $886,265
Income from continuing
operations 44,689 75,765 81,127 58,302 40,346
Income per share from
continuing operations .42 .70 .75 .55 .40
Cash dividends per
common share .09 .09 .08 .06 .06
AT YEAR END:
Total assets 840,809 829,233 737,251 637,015 525,334
Long-term obligations 17,298 22,298 26,246 31,199 35,876
Working capital 191,815 181,906 200,083 182,289 137,058
Stockholders' equity 558,822 522,100 445,309 362,208 299,199
</TABLE>
10
<PAGE> 12
IITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
FINANCIAL SUMMARY
The following table sets forth certain financial data expressed as a percentage
of net sales and on a comparative basis:
<TABLE>
<CAPTION>
PERCENTAGE OF NET SALES PERCENTAGE INCREASE (DECREASE)
FROM PRIOR YEAR
1995 1994 1993 1994-1995 1993-1994
---- ---- ---- --------- ---------
<S> <C> <C> <C> <C> <C>
Net Sales 100.0% 100.0% 100.0% 1.5% 6.4%
Cost of goods sold,
buying and occupancy 73.2% 68.9% 68.3% 8.0% 7.3%
Selling, general and
administrative 22.4% 22.8% 22.1% (.2%) 9.6%
Interest .2% .2% .3% (9.9%) (13.6%)
Income Taxes 1.4% 2.9% 3.2% (50.4%) (5.4%)
Net Income 3.5% 6.1%* 6.9% (41.0%) (6.6%)
</TABLE>
* Net Income for Fiscal 1994 is before the cumulative effect of an accounting
change of $3,991,000 or $.04 per share.
NET SALES
Net sales for the fiscal year ended January 28, 1995 ("Fiscal 1995"), totaled
$1,272,693,000 as compared to $1,254,122,000 for the fiscal year ended January
29, 1994 ("Fiscal 1994"), a 1.5% increase. The Company had a 6.3% decrease in
sales of existing stores compared to Fiscal 1994. 10.2% of Fiscal 1995 sales
relate to stores opened in that year. Sales of stores closed during Fiscal
1995 accounted for 2.4% of Fiscal 1994 sales. The net sales increase of 6.4%
in Fiscal 1994 was primarily attributable to the net addition of new stores
partially offset by a 1.8% decrease in comparable stores sales. The number of
retail stores increased from 1,333 on January 29, 1994 to 1,428 on January 28,
1995.
Sales for the fourth quarter of Fiscal 1995 totaled $345,382,000 as compared to
$357,186,000 for the corresponding period of Fiscal 1994, a 3.3% decrease. The
decrease in sales was primarily attributable to a disappointing response to the
Company's merchandise assortment and a general weakness in women's apparel
sales. The Company has and continues to make changes in its ongoing
merchandise strategy to address this decline in sales. The Company had a 10.1%
decrease in quarterly sales for existing stores as compared to the prior year.
9.1% of the quarterly sales are attributable to new stores opened during Fiscal
1995. Sales of stores closed during Fiscal 1995 accounted for 2.3% of Fiscal
1994 fourth quarter sales.
The Company anticipates a decline in sales of existing stores in the first
quarter of the fiscal year ending February 3, 1996 ("Fiscal 1996") when
compared with sales of the first quarter of Fiscal 1995. The Company had a 22%
decrease in sales of existing stores for the two months ended April 1, 1995
when compared to the corresponding period of the prior fiscal year.
Net sales increased 5.9% for the fourth quarter of Fiscal 1994 as compared to
the corresponding period during the fiscal year ended January 30, 1993 ("Fiscal
1993"). This increase in sales was primarily due to newly opened stores
partially offset by a 2.9% decrease in comparable store sales.
11
<PAGE> 13
COST OF GOODS SOLD, BUYING AND OCCUPANCY
Cost of goods sold, buying and occupancy expenses expressed as a percentage of
sales increased 4.3% in Fiscal 1995 over the prior year and increased 0.6% in
Fiscal 1994 over Fiscal 1993. The Company's cost of goods sold percentage
increased during Fiscal 1995. This increase resulted from agressive promotions
initiated to stimulate consumer demand which caused markdowns to exceed planned
levels. During Fiscal 1994, the Company's cost of goods sold percentage
decreased as a result of cost reductions achieved through the direct sourcing
of private label merchandise.
As a percentage of sales, buying and occupancy expenses increased in Fiscal
1995 and Fiscal 1994 as a result of the spreading of these relatively fixed
costs over decreased comparable store sales.
Cost of goods sold, buying and occupancy expenses expressed as a percentage of
sales increased 8.2% in the fourth quarter of Fiscal 1995 as compared to the
corresponding period of Fiscal 1994 and comprised the same percentage of sales
in the fourth quarter of Fiscal 1994 as compared to the corresponding period of
Fiscal 1993. During the fourth quarter of Fiscal 1995, the Company's cost of
goods sold percentage increased as compared to the corresponding period of
Fiscal 1994. This increase resulted from aggressive promotions initiated to
stimulate consumer demand. Markdowns were taken earlier and more frequently
than planned. In the fourth quarter of Fiscal 1994 the Company's cost of goods
sold percentage decreased as compared to the corresponding period of Fiscal
1993. This decrease resulted from savings achieved through an increase in the
direct sourcing of private label merchandise. Buying and occupancy expenses
increased as a percentage of sales in both Fiscal 1995 and Fiscal 1994 as a
result of the effect of relatively fixed costs on lower comparable store sales.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses, expressed as a percentage of
sales decreased 0.4% in Fiscal 1995 over Fiscal 1994. The primary reason for
the decrease in Fiscal 1995 was the favorable effect of the lower cost of
servicing the Company's private label credit card program as compared to the
corresponding period of the prior fiscal year. This was partially offset by
the effect of lower comparative store sales on relatively fixed general and
administrative expenses. In Fiscal 1994, selling, general and administrative
expenses increased 0.7% over Fiscal 1993. The primary reason for the increase
was the effect of lower comparative store sales on these relatively fixed
expenses.
INTEREST EXPENSE
Interest expense decreased in Fiscal 1995 due to a reduction in long-term debt
and in Fiscal 1994 due to lower interest rates and a reduction in long-term
debt.
PROVISION FOR INCOME TAXES
The effective tax rates were 28.5%, 32.2%, and 31.9% for Fiscal 1995, 1994,
and 1993, respectively. The decrease in the effective tax rate for Fiscal 1995
was primarily the result of an increase in the effect of permanent federal tax
deductions on lower pretax income.
12
<PAGE> 14
PERFORMANCE ANALYSIS
The following ratios measure the Company's overall performance as shown by the
return on average stockholders' equity and return on average total assets.
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net return on average
stockholders' equity 8.3% 16.5% 20.1%
Net return on average
total assets 5.4% 10.2% 11.8%
</TABLE>
FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES
Cash provided from operations and the Company's capital structure provide the
resources needed to support both current operations and future growth. The
following ratios measure the Company's ability to meet its short-term
obligations:
<TABLE>
<CAPTION>
(in thousands) 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Working capital $ 191,815 $ 181,906 $ 200,083
Current ratio 1.8 1.7 1.9
</TABLE>
The Company considers, and currently uses for internal management purposes, the
following measures of liquidity and capital resources:
<TABLE>
<CAPTION>
(in thousands) 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Cash provided by
operating activities $ 70,700 $90,236 $98,807
Capital Resources and Leverage Ratios:
Debt to equity 4.0% 5.2% 7.0%
Cash provided by operating
activities to capital investment 93% 114% 152%
</TABLE>
Cash provided by operating activities represents the Company's primary source
of liquidity and capital. Cash flow from operations decreased $19.5 million in
Fiscal 1995 as compared to Fiscal 1994. The primary reason for this decrease
was the approximately $35.0 million decline in net income. In addition, Fiscal
1994 cash flow benefited by a $21.4 million increase in accrued expenses
primarly related to a limited recourse liability which was established for the
acquisition of the Company's private label credit card receivables. Store
inventories as calculated by inventory per leased square feet of selling space
declined by 13% in Fiscal 1995 as compared to an increase of 7% in Fiscal 1994.
This resulted in a $41.6 million increase in cash flow from the net investment
in inventory (inventory net of accounts payable) in Fiscal 1995 as compared to
Fiscal 1994.
13
<PAGE> 15
The Company has formed a trust to which it has transferred, at face value, its
interest in receivables created under the Company's proprietary credit card
program. The Company, together with the trust has entered into various
agreements whereby it can sell, on a revolving basis, interests in these
receivables for a specified term. When the revolving period terminates an
amortization period begins whereby the principal payments are made to the party
with whom the trust has entered into the securitization agreement. Through the
end of Fiscal 1995, the trust has securitized $410.4 million of receivables of
which $30.7 million were retained by the Company (see "Item 8, Financial
Statements and Supplementary Data; Notes to Financial Statements -- Asset
Securitization" for a complete discussion).
These securitization agreements improve overall liquidity of the Company and
lessen the effect of interest rate volatility by providing short- term sources
of funding. These agreements provide for the Company to continue to service
the credit card receivables and control credit policies. This control allows
the Company to fund continued credit card receivable growth and to provide the
appropriate customer service and collection activities. Accordingly, its
relationship with its credit card customers is not affected by these
agreements.
The Company believes that its liquidity and capital resources are sufficient to
sustain current operations and provide for future growth.
CAPITAL REQUIREMENTS
Capital expenditures amounted to $75.7 million, $79.0 million, and $65.0
million in Fiscal 1995, 1994, and 1993, respectively. These expenditures were
primarily for new store construction, the remodeling and expansion of existing
stores and the expansion of the Company's Greencastle, Indiana distribution
center.
During Fiscal 1996, the Company anticipates capital expenditures of
approximately $30 million which are principally for the construction of
approximately 60 new stores, the remodeling and expansion of existing stores
and completing the expansion of its distribution center in Greencastle,
Indiana. The reduction in new store openings from 126 during Fiscal 1995 to
approximately 60 during Fiscal 1996 is the primary reason for the reduction in
capital expenditures for Fiscal 1996. In Fiscal 1996 and fiscal 1997, the
Company has scheduled debt maturity payments of $5.0 million and $6.0 million,
respectively. It is anticipated that the capital required for these
expenditures and debt payments will be financed principally through internally
generated funds.
Cash dividends were $9,255,000 during Fiscal 1995 as compared to $9,236,000
during Fiscal 1994.
INFLATION
The Company's financial statements are presented on a historical cost basis.
The Company believes that the impact of inflation during Fiscal 1995 has not
been material to its financial condition and results of operations.
14
<PAGE> 16
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Stockholders and Board of Directors
Charming Shoppes, Inc.
We have audited the accompanying consolidated balance sheets of Charming
Shoppes, Inc. and subsidiaries as of January 28, 1995 and January 29, 1994 and
the related consolidated statements of income, stockholders' equity, and cash
flows for each of the three fiscal years in the period ended January 29, 1994.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
schedules are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and schedules. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Charming Shoppes,
Inc. and subsidiaries at January 28, 1995 and January 29, 1994 and the
consolidated results of their operations and their cash flows for each of the
three fiscal years in the period ended January 28, 1995, in conformity with
generally accepted accounting principles.
As discussed in the Notes to Consolidated Financial Statements, the Company
changed its method of accounting for investments as of January 30, 1994 and its
method of accounting for income taxes as of January 31, 1993
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
March 7, 1995
15
<PAGE> 17
CONSOLIDATED BALANCE SHEETS
CHARMING SHOPPES, INC. AND SUBSIDIARIES
(in thousands except share and per share amounts)
<TABLE>
<CAPTION>
JANUARY 28 JANUARY 29
ASSETS 1995 1994
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 43,923 $ 52,390
Available-for-sale securities 40,180 45,290
Merchandise inventories 258,552 259,527
Prepayments and other 89,060 83,097
- --------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 431,715 440,304
Property, equipment and leasehold improvements - at cost 483,372 416,029
Less: accumulated depreciation and amortization 197,119 161,695
- --------------------------------------------------------------------------------------------------------------
Net property, equipment and leasehold improvements 286,253 254,334
Available-for-sale securities (including a fair value adjustment
of ($2,591) as of January 28, 1995 76,988 83,695
Other assets 45,853 50,900
- --------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 840,809 $ 829,233
- --------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 137,622 $ 147,638
Accrued expenses 97,276 97,234
Income taxes 0 8,521
Current portion - long-term debt 5,002 5,005
- --------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 239,900 258,398
Deferred taxes 24,789 26,437
Long-term debt 17,298 22,298
STOCKHOLDERS' EQUITY
Common Stock $.10 par value
Authorized 300,000,000 shares. Issued and
outstanding 102,894,239 and 102,735,437 shares 10,289 10,274
Additional paid-in capital 55,176 54,208
Deferred employee compensation (5,025) (7,015)
Unrealized losses on available-for-sale securities
(net of income taxes of $906) (1,685) 0
Retained Earnings 500,067 464,633
- --------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 558,822 522,100
- --------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 840,809 $ 829,233
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements
16
<PAGE> 18
CONSOLIDATED STATEMENTS OF INCOME
CHARMING SHOPPES, INC. AND SUBSIDIARIES
(in thousands except shares and per share amounts)
<TABLE>
<CAPTION>
YEAR ENDED
JANUARY 28 JANUARY 29 JANUARY 30
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
NET SALES $ 1,272,693 $ 1,254,122 $ 1,178,714
Other Income 9,358 9,352 9,146
- --------------------------------------------------------------------------------------------------------------
TOTAL REVENUE 1,282,051 1,263,474 1,187,860
- --------------------------------------------------------------------------------------------------------------
Cost of goods sold, buying and occupancy expenses 932,138 863,381 804,963
Selling, general and administrative expenses 285,090 285,804 260,806
Interest expense 2,304 2,557 2,958
- --------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 1,219,532 1,151,742 1,068,727
- --------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 62,519 111,732 119,133
- --------------------------------------------------------------------------------------------------------------
Income Taxes 17,830 35,967 38,006
- --------------------------------------------------------------------------------------------------------------
Income before cumulative effect
of accounting change 44,689 75,765 81,127
- --------------------------------------------------------------------------------------------------------------
Cumulative effect of adoption of SFAS 109 0 3,991 0
- --------------------------------------------------------------------------------------------------------------
NET INCOME $ 44,689 $ 79,756 $ 81,127
- --------------------------------------------------------------------------------------------------------------
PER SHARE DATA
- -----------------
Net Income before cumulative effect of
accounting change $.42 $.70 $.75
Cumulative effect of accounting change .00 .04 .00
--- --- ---
Net Income $.42 $.74 $.75
Cash Dividends $.09 $.09 $.08
Weighted average number of common shares
and share equivalents outstanding during
the year 107,207,660 108,390,583 108,681,305
</TABLE>
See Notes to Consolidated Financial Statements
17
<PAGE> 19
CONSOLIDATED STATEMENTS OF CASH FLOWS
CHARMING SHOPPES, INC. AND SUBSIDIARIES
(in thousands)
<TABLE>
<CAPTION>
YEAR ENDED
JANUARY 28 JANUARY 29 JANUARY 30
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES
- ---------------------
NET INCOME $ 44,689 $ 79,756 $ 81,127
Adjustments to reconcile net income to net cash
provided by operating activities:
Deferred income taxes 4,682 2,007 1,344
Depreciation and amortization 46,924 42,487 35,065
Amortization of deferred compensation expense 2,535 3,597 3,512
Tax benefit from Employee Stock Plans 375 1,798 3,200
Cumulative effect of an accounting change 0 (3,991) 0
Gain on sale of available-for-sale securities (174) (115) (109)
Loss from abandonment of capital assets 1,153 2,333 3,106
Changes in operating assets and liabilities:
Accounts receivable 0 0 (10,830)
Merchandise inventories 975 (51,082) (21,695)
Accounts payable (10,016) 413 12,077
Prepayments and other (11,964) (11,273) (15,488)
Income taxes payable (8,521) 2,949 (1,692)
Accrued expenses 42 21,357 9,190
-----------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 70,700 90,236 98,807
- --------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
- ---------------------
Investment in capital assets 75,656 79,023 64,988
Gross purchases of available-for-sale securities 91,118 107,557 135,575
Proceeds from sales of available-for-sale securities (100,518) (87,107) (59,944)
Increase (decrease) in other assets (706) 25,022 11,063
Purchase of accounts receivable 0 186,857 0
Sale of accounts receivable 0 (186,857) (54,826)
- --------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES 65,550 124,495 96,856
- --------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
- ---------------------
Proceeds from long-term borrowings 0 1,200 0
Reduction of long-term borrowings (5,003) (4,971) (4,945)
Proceeds from exercise of stock options 641 870 2,976
Payments on notes receivable 0 0 69
Dividends paid (9,255) (9,236) (8,176)
- --------------------------------------------------------------------------------------------------------------
NET CASH USED IN FINANCING ACTIVITIES (13,617) (12,137) (10,076)
- --------------------------------------------------------------------------------------------------------------
DECREASE IN CASH AND CASH EQUIVALENTS (8,467) (46,396) (8,125)
Cash and Cash Equivalents, Beginning of Year 52,390 98,786 106,911
- --------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 43,923 $ 52,390 $ 98,786
- --------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements
18
<PAGE> 20
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
CHARMING SHOPPES, INC. AND SUBSIDIARIES
(in thousands except shares)
<TABLE>
<CAPTION>
ADDITIONAL DEFERRED
COMMON STOCK PAID-IN EMPLOYEE
SHARES AMOUNT CAPITAL COMPENSATION
------ ------ ------- ------------
<S> <C> <C> <C> <C>
BALANCE, FEBRUARY 1, 1992 50,805,426 $ 5,081 $ 43,286 $(11,974)
Issued to employees, net (440,163) (44) 2,190 (2,295)
Exercise of stock options 941,118 94 3,032
Amortization 3,512
Tax benefit - Employee
Stock Programs 3,200
Two-for-one stock split 51,141,777 5,114
- --------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 30, 1993 102,448,158 10,245 51,708 (10,757)
Issued to employees, net (69,193) (7) (822) 145
Exercise of stock options 356,472 36 1,524
Amortization 3,597
Tax benefit - Employee
Stock Programs 1,798
- --------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 29, 1994 102,735,437 10,274 54,208 (7,015)
Issued to employees, net (44,939) (5) 87 (545)
Exercise of stock options 203,741 20 506
Amortization 2,535
Tax benefit - Employee
Stock Programs 375
- --------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 28, 1995 102,894,239 $10,289 $ 55,176 $ (5,025)
<CAPTION>
UNREALIZED LOSSES ON
AVAILABLE-FOR-SALE NOTES RETAINED
SECURITIES RECEIVABLE EARNINGS
----------------------- ---------- --------
<S> <C> <C> <C>
BALANCE, FEBRUARY 1, 1992 $ (461) $ 326,276
Two-for-one stock split (5,114)
Payment 69
Transfer 392
Cash dividends (8,176)
Net income 81,127
- --------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 30, 1993 0 394,113
Cash dividends (9,236)
Net income 79,756
- --------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 29, 1994 $ 0 0 464,633
Unrealized losses (net of
income taxes of $906) (1,685)
Cash dividends (9,255)
Net income 44,689
- --------------------------------------------------------------------------------------------------------------------
BALANCE, JANUARY 28, 1995 $(1,685) $ 0 $ 500,067
</TABLE>
See Notes to Consolidated Financial Statements
19
<PAGE> 21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
CHARMING SHOPPES, INC. AND SUBSIDIARIES
Year Ended January 28, 1995
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
The Company operates a chain of specialty stores merchandising moderately
priced junior, misses, plus and children's size sportswear, dresses, coats,
lingerie, accessories and casual footwear. A limited assortment of men's
sportswear, accessories and coats is also available in most stores.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly owned. All significant intercompany
accounts and transactions are eliminated. The parent and its subsidiaries have
a 52-53 week fiscal year ending the Saturday nearest January 31.
FOREIGN OPERATIONS
The Company follows the practice of using a December 31 fiscal year for all
foreign subsidiaries in order to expedite the year-end closing.
CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents. These amounts are stated
at cost which approximates market value.
INVESTMENTS
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115 ("SFAS 115"), "Accounting for Certain
Investments in Debt and Equity Securities." The Company adopted the provisions
of the new standard for investments held as of or acquired after January 30,
1994. The cumulative effect of adopting SFAS 115 was an increase in
Stockholders' Equity of $1,357,000. In accordance with SFAS 115, prior-period
financial statements have not been restated. Pursuant to SFAS 115, management
has determined that the Company's investments should be classified as
available-for-sale. As available-for-sale investments, these securities are
carried at fair value (previously carried at amortized cost) and unrealized
gains and losses are reported in a separate component of stockholders' equity.
The amortized cost of investments is adjusted for amortization of premiums and
the accretion of discounts to maturity. Such amortization is included in other
income. Realized gains and losses and interest from investments are also
included in other income. The cost of securities sold is based on the specific
identification method.
Short-term investments include investments with an original maturity of greater
than three months and a remaining maturity of less than one year. Short-term
investments are stated at cost which approximates market value.
INVENTORIES
Merchandise inventories are valued at the lower of cost or market as determined
by the retail method (average cost basis).
PROPERTY AND DEPRECIATION
Depreciation and amortization for financial reporting purposes are principally
computed by the straight-line method over the estimated useful lives of the
assets, or in the case of leasehold improvements, over the lives of the
respective leases. Accelerated depreciation methods are used for income tax
reporting purposes. Depreciation expense was $42,583,000, $36,417,000, and
$29,575,000 in fiscal 1995, 1994, and 1993, respectively.
COMMON STOCK PLANS
Deferred compensation expense relating to Employee Stock Option, Stock
Incentive and Stock Purchase Plans is amortized over the required employment
period.
20
<PAGE> 22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CHARMING SHOPPES, INC. AND SUBSIDIARIES
Year Ended January 28, 1995
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INCOME TAXES
Effective January 31, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes" and
has separately reported the cumulative effect of that change in the
Consolidated Statement of Income for the fifty-two weeks ended January 29,
1994. SFAS 109 requires a change from the deferred method of accounting for
income taxes under APB Opinion 11 to the liability method of accounting for
income taxes. Under the liability method, deferred tax assets and liabilities
are adjusted to reflect the effect of changes in enacted tax rates on expected
reversals of financial statement and income tax carrying value differences. As
permitted by SFAS 109, the Company has elected not to restate the financial
statements for any prior years. The effect of the change on pretax income from
continuing operations for the twelve months ended January 29, 1994 was not
material; however, the cumulative effect of the change increased net income by
$3,991,000 or $0.04 per share.
U.S. income taxes have not been provided on undistributed earnings of foreign
subsidiaries accumulated prior to January 28, 1995, because the Company intends
to reinvest such undistributed earnings in the operations. Presently, income
taxes would not be significantly increased if such earnings were remitted
because of available foreign tax credits.
NET INCOME PER SHARE
Net income per common share is based on the weighted average number of shares
and share equivalents outstanding during each fiscal year. Common stock
equivalents include the effect of dilutive stock options.
21
<PAGE> 23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
<TABLE>
<CAPTION>
Lives
(in thousands) (Years) 1995 1994
------- ---- ----
<S> <C> <C> <C>
Land $ 4,845 $ 3,385
Building and improvements 10 to 33 69,718 61,759
Store fixtures 5 to 10 120,808 92,794
Equipment 3 to 10 105,216 96,622
Leasehold improvements 10 to 20 172,168 161,469
Construction in progress 10,617 0
- -----------------------------------------------------------------------------
Total at cost 483,372 416,029
Less accumulated depreciation
and amortization 197,119 161,695
- -----------------------------------------------------------------------------
$286,253 $254,334
- -----------------------------------------------------------------------------
</TABLE>
AVAILABLE-FOR-SALE SECURITIES
The following is a summary of available-for-sale securities as of January 28,
1995:
<TABLE>
<CAPTION>
(in thousands)
UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
---- ----- --------- ----------
<S> <C> <C> <C> <C>
Charming Shoppes Master Trust Certificates $ 30,680 $ 0 $ 0 $ 30,680
Charming Shoppes Master Trust Note 5,500 0 0 5,500
Municipal bonds and Municipal bond funds 49,743 18 (926) 48,835
Government agency mortgage
backed securities 11,428 0 (1,746) 9,682
U. S. Treasury and government
agency bonds 15,324 470 (295) 15,499
Low income housing partnerships 3,208 0 0 3,208
Preferred stocks 3,096 52 (144) 3,004
Other 780 0 (20) 760
- ---------------------------------------------------------------------------------------------------------------
$119,759 $ 540 $(3,131) $117,168
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
The following is a summary of available-for-sale securities as of January 29,
1994:
<TABLE>
<CAPTION>
(in thousands)
UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR VALUE
---- ----- -------- ----------
<S> <C> <C> <C> <C>
Charming Shoppes Master Trust Certificates $ 27,835 $ 0 $ 0 $ 27,835
Municipal bonds and Municipal bond funds 52,393 211 (35) 52,569
Government agency mortgage
backed securities 23,229 653 ( 45) 23,837
U. S. Treasury and government
agency bonds 14,436 985 0 15,421
Low income housing partnerships 2,486 0 0 2,486
Preferred stocks 3,876 391 (68) 4,199
Other 4,730 0 0 4,730
- ---------------------------------------------------------------------------------------------------------------
$128,985 $2,240 $(148) $131,077
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
The gross realized gains and (losses) on available-for-sales securities totaled
$198,000 and ($24,000), respectively for the fiscal year ended January 28,
1995.
22
<PAGE> 24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CHARMING SHOPPES, INC. AND SUBSIDIARIES
Year Ended January 28, 1995
The contractual maturities of available-for-sale securities at January 28 1995
were:
<TABLE>
<CAPTION>
(in thousands)
ESTIMATED
COST FAIR VALUE
---- ----------
<S> <C> <C>
Due in one year or less $ 40,180 $ 40,180
Due after one year through five years 47,803 47,637
Due after five years 14,044 13,457
- -------------------------------------------------------------------------------------
102,027 101,274
Government agency mortgage backed securities 11,428 9,682
Equity Securities 6,304 6,212
- -------------------------------------------------------------------------------------
$119,759 $117,168
- -------------------------------------------------------------------------------------
</TABLE>
INCOME TAXES
The Company adopted SFAS 109 as of January 31, 1993. The cumulative effect of
this change in accounting for income taxes of $3,991,000 is determined as of
January 31, 1993 and is reported separately in the consolidated statement of
income for the year ended January 29, 1994.
Income tax expense attributable to income from continuing operations consists
of:
<TABLE>
<CAPTION>
(in thousands) 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
CURRENT:
Federal $ 8,771 $29,971 $33,479
State 2,046 2,393 1,735
Foreign 2,331 1,596 1,448
- -------------------------------------------------------------------------------------
13,148 33,960 36,662
- -------------------------------------------------------------------------------------
DEFERRED:
Federal 5,653 2,250 1,236
State (971) (243) 108
- -------------------------------------------------------------------------------------
4,682 2,007 1,344
- -------------------------------------------------------------------------------------
Income Tax Expense $ 17,830 $35,967 $38,006
- -------------------------------------------------------------------------------------
</TABLE>
The components of deferred income tax expense of $4,682,000 and $2,007,000 for
the years ended January 28, 1995 and January 29, 1994, respectively, are all
attributable to income from continuing operations.
The components of deferred income tax expense for the year ended January 30,
1993 is as follows:
<TABLE>
<CAPTION>
(in thousands) 1993
----
<S> <C>
Depreciation $2,522
Employee benefits 1,222
Inventory (352)
Accounts receivable (1,090)
Other (958)
- ---------------------------------------------------
Deferred Income Tax Expense $1,344
- ---------------------------------------------------
</TABLE>
23
<PAGE> 25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CHARMING SHOPPES, INC. AND SUBSIDIARIES
Year Ended January 28, 1995
Prepayments and other assets include prepaid income taxes of $7,493,000 at
January 28, 1995. The Company made income tax payments of $30,081,000,
$33,674,000 and $30,778,000 for the years ended January 28, 1995, January 29,
1994 and January 30, 1993, respectively.
The components of deferred tax assets and liabilities for the years ended
January 28, 1995 and January 29,1994 are as follows:
<TABLE>
<CAPTION>
(in thousands)
1995 1994
NET CURRENT NET LONG-TERM NET CURRENT NET LONG-TERM
ASSETS ASSETS ASSETS ASSETS
(LIABILITIES) (LIABILITIES) (LIABILITIES) (LIABILITIES)
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Property, equipment and leasehold
improvements $(23,886) $ (22,774)
Inventory $(8,250) $ 2,600
Deferred employee compensation 4,278 4,113
Prepaid employee benefits (1,815) (1,880)
Accounts Receivable 4,510 4,768
Deferred Rent 3,802 3,668
Other 4,129 (5,181) (7,776)
- ------------------------------------------------------------------------------------------------------------------
$ 2,376 $(24,789) $ 9,156 $ (26,437)
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Net current deferred taxes are included in prepayments and other current
assets.
24
<PAGE> 26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CHARMING SHOPPES INC. AND SUBSIDIARIES
Year Ended January 28, 1995
A reconciliation of the effective tax rate with the statutory federal income
tax rate follows:
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Statutory federal income tax rate 35.0% 35.0% 34.0%
State income tax, net of federal income tax benefit 1.1 1.3 1.0
Foreign income 1.4 (0.1) 0.4
Investment income (1.7) (1.1) (1.0)
Employee benefits (3.9) (1.6) (1.3)
Other, net (3.4) (1.3) (1.2)
- --------------------------------------------------------------------------------------------------
28.5% 32.2% 31.9%
- --------------------------------------------------------------------------------------------------
</TABLE>
The components of income before income taxes and the cumulative effect of an
accounting change consist of the following:
<TABLE>
<CAPTION>
(in thousands) 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Domestic $58,279 $106,755 $116,338
Foreign 4,240 4,977 2,795
- --------------------------------------------------------------------------------------------------
$62,519 $111,732 $119,133
- --------------------------------------------------------------------------------------------------
</TABLE>
DEBT
Long-term debt at year end consisted of the following:
<TABLE>
<CAPTION>
(in thousands) 1995 1994
---- ----
<S> <C> <C>
9.3% note payable, annually through 1998 $17,143 $21,428
Variable rate mortgage due 1996
(3.5% at 1/28/95) 1,000 1,000
Variable rate mortgage note, interest rate
1.25% above Hong Kong Prime Rate,
payable monthly through 2001
(9.75% at 1/28/95) 425 496
Variable rate mortgage note, interest rate
1% above HIBOR, payable monthly
through 2000 (6.5% at 1/28/95) 2,692 3,167
Variable rate mortgage note, interest rate
1.% above SIBOR, payable monthly through
2000 (7.125% at 1/28/95) 885 1,057
Other 155 155
- ---------------------------------------------------------------------------------
Total long-term debt 22,300 27,303
Less current portion 5,002 5,005
- ---------------------------------------------------------------------------------
$17,298 $22,298
- ---------------------------------------------------------------------------------
</TABLE>
25
<PAGE> 27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CHARMING SHOPPES INC. AND SUBSIDIARIES
Year Ended January 28, 1995
The mortgages are collateralized by buildings with a net book value of
$8,926,000.
During the fiscal years ended January 28, 1995, January 29, 1994, and January
30, 1993, the Company made interest payments of $2,436,000, $2,688,000, and
$3,095,000, respectively.
The carrying amount of the Company's variable rate debt approximates its fair
value.
The fair value of the Company's $17,143,000 9.3% Note payable is estimated to
be $18,404,000 using discounted cash flow analysis based on an estimate of the
Company's current rate for similar borrowing arrangements.
Aggregate maturities of long-term debt during the next five fiscal years are:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
1996 $5,002
1997 6,025
1998 5,033
1999 5,042
2000 760
</TABLE>
STOCKHOLDERS' EQUITY
The Company's authorized capital consists of 1,000,000 shares of Series
Participating Preferred Stock, $1.00 par value, of which 300,000 shares of
Participating Series A Junior Preferred Stock, $1.00 par value have been
authorized; and 300,000,000 shares of Common Stock, $.10 par value.
STOCK OPTION AND STOCK INCENTIVE PLANS
The Company's 1993 Employee Stock Incentive Plan provides for the grant of
options to purchase up to 9,000,000 shares of common stock plus 9% of shares
issued by the Company after the effective date of the plan and any shares
available but unissued under the 1990 Plan described below. The form of the
grants and exercise price where applicable, are at the discretion of the Stock
Option Committee of the Board of Directors. As of January 28, 1995, 152,040
options were exercisable.
The Company's 1990 Employees' Stock Incentive Plan provides for the grant of
options to purchase common stock to key employees of the Company. The exercise
price of such options may not be less than the fair market value at the date
of the grant. As a result of the adoption of the 1993 Employees' Stock
Incentive Plan, the Company no longer intends to issue shares under this Plan.
As of January 28, 1995, 5,162,199 options were exercisable.
26
<PAGE> 28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CHARMING SHOPPES, INC. AND SUBSIDIARIES
Year Ended January 28, 1995
The Company's 1989 Non-Employee Director Stock Option Plan provides for the
grant of options to purchase up to 30,000 shares of common stock to each member
of the Board of Directors who are non-employees of the Company. The exercise
price of such options shall be equal to the fair market value of the stock on
the date that the option is granted. As of January 28, 1995, 90,000 options
were exercisable.
The Company's 1988 Key Employee Stock Option Plan provides for the grant of
options to purchase up to 3,000,000 shares of common stock to key employees of
the Company. The exercise price of options granted under this plan is $1.00
per share. As of January 28, 1995, 968,914 options were exercisable.
The table below summarizes the activity in all Stock Option Plans:
<TABLE>
<CAPTION>
Average Option
Option Option Prices
Shares Price Per Share
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at February 1, 1992 8,983,506 $ 3.824 $ 500 - 12.250
Granted 1,214,250 11.760 .500 - 18.563
Cancelled (158,432) 3.321 .500 - 13.500
Exercised (941,118) 4.317 .222 - 12.250
- ----------------------------------------------------------------------------------------------------
Outstanding at January 30, 1993 9,098,206 4.927 .222 -18.563
Granted 1,270,000 14.253 1.000 -18.875
Cancelled (327,224) 4.376 .500 -18.875
Exercised (356,472) 8.621 .222 -13.500
- ----------------------------------------------------------------------------------------------------
Outstanding at January 29, 1994 9,684,510 6.045 .222 -18.563
Granted 2,206,050 10.047 1.000 -13.250
Cancelled (188,518) 2.582 .500 -18.563
Exercised (203,741) 9.160 .222 -10.938
- ----------------------------------------------------------------------------------------------------
Outstanding at January 28, 1995 11,498,301 $ 6.818 $.222 -17.000
- ----------------------------------------------------------------------------------------------------
</TABLE>
At January 28, 1995, 6,004,425 shares were available for future grant under the
1988 Key Employee Stock Option, and the 1993 Employees' Stock Incentive plans.
The Company's Non-Employee Directors Restricted Stock Plan provides for a
one-time grant of 5,000 shares of restricted stock to each member of the Board
of Directors who are non-employees of the Company at the time of the inception
of this plan and a pro-rata grant to each non-employee Director who is elected
thereafter. Directors will pay no cash consideration for the restricted stock
granted to them. 40,000 shares of the Company's common stock have been
reserved for issuance under this plan of which 0, 3,250, and 4,084 shares were
issued during the fiscal years ended January 28, 1995, January 29, 1994, and
January 30, 1993, respectively.
The shares issued and options granted under the above plans are subject to
forfeiture if the employees do not remain in the employ of the Company for a
specified period of time, or, in the case of the 1989 Non-Employee Director
Stock Option Plan, if the individual ceased to remain a Director of the
Company.
27
<PAGE> 29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CHARMING SHOPPES, INC. AND SUBSIDIARIES
Year Ended January 28, 1995
EMPLOYEE STOCK PURCHASE PLAN
The 1994 Employee Stock Purchase Plan was approved by shareholders at the 1994
annual meeting. The Plan permits employees to purchase shares during each
three month offering period at a price equal to 85% of the market price of the
Company's common stock on either the first day of the offering period or the
fifth business day after the end of the offering period, whichever is lower.
The shares are purchased through the accumulation of payroll deductions up to
10% of each participating employee's compensation during such offering period.
2,000,000 shares have been reserved for grant under the plan, none of which
were purchased during fiscal 1995.
SHAREHOLDER RIGHTS PLAN
In April 1989, the Board of Directors adopted a Shareholder Rights Plan and
declared a dividend of one Right for each outstanding share of Common Stock.
In connection with the Company's two-for-one stock split which was effected on
December 7, 1992, the number of Rights associated with each outstanding share
of Common Stock was adjusted from one Right per share of Common Stock to
one-half of a Right per share of Common Stock. Such Rights only become
exercisable or transferable apart from the Common Stock, ten days after a
person or group (Acquiring Person) acquires beneficial ownership of, or
commences a tender or exchange offer for twenty percent (20%) or more of the
Company's outstanding common shares. Each Right then may be exercised to
acquire one three-hundredth of a share of newly created Series A Junior
Participating Preferred Stock or a combination of securities and assets of
equivalent value at a price of $70, subject to adjustment.
Upon the occurrence of certain events (for example, if the Company is a
surviving corporation in a merger with an Acquiring Person), the Rights entitle
holders other than the Acquiring Person to acquire Common Stock having a value
of twice the exercised price of the Rights, or, upon the occurrence of certain
other events (for example, if the Company is acquired in a merger or other
business combination transaction in which the Company is not the surviving
corporation), to acquire Common Stock of the Acquiring Person having a value
twice the exercise price of the Rights. The Rights may be redeemed by the
Company at $.01 per Right at any time until the tenth day following public
announcement that a twenty percent (20%) position has been acquired. The
Rights will expire on April 26, 1999.
EMPLOYEE RETIREMENT BENEFIT PLAN
The Company provides a comprehensive retirement benefit program for its
employees.
The Plan provides for a noncontributory profit sharing contribution which
covers substantially all full-time employees who meet age and service
requirements. The contribution is completely discretionary and is determined
by the Board of Directors on an annual basis. As of March 7, 1995 the
contribution for the plan year ended December 31, 1994 had not been approved by
the Board of Directors.
The Plan also provides an employee savings provision (401(k) plan) whereby
eligible participating employees may elect to contribute up to 15% of their
compensation to an investment trust. The Company contributes an amount equal
to 30% of the participant's elective contribution, up to 6% of the
participant's compensation.
The total expense for the above plan amounted to $3,394,241, $3,323,000, and
$3,039,000 for the years ended January 28, 1995, January 29, 1994, and January
30, 1993, respectively.
28
<PAGE> 30
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CHARMING SHOPPES, INC. AND SUBSIDIARIES
Year Ended January 28, 1995
ASSET SECURITIZATION
The Company securitizes and sells substantially all of its private label credit
card receivables in the public and private markets. These asset-backed
securities are generally credit-enhanced by a third party to provide a AAA
credit rating at the time of issuance. In each securitization, credit card
receivables were transferred to a trust which issued certificates representing
ownership interests in the trust to institutional investors. The Company has
retained a participation interest in the trust, reflecting the excess of the
total amount of receivables transferred to the trust over the portion
represented by certificates sold to investors. The retained participation
interests in the credit card trust was $30,680,000 and $20,210,000 at January
28, 1995 and January 29, 1994, respectively, and are included as available-
for-sale securities in the accompanying consolidated balance sheet. Although
the Company continues to service the underlying credit card accounts and
maintain the customer relationships, these transactions are treated as sales
for financial reporting purposes to the extent of the investors' interests in
the trusts. Accordingly, the associated credit card receivables are not
reflected on the balance sheet.
Due to the relatively short average life of credit card loans, no gain or loss
is recorded at the time of sale. Rather, loan servicing fees (credit card
interest income and fees in excess of interest paid to certificate holders,
credit losses and other expenses) are recognized monthly over the life of the
transaction when earned as a reduction of selling, general and administrative
expenses. Transaction expenses are deferred and amortized over the
reinvestment period of the transaction as a component of selling, general and
administrative expenses. The monthly pattern of recording loan servicing fees
is similar to the revenue recognition that the Company would have experienced
if the loans had not been securitized.
The Company is subject to certain recourse provisions in connection with these
securitizations. At January 28, 1995 and January 29, 1994, the Company had
reserves of $26,649,000 and $29,225,000, respectively, related to these
recourse provisions. At January 28, 1995 the Company had amounts receivable
from the credit card securitizations of $5.5 million which were subject to
liens in favor of the providers of the credit enhancement facilities for the
individual securitizations. The providers of the credit enhancements have no
other recourse to the Company. The Company does not receive collateral from
any party to the securitization, and the Company does not have any risk of
counterparty nonperformance.
The Company is active in originating private label credit card lines to the
customers of the Company's retail stores. Holders of credit cards issued by
the Company are located throughout the United States and have various available
lines of credit which are made on an unsecured basis after reviewing each
potential cardholder's credit application and evaluating their financial
history and ability to repay.
DERIVATIVE FINANCIAL INSTRUMENTS HELD FOR PURPOSES OTHER THAN TRADING
The Company enters into interest-rate swap and interest-rate cap agreements to
reduce the impact of increases in interest rates on the Company's floating rate
credit card securitizations. For interest-rate swap agreements the Company
agrees to exchange, on a monthly basis, the difference between fixed- and
floating-interest amounts calculated on an agreed-upon notional principal
amount. Because some of the Company's securitizations involve fixed-rate
credit cards which are funded by short-term floating-rate obligations,
interest-rate swaps in which the Corporation pays a fixed rate and receives a
floating rate are used to reduce the impact of changes in interest rates on the
Company's operations. As of January 28, 1995, $100 million of such "pay-fixed"
swaps were in effect. All of the Company's interest rate swaps mature in 1996.
The net amount payable or receivable from interest-rate swap agreements is
accrued as an adjustment to selling, general and administrative expenses.
The Company has entered into interest-rate cap agreements with an aggregate
notional amount of $370 million as of January 28, 1995, which mature as
follows: $100 million - 1995, $160 million - 1996, $100 million - 1997, $10
million - 1999. The agreements effectively entitle the Company to receive from
a bank the amount, if any, by which the interest rates on the Company's
floating-rate credit card securitizations exceed 9% for $200 million notional
amount, 10% for $160 million notional amount and 12% for $10 million notional
amount. The premiums paid for these interest-rate cap agreements are included
in other assets and are being amortized to selling, general and administrative
expense over the respective lives of the
29
<PAGE> 31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CHARMING SHOPPES, INC. AND SUBSIDIARIES
Year Ended January 28, 1995
individual interest-rate cap agreements. Any payments that may be received as
a result of the cap will be accrued as a reduction of selling, general and
administrative expense.
The Company's current credit exposure on swaps is limited to the value of
interest-rate swaps that have become favorable to the Company. At January 28,
1995 and January 29, 1994, the market value of interest-rate swaps was
$3,246,000 and $(657,000), respectively. The Company is exposed to credit loss
in the event of nonperformance by counterparties on interest-rate caps and
swaps but the Company does not anticipate nonperformance by any of these
counterparties. The amount of such exposure is generally the unrealized gains
in the contracts. The market value of interest rate caps as of January 28,
1995 and January 29, 1994 was $175,000 and $0, respectively. The market value
of interest rate swaps and caps was determined on the basis of valuation
pricing models which take into account current market and contractual prices of
the underlying instruments, as well as the time value, yield curve, and
volatility factors underlying the positions.
LEASES
The Company leases substantially all of its stores under noncancelable
operating lease agreements. Generally, these leases have initial periods of 5
to 20 years and contain provisions for renewal options, additional rentals
based on a percentage of sales and payment of certain real estate taxes.
In November 1991, the Company completed a sale and leaseback agreement for
$21.0 million of point-of-sale equipment. Under the terms of this agreement,
the Company has agreed to lease back this equipment under a three-year lease
with a two-year option for $4.0 million per year.
The Company also leases certain other buildings and equipment.
<TABLE>
<CAPTION>
Rental expense (in thousands) 1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Minimum rental $ 97,976 $82,425 $70,321
Contingent rental 14,302 12,413 11,332
- -----------------------------------------------------------------------------
Total rent expense $112,278 $94,838 $81,653
- -----------------------------------------------------------------------------
</TABLE>
Minimum annual rental commitments for all noncancelable leases for the next
five fiscal years and thereafter are:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
1996 $ 112,261
1997 107,059
1998 97,369
1999 84,785
2000 73,425
Thereafter 282,432
</TABLE>
30
<PAGE> 32
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
IN THOUSANDS EXCEPT PER SHARE AMOUNTS
------------------------------------------
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
---------------------------------------------------
<S> <C> <C> <C> <C>
FISCAL 1995
Net sales $297,611 $323,417 $306,283 $345,382
Gross profit 86,896 93,682 77,261 82,715
Income before cumulative effect of
accounting change 13,955 18,064 7,507 5,163
Income per share before cumulative
effect of accounting change .13 .17 .07 .05
Net income $ 13,955 $ 18,064 $ 7,507 $ 5,163
Net income per share .13 .17 .07 .05
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
---------------------------------------------------
<S> <C> <C> <C> <C>
FISCAL 1994
Net sales $275,299 $308,637 $313,000 $357,186
Gross profit 85,216 96,620 94,370 114,535
Income before cumulative effect of
accounting change 16,219 20,602 15,163 23,781
Income per share before cumulative
effect of accounting change .15 .19 .14 .22
Net income $ 20,210 $ 20,602 $ 15,163 $ 23,781
Net income per share .19 .19 .14 .22
</TABLE>
31
<PAGE> 33
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There are no matters which are required to be reported under this Item 9.
PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding Directors of the Company is set forth under the caption
"Election of Directors" of the Company's definitive proxy statement which is
incorporated herein by reference. Information regarding Executive Officers is
set forth herein under Item 4A. "Executive Officers of the Registrant," in
Part I hereof.
ITEM 11 EXECUTIVE COMPENSATION
Information regarding executive compensation is set forth under the captions
"Management Compensation" and "Report of the Compensation and Stock Option
Committees of the Board of Directors on Executive Compensation" of the
Company's definitive proxy statement which is incorporated herein by reference.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding the security ownership of certain beneficial owners and
management is set forth under the caption "Principal Shareholders and
Management Ownership" of the Company's definitive proxy statement which is
incorporated herein by reference.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related transactions is set
forth under the caption "Certain Relationships and Related Transactions" of the
Company's definitive proxy statement which is incorporated herein by reference.
32
<PAGE> 34
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) FINANCIAL STATEMENTS
The following Consolidated Financial Statements of Charming Shoppes, Inc. and
its subsidiaries are included in Part II, Item 8:
<TABLE>
<S> <C>
Report of independent auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Consolidated Balance Sheets - January 28, 1995 and January 29, 1994 . . . . . . . . . . . . . . . . . . . 16
Consolidated Statements of Income - years ended
January 28, 1995, January 29, 1994 and January 30, 1993 . . . . . . . . . . . . . . . . . . . . 17
Consolidated Statements of Cash Flows - years ended
January 28, 1995, January 29, 1994 and January 30, 1993 . . . . . . . . . . . . . . . . . . . 18
Consolidated Statements of ' Equity - years ended
January 28, 1995, January 29, 1994 and January 30, 1993 . . . . . . . . . . . . . . . . . . . . . 19
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
(a) (2) FINANCIAL STATEMENT SCHEDULES No schedules required to be filed
REPORTS ON FORM 8-K: No reports were filed during the quarter
ended January 28, 1995.
EXHIBITS, INCLUDING THOSE INCORPORATED BY REFERENCE
The following is a list of Exhibits filed as part of this annual report on Form
10-K. Where so indicated by footnote, Exhibits which were previously filed are
incorporated by reference. For Exhibits incorporated by reference, the
location of the Exhibit in the previous filing is indicated in parenthesis. If
page numbers are listed, they refer to the page numbers where such Exhibits are
located using the sequential numbering system specified by Rules 03 and 403:
33
<PAGE> 35
ARTICLES OF INCORPORATION AND BY-LAWS
3.1 Restated Articles of Incorporation incorporated by reference
to Form 10-K of the Registrant for the fiscal year ended
January 29 1994. (Exhibit 3.1)
3.2 By-Laws, as Amended and Restated incorporated by reference
to Form 10-K of the Registrant for the fiscal year ended
January 29, 1994. (Exhibit 3.2)
INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING INDENTURES
4.1 Shareholders' Rights Plan, incorporated by reference to
Form 8-K of the Registrant, filed May 23, 1989.
MATERIAL CONTRACTS
10.1.1 Note Agreement between the Registrant and various Insurance
Companies in the amount of $30,000,000 dated June 1, 1988
incorporated by reference to Form 10-K of the Registrant for
the fiscal year ended January 28, 1989. (Exhibit 10-1,
Pg. 63)
10.1.2 Sale and Purchase Agreement between Fashion Service Corp.
and BancOhio National Bank dated July 27, 1988 incorporated
by reference to Form 10-K of the Registrant for the fiscal
year ended January 28, 1989. (Exhibit 10-1, Pg. 96)
10.1.3 Receivables Purchase Agreement between Fashion Service Corp.
and Mellon Bank, N.A. dated April 4, 1989 incorporated by
reference to Form 10-K of the Registrant for the fiscal year
ended January 28, 1989 (Exhibit 10-1, Pg. 114)
10.1.4 Amended and Restated Receivables Purchase Agreement among
Spirit of America National Bank, as Seller, Fashion Service
Corp. and Charming Shoppes, Inc., as Guarantors, and Mellon
Bank, N.A., as Buyer, dated November 14, 1991, incorporated
by reference to Form 10-K of the Registrant for the fiscal
year ended February 1, 1992. (Exhibit 10-1, Pg. 38)
10.1.5 Participation Agreement between the Registrant, Charming
Shoppes of Delaware, Inc., and various financial services
companies for Lease Financing of Point-of-Sale Equipment
dated October 31, 1991, incorporated by reference to Form
10-K of the Registrant for the fiscal year ended February 1,
1992. (Exhibit 10-1, Pg. 161)
10.1.6 Agreement of Lease between Charming Shoppes of Delaware,
Inc., as Lessee and Mellon Financial Services Corporation as
Lessor dated October 31, 1991, incorporated by reference to
Form 10-K of the Registrant for the fiscal year ended
February 1, 1992. (Exhibit 10-1, Pg. 214)
10.1.7 Amended and Restated Pooling and Servicing Agreement dated
as of December 24, 1992, as amended and restated as of May
4, 1994, by and between Spirit of America National Bank, as
Seller and Servicer, and First Fidelity Bank, National
Association, as Trustee, incorporated by reference to Form
8-K of Spirit of America National Bank (No. 33-73884) dated
May 4, 1994. (Exhibit No. 4)
10.1.8 Series 1994-1 Supplement dated as of May 4, 1994 to Amended
and Restated Pooling and Servicing Agreement dated as of
December 24, 1992 and amended and restated as of May 4,
1994, by and between Spirit of America National Bank, as
Seller and Servicer, and First Fidelity Bank, National
Association, as Trustee, (for $200,000,000 Charming Shoppes
Master Trust Asset Backed Certificates Series 1994-1),
incorporated by reference to Form 8-K of Spirit of America
National Bank (No. 33-73884) dated May 4, 1994. (Exhibit No.
4)
34
<PAGE> 36
10.1.9 Receivables Purchase Agreement dated as of December 24,
1992, as amended and restated as of May 4, 1994, among First
Fidelity Bank, National Association, as Trustee for Charming
Shoppes Master Trust, as Seller, Fashion SPC, Inc., as
Subordinated Purchaser, Spirit of America National Bank, as
Owner and Servicer, Ciesco L.P., Corporate Asset Funding
Company, Inc., and Corporate Receivables Corporation, as
Purchasers and Citicorp North America, Inc., as Agent.
10.1.10 Parallel Purchase Commitment among Fidelity Bank, N.A., as
Trustee, Charming Shoppes Master Trust (formerly Spirit of
America Master Trust, as Seller, Fashion SPC, Inc., as
Subordinated Purchaser, Spirit of America National Bank, as
Owner and Servicer, Citibank, N.A., and Citicorp North
America, Inc., as Agent, dated December 24, 1992 and
incorporated by reference to Form 10-K of the registrant
for the fiscal year ended January 30, 1993.
(EXHIBIT 10-1, Pg. 404)
*10.1.11 Amendment Agreement dated September 20, 1993 to Parallel
Purchase Commitment dated December 24, 1992, by and among
First Fidelity Bank, National Association, in its capacity
as Trustee for Charming Shoppes Master Trust, as Seller,
Fashion SPC, Inc., as Subordinated Purchaser, Spirit of
America National Bank, as Owner, Citibank, N.A.
("Citibank"), Citicorp North America, Inc., as Agent for
Citibank, Charming Shoppes, Inc. and Fashion Service Corp.
(Reference in Exhibit 10.1.10), incorporated by reference to
Form 10-K of the Registrant for the fiscal year ended
January 29, 1994. (Exhibit 10.1.11)
10.1.12 Amendment No. 2 to the Receivables Purchase Agreement
(Parallel Purchase Agreement) and Company Agreement dated as
of May 4, 1994, among First Fidelity Bank, National
Association, as Trustee for Charming Shoppes Master Trust,
as Seller, Fashion SPC, Inc., as Subordinated Purchaser,
Spirit of America National Bank, as Owner and Servicer,
Citibank, N.A. ("Citibank") and Citicorp North America,
Inc., as Agent for Citibank, Charming Shoppes, Inc. and
Fashion Service Corp.
*10.1.13 Sale and Purchase Agreement between National City Bank,
Columbus, N.A. and Fashion Service Corp., dated September
30, 1993, incorporated by reference to Form 10-K of the
Registrant for the year ended January 29, 1994. (Exhibit
10.1.12)
10.1.14 Series 1994-2 Supplement dated as of August 15, 1994, to
Amended and Restated Pooling and Servicing Agreement, dated
as of December 24, 1992, as amended and restated as of May
4, 1994 (Exhibit 10.1.7) by and between Spirit of America
National Bank, as Seller and Servicer, and First Fidelity
Bank, National Association, as Trustee (for $14,000,000
Charming Shoppes Master Trust Asset Backed Certificates
Series 1994-2).
10.1.15 Amendment No. 1 to the Receivables Purchase Agreement dated
as of November 15, 1994, among First Fidelity Bank, National
Association, as Trustee for Charming Shoppes Master Trust,
as Seller, Fashion SPC, Inc., as Subordinated Purchaser,
Spirit of America National Bank, as Owner and Servicer,
CIESCO L.P., Corporate Asset Funding Company, Inc., and
Corporate Receivables Corporation, as Purchasers, Citicorp
North America, Inc., as Agent for the Purchasers, Charming
Shoppes, Inc. and Fashion Service Corp.
10.1.16 Amendment No. 3 to the Receivables Purchase Agreement
(Parallel Purchase Commitment) dated as of November 15,
1994, among First Fidelity Bank, National Association, as
Trustee for the Charming Shoppes Master Trust, as Seller,
Fashion SPC, Inc., as Subordinated Purchaser, Spirit of
America National Bank, as Owner and Servicer, Citibank, N.A.
("Citibank"), Citicorp North America, Inc., as Agent for
Citibank, Charming Shoppes, Inc. and Fashion Service Corp.
MANAGEMENT CONTRACTS AND COMPENSATORY PLANS AND ARRANGEMENTS
10.2.1 The 1986 Employees' Stock Option Plan of Charming Shoppes,
Inc., incorporated by reference to Form 10-K of the
Registrant for the fiscal year ended February 1, 1992.
(Exhibit 10.2.2, Pg. 240)
35
<PAGE> 37
10.2.2 The 1988 Key Employee Stock Option Plan of Charming Shoppes,
Inc., as amended, incorporated by reference to Form 10-K of
the Registrant for the fiscal year ended January 30, 1993.
(Exhibit 10.2.3, Pg. 486)
10.2.3 The 1990 Employees' Stock Incentive Plan of Charming
Shoppes, Inc., as amended, incorporated by reference to Form
10-K of the Registrant for the fiscal year ended January 30,
1993. (Exhibit 10.2.4, Pg. 492)
10.2.4 The 1989 Non-Employee Director Stock Option Plan of Charming
Shoppes, Inc., as amended, incorporated by reference to Form
10-K of the Registrant for the fiscal year ended January 30,
1993. (Exhibit 10.2.5, Pg. 499)
10.2.5 Non-Employee Director Restricted Stock Plan of Charming
Shoppes, Inc., as amended, incorporated by reference to Form
10-K of the Registrant for the fiscal year ended January 30,
1993. (Exhibit 10.2.6, Pg. 503)
10.2.6 Employment Agreement with Colin D. Stern, dated as of
October 3, 1989, incorporated by reference to Form 10-K of
the Registrant for the fiscal year ended February 1, 1992.
(EXHIBIT 10.2.12, Pg. 245)
10.2.7 Subplan and Summary Description of the Annual Incentive Plan
of Charming Shoppes, Inc., incorporated by reference to Form
10-K of the Registrant for the fiscal year ended February 1,
1992. (EXHIBIT 10.2.13, Pg. 251)
10.2.8 The 1993 Employees' Stock Incentive Plan of Charming
Shoppes, Inc., incorporated by reference to Form 10-K of the
Registrant for the fiscal year ended January 29, 1994.
(Exhibit 10.2.10)
10.2.9 The 1993 Employees' Stock Incentive Plan Stock Option
Agreement (regular vesting schedule) of Charming Shoppes,
Inc., incorporated by reference to Form 10-K of the
Registrant for the fiscal year ended January 29, 1994.
(Exhibit 10.2.11)
10.2.10 The 1993 Employees' Stock Incentive Plan Stock Option
Agreement (accelerated vesting schedule) of Charming
Shoppes, Inc., incorporated by reference to Form 10-K of the
Registrant for the fiscal year ended January 29, 1994.
(Exhibit 10.2.12)
OTHER EXHIBITS
Exhibit 21 - Subsidiaries of Registrant
Exhibit 23 - Consent of independent auditors
Exhibit 27 - Financial Data Schedule
*Portions of this Exhibit have been omitted and filed separately with the
Secretary of the Commission pursuant to the Registrant's Application Requesting
Confidential Treatment.
All other schedules are omitted because they are not applicable or not
required, or because the required information is included in the consolidated
financial statements or notes thereto.
36
<PAGE> 38
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Registration Statement (Form
S-8, No.33-56145) and Registration Statement (Form S-8, No. 33- 56147), dated
October 25, 1994, Registration Statement (Form S-8, No.33-39558), dated March
25, 1991, Registration Statement (Form S-8 No. 2- 92975) dated September 17,
1984 and Registration Statement (Form S-3, No. 33-00074) dated September 25,
1985 of our report dated March 7, 1995 with respect to the consolidated
financial statements and schedules of Charming Shoppes, Inc. included in this
Annual Report (Form 10-K) for the year ended January 28, 1995.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
April 13, 1995
<PAGE> 39
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Charming Shoppes, Inc., has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
CHARMING SHOPPES, INC.
S / David V. Wachs
----------------------------------
By: David V. Wachs
Chairman of the Board
(Chief Executive Officer)
Date: April 13, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
<TABLE>
<S> <C>
S / David V. Wachs S / Ivan Szeftel
------------------------------------------ ------------------------------------------
David V. Wachs, April 13, 1995 Ivan Szeftel, April 13, 1995
Chairman of the Board (Chief Financial Officer)
(Chief Executive Officer)
S / Philip Wachs S / Samuel Sidewater
------------------------------------------ ------------------------------------------
Philip Wachs, April 13, 1995 Samuel Sidewater, April 13, 1995
President and Director
Vice Chairman of the Board
(Chief Operating Officer)
S / Joseph L. Castle II S / Mordechay Kafry
------------------------------------------ ------------------------------------------
Joseph L. Castle II, April 13, 1995 Mordechay Kafry, April 13, 1995
Director Director
S / Eric Specter
------------------------------------------
Eric Specter, April 13, 1995
(Chief Accounting Officer)
</TABLE>
<PAGE> 40
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
10.1.9 Receivables Purchase Agreement dated as of December 24,
1992, as amended and restated as of May 4, 1994, among First
Fidelity Bank, National Association, as Trustee for Charming
Shoppes Master Trust, as Seller, Fashion SPC, Inc., as
Subordinated Purchaser, Spirit of America National Bank, as
Owner and Servicer, Ciesco L.P., Corporate Asset Funding
Company, Inc., and Corporate Receivables Corporation, as
Purchasers and Citicorp North America, Inc., as Agent.
10.1.12 Amendment No. 2 to the Receivables Purchase Agreement
(Parallel Purchase Agreement) and Company Agreement dated as
of May 4, 1994, among First Fidelity Bank, National
Association, as Trustee for Charming Shoppes Master Trust,
as Seller, Fashion SPC, Inc., as Subordinated Purchaser,
Spirit of America National Bank, as Owner and Servicer,
Citibank, N.A. ("Citibank") and Citicorp North America,
Inc., as Agent for Citibank, Charming Shoppes, Inc. and
Fashion Service Corp.
10.1.14 Series 1994-2 Supplement dated as of August 15, 1994, to
Amended and Restated Pooling and Servicing Agreement, dated
as of December 24, 1992, as amended and restated as of May
4, 1994 (Exhibit 10.1.7) by and between Spirit of America
National Bank, as Seller and Servicer, and First Fidelity
Bank, National Association, as Trustee (for $14,000,000
Charming Shoppes Master Trust Asset Backed Certificates
Series 1994-2).
10.1.15 Amendment No. 1 to the Receivables Purchase Agreement dated
as of November 15, 1994, among First Fidelity Bank, National
Association, as Trustee for Charming Shoppes Master Trust,
as Seller, Fashion SPC, Inc., as Subordinated Purchaser,
Spirit of America National Bank, as Owner and Servicer,
CIESCO L.P., Corporate Asset Funding Company, Inc., and
Corporate Receivables Corporation, as Purchasers, Citicorp
North America, Inc., as Agent for the Purchasers, Charming
Shoppes, Inc. and Fashion Service Corp.
10.1.16 Amendment No. 3 to the Receivables Purchase Agreement
(Parallel Purchase Commitment) dated as of November 15,
1994, among First Fidelity Bank, National Association, as
Trustee for the Charming Shoppes Master Trust, as Seller,
Fashion SPC, Inc., as Subordinated Purchaser, Spirit of
America National Bank, as Owner and Servicer, Citibank, N.A.
("Citibank"), Citicorp North America, Inc., as Agent for
Citibank, Charming Shoppes, Inc. and Fashion Service Corp.
21 Subsidiaries of Registrant
23 Consent of independent auditors
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 10.1.9
EXECUTION COPY
U.S. $250,000,000
RECEIVABLES PURCHASE AGREEMENT
Dated as of December 24, 1992,
As Amended and Restated
as of May 4, 1994,
Among
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
(formerly known as
First Fidelity Bank, N.A., Pennsylvania),
solely in its capacity as the trustee for
CHARMING SHOPPES MASTER TRUST
as the Seller
and
FASHION SPC, INC.
as the Subordinated Purchaser
and
SPIRIT OF AMERICA NATIONAL BANK
as the Owner and as the Servicer
and
CIESCO L.P.
CORPORATE ASSET FUNDING COMPANY, INC.
and
CORPORATE RECEIVABLES CORPORATION
as the Purchasers
and
CITICORP NORTH AMERICA, INC.
as the Agent
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.01. Purchase Facility . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.02. [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.03. Making Purchases . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.04. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.05. Payments and Computations, Etc. . . . . . . . . . . . . . . . . . . 5
SECTION 1.06. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 1.07. Additional Yield on Purchaser
Receivable Interests Bearing a
Eurodollar Rate; Breakage Fee . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
ALLOCATION AND DISTRIBUTION
OF COLLECTIONS
SECTION 2.01. General Allocation Procedures . . . . . . . . . . . . . . . . . . 7
SECTION 2.02. Allocation Among the Purchasers,
the Subordinated Purchaser and
the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.03. Allocation and Distribution of
Finance Charges . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.04. Allocation and Distribution of
Excess Finance Charge Collections . . . . . . . . . . . . . . . . 10
SECTION 2.05. Required Amount; Subordinated
Principal Collections; Charge-Offs . . . . . . . . . . . . . . . 11
SECTION 2.06. Allocation and Distribution of
Allocable Principal Collections . . . . . . . . . . . . . . . . . 12
SECTION 2.07. Dilution Amounts . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE III
REPRESENTATIONS AND WARRANTIES; COVENANTS;
EARLY AMORTIZATION EVENTS
SECTION 3.01. Representations and Warranties;
Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.02. Early Amortization Events . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV
INDEMNIFICATION; PURCHASE OF
INELIGIBLE RECEIVABLES
SECTION 4.01. Indemnities by the Owner . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.02. Indemnities by the Servicer . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 4.03. Purchase of Ineligible and
Certain Other Receivables . . . . . . . . . . . . . . . . . . 19
SECTION 4.04. Reassignment of Receivables
and Receivable Interests . . . . . . . . . . . . . . . . . . . 20
SECTION 4.05. Repurchase of Purchaser
Receivable Interests . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V
THE SERVICER
SECTION 5.01. Designation of the Servicer;
Delegation of Duties . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.02. Administration and Collection
of the Pool Receivables . . . . . . . . . . . . . . . . . . . 22
SECTION 5.03. Servicer Fee . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VI
THE PURCHASER REPRESENTATIVE
SECTION 6.01. Designation of the Purchaser
Representative . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 6.02. Duties of the Purchaser
Representative . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 6.03. Limitation on Purchaser
Representative Liability, Etc. . . . . . . . . . . . . . . . . 23
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Waivers, Etc . . . . . . . . . . . . . . . . . . 24
SECTION 7.02. Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.03. Assignability . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.04. Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . 27
SECTION 7.05. No Proceedings . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 7.06. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.07. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.08. Execution in Counterparts . . . . . . . . . . . . . . . . . . 29
SECTION 7.09. Survival of Termination . . . . . . . . . . . . . . . . . . . 29
SECTION 7.10. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.11. Duties of the Trustee . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.12. Limitation on Seller/Trustee
Liability, Etc. . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.13. Third Party Beneficiaries . . . . . . . . . . . . . . . . . . 31
SECTION 7.14. Limited Recourse . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.15. Limitation on Rights of Purchasers . . . . . . . . . . . . . 31
SECTION 7.16. Consent to Amended and Restated PSA . . . . . . . . . . . . . 32
SECTION 7.17. References to the RPA . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
ii
<PAGE> 4
EXHIBITS
<TABLE>
<S> <C>
Exhibit I Definitions
Exhibit II Conditions of Purchases
Exhibit III Representations and Warranties
Exhibit IV Covenants
Exhibit V Administration and Collection of Pool Receivables
Exhibit VI Early Amortization Events
ANNEXES
Annex A Form of Servicer Report
Annex B Form of Depositary Agreement
Annex C Form of Opinion of Counsel to the Trustee
Annex D-1 Form of Opinion of New York Counsel to the Owner,
the Subordinated Purchaser and the Servicer
Annex D-2 Form of Opinion of Special Regulatory Counsel to
the Owner and the Servicer
Annex D-3 Form of Opinion of Counsel to the Owner, the
Subordinated Purchaser and the Servicer
Annex E Form of Opinion of Counsel to the Companies
Annex F Form of Store Payment Notice
Annex G Form of Summary of Interest Rate Agreements
SCHEDULES
Schedule I Depositary Banks
</TABLE>
iii
<PAGE> 5
RECEIVABLES
PURCHASE AGREEMENT
Dated as of December 24, 1992,
as amended and restated
as of May 4, 1994
FIRST FIDELITY BANK, NATIONAL ASSOCIATION (formerly known as
First Fidelity Bank, N.A., Pennsylvania, and prior to that known as Fidelity
Bank, National Association) a national banking association, solely in its
capacity as the trustee (the "Trustee") for CHARMING SHOPPES MASTER TRUST
(formerly known as Spirit of America Master Trust), a trust formed pursuant to
the Pooling and Servicing Agreement (defined in Exhibit I hereto) (in such
capacity, the "Seller"), FASHION SPC, INC., a Delaware corporation (the
"Subordinated Purchaser"), SPIRIT OF AMERICA NATIONAL BANK, a national banking
association ("Spirit"), in its capacity as the originator or the owner (prior
to the sale thereof to the Seller pursuant to the Pooling and Servicing
Agreement) of the Accounts (defined in Exhibit I hereto) (in such capacity, the
"Owner") and in its capacity as the Servicer (in such capacity, the
"Servicer"), CIESCO L.P., a New York limited partnership, CORPORATE ASSET
FUNDING COMPANY, INC., a Delaware corporation, and CORPORATE RECEIVABLES
CORPORATION, a California corporation, and CITICORP NORTH AMERICA, INC., a
Delaware corporation ("CNAI"), as agent (the "Agent") for the Purchasers, agree
as follows:
PRELIMINARY STATEMENTS. (1) Certain terms that are
capitalized and used throughout this Agreement are defined in Exhibit I to this
Agreement. References in the Exhibits to "the Agreement" refer to this
Agreement, as amended, restated, modified or supplemented from time to time.
(2) Spirit is the owner of certain revolving credit card
accounts and expects to become the owner of certain additional credit card
accounts from time to time (collectively defined as the "Accounts" in Exhibit I
to this Agreement).
(3) Pursuant to the Pooling and Servicing Agreement, Spirit
has sold to the Seller an ownership interest in all amounts shown on its
records as billed to the Obligor on any Account from time to time in respect of
purchases of merchandise or services, including, without limitation, finance
charges and fees payable thereon, all Insurance Proceeds relating thereto, all
rights, remedies, powers and privileges with respect thereto, and all proceeds
thereof (collectively, the "Receivables"), and Spirit has been appointed and
agreed to act as the servicer under the Pooling and Servicing Agreement.
(4) Pursuant to the Pooling and Servicing Agreement and
certain related agreements, the Seller may, among other things, sell undivided
ownership interests in the Receivables
<PAGE> 6
(referred to herein as "Receivable Interests") to various purchasers and may
sell certificates of beneficial interest in the Receivables in the Trust to
various investors.
(5) The Subordinated Purchaser and the Purchasers are
prepared to purchase the Receivable Interests on the terms set forth herein.
(6) Pursuant to the Pooling and Servicing Agreement, a
portion of all Collections of the Receivable Interests and all Loss Amounts
with respect thereto will be allocated to the Purchase Interests based on the
Allocation Percentage.
(7) Spirit has been requested and is prepared to act as the
Servicer hereunder.
(8) This Agreement is one of the "Receivables Purchase
Agreements" referred to in the Pooling and Servicing Agreement.
(9) Notwithstanding anything to the contrary in this
Agreement, the Agent, the Purchasers and the Subordinated Purchaser hereby
acknowledge that their rights and remedies hereunder, and the rights and
remedies of their respective assignees under this Agreement, may be subject to
the limitations set forth in the Pooling and Servicing Agreement. To the
extent that any provision in this Agreement or in any certificate or document
delivered in connection with this Agreement is inconsistent with any provision
under the Pooling and Servicing Agreement, or in any circumstance in which it
is unclear whether this Agreement or the Pooling and Servicing Agreement shall
control, the provisions contained in the Pooling and Servicing Agreement shall
control, except that with respect to any such inconsistency between any such
provision and Section 2 of this Agreement (including the defined terms used in
such Section 2), this Agreement shall control.
(10) The Purchasers acknowledge that the purchase of the
Receivable Interests shall not include the right to sell the Owner's customer
lists, the right to use the Owner's customer lists for any purpose other than a
purpose expressly set forth in this Agreement, or the right to use any
trademarks of the Seller, the Owner or the Servicer or any of their respective
Affiliates.
(11) The Owner, the Servicer and the Trustee entered into
that certain Pooling and Servicing Agreement dated as of December 24, 1992 (the
"Original PSA"), and the parties hereto entered into that certain Receivables
Purchase Agreement dated as of December 24, 1992, as amended by Amendment No. 1
dated as of September 20, 1993 (the "Original RPA"). In connection with the
amendment and restatement of the Original PSA, the parties hereto desire to
amend and restate the Original RPA.
2
<PAGE> 7
Accordingly, the Original RPA is hereby amended and restated
in its entirety as follows, effective as of the Effective Date, and the parties
agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.01. Purchase Facility.
(a) On the terms and conditions hereinafter set forth, a
Purchaser may, in its sole discretion, purchase Purchaser Receivable Interests
from the Seller from time to time during the period from the date hereof to the
Facility Termination Date. Under no circumstances shall any Purchaser make any
such purchase on any date if after giving effect to such purchase the aggregate
outstanding Purchaser Capital, together with the aggregate outstanding
"Purchaser Capital" of "Purchaser Receivable Interests" under the Parallel
Purchase Commitment, would exceed the Purchase Limit on such date.
(b) The Subordinated Purchaser shall, on the date of each
purchase of Purchaser Receivable Interests by the Purchasers hereunder,
purchase Subordinated Receivable Interests in the amount determined pursuant to
paragraph 3 of Exhibit II hereto.
(c) The Seller may, upon at least six months' prior notice to
the Agent, terminate in whole or, from time to time, reduce in part the unused
portion of the Purchase Limit; provided that each partial reduction shall be in
the amount of at least $1,000,000 or an integral multiple thereof; and
provided, further, that any termination or partial reduction shall only be
effective after December 24, 1993.
SECTION 1.02. [Intentionally Omitted]
SECTION 1.03. Making Purchases.
(a) Each offer by the Seller to sell Purchaser Receivable
Interests to the Purchasers hereunder shall be made, by written notice from the
Seller to the Agent and the Subordinated Purchaser, at least three Business
Days' prior to the date of the proposed sale. Each such notice of an offer to
sell Purchaser Receivable Interests on a Distribution Date shall specify (i)
the amount requested to be paid to the Seller (such amount, which shall not be
less than $1,000,000, being referred to herein as the initial "Purchaser
Capital" of the Purchaser Receivable Interest then being sold) and (ii) the
proposed date of such purchase (which, in the case of the initial purchase,
shall be a Business Day and in the case of each subsequent purchase, shall be a
Distribution Date). The Agent shall promptly thereafter notify the Seller
whether Ciesco, CAFCO
3
<PAGE> 8
and/or CRC, or any of them, has determined that it may make a purchase and, if
so, whether all of the terms specified by the Seller are acceptable to the
Purchasers and, if such terms are acceptable, which Purchaser or Purchasers may
make such purchase.
(b) On the date of each purchase of a Purchaser Receivable
Interest by one or more Purchasers, the Purchaser(s) making such purchase
shall, upon satisfaction of the applicable conditions set forth in Exhibit II
hereto, make available to the Seller in same day funds, by deposit to the
Seller Account no later than 12:00 Noon (New York City time), an amount equal
to the initial Purchaser Capital of such Purchaser Receivable Interest.
(c) Effective on the date of each purchase by one or more
Purchasers pursuant to this Section 1.03 and each reinvestment on behalf of one
or more Purchasers pursuant to Section 2.06(a) hereof, the Seller hereby sells
and assigns to the Agent, for the ratable benefit of the Purchaser(s) making
such purchase or reinvestment, an undivided percentage ownership interest, to
the extent of the Purchaser Receivable Interest then being purchased, in each
Pool Receivable then existing or thereafter arising and in the Collections with
respect thereto.
(d) On the date of each purchase by the Purchasers pursuant
to Section 1.03(a) above, the Subordinated Purchaser shall make available to
the Seller in same day funds, by deposit to the Seller Account no later than
12:00 Noon (New York City time), an amount equal to the amount required under
paragraph 3 of Exhibit II hereto (such amount being referred to herein as the
initial "Subordinated Purchaser Capital" of the Subordinated Receivable
Interest then being purchased). Effective on the date of each such payment and
each reinvestment on behalf of the Subordinated Purchaser pursuant to Section
2.06(a) hereof, the Seller hereby sells and assigns to the Subordinated
Purchaser a subordinated (to the extent set forth in Article II hereof)
undivided percentage ownership interest, to the extent of the Subordinated
Receivable Interest then being purchased, in each Pool Receivable then existing
or thereafter arising and in the Collections with respect thereto.
SECTION 1.04. Fees. The fees set forth in the separate fee
agreement of even date among the Seller, the Owner, and the Agent, as amended
or restated from time to time (the "Fee Letter") shall be payable to the Agent
and the Purchasers in the amounts and on the dates set forth therein, subject
to the allocation and priority of distribution of such Collections set forth in
Article II hereof.
4
<PAGE> 9
SECTION 1.05. Payments and Computations, Etc.
(a) All amounts to be paid or deposited by the Seller or the
Servicer hereunder shall be paid or deposited no later than 11:00 A.M. (New
York City time) on the day when due in same day funds to the Agent's Account.
(b) The Owner (with respect to payments or deposits to be
paid by the Seller) and the Servicer (with respect to payments or deposits to
be paid by the Servicer) shall, to the extent permitted by law, pay or cause to
be paid interest on any amount not paid or deposited by the Seller or the
Servicer when due hereunder (without regard to any applicable grace period
before such missed payment or deposit gives rise to an Early Amortization Event
hereunder), at an interest rate per annum equal to 2.0% per annum above the
Alternate Base Rate, payable on demand.
(c) All computations of interest under subsection (b) above
and all computations of Yield, fees, and other amounts hereunder shall be made
on the basis of a year of 360 days for the actual number of days elapsed.
Whenever any payment or deposit to be made hereunder shall be due on a day
other than a Business Day, such payment or deposit shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of such payment or deposit.
SECTION 1.06. Increased Costs.
(a) If CNAI, any Purchaser, any entity which enters into a
commitment to purchase Purchaser Receivable Interests or interests therein, or
any of their respective Affiliates (each an "Affected Person") determines that
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force
of law) affects or would affect the amount of capital required or expected to
be maintained by such Affected Person and such Affected Person determines that
the amount of such capital is increased by or based upon the existence of any
commitment to make purchases of or otherwise to maintain the investment in Pool
Receivables or interests therein related to this Agreement or to the funding
thereof and other commitments of the same type, then, upon demand by such
Affected Person (with a copy to the Agent), the Owner shall immediately pay, or
cause to be paid, to the Agent, for the account of such Affected Person (as a
third-party beneficiary), from time to time as specified by such Affected
Person, additional amounts sufficient to compensate such Affected Person in the
light of such circumstances, to the extent that such Affected Person reasonably
determines such increase in capital to be allocable to the existence of any of
such commitments. A certificate as to such amounts submitted to the Seller,
the Owner, the Servicer and the Agent by such Affected
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Person shall be conclusive and binding for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve requirements
referred to in Section 1.07) in or in the interpretation of any law or
regulation or (ii) compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to a Purchaser of agreeing to purchase
or purchasing, or maintaining the ownership of Purchaser Receivable Interests
in respect of which Yield is computed by reference to the Eurodollar Rate,
then, upon demand by such Purchaser (with a copy to the Agent), the Owner shall
immediately pay, or cause to be paid, to the Agent, for the account of such
Purchaser (as a third-party beneficiary), from time to time as specified by
such Purchaser, additional amounts sufficient to compensate such Purchaser for
such increased costs. A certificate as to such amounts submitted to the
Seller, the Owner, the Servicer and the Agent by such Purchaser shall be
conclusive and binding for all purposes, absent manifest error.
SECTION 1.07. Additional Yield on Purchaser Receivable
Interests Bearing a Eurodollar Rate; Breakage Fee.
(a) The Owner shall pay, or cause to be paid, to any
Purchaser, so long as such Purchaser shall be required under regulations of the
Board of Governors of the Federal Reserve System to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional Yield on the unpaid Purchaser Capital of each Purchaser
Receivable Interest of such Purchaser during each Fixed Period in respect of
which Yield is computed by reference to the Eurodollar Rate, for such Fixed
Period, at a rate per annum equal at all times during such Fixed Period to the
remainder obtained by subtracting (i) the Eurodollar Rate for such Fixed Period
from (ii) the rate obtained by dividing such Eurodollar Rate referred to in
clause (i) above by that percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage of such Purchaser for such Fixed Period, payable on the next
succeeding date on which Yield is payable on such Purchaser Receivable
Interest. Such additional Yield shall be determined by such Purchaser and
notified to the Seller, the Owner and the Servicer through the Agent within 30
days after any Yield payment is made with respect to which such additional
Yield is requested. A certificate as to such additional Yield submitted to the
Seller, the Owner and the Servicer and the Agent by such Purchaser shall be
conclusive and binding for all purposes, absent manifest error.
(b) If (i) any payment of Purchaser Capital with respect to a
Purchaser Receivable Interest as to which Yield is computed by reference to the
Eurodollar Rate is made by the Seller to or for the account of any Purchaser(s)
other than on
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the last day of the Fixed Period for such Purchaser Receivable Interest, as a
result of a payment pursuant to Section 4.03, or for any other reason, or (ii)
the Termination Date shall occur during any Fixed Period, the Owner shall, upon
demand by such Purchaser (with a copy to the Seller, the Servicer and the
Agent), immediately pay, or cause to be paid, to the Agent for the account of
such Purchaser (as a third-party beneficiary) any amounts required to
compensate such Purchaser for any additional losses, costs or expenses which it
may reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits), costs or expenses
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by such Purchaser to fund or maintain its interest in such
Purchaser Receivable Interest. A certificate as to such amounts submitted to
the Seller, the Servicer, the Owner and the Agent by such Purchaser shall be
conclusive and binding for all purposes, absent manifest error.
ARTICLE II
ALLOCATION AND DISTRIBUTION
OF COLLECTIONS
SECTION 2.01. General Allocation Procedures. Pursuant to
the Pooling and Servicing Agreement, the Servicer will allocate to the Purchase
Interests arising under this Agreement a portion of all Collections of Pool
Receivables and all Loss Amounts for each Due Period, based on the Allocation
Percentage. Collections of Pool Receivables and Loss Amounts which have been
so allocated to the Purchase Interests arising under this Agreement shall be
allocated and distributed or reallocated among the Purchasers, the Subordinated
Purchaser and the Seller as set forth in this Article II.
SECTION 2.02. Allocation Among the Purchasers, the Subordinated Purchaser
and the Seller.
(a) The Servicer shall, on each day on which Collections of
Pool Receivables are received by it which are allocated to the Purchase
Interests arising under this Agreement, hold such Collections in trust for the
Purchasers, the Subordinated Purchaser and the Seller (and shall, at the
request of the Agent at any time following an Early Amortization Event,
segregate and deposit Collections allocable to the Purchasers and the
Subordinated Purchaser pursuant to this Section 2.02 into the Collection
Account within one Business Day after receipt thereof and deposit or cause such
Collections to be deposited into the Agent's Account within 1 Business Day of
deposit into the Collection Account), and shall allocate such amounts, during
each Due Period, as follows:
(i) during the Revolving Period and the Amortization
Period, Allocable Finance Charge Collections
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will be allocated to the Purchasers and the Subordinated Purchaser
jointly based on the Floating Allocation Percentage for such Due
Period;
(ii) during the Revolving Period and the Amortization
Period, Allocated Loss Amounts will be allocated to the Purchasers and
the Subordinated Purchaser jointly based on the Floating Allocation
Percentage for such Due Period;
(iii) during the Revolving Period, Allocable
Principal Collections will be allocated to the Purchasers and the
Subordinated Purchaser jointly based on the Floating Allocation
Percentage for such Due Period and the Servicer shall, on behalf of the
Purchasers and the Subordinated Purchaser which own such Purchase
Interests, have the proceeds of the Allocable Principal Collections
attributable to such Purchase Interests automatically reinvested in
additional undivided percentage interests in the Pool Receivables
pursuant to Section 2.06(a) below;
(iv) during the Amortization Period, Allocable
Principal Collections will be allocated to the Purchasers and the
Subordinated Purchaser jointly based on the Fixed Allocation Percentage
for such Due Period; and
(v) notwithstanding the occurrence of the Final
Distribution Date or the termination of the Trust under the Pooling and
Servicing Agreement, the Purchasers shall be entitled to receive all
amounts constituting the Allocation Percentage of Recoveries of Pool
Receivables up to the amount of the unreimbursed Purchaser Charge-Offs
on such date.
(b) Amounts not allocated to the Purchasers and the
Subordinated Purchaser jointly as described above will be allocated to the
Seller Interest and deposited into the Seller Account. Amounts allocated under
subsection (a)(iii) and (a)(iv) above for any Due Period are referred to as the
"Total Principal Collections" for such Due Period.
SECTION 2.03. Allocation and Distribution of Finance
Charges. (a) On each Distribution Date, the Servicer will allocate all
Allocable Finance Charge Collections for the immediately preceding Due Period
held by it for the Purchasers and the Subordinated Purchaser jointly pursuant
to Section 2.02 above to the Purchasers and the Subordinated Purchaser pro rata
based on their relative Capital as of the end of the second preceding Due
Period.
(b) On each Distribution Date, the Servicer shall further
allocate and distribute Allocable Finance Charge
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Collections allocated to the Purchasers pursuant to Section 2.03(a) in the
following priority:
(i) first, an amount equal to the accrued but unpaid
Yield to such Distribution Date with respect to such Receivable
Interest plus any additional interest with respect to Yield that was
due with respect to such Purchaser Receivable Interest but not paid on
a prior Distribution Date will be deposited into the Agent's Account on
behalf of the Purchasers owning such Purchaser Receivable Interest;
(ii) second, an amount equal to any accrued but
unpaid amounts, fees and expenses (including amounts payable under the
Fee Letter and (if the Agent shall notify the Servicer at least two
Business Days prior to such Distribution Date) payments under Sections
1.06, 1.07, 4.01,4.02, 4.03 and 7.04 of this Agreement) due and payable
under this Agreement with respect to such Receivable Interest will be
deposited into the Agent's Account, for the Agent's own account or on
behalf of the Purchasers owning such Purchaser Receivable Interest, as
the case may be;
(iii) third, an amount equal to the Purchaser Loss
Amount for such Distribution Date shall be allocated and distributed,
in accordance with the provisions of Section 2.06 hereof, in the same
manner as Available Principal Collections for such Distribution Date;
(iv) fourth, if the Servicer is neither Spirit nor an
Affiliate of Spirit, an amount equal to the Purchaser Servicer Fee for
such Distribution Date will be paid to the Servicer; and
(v) fifth, the balance, if any, will constitute a
portion of the Excess Finance Charge Collections for such Distribution
Date and will be allocated as set forth in Section 2.04 hereof.
(c) Upon receipt of funds deposited into the Agent's
Account pursuant to subsection (b) above, the Agent will distribute such funds
to the relevant Purchasers or retain such funds for its own account, as the
case may be.
(d) On each Distribution Date, the Servicer shall further
allocate and distribute Allocable Finance Charge Collections allocated to the
Subordinated Purchaser pursuant to Section 2.03(a) in the following priority:
(i) first, if the Servicer is neither Spirit nor an
Affiliate of Spirit, an amount equal to the Subordinated Purchaser
Servicer Fee for such Distribution Date will be paid to the Servicer;
and
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(ii) second, the balance, if any, will constitute a
portion of Excess Finance Charge Collections for such Distribution Date
and will be allocated and distributed as set forth in Section 2.04
hereof.
SECTION 2.04. Allocation and Distribution of Excess Finance
Charge Collections. On each Distribution Date, the Servicer will allocate and
distribute all amounts, if any, specified pursuant to Section 2.03(b)(v) and
Section 2.03(d)(ii) (the "Excess Finance Charge Collections" for such
Distribution Date), in the following priority:
(a) first, an amount equal to the Required Amount, if any,
with respect to such Due Period will be deposited into the Agent's Account, and
upon receipt of such funds, the Agent shall apply such funds to the Required
Amount, in the order set forth in Section 2.05(a) hereof;
(b) second, an amount equal to the aggregate amount of
Purchaser Charge-Offs which have not been previously reimbursed will be
allocated and distributed, in accordance with the provisions of Section 2.06
hereof, in the same manner as, Available Principal Collections for such
Distribution Date;
(c) third, an amount equal to the Subordinated Purchaser Loss
Amount for such Distribution Date will be allocated and distributed, in
accordance with the provisions of Section 2.06 hereof, in the same manner as
Available Principal Collections for such Distribution Date;
(d) fourth, if the Servicer is Spirit or an Affiliate of
Spirit, an amount equal to the sum of the Purchaser Servicer Fee and the
Subordinated Purchaser Servicer Fee for such Distribution Date will be
allocated and paid to the Servicer;
(e) fifth, an amount equal to the aggregate amount by which
the Subordinated Purchaser Capital has been reduced pursuant to clauses (c),
(d) and (e) of the definition of "Subordinated Purchaser Capital" (but not in
excess of the aggregate amount of such reductions which have not been
previously reimbursed) will be allocated and distributed, in accordance with
the provisions of Section 2.06 hereof, in the same manner as Available
Principal Collections for such Distribution Date;
(f) sixth, an amount equal to the Subordinated Purchaser
Yield will be allocated and deposited into the Subordinated Purchaser Account;
and
(g) seventh, the balance, if any, will be allocated to the
Seller Interest and deposited into the Seller Account.
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SECTION 2.05. Required Amount; Subordinated Principal
Collections; Charge-Offs. (a) On the second Business Day preceding each
Distribution Date, the Servicer will determine the amount (the "Required
Amount"), if any, by which:
(i) the sum of:
(A) the accrued but unpaid Yield to such
Distribution Date,
(B) any additional interest with respect
to Yield that was due but not paid on
a prior Distribution Date,
(C) the amount of any accrued but unpaid
amounts, fees or expenses due and
payable to the Purchasers or the
Agent under this Agreement (including
amounts payable under the Fee Letter
and (if the Agent shall have notified
the Servicerat least two Business
Days prior to such Distribution Date)
payments under Sections 1.06, 1.07,
4.01, 4.02, 4.03 and 7.04 of this
Agreement) accrued to such
Distribution Date,
(D) the Purchaser Loss Amount for the
related Due Period, and
(E) if Spirit or an Affiliate of Spirit
is no longer the Servicer, the
Purchaser Servicer Fee accrued to
such Distribution Date;
exceeds:
(ii) the product of:
(A) Allocated Finance Charges, and
(B) the Purchaser Percentage.
The Servicer will give the Agent notice of the Required Amount on each such
determination date on which the Servicer determines that the Required Amount is
greater than zero.
(b) If the Required Amount is greater than zero, Excess
Finance Charge Collections for the related Distribution Date will be allocated
to and used to fund the Required Amount with respect to such Distribution Date
pursuant to Section 2.04(a) hereof.
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(c) If Excess Finance Charge Collections with respect to such
Distribution Date are less than the Required Amount, an amount up to the amount
of the Subordinated Principal Collections for such Distribution Date will be
allocated to and used to fund the remaining Required Amount. The Subordinated
Purchaser Capital, if any, will be reduced by the amount of Subordinated
Principal Collections allocated to fund the Required Amount. In the event that
such reduction would cause the Subordinated Purchaser Capital to be a negative
number, the Subordinated Purchaser Capital will be reduced to zero, and the
Purchaser Capital will be reduced by the amount by which the Subordinated
Purchaser Capital would have been reduced below zero (but not by more than the
Purchaser Loss Amount for such Due Period).
(d) If Subordinated Principal Collections with respect to any
Due Period are insufficient to fund the remaining Required Amount for such Due
Period, then a portion of the Subordinated Purchaser Capital, if any, equal to
such insufficiency (but not in excess of the Purchaser Loss Amount for such Due
Period) will be allocated and distributed to the Purchasers and the
Subordinated Purchaser Capital will be reduced by the amount so allocated and
distributed. In the event that such reduction would cause the Subordinated
Purchaser Capital to be a negative number, the Subordinated Purchaser Capital
will be reduced to zero, and the Purchaser Capital will be reduced by the
amount by which the Subordinated Purchaser Capital would have been reduced
below zero (but not by more than the Purchaser Loss Amount for such Due Period)
and such amount will be treated as a Purchaser Charge-Off.
(e) Such reductions of the Subordinated Purchaser Capital
shall thereafter be reimbursed and the Subordinated Purchaser Capital increased
(but not by an amount in excess of the aggregate reductions of the Subordinated
Purchaser Capital) on each Distribution Date by the amount of Excess Finance
Charge Collections for such Distribution Date allocated and available for that
purpose pursuant to Section 2.04(e) hereof.
(f) Purchaser Charge-Offs shall thereafter be reimbursed and
the Purchaser Capital increased (but not by an amount in excess of the
aggregate Purchaser Charge-Offs) on any Distribution Date by the amount of
Excess Finance Charge Collections allocated and available for that purpose
pursuant to Section 2.04(b) hereof.
SECTION 2.06. Allocation and Distribution of Allocable
Principal Collections. (a) On each day during the Revolving Period on which
Collections of Pool Receivables are received by it, the Servicer will allocate
Total Principal Collections to the Purchasers and the Subordinated Purchaser
pro rata based on their relative Capital as of the end of the immediately
preceding Due Period. The Servicer shall, on each day during the Revolving
Period on which Total Principal
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Collections are allocated pursuant to the preceding sentence, unless the
Servicer shall then have knowledge that any of the conditions precedent set
forth in paragraph 2 of Exhibit II hereto has not been satisfied, reinvest with
the Seller, on behalf of the Purchasers and the Subordinated Purchaser,
respectively, in additional undivided percentage interests in the Pool
Receivables, the amount of the Total Principal Collections so allocated to the
Purchasers and the Subordinated Purchaser, as the case may be; provided,
however, that such reinvestment shall be effected in a manner such that the
Purchaser Capital and the Subordinated Purchaser Capital immediately following
such reinvestment are equal to the Purchaser Capital and the Subordinated
Purchaser Capital immediately prior to the allocation of Total Principal
Collections on such day pursuant to the first sentence of this Section 2.06(a).
(b) On each Distribution Date with respect to the
Amortization Period, the portion of the Total Principal Collections received by
the Servicer during the preceding Due Period not used to fund any portion of
the Required Amount pursuant to Section 2.05(c) hereof (the "Available
Principal Collections") will be allocated and distributed by the Servicer in
the following priority:
(i) if the Partial Amortization Date shall have
occurred but the Termination Date shall not yet have occurred,
(A) first, such Available Principal Collections
will be allocated to the Purchaser Receivable Interests and deposited
into the Agent's Account until Purchaser Capital for such Distribution
Date shall have been reduced to $100,000,000; upon receipt of such
funds, the Agent shall distribute such funds to the Purchasers;
(B) second, the balance of such Available
Principal Collections will be allocated to the Subordinated Purchaser
Receivable Interests and deposited into the Subordinated Purchaser
Account, until Subordinated Purchaser Capital for such Distribution
Date shall have been reduced to $9,890,110; and
(C) third, the balance, if any, shall be
allocated and distributed in accordance with the provisions of Section
2.06(a) hereof, as if such balance constituted Total Principal
Collections received by the Servicer on a day during the Revolving
Period and (for the purposes of the allocation in the first sentence of
Section 2.06(a) and the proviso at the end of Section 2.06(a)) as if
the Purchaser Capital and the Subordinated Purchaser Capital on the
relevant dates had been $100,000,000 and $9,890,110, respectively; or
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(ii) if the Termination Date shall have occurred,
(A) first, such Available Principal Collections
will be allocated to the Purchaser Receivables Interests and deposited
into the Agent's Account, until Purchaser Capital for such Distribution
Date shall have been reduced to zero; upon receipt of such funds, the
Agent shall distribute such funds to the Purchasers;
(B) second, the balance of such Available
Principal Collections will be allocated to the Subordinated Purchaser
Receivable Interests and deposited into the Subordinated Purchaser
Account, until Subordinated Purchaser Capital for such Distribution
Date shall have been reduced to zero; and
(C) third, the balance, if any, will be allocated
to the Seller Interest and deposited into the Seller Account.
SECTION 2.07. Dilution Amounts. (a) On the last day of
each Due Period, the aggregate amount of Principal Receivables used to
calculate the Seller Interest will be reduced by an amount equal to the Series
Dilution Amount for this Series (as defined in the Pooling and Servicing
Agreement) (such reduction to be in addition to the reductions required by
Section 4.3(d) of the Pooling and Servicing Agreement). If such reduction (by
an amount equal to the Series Dilution Amount for this Series) would cause the
Seller Interest to be less than the difference between the Aggregate Minimum
Seller Interest (as defined in the Pooling and Servicing Agreement) and the
Minimum Seller Capital (the amount by which the Seller Interest is reduced
below such amount is referred to herein as the "Series Dilution Deficit"), then
the Owner shall promptly, but in no event later than 10 Business Days after
such last day, either (i) deposit into the Agent's Account in immediately
available funds an amount equal to such Series Dilution Deficit, which deposit
shall be treated as Allocable Principal Collections with respect to such Due
Period and shall be applied in accordance with this Article II, or (ii) convey
Principal Receivables arising in Additional Accounts to the Trust in an
aggregate amount at least equal to such Series Dilution Deficit; provided, that
if any Certificate Series is outstanding and the Owner shall fail to either
deposit the Series Dilution Deficit into the Agent's Account or convey
Principal Receivables arising in Additional Accounts in an aggregate amount at
least equal to such Series Dilution Deficit with respect to any Due Period
within ten days after the Owner shall be required to make such a deposit or
conveyance, then (i) the Subordinated Purchaser Capital will be reduced by an
amount equal to the lesser of such Series Dilution Deficit and the Subordinated
Purchaser Capital and (ii) the positive difference, if any, between the Series
Dilution Deficit and the Subordinated Purchaser Capital will be
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treated as a Purchaser Charge-Off and the Purchaser Capital will be reduced by
such amount.
(b) If the Pool Receivables shall include any Discount
Option Receivables on any date when the Owner is required, pursuant to Section
2.07(a) of this Agreement, to deposit any amount into the Agent's Account or to
convey Principal Receivables to the Trust, the Owner shall on such date make an
additional deposit into the Agent's Account or convey Principal Receivables
arising in Additional Accounts to the Trust, in each case in an amount equal to
the difference between (i) the amount the Owner would have been required to
deposit or convey on such date pursuant to Section 2.07(a) if none of the Pool
Receivables had been Discount Option Receivables, minus (ii) the amount
actually deposited or conveyed by the Owner on such date pursuant to Section
2.07(a).
ARTICLE III
REPRESENTATIONS AND WARRANTIES; COVENANTS;
EARLY AMORTIZATION EVENTS
SECTION 3.01. Representations and Warranties; Covenants. (a)
Each of the Trustee, the Subordinated Purchaser, the Owner and the Servicer
hereby makes the representations and warranties set forth for such party in
Exhibit III hereto.
(b) Each of the Trustee, the Subordinated Purchaser, the
Owner and the Servicer hereby agrees to perform and observe the covenants set
forth for such party in Exhibit IV hereto.
(c) In addition, the Servicer hereby agrees to perform and
observe the covenants set forth in Exhibit V hereto.
SECTION 3.02. Early Amortization Events. If any of the Early
Amortization Events set forth in Exhibit VI hereto shall occur and be
continuing, the Agent may, by notice to the Owner, the Seller and the Servicer,
declare the Facility Termination Date to have occurred (in which case the
Facility Termination Date shall be deemed to have occurred); provided that,
automatically upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in paragraph (g) of Exhibit
VI, the Facility Termination Date shall occur. Upon any such declaration or
upon any such automatic termination, and subject to any limitations on the
Purchasers' rights and remedies in respect of the Pool Receivables under the
Pooling and Servicing Agreement or pursuant to the other terms of this
Agreement, the Purchasers and the Agent shall have, in addition to the rights
and remedies which they may have under this Agreement, all other rights and
remedies provided under the UCC with respect to the Receivable Interests
purchased by them hereunder and under other applicable law, which rights and
remedies shall be cumulative; provided, however, that
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so long as any Investor Certificates shall be outstanding, the Agent and the
Purchasers shall not exercise such other rights and remedies under the UCC and
other applicable law unless the Agent shall have obtained and delivered to the
Trustee an Opinion of Counsel to the effect that the exercise of such rights
and remedies shall not materially and adversely affect the interests of the
holders of the Investor Certificates.
ARTICLE IV
INDEMNIFICATION; PURCHASE OF
INELIGIBLE RECEIVABLES
SECTION 4.01. Indemnities by the Owner. Without limiting any
other rights that the Agent, the Purchaser Representative, the Seller, the
Trustee, or any Purchaser or any of their respective Affiliates (each, an
"Indemnified Party") may have under this Agreement or under applicable law, the
Owner hereby agrees to indemnify each Indemnified Party from and against any
and all claims, losses and liabilities (including reasonable attorneys' fees)
(all of the foregoing being collectively referred to as "Indemnified Amounts")
arising out of or resulting from this Agreement or the use of proceeds of
purchases or reinvestments or the ownership of Purchaser Receivable Interests
or in respect of any Receivable or any Cardholder Agreement, excluding,
however, (a) Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of such Indemnified Party or any of its
Affiliates, (b) recourse (except as otherwise specifically provided in this
Agreement) for uncollectible Receivables or (c) any income taxes incurred by
such Indemnified Party arising out of or as a result of this Agreement or the
ownership of Purchaser Receivable Interests or in respect of any Receivable or
any Cardholder Agreement. Without limiting or being limited by the foregoing,
the Owner shall pay on demand to each Indemnified Party any and all amounts
necessary to indemnify such Indemnified Party from and against any and all
Indemnified Amounts relating to or resulting from any of the following:
(i) the creation of an undivided percentage ownership
interest in any Receivable (A) which purports to be part of
the Net Receivables Pool Balance but which is not, at the date
of the creation of such interest, an Eligible RPA Receivable
or (B) the Obligor of which is not a United States resident,
is an Affiliate of any of the parties hereto or is a
government or a governmental subdivision or agency;
(ii) reliance on (A) any written representation or
warranty or statement made or deemed made by the Seller or the
Owner (or any of their respective officers) on or prior to the
date of this Agreement under or in connection with this
Agreement, or any exhibit,
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certificate or report delivered pursuant hereto or in
connection herewith, which shall have been incorrect in any
material respect when made, and (B) thereafter, any
representation or warranty or statement made or deemed made by
the Seller or the Owner (or any of their respective officers)
under or in connection with this Agreement which shall have
been incorrect in any material respect when made;
(iii) the failure by the Seller or the Owner to comply
with any applicable law, rule or regulation with respect to
any Pool Receivable or the related Cardholder Agreement
(including, without limitation, Regulation Z of the Board of
Governors of the Federal Reserve System, the Federal Consumer
Protection Act (including, without limitation, the Federal
Truth in Lending Act), the Fair Credit Billing Act, and all
other laws, rules and regulations relating to usury, consumer
protection, truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection
practices and privacy); or the failure of any Pool Receivable
or the related Cardholder Agreement to conform to any such
applicable law, rule or regulation;
(iv) the failure to vest in the relevant Purchaser a
perfected undivided percentage ownership interest in the
Receivables in, or purporting to be in, the Receivables Pool
and the Collections in respect thereof, free and clear of any
Adverse Claim (except for interests created therein pursuant
to the Pooling and Servicing Agreement);
(v) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to any Receivables in, or
purporting to be in, the Receivables Pool and the Collections
in respect thereof, whether at the time of any purchase or
reinvestment or at any subsequent time;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense
based on such Receivable or the related Cardholder Agreement
not being a legal, valid and binding obligation of such
Obligor enforceable against it in accordance with its terms),
or any other claim resulting from the sale of the merchandise
or services related to such Receivable or
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the furnishing or failure to furnish such merchandise or
services;
(vii) any failure of the Seller or the Owner to perform
its duties or obligations in accordance with the provisions
hereof or of the Pooling and Servicing Agreement or to perform
its duties or obligations under the Cardholder Agreements;
(viii) any products liability or other claim arising out of
or in connection with merchandise, insurance or services which
are the subject of any Cardholder Agreement;
(ix) the commingling of Collections of Pool Receivables
at any time with other funds;
(x) any action or omission by the Owner or the Seller
reducing or impairing the rights of any Purchaser with respect
to any Pool Receivable or the value of any Pool Receivable
(including, without limitation, any cancellation, modification
or netting of any Receivable by the Owner or the Seller); or
(xi) any investigation, litigation or proceeding related
to this Agreement or the use of proceeds of purchases or
reinvestments or the ownership of Purchaser Receivable
Interests or in respect of any Receivable or Cardholder
Agreement.
SECTION 4.02. Indemnities by the Servicer. Without limiting
any other rights that any Indemnified Party may have under this Agreement or
under applicable law, the Servicer hereby agrees to indemnify each Indemnified
Party from and against, and to pay on demand to each Indemnified Party any and
all amounts necessary to indemnify such Indemnified Party from and against, any
and all Indemnified Amounts relating to or resulting from any of the following:
(i) reliance on (A) any written representation or
warranty or statement made or deemed made by the Servicer (or
any of its officers) on or prior to the date of this Agreement
under or in connection with this Agreement, or any exhibit,
certificate or report delivered pursuant hereto or in
connection herewith, which shall have been incorrect in any
material respect when made, and (B) thereafter, any
representation or warranty or statement made or deemed made by
the Servicer (or any of its officers) under or in connection
with this Agreement which shall have been incorrect in any
material respect when made;
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(ii) the failure by the Servicer to comply with any
applicable law, rule or regulation with respect to any Pool
Receivable or the related Cardholder Agreement (including,
without limitation, Regulation Z of the Board of Governors of
the Federal Reserve System, the Federal Consumer Protection
Act (including, without limitation, the Federal Truth in
Lending Act), the Fair Credit Billing Act, and all other laws,
rules and regulations relating to usury, consumer protection,
truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and
privacy);
(iii) any claim relating to collection activities with
respect to any Pool Receivable;
(iv) any failure of the Servicer or the Administrative
Servicer to perform its duties or obligations in accordance
with the provisions hereof or of the Administrative Servicer
Agreement or of the Pooling and Servicing Agreement;
(v) any action or omission by the Servicer reducing
or impairing the rights of any Purchaser with respect to any
Pool Receivable or the value of any Pool Receivable;
excluding, however, (a) Indemnified Amounts to the extent resulting from gross
negligence or willful misconduct on the part of such Indemnified Party or any
of its Affiliates, (b) recourse (except as otherwise specifically provided in
this Agreement) for uncollectible Receivables or (c) any income taxes incurred
by such Indemnified Party arising out of or as a result of this Agreement or
the ownership of Receivable Interests or in respect of any Receivable or any
Cardholder Agreement.
SECTION 4.03. Purchase of Ineligible and Certain Other
Receivables. (a) The Owner agrees to make payment when due of all deposits
which the Owner is required to make pursuant to Section 2.4(d)(iii) and 2.4(e)
of the Pooling and Servicing Agreement. Any amount deposited by the Owner in
the Collection Account pursuant to Section 2.4(d)(iii) or 2.4(e) of the Pooling
and Servicing Agreement, which deposit is made on account of the Receivable
Interests created under this Agreement, shall be deemed to be a Collection in
respect of the related Pool Receivable as to which such deposit is made, and
the amount of each such Collection shall be applied in accordance with Article
II hereof. If any such deposit is made after the end of a Due Period but on or
prior to the first Distribution Date following the end of such Due Period, such
deposit shall be deemed to be a Collection received during such Due Period.
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(b) If the Pool Receivables shall include any Discount
Option Receivables on any date when the Owner is required, pursuant to Section
2.4(d)(iii) or 2.4(e) of the Pooling and Servicing Agreement, to deposit any
amount into the Collection Account on account of the Receivable Interests
created under this Agreement, the Owner shall make an additional deposit into
the Collection Account on such date in an amount equal to the difference
between (i) the amount the Owner would have been required to deposit into the
Collection Account on such date on account of such Receivable Interests
pursuant to the Pooling and Servicing Agreement if none of the Pool Receivables
had been Discount Option Receivables, minus (ii) the amount actually deposited
by the Owner into the Collection Account on such date on account of such
Receivable Interests pursuant to the Pooling and Servicing Agreement.
SECTION 4.04. Reassignment of Receivables and Receiv-able
Interests. (a) If, pursuant to Section 2.4(d) of the Pooling and Servicing
Agreement, any Receivables that are "Ineligible Receivables" (as defined in the
Pooling and Servicing Agreement) are required to be assigned by the Seller to
the Owner, each Purchaser and the Subordinated Purchaser hereby assigns such
Receivables to the extent of its Receivable Interest to the Seller, effective
upon and simultaneously with the assignment by the Seller of such Receivable to
the Owner in accordance with the Pooling and Servicing Agreement, subject to
the prior payment by the Owner of the amounts required under the Pooling and
Servicing Agreement.
(b) If, pursuant to Section 2.4(e) of the Pooling and
Servicing Agreement, all Receivable Interests are required to be assigned by
the Seller to the Owner, each Purchaser and the Subordinated Purchaser hereby
assigns its Receivable Interest to the Seller, effective upon and
simultaneously with the assignment by the Seller of the Receivables to the
Owner in accordance with the Pooling and Servicing Agreement, subject to the
prior payment by the Owner of the amounts required under the Pooling and
Servicing Agreement.
(c) If, pursuant to Section 9.2 of the Pooling and
Servicing Agreement, all Receivables are to be sold by the Seller, each
Purchaser and the Subordinated Purchaser hereby assigns its Receivable Interest
to the Seller, effective upon and simultaneously with the sale by the Seller of
the Receivables in accordance with the Pooling and Servicing Agreement.
SECTION 4.05. Repurchase of Purchaser Receivable Interests.
On any Distribution Date on or after the Facility Termination Date, the Owner
may, upon 30 days' prior notice to the Agent, purchase all, but not less than
all, of the Purchaser Receivable Interests outstanding on such Distribution
Date, in accordance with the terms specified in Section 12.2(a) of the Pooling
and Servicing Agreement, provided that on such
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Distribution Date (a) the Subordinated Purchaser Capital has not been reduced
to zero, and (b) the sum of the Purchaser Capital plus the Subordinated
Purchaser Capital is equal to or less than 5% of the highest Purchase Limit
theretofore in effect under this Agreement. The deposit required in connection
with any such purchase shall be made to the Agent's Account, for the account of
the relevant Purchaser(s), and shall be in an amount equal to the Purchaser
Capital plus all Yield accrued thereon through the date of such purchase. The
Owner shall also pay to the Agent, on the date of any such purchase, for the
account of the Agent and the relevant Purchaser(s), as the case may be, all
accrued fees, costs and expenses payable hereunder to the Agent and/or the
Purchasers.
ARTICLE V
THE SERVICER
SECTION 5.01. Designation of the Servicer; Delegation of
Duties. a) Each of the Seller, the Subordinated Purchaser, the Purchasers and
the Agent hereby confirms that the Person appointed from time to time to act as
Servicer under the Pooling and Servicing Agreement, initially Spirit, shall act
as its agent and as agent for the holders of the Investor Certificates in
servicing the Pool Receivables and the Collections. The parties hereto confirm
that it is impracticable to have more than one Servicer servicing the Pool
Receivables and, accordingly, all servicing activities described in the Pooling
and Servicing Agreement shall be the responsibility of the Servicer and shall
be performed in accordance with the Pooling and Servicing Agreement. Spirit as
the initial Servicer hereby confirms, for the benefit of the parties hereto,
that it shall perform the duties and obligations of the Servicer pursuant to
the terms of the Pooling and Servicing Agreement.
(b) In accordance with Section 10.2 of the Pooling and
Servicing Agreement, the Servicer may be terminated from time to time. Any
Successor Servicer shall be appointed by the Trustee in accordance with Section
10.2 of the Pooling and Servicing Agreement and any Successor Servicer so
appointed shall act as the Servicer.
(c) The Servicer may subcontract with any other Person, with
the prior consent of the Agent (which consent will not be unreasonably
withheld), for the administration and collection of the Pool Receivables;
provided, however, that such subcontract shall not affect the Servicer's
liability for performance of its duties and obligations pursuant to the terms
hereof and of the Pooling and Servicing Agreement. The Agent hereby
acknowledges and consents to the continuation of J. C. Penney Business
Services, Inc. as the Administrative Servicer pursuant to the terms and
conditions set forth in the Administrative Servicer Agreement.
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SECTION 5.02. Administration and Collection of the Pool
Receivables. In addition to performing the duties undertaken pursuant to the
Pooling and Servicing Agreement, the Servicer shall conduct the administration
and collection of the Pool Receivables in accordance with the provisions of
Exhibit V.
SECTION 5.03. Servicer Fee. The Servicer shall be paid a
servicing fee (the "Servicer Fee") at the per annum rate of 2.0% (the
"Servicing Fee Rate") on the average daily Purchaser Capital and Subordinated
Purchaser Capital of each Receivable Interest, from the date of purchase of
such Receivable Interest until the date on which such Purchaser Capital and
Subordinated Purchaser Capital is reduced to zero, payable on each Distribution
Date for the immediately preceding Settlement Period. The Servicer Fee shall
be payable only from Collections pursuant to, and subject to the priority of
payment set forth in, Article II of the Agreement.
ARTICLE VI
THE PURCHASER REPRESENTATIVE
SECTION 6.01. Designation of the Purchaser Representative.
(a) CNAI is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Purchaser Representative pursuant to the terms hereof and
(with respect to the Receivables Purchase Series arising in connection with
this Agreement) pursuant to the Pooling and Servicing Agreement.
(b) The Subordinated Purchaser and the Agent hereby appoint
the Purchaser Representative, from time to time designated pursuant to this
Section 6.01, as the representative for themselves and for the Purchasers to
perform the duties and obligations of the Purchaser Representative on their
behalf under the Pooling and Servicing Agreement.
(c) The Agent may, by notice to the Seller, the Owner, the
Subordinated Purchaser and the Servicer, designate another Person (including,
without limitation, the Agent itself) to succeed CNAI as the Purchaser
Representative if such Person shall consent and agree to the terms hereof and
of the Pooling and Servicing Agreement.
SECTION 6.02. Duties of the Purchaser Representative. (a)
The Purchaser Representative shall furnish to each Purchaser and to the
Subordinated Purchaser a copy of each notice, instrument or other document
received by it in connection with this Agreement or the Pooling and Servicing
Agreement within a reasonable period of time after receipt thereof.
(b) The Purchaser Representative shall, on behalf of the
Purchasers and the Subordinated Purchaser, direct the time, method and place of
exercising any right or remedy available to
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the Purchasers and/or the Subordinated Purchaser under the Pooling and
Servicing Agreement and take such other actions under the Pooling and Servicing
Agreement as could be taken by the Purchasers and/or the Subordinated Purchaser
and as are, in the sole discretion of the Purchaser Representative, necessary
or desirable to effectuate the purposes of this Agreement; provided, however,
that the Purchaser Representative shall not be required to take any action
which exposes the Purchaser Representative to personal liability or which is
contrary to this Agreement or applicable law.
SECTION 6.03. Limitation on Purchaser Representative
Liability, Etc. (a) Neither the Purchaser Representative nor any of its
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Purchaser
Representative:
(i) may treat the Purchaser of any Purchaser
Receivable Interest as the holder thereof, and may treat the
Subordinated Purchaser as the holder of the Subordinated Receivable
Interest, until the Purchaser Representative receives written notice of
the assignment or transfer thereof signed by such Person and in form
satisfactory to the Purchaser Representative;
(ii) may consult with legal counsel (including
counsel for the Seller, the Owner or the Servicer), independent public
accountants and other experts selected by it and shall not be liable
for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts;
(iii) makes no warranty or representation to any
Purchaser or to the Subordinated Purchaser and shall not be responsible
to any Purchaser or to the Subordinated Purchaser for any statements,
warranties or representations made in or in connection with this
Agreement or the Pooling and Servicing Agreement;
(iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or the Pooling and Servicing
Agreement on the part of the Seller, the Owner or the Servicer or to
inspect the property (including the books and records) of the Seller,
the Owner or the Servicer;
(v) shall not be responsible to any Purchaser or the
Subordinated Purchaser for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value
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of this Agreement or the Pooling and Servicing Agreement or any
instrument or document furnished pursuant hereto; and
(vi) shall incur no liability under or in respect of
this Agreement, the Pooling and Servicing Agreement or any such other
document or instrument by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram) believed by
it to be genuine and signed or sent by the proper party or parties.
(b) With respect to rights and obligations under this
Agreement and as a Purchaser hereunder, each of Ciesco, CAFCO and CRC shall
have the same rights and powers under this Agreement, the Pooling and Servicing
Agreement or any such other document or instrument as any other Purchaser and
may exercise the same as though CNAI were not the Purchaser Representative
hereunder. CNAI and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of
business with, the Seller, the Owner or the Servicer, any of their respective
Affiliates and any Person or entity who may do business with or own securities
of the Seller, the Owner or the Servicer or any of its Affiliates, all as if
CNAI were not the Purchaser Representative and without any duty to account
therefor to the Purchasers or the Subordinated Purchaser.
(c) The Subordinated Purchaser acknowledges that it has,
independently and without reliance upon the Purchaser Representative and based
on such financial statements and other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. The Subordinated Purchaser also acknowledges that it will,
independently and without reliance upon the Purchaser Representative or any
other Purchaser and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, the Pooling and Servicing Agreement and
any other agreement or other document.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendments, Waivers, Etc. (a) No amendment or
waiver of any provision of this Agreement or consent to any departure by the
Seller, the Owner, the Servicer or the Subordinated Purchaser therefrom shall
be effective unless in a writing signed by the Owner, the Seller, the Servicer,
the Subordinated Purchaser and the Agent, as agent for the Purchasers, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided that so long as
any Investor Certificates shall be outstanding, no such amendment shall become
effective unless (i) the Owner shall have delivered an Opinion of
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Counsel to the Agent and the Trustee to the effect that such amendment shall
not materially and adversely affect the interests of the holders of the
Investor Certificates or (ii) S&P and Moody's shall have notified the Owner,
the Servicer and the Trustee in writing that such action will not result in a
reduction or withdrawal of their respective ratings on any Investor
Certificates. In addition, and so long as any Investor Certificates shall be
outstanding, (y) if such amendment relates to any of the provisions of Article
II hereof (and regardless of whether an Opinion of Counsel has been delivered
pursuant to clause (i) of the preceding sentence), S&P shall have notified the
Owner, the Servicer and the Trustee in writing that such action will not result
in a reduction or withdrawal of its rating on any Investor Certificates, and
(z) if such amendment relates to any other provisions of this Agreement (other
than an amendment the sole effect of which is to extend the Facility
Termination Date or to modify the terms of an Enhancement which is for the sole
benefit of the Purchase Interests under this Agreement and the "Purchase
Interests" under the Parallel Purchase Commitment), S&P shall have been given
at least one Business Day's prior written notice of such amendment and S&P
shall not have advised the Owner or the Servicer at the close of business on
the Business Day following receipt of such notice that such action would result
in a reduction or withdrawal of its rating on any Investor Certificates.
Defined terms which are incorporated herein by reference from the Pooling and
Servicing Agreement shall not be altered or affected by any subsequent
amendment to the Pooling and Servicing Agreement which relates to such terms,
unless the Agent shall have consented in writing to such amendment.
(b) No failure on the part of any Purchaser, the
Subordinated Purchaser or the Agent to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right.
(c) Each of the parties hereto acknowledges its intent to
enter into negotiations with a view to agreeing upon terms and conditions of an
amendment to this Agreement in the event that the Owner desires to have the
Purchasers fund purchases of Purchaser Receivable Interests from the Seller
with medium term notes.
SECTION 7.02. Notices, Etc. (a) All notices and other
communications hereunder shall, unless otherwise stated herein, be in writing
(which shall include facsimile communication) and faxed or delivered, to each
party hereto, at its address set forth under its name on the signature pages
hereof or at such other address as shall be designated by such party in a
written notice to the other parties hereto. Notices and communications by
facsimile shall be effective when sent (and
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shall be followed by hard copy sent by regular mail), and notices and
communications sent by other means shall be effective when received.
(b) So long as Spirit is the Servicer under this Agreement,
any notice required to be given to the Owner and the Servicer hereunder shall
be deemed to have been delivered to both the Owner and the Servicer if such
notice is delivered to Spirit at its address set forth below its name on the
signature page hereof.
SECTION 7.03. Assignability. (a) This Agreement and each
Purchaser's rights and obligations herein (including ownership of each
Purchaser Receivable Interest) shall be assignable by such Purchaser and its
successors and assigns; provided, that no assignee shall be entitled to
compensation pursuant to Section 1.06(a) hereof at a rate in excess of that to
which the assignor Purchaser was entitled immediately prior to such assignment;
and provided, further, that, unless the proposed assignee is any of Ciesco,
CAFCO, CRC, CNAI or Citibank, each assignor of a Purchaser Receivable Interest
or any interest therein shall give the Agent, the Owner, the Servicer and the
Seller at least ten Business Days' notice of a proposed assignment and shall
not consummate such assignment if the Owner notifies such assignor that the
proposed assignee or any Affiliate of a proposed assignee is a competitor of
the Owner, Charming Shoppes or any of their respective Affiliates. Subject to
the provisions of Section 7.06(b) hereof, each assignor of a Purchaser
Receivable Interest may in connection with the assignment or participation,
disclose to the assignee or participant any information relating to the Seller,
the Servicer or the Owner, including the Receivables, furnished to such
assignor by or on behalf of the Seller, the Servicer or the Owner or by the
Agent.
(b) This Agreement and the rights and obligations of the
Agent (in its capacity as agent hereunder) herein shall be assignable by the
Agent and its successors and assigns; provided, however, that the Agent agrees
that it will not assign of its own volition such rights and obligations to any
Person that is not Affiliate of CNAI unless:
(i) in the reasonable judgment of the Agent
consistent with its internal policy (including, without limitation, the
internal policy of any Affiliate of the Agent, with respect to which
the manner in which conflicts of interest are to be resolved) and legal
and regulatory restrictions, the Agent determines that it would be
disadvantageous to the Agent or an Affiliate of the Agent for it to
continue as the Agent hereunder, or
(ii) the Agent's decision to assign its rights and
obligations (in its capacity as the agent hereunder) is
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consistent with its determination to assign its rights and obligations
as the agent in respect of a majority of the other transactions with
sellers of receivables in which it is, at such time, the agent, which
involve receivables having a tenor similar to the tenor of the
Receivables.
(c) None of the Seller or the Subordinated Purchaser, or
subject to paragraph 2(m) of Exhibit IV hereto, the Owner, or subject to
Section 8.2 of the Pooling and Servicing Agreement and paragraph 2(e) of
Exhibit IV hereto, the Servicer, may assign its rights or obligations hereunder
or any interest herein without the prior written consent of the Agent.
SECTION 7.04. Costs, Expenses and Taxes. (a) In addition to
the rights of indemnification granted under Sections 4.01 and 4.02 hereof, the
Owner agrees to pay on demand all costs and expenses in connection with the
preparation, execution, delivery and administration of this Agreement, any
asset purchase agreement or similar agreement relating to the sale or transfer
of interests in Purchaser Receivable Interests and the other documents and
agreements to be delivered hereunder, including, without limitation, (i) the
reasonable fees and out-of-pocket expenses of counsel for the Agent, CNAI,
Citicorp Securities Markets, Inc., Citibank, N.A., Ciesco, CAFCO, and CRC with
respect thereto and with respect to advising the Agent, CNAI, Citicorp
Securities Markets, Inc., Citibank, N.A., Ciesco, CAFCO and CRC as to their
rights and remedies under this Agreement, (ii) the Agent's out-of-pocket costs
and expenses in connection with annual audits under paragraph 1(b) of Exhibit
V, and (iii) all costs and expenses, if any (including reasonable counsel fees
and expenses), of the Agent, CNAI, Citicorp Securities Markets, Inc., Citibank,
N.A., the Seller, the Trustee, or the Purchasers in connection with the
enforcement of this Agreement and the other documents and agreements to be
delivered hereunder.
(b) In addition, the Owner shall pay any and all stamp and
other taxes and fees payable in connection with the execution, delivery, filing
and recording of this Agreement or the other documents or agreements to be
delivered hereunder, and agrees to save each Indemnified Party harmless from
and against any liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees.
SECTION 7.05. No Proceedings. (a) Each of the Seller, the
Agent, the Owner, the Servicer, the Subordinated Purchaser, each Purchaser,
each assignee of a Purchaser Receivable Interest or any interest therein and
each entity which enters into a commitment to purchase Purchaser Receivable
Interests or interests therein hereby agrees that it will not institute against
Ciesco, CAFCO or CRC any proceeding of the type referred to in paragraph (g) of
Exhibit VI so long as any senior indebtedness issued by Ciesco, CAFCO or CRC,
as the case may be,
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shall be outstanding or there shall not have elapsed one year plus one day
since the last day on which any such senior indebtedness shall have been
outstanding.
(b) Each of the Agent, the Owner, the Servicer, each
Purchaser, each assignee of a Purchaser Receivable Interest or any interest
therein and each entity which enters into a commitment to purchase Purchaser
Receivable Interests or interests therein hereby agrees that it will not
institute against the Trust any proceeding of the type referred to in paragraph
(g) of Exhibit VI so long as any Investor Certificate shall be outstanding or
there shall not have elapsed one year plus one day since the last day on which
any Investor Certificate shall have been outstanding.
SECTION 7.06. Confidentiality. (a) Unless otherwise
required by applicable law, each of the Seller, the Owner, the Servicer and the
Subordinated Purchaser agrees to maintain the confidentiality of this Agreement
(and all drafts thereof) in communications with third parties and otherwise;
provided that this Agreement may be disclosed (i) to third parties to the
extent such disclosure is made pursuant to a written agreement of
confidentiality in form and substance reasonably satisfactory to the Agent,
(ii) to independent financial rating agencies in connection with the rating of
any Certificate Series issued or to be issued pursuant to the Pooling and
Servicing Agreement, and (iii) to the Seller's legal counsel and auditors, the
Owner's legal counsel and auditors, the Servicer's legal counsel and auditors,
and the Subordinated Purchaser's legal counsel and auditors if, in each case,
they agree (whether or not in writing) to hold it confidential.
(b) Each of the Agent and each Purchaser agrees (i) to
maintain the confidentiality of this Agreement (and all drafts thereof) in
communications with third parties and otherwise and (ii) to use reasonable
efforts (e.g., procedures substantially comparable to those applied by the
Agent or such Purchaser, as the case may be, in respect of non-public
information as to its business) to maintain the confidentiality of (x) the
Owner's customer lists, the list of Stores delivered to the Agent pursuant to
paragraph 2(n) of Exhibit IV hereto, and any other non-public information as to
the Owner's business and the Servicer's business and (y) the contents of the
Administrative Servicer Agreement, in each case, to the extent that such
information is not and does not become publicly available (other than by the
filing of financing statements pursuant to this Agreement); provided, that
nothing in this subsection (b) shall affect the disclosure of this Agreement or
such non-public information (1) to the extent required by law (including
statute, rule, regulation or judicial process), (2) to the Agent's or a
Purchaser's counsel or accountants, as the case may be, provided they agree
(whether or not in writing) to hold it confidential, and (3) to bank examiners
and auditors and appropriate government
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examining authorities, and provided, further, that the Agent, each Purchaser
and each assignee of Receivable Interests may, in connection with any
assignment or participation or proposed assignment or participation, disclose
this Agreement to the assignee or participant or to a proposed assignee or
participant and any information relating to the Owner or the Servicer furnished
to such entity by or on behalf of the Owner or the Servicer or by the Agent,
if, prior to any such disclosure, such assignee or participant or proposed
assignee or participant agrees, in a writing reasonably satisfactory to the
Owner or the Servicer, as the case may be, to preserve the confidentiality of
this Agreement and any confidential information relating to the Owner or the
Servicer received by it from any of the foregoing entities. The Agent and each
Purchaser shall, as promptly as practicable after becoming aware of any
disclosure of any confidential information relating to the Owner or the
Servicer, use good faith efforts to notify the Owner and the Servicer of such
disclosure; provided, however, that the failure by the Agent or any Purchaser
to give such notice shall not subject it to liability.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF), EXCEPT TO
THE EXTENT THAT THE PERFECTION OF THE INTERESTS OF THE PURCHASERS OR THE
SUBORDINATED PURCHASER IN THE RECEIVABLES OR REMEDIES HEREUNDER, IN RESPECT
THEREOF, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
SECTION 7.08. Execution in Counterparts. This Agreement may
be executed in any number of counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same agreement.
SECTION 7.09. Survival of Termination. The provisions of
Sections 1.06, 1.07, 4.01, 4.02, 4.03, 7.04, 7.05 and 7.06 shall survive any
termination of this Agreement.
SECTION 7.10. Tax Treatment. The Owner and the Seller have
structured this Agreement and the Receivable Interests with the intention that
the Receivable Interests will qualify under applicable federal, state and local
tax law as indebtedness. Except as otherwise required by law, the Seller, the
Servicer, the Agent and each Purchaser agree to treat and to take no action
inconsistent with the treatment of the Receivable Interests as indebtedness for
purposes of federal, state and local income or franchise taxes and any other
tax imposed on or measured by income.
SECTION 7.11. Duties of the Trustee. The Trustee hereby
agrees to (i) perform its duties and obligations as set
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<PAGE> 34
forth in the Pooling and Servicing Agreement and (ii) promptly take each action
which the Agent may specify in accordance with Section 11.14(a) or any other
applicable Section of the Pooling and Servicing Agreement to enforce the
Pooling and Servicing Agreement for the benefit of the Purchasers, any other
receivables purchasers, and any holders of Investor Certificates, all with
reasonable care and diligence and in accordance with applicable laws, rules and
regulations and the Pooling and Servicing Agreement.
SECTION 7.12. Limitation on Seller/Trustee Liability, Etc.
(a) Neither the Trustee, in its individual capacity or in its capacity as the
Seller hereunder, nor any of its directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, the
Trustee:
(i) may consult with legal counsel (including counsel
for the Seller, the Owner or the Servicer), independent public
accountants and other experts selected by it and shall not be liable
for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts;
(ii) makes no warranty or representation to any
Purchaser or to the Subordinated Purchaser and shall not be responsible
to any Purchaser or to the Subordinated Purchaser for any statements,
warranties or representations made in or in connection with this
Agreement or the Pooling and Servicing Agreement;
(iii) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or the Pooling and Servicing
Agreement on the part of the Seller, the Owner or the Servicer or to
inspect the property (including the books and records) of the Seller,
the Owner or the Servicer;
(iv) shall not be responsible to any Purchaser or the
Subordinated Purchaser for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or
the Pooling and Servicing Agreement or any instrument or document
furnished pursuant hereto; and
(v) shall incur no liability under or in respect of
this Agreement, the Pooling and Servicing Agreement or any such other
document or instrument by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram) believed by
it to be genuine and signed or sent by the proper party or parties.
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<PAGE> 35
SECTION 7.13. Third Party Beneficiaries. (a) Each of the
Seller and the Owner hereby acknowledge that the Agent, for the ratable benefit
of the Purchasers, and the Purchasers are, to the extent of the Purchasers'
rights and obligations under this Agreement, intended to be third party
beneficiaries under Section 13.13 of the Pooling and Servicing Agreement.
(b) No "Investor Certificateholder" or "Enhancement Provider"
(in each case as defined in the Pooling and Servicing Agreement) shall be a
third-party beneficiary of this Agreement or have any benefit or any legal or
equitable right, remedy or claim under this Agreement.
SECTION 7.14. Limited Recourse. (a) In no event will any
Purchaser have any right or interest in the Trust to the extent allocated to
the holder of Investor Certificates or attributable to the receivables purchase
interest of any other Receivables Purchaser. Notwithstanding any other
provision herein or in any other agreement or instrument, the Agent, on behalf
of each Purchaser, confirms that it and each Purchaser has no interest in and
will make no claim on, or otherwise interfere with, distributions of
Collections allocated to any Investor Certificates or attributable to any other
Receivables Purchasers under the Pooling and Servicing Agreement, any
Supplement or any other receivables purchase agreement.
(b) Notwithstanding any claim that any Purchaser or the Agent
may have hereunder, no such claim shall be payable from any Collections other
than those attributable to the Purchase Interests pursuant to Section 2.01 and,
as to all claims that any Purchaser or the Agent may have hereunder against the
Trust, no such claim shall be payable other than from Allocable Finance Charge
Collections, Allocable Principal Collections and the Allocation Percentage of
Recoveries of Pool Receivables attributable to the Purchase Interests pursuant
to Section 2.01. Nothing contained in this Section, however, shall limit or
affect any claim that any Purchaser or the Agent may have hereunder against the
Owner or the Servicer for any obligations under this Agreement which are direct
obligations of the Owner or the Servicer.
Section 7.15. Limitation on Rights of Purchasers. It is
understood and intended, and upon the purchase of each Purchaser Receivable
Interest the Agent and each related Purchaser shall be deemed to have expressly
covenanted and agreed with every other Receivables Purchaser and holder of an
Investor Certificate and the Trustee, that the Purchaser Receivable Interests
and the Investor Certificates shall rank pari passu among one another and
amongst themselves (except for any Enhancement that may apply to only the
Purchaser Receivable Interests or one series of Investor Certificates) and
neither the Agent nor any Purchaser shall have any right hereunder or under the
Pooling and Servicing Agreement (i) to surrender, waive,
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<PAGE> 36
impair, disturb or prejudice the rights of any other Receivables Purchasers or
the holders of the Investor Certificates, (ii) to obtain or seek to obtain
priority over or preference to any other Receivables Purchaser or holder of an
Investor Certificate or (iii) to enforce any right under this Agreement or the
Pooling and Servicing Agreement against the Seller, except in the manner
provided in the Pooling and Servicing Agreement and for the equal, ratable and
common benefit of all Receivables Purchasers and holders of Investor
Certificates and except (x) as otherwise expressly provided in the Pooling and
Servicing Agreement or (y) to the extent this Agreement creates independent and
non-duplicative rights against the Seller. For the protection and enforcement
of the provisions of this Section, each and every Receivables Purchaser and
holder of an Investor Certificate and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
SECTION 7.16. Consent to Amended and Restated PSA. Pursuant
to Section 13.1(b) of the Original PSA, the Agent, as the Series Representative
under this Agreement, consents as of the Effective Date to the amendments
effected pursuant to the Amended and Restated Pooling and Servicing Agreement.
SECTION 7.17. References to the RPA. Each reference in each
document delivered pursuant to the Original RPA to the "Receivables Purchase
Agreement" shall mean and be a reference to this Agreement, as the same may be
amended or restated from time to time.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
SELLER: FIRST FIDELITY BANK, NATIONAL ASSOCIATION
(formerly known as First Fidelity Bank,
N. A., Pennsylvania), not in its
individual capacity but solely
as the Trustee for CHARMING
SHOPPES MASTER TRUST (formerly known as
Spirit of America Master Trust)
By:
----------------------
Title: Vice President
123 South Broad Street
Philadelphia, Pennsylvania 19109
Attention: George Rayzis,
Vice President
Facsimile Number: (215) 985-7290
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with copies to:
First Fidelity Bank,
National Association, New York
520 Madison Avenue
New York, New York 10022
Attention: Corporate Trust
Administration
Facsimile Number: (212) 715-4945
Pepper, Hamilton & Scheetz
1201 Market Street, Suite 1402
Wilmington, Delaware 19801-1163
Attention: Richard Eckman, Esq.
Facsimile Number: (302) 656-8865
SUBORDINATED
PURCHASER: FASHION SPC, INC.
By:
----------------------
Title: Vice President
3411 Silverside Road
Wilmington, Delaware 19810
Attention: Kirk R. Simme
Facsimile Number:
-----------
OWNER/SERVICER: SPIRIT OF AMERICA NATIONAL BANK,
as the Owner and the Servicer
By:
----------------------
Title: Vice President
745 Center Street
Milford, Ohio 45150
Attention: Kirk R. Simme
Facsimile No. 513-576-5320
with copies to:
Lawrence H. Berger, Esq.
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, Pennsylvania 19103
Colin Stern, Esq.,
General Counsel
Charming Shoppes, Inc.
450 Winks Lane
Bensalem, Pennsylvania 19020
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<PAGE> 38
CIESCO: CIESCO L.P.
By: Citicorp North America,
Inc., as Attorney-in-Fact
By:
----------------------
Vice President
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: President
Facsimile No. 914-899-7890
CAFCO: CORPORATE ASSET FUNDING COMPANY, INC.
By: Citicorp North America,
Inc., as Attorney-in-Fact
By:
----------------------
Vice President
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: President
Facsimile No. 914-899-7890
CRC: CORPORATE RECEIVABLES CORPORATION
By: Citicorp North America,
Inc., as Attorney-in-Fact
By:
----------------------
Vice President
725 South Figueroa Street
Los Angeles, California 90017
Attention: President
Facsimile No.: (213) 624-9765
with a copy to:
Citicorp North America, Inc.,
as Agent
450 Mamaroneck Avenue
Harrison, New York 10528
Attention: President
Facsimile No.: 914-899-7890
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<PAGE> 39
AGENT: CITICORP NORTH AMERICA, INC.,
as Agent
By:
----------------------
Vice President
450 Mamaroneck Avenue
Harrison, N.Y. 10528
Attention: Corporate Asset
Funding
Facsimile No. 914-899-7890
35
<PAGE> 40
EXHIBIT I
DEFINITIONS
1. Certain Defined Terms. As used in the Agreement
(including its Exhibits), the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms
of the terms defined):
"Account" means each Spirit of America National Bank revolving
credit card account (including, without limitation, accounts which have been
written off as uncollectible) issued to an Obligor pursuant to a Cardholder
Agreement between the Owner and any Person for the sole purpose of providing
credit for the purchase of merchandise or services at any Affiliate of the
Owner, and which is identified by account number, Obligor name, Obligor address
and Receivable balance as of the applicable Cut Off Date in each computer file
or microfiche list delivered to the Trustee by the Owner from time to time
pursuant to Section 2.1 or Section 2.6 of the Pooling and Servicing Agreement.
The term "Account" shall include each Renumbered Account. The term "Account"
shall be deemed to refer to an Additional Account only from and after the
Addition Date with respect thereto, and the term "Account" shall be deemed to
refer to any Removed Account only prior to the Removal Date with respect
thereto.
"Addition Cut Off Date" has the meaning set forth in Section
1.1 of the Pooling and Servicing Agreement.
"Addition Date" means each date as of which Additional
Accounts will be included as Accounts for purposes of the Pooling and Servicing
Agreement pursuant to Section 2.6 thereof.
"Additional Accounts" means additional Eligible Accounts from
the Bank Portfolio to be included as Accounts under the Pooling and Servicing
Agreement pursuant to Section 2.6(a) thereof.
"Administrative Servicer" means, initially, JC Penney Business
Services, Inc., a Delaware corporation, and shall also include any other Person
who succeeds to the functions performed by the Administrative Servicer, as
provided in the Administrative Servicer Agreement, and/or such other
Administrative Servicer, including Spirit, as the Agent and the Owner shall
reasonably and mutually agree upon.
"Administrative Servicer Agreement" means the Credit
Processing Agreement effective as of July 8, 1988, as amended as of July 26,
1991, between Spirit of America National Bank and the Administrative Servicer,
and any other agreement with the same or any successor Administrative Servicer
regarding the performance of servicing functions for the Receivables, and all
agreements,
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instruments and documents attached thereto or delivered in connection
therewith, as any of the same may from time to time be hereafter amended,
supplemented, or otherwise modified in accordance with the terms of the
Agreement.
"Adverse Claim" means a lien, security interest or other
charge or encumbrance, or any other type of preferential arrangement.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person. For
purposes of this definition, a Person shall be deemed to be "controlled by"
another Person if such other Person possesses, directly or indirectly, power
either to (a) vote 10% or more of the securities having ordinary voting power
for the election of directors of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agent's Account" means the special account (account number
4060-0094) of the Agent maintained at the office of Citibank, N.A. at 399 Park
Avenue, New York, New York. The Agent's Account is the "Series Account"
referred to in the Pooling and Servicing Agreement for the Receivables Purchase
Series arising in connection with the Agreement.
"Allocable Finance Charge Collections" means, for any Due
Period, the product of (a) the Allocation Percentage for such Due Period and
(b) the amount of Collections of Finance Charge Receivables with respect to
such Due Period.
"Allocable Principal Collections" means, for any Due Period,
the product of (a) the Allocation Percentage for such Due Period and (b) the
amount of Collections of Principal Receivables with respect to such Due Period.
"Allocated Finance Charges" means amounts allocated pursuant
to Section 2.02(a)(i) of the Agreement.
"Allocated Loss Amount" means, with respect to any Due Period,
an amount equal to the product of (a) the Allocation Percentage for such Due
Period and (b) the Loss Amount with respect to such Due Period.
"Allocation Percentage" means:
(i) for the initial Due Period, the ratio (expressed
as percentage) computed as of the date of the initial purchase under
the Agreement by dividing (A) the sum of (1) the initial Purchaser
Capital, (2) the initial Subordinated Purchaser Capital and (3) the
Minimum Seller
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Capital, in each case as of such date by (B) the Outstanding Balance of
all Pool Receivables on the initial Cut Off Date;
(ii) for any subsequent Due Period during the Revolving
Period, the ratio (expressed as percentage) computed as of the last day
of the immediately preceding Due Period by dividing (A) the sum of (1)
the Purchaser Capital, (2) the Subordinated Purchaser Capital and (3)
the Minimum Seller Capital, in each case as of such last day by (B) the
greater of (1) the Outstanding Balance of all Pool Receivables as of
such last day minus the total amount of Discount Option Receivables (if
any) on such last day and (2) the sum of the numerators used to
calculate the Investor/Purchaser Percentages for such subsequent Due
Period for all Certificate Series and Receivables Purchase Series
outstanding; and
(iii) for any subsequent Due Period during the
Amortization Period, the ratio (expressed as percentage) computed as of
the last day of the immediately preceding Due Period by dividing (A)
the sum of (1) the Purchaser Capital, (2) the Subordinated Purchaser
Capital and (3) the Unallocated Receivables Balance, in each case as of
such last day by (B) the greater of (i) the Outstanding Balance of all
Pool Receivables as of such last day minus the total amount of Discount
Option Receivables (if any) on such last day and (2) the sum of the
numerators used to calculate the Investor/Purchaser Percentages for
such subsequent Due Period for all Certificate Series and Receivables
Purchase Series outstanding.
Notwithstanding the foregoing, with respect to any Due Period
in which an Addition Date or Removal Date occurs, the amount in (ii)(B)(1) and
(iii)(B)(1) above shall be (1) for the period from and including the first day
of such Due Period to but excluding the related Addition Date or Removal Date,
the Outstanding Balance of all Pool Receivables as of the last day of the
immediately preceding Due Period, minus the total amount of Discount Option
Receivables (if any) on such last day, and (2) for the period from and
including the related Addition Date or Removal Date to and including the last
day of such Due Period, the Outstanding Balance of all Pool Receivables at the
end of the day on the related Addition Date or Removal Date, minus the total
amount of Discount Option Receivables (if any) at the end of the day on such
Addition Date or Removal Date; provided further, that with respect to any Due
Period in which an Addition Date or Removal Date occurs and the Servicer need
not make daily deposits of Collections into the Collection Account, the amount
in (ii)(B)(1) and (iii)(B)(1) above shall be the Average Principal Balance for
such Due Period.
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For purposes of this definition, "Investor/Purchaser Percentages" and
"Certificate Series" have the meanings attributed to them in the Pooling and
Servicing Agreement, and "Unallocated Receivables Balance" on any day means the
lesser of (1) the Outstanding Balance of the Pool Receivables not allocated to
the Purchaser Receivable Interests or the Subordinated Receivable Interests
pursuant to the Agreement and not allocated to any other Person other than the
Holder of the Exchangeable Seller Certificate pursuant to a supplement to the
Pooling and Servicing Agreement or pursuant to any other receivables purchase
agreement that is subject to the Pooling and Servicing Agreement and (2) the
Minimum Seller Capital as of such day. The Allocation Percentage may never be
greater than 100%. The Allocation Percentage is the "Investor/Purchaser
Percentage" referred to in the Pooling and Servicing Agreement for the
Receivables Purchase Series arising in connection with the Agreement.
"Alternate Base Rate" means a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall be at all times
equal to the interest rate per annum determined using the applicable spread
specified in the Fee Letter plus the highest of:
(a) the rate of interest announced publicly by
Citibank, N.A. in New York, New York, from time to time as
Citibank, N.A.'s base rate;
(b) 1/2 of one percent above the latest three-week
moving average of secondary market morning offering rates in
the United States for three-month certificates of deposit of
major United States money market banks, such three- week
moving average being determined weekly on each Monday (or, if
such day is not a Business Day, on the next succeeding
Business Day) for the three-week period ending on the previous
Friday by Citibank, N.A. on the basis of such rates reported
by certificate of deposit dealers to and published by the
Federal Reserve Bank of New York or, if such publication shall
be suspended or terminated, on the basis of quotations for
such rates received by Citibank, N.A. from three New York
certificate of deposit dealers of recognized standing selected
by Citibank, N.A., in either case adjusted to the nearest 1/4
of one percent or, if there is no nearest 1/4 of one percent,
to the next higher 1/4 of one percent; and
(c) the Federal Funds Rate.
"Amortization Period" means (a) the period (if any) beginning
at the close of business of the Agent on the Business Day immediately preceding
the Partial Amortization Date and ending on the Partial Amortization Ending
Date or (if the
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<PAGE> 44
Termination Date shall occur prior to the Partial Amortization Ending Date) the
Final Distribution Date, and (b) the period beginning at the close of business
of the Agent on the Business Day immediately preceding the Termination Date and
ending on the Final Distribution Date.
"Assignee Rate" for any Fixed Period for any Purchaser
Receivable Interest means an interest rate per annum determined using the
applicable spread specified in the Fee Letter plus the Eurodollar Rate for such
Fixed Period; provided, however, that in the case of
(i) any Fixed Period beginning on or after the
first day of which a Purchaser shall have notified the Agent
that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or
any central bank or other governmental authority asserts that
it is unlawful, for such Purchaser to fund such Purchaser
Receivable Interest at the Assignee Rate set forth above (and
such Purchaser shall not have subsequently notified the Agent
that such circumstances no longer exist),
(ii) any Fixed Period of one to (and including) 29
days,
(iii) any Fixed Period as to which the Agent does
not receive notice, by no later than 12:00 noon (New York City
time) on the third Business Day preceding the first day of
such Fixed Period, that the related Purchaser Receivable
Interest will not be funded by issuance of commercial paper,
or
(iv) any Fixed Period for a Purchaser Receivable
Interest the Purchaser Capital of which is less than $500,000,
the "Assignee Rate" for each such Fixed Period shall be an interest rate per
annum equal to the Alternate Base Rate in effect on the first day of such Fixed
Period; provided further that the Agent and the Owner may agree in writing from
time to time upon a different "Assignee Rate".
"Available Principal Collections" has the meaning set forth in
Section 2.06(b) of the Agreement.
"Average Principal Balance" shall mean, for a Due Period in
which an Addition Date or Removal Date occurs, the weighted average of (i) the
Outstanding Balance of all Pool Receivables at the end of the day on the last
day of the prior Due Period minus the total amount of Discount Option
Receivables (if any) on such last day and (ii) the Outstanding Balance of all
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Pool Receivables at the end of the day on the related Addition Date or Removal
Date minus the total amount of Discount Option Receivables (if any) at the end
of the day on such Addition Date or Removal Date, weighted, respectively, by a
fraction, the numerator of which is the number of days from and including the
first day of such Due Period to but excluding the related Addition Date or
Removal Date, and the denominator of which is the number of days in such Due
Period, and by a fraction, the numerator of which is the number of days from
and including the related Addition Date or Removal Date to and including the
last day of such Due Period, and the denominator of which is the number of days
in such Due period.
"BancOhio Portfolio" means the private label revolving credit
card account receivables portfolio owned by BancOhio National Bank pursuant to
an agreement dated October 4, 1985 (as amended).
"Bank Portfolio" has the meaning set forth in Section 1.1 of
the Pooling and Servicing Agreement.
"Business Day" means any day on which (i) banks are not
authorized or required to close in New York City, Philadelphia, Pennsylvania or
Milford, Ohio and (ii) if this definition of "Business Day" is utilized in
connection with the Eurodollar Rate, dealings are carried out in the London
interbank market.
"CAFCO" means Corporate Asset Funding Company, Inc., a
Delaware corporation, and any successor or assignee of CAFCO that is a
receivables investment company which in the ordinary course of its business
issues commercial paper or other securities to fund its acquisition and
maintenance of receivables.
"Cardholder Agreement" means the agreement (and the related
application) for any Account, as such agreement may be amended, modified or
otherwise changed from time to time in accordance with the terms thereof. The
"related Cardholder Agreement" means, when used with respect to any Receivable,
the Cardholder Agreement under which such Receivable arose.
"Cardholder Guidelines" means the Owner's policies and
procedures relating to the operation of its credit card business in effect on
the date of the Agreement, including, without limitation, the policies and
procedures for determining the creditworthiness of potential and existing
credit card customers, and relating to the maintenance of credit card accounts
and collection of credit card receivables, as such policies and procedures may
be amended from time to time in accordance with the Agreement.
"Charming Shoppes" means Charming Shoppes, Inc., a
Pennsylvania corporation.
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"Ciesco" means Ciesco L.P., a New York limited partnership,
and any successor or assignee of Ciesco that is a receivables investment
company which in the ordinary course of its business issues commercial paper or
other securities to fund its acquisition and maintenance of receivables.
"Collection" means any payment by or on behalf of Obligors
received by the Servicer in respect of the Pool Receivables, in the form of
cash, checks, wire transfers, electronic transfers, ATM transfers or any other
form of payment in accordance with a Cardholder Agreement in effect from time
to time, including, without limitation, (x) all Recoveries, (y) all payments
made with respect to Principal Receivables by deposit into the Collection
Account pursuant to Section 4.3(d) of the Pooling and Servicing Agreement or
Section 2.07(b) of the Agreement and (z) payments by the Owner with respect to
the reassignment of ineligible Receivables or the reassignment of Receivables
following the breach of certain representations, made by deposit into the
Collection Account pursuant to Section 2.4(d)(iii) or 2.4(e) of the Pooling and
Servicing Agreement or pursuant to Section 4.03(b) of the Agreement. The term
"Collection" shall include Insurance Proceeds generally, but shall exclude
Insurance Proceeds and other amounts constituting Recoveries of Pool
Receivables to the extent the aggregate Insurance Proceeds received in respect
of the Pool Receivables during any Due Period exceed the Loss Amount for such
Due Period. A Collection processed on an Account in excess of the amount of
Receivables in such Account as of the date of receipt by the Servicer of such
Collection shall be deemed to be a payment in respect of Principal Receivables
to the extent of such excess. The term "Collection" shall also include all
benefits of the Owner or FSC or any other Owner Affiliate under and all monies
due or to become due to the Owner or FSC or any other Owner Affiliate under the
Interest Rate Agreements, and any such monies received shall be deemed a
Collection of Finance Charge Receivables and shall be considered a Collection
with respect to Pool Receivables. Notwithstanding any other provision of the
Agreement to the contrary, Collections constituting payments in respect of the
Interest Rate Agreements shall be allocated entirely to the Purchase Interests
under the Agreement and to the "Purchase Interests" under the Parallel Purchase
Commitment, and Collections described in clauses (y) and (z) above (to the
extent allocable to the Receivables Purchase Series arising in connection with
the Agreement) shall be allocated entirely to the Purchase Interests under the
Agreement.
"Collection Account" means the segregated account established
by the Trustee pursuant to Section 4.2(a) of the Pooling and Servicing
Agreement.
"Company" means each of FSC and Charming Shoppes.
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"Company Agreement" means an agreement, dated as of the date
hereof, made by each of FSC and Charming Shoppes in favor of the Purchasers, in
form and substance satisfactory to the Agent.
"CRC" means Corporate Receivables Corporation, a California
corporation, and any successor or assignee of CRC that is a receivables
investment company which in the ordinary course of its business issues
commercial paper or other securities to fund its acquisition and maintenance of
receivables.
"Cut Off Date" means the close of business of the Owner on
November 28, 1992, or, in the case of Additional Accounts, the applicable
Addition Cut Off Date.
"Cycle" means each billing cycle used by the Owner to bill
Obligors of the Receivables.
"Cycle Closing Date", in respect of any Account, means the
last day of each Cycle applicable to such Account.
"Defaulted Receivable" means a Principal Receivable:
(i) in respect of which the related Obligor has
failed to make the minimum monthly payment required under the
terms of the related Cardholder Agreement for a period of 120
days or five consecutive Cycles (whichever is less);
(ii) as to which the Obligor thereof or any other Person
obligated thereon has taken any action, or suffered any event
to occur, of the type described in paragraph (g) of Exhibit
VI; or
(iii) which, consistent with the Cardholder Guidelines,
would be written off the Seller's books as uncollectible.
"Delinquency Ratio" means the ratio (expressed as a
percentage) computed as of the last day of any Due Period by dividing (i) the
average of the aggregate Outstanding Balances of all Pool Receivables that were
Delinquent Receivables on such last day and on the last day of the two
immediately preceding Due Periods by (ii) the aggregate Outstanding Balance of
all Pool Receivables on such last day.
"Delinquent Receivable" means a Receivable:
(i) in respect of which the related Obligor has
failed to make the minimum monthly payment required under the
terms of the related Cardholder Agreement for a period of 90
days or four consecutive Cycles (whichever is less); or
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(ii) which, consistent with the Cardholder Guidelines,
would be classified as delinquent by the Servicer.
"Depositary Agreement" means an agreement, in substantially
the form of Annex B, from the Seller to any Depositary Bank.
"Depositary Bank" means any of the banks holding one or more
Initial Depositary Accounts.
"Discount Option Receivable" has the meaning set forth in the
Pooling and Servicing Agreement.
"Distribution Date" means the fifteenth day of each month, or
if such day is not a Business Day, the next succeeding Business Day.
Notwithstanding the foregoing, in the event a Total Systems Failure exists on
any Distribution Date, the date of such Distribution Date shall mean the fourth
Business Day after the date on which the Seller or the Servicer delivers a
Servicer Report; provided, that in no event shall a Distribution Date be
postponed more than 10 Business Days due to a Total Systems Failure.
"Due Period" means, initially, the period from the close of
business on the Cut-Off Date to the close of business on the Last Cycle Closing
Date for the month of December, 1992, and thereafter, the period from the close
of business on the last day of the prior Due Period to the close of business of
the next Last Cycle Closing Date.
"Early Amortization Event" has the meaning set forth in
Exhibit VI.
"Effective Date" means May __, 1994.
"Eligible Account" has the meaning set forth in Section 1.1 of
the Pooling and Servicing Agreement.
"Eligible Receivable" has the meaning set forth in Section 1.1
of the Pooling and Servicing Agreement.
"Eligible RPA Receivable" means, at any time, an Eligible
Receivable:
(i) the Obligor of which, at the time of the initial
creation of an interest therein under the Agreement, has not
failed to make, at the time of the sale of the goods or
services giving rise to such Receivable, at least the minimum
monthly payment required in order to entitle such Obligor to
further
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extensions of credit under the terms of the Cardholder
Guidelines;
(ii) the Obligor of which, at the time of the initial
creation of an interest therein under the Agreement, has not
failed to make any such required payments for any period of
two consecutive Cycles (including the Cycle ending on the most
recent Cycle Closing Date under the related Cardholder
Agreement to occur 10 Business Days or more prior to the date
of such creation); provided, however, that this clause (ii)
shall not apply to determine the eligibility of a Receivable
on the date of its purchase under the Agreement;
(iii) which is an obligation representing all or part of
the sales price of merchandise, insurance or services within
the meaning of Section 3(c)(5) of the Investment Company Act
of 1940, as amended, and the nature of which is such that its
purchase with the proceeds of notes would constitute a
"current transaction" within the meaning of Section 3(a)(3) of
the Securities Act of 1933, as amended;
(iv) which is a "general intangible" or an "account"
within the meaning of Section 9-106 of the UCC of each
jurisdiction whose law governs the perfection of the interest
created by a Purchaser Receivable Interest;
(v) which is (A) denominated and payable only in
United States dollars in the United States, and (B) required
to be paid either by means of a check sent to a Lock-Box
Account or, until the date on which the Store Payment Notice
is delivered to the Store managers pursuant to paragraph
2(b)(ii) of Exhibit V to the Agreement, by means of a Store
Payment;
(vi) which:
(A) arises under a Cardholder Agreement
which, together with such Receivable, is in full force
and effect and constitutes the legal, valid and
binding obligation of the Obligor of such Receivable,
except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights
generally or by general principles of equity (whether
considered in a proceeding in equity or at law),
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(B) arises under a Cardholder Agreement the
terms of which require minimum monthly payments such
that such Receivable is scheduled to be paid in full
within 5 years from the date of its creation,
(C) arises from a Cardholder Agreement and
has been billed to the related Obligor on such
Obligor's Statement in accordance with the terms of
such Cardholder Agreement,
(D) is not subject to any dispute, offset,
counterclaim or defense whatsoever (except the
potential discharge in bankruptcy of such Obligor),
(E) has not been purchased by the Owner
pursuant to Section 2.4(d)(iii) or 2.4(e) of the
Pooling and Servicing Agreement,
(F) at the time of the initial creation
of an interest therein under the Agreement is not a
Defaulted Receivable,
(G) does not arise under an Account which
the Owner has classified on its electronic records as
counterfeit, cancelled or fraudulent, or which has
been identified as an Account with respect to which
the related card has been lost or stolen, and
(H) has not otherwise been charged off as
uncollectible pursuant to the Cardholder Guidelines;
(vii) which, together with the Cardholder Agreement
related thereto, does not contravene in any material respect
any local, state or federal laws, rules or regulations
applicable thereto (including, without limitation, Regulation
Z of the Board of Governors of the Federal Reserve System, the
Federal Consumer Protection Act (including, without
limitation, the Federal Truth in Lending Act), the Fair Credit
Billing Act, and all other laws, rules and regulations
relating to usury, consumer protection, truth in lending, fair
credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy) and
with respect to which no party to the Cardholder Agreement
related thereto is in violation of any such law, rule or
regulation in any material respect;
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(viii) which satisfies all applicable requirements of the
Cardholder Guidelines;
(ix) which was not originated in or subject to the laws
of a jurisdiction whose laws would make such Receivable, the
related Cardholder Agreement or the sale of such Receivable to
a Purchaser under the Agreement unlawful, invalid or
unenforceable; and
(x) which is owned solely by the Seller free and
clear of all Adverse Claims, except for (1) the interests
created therein pursuant to the Pooling and Servicing
Agreement (which interests are pari passu with the Purchasers'
interests therein), and (2) the interests therein created
under the Agreement.
"Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"Eurodollar Rate" means, for any Fixed Period, an interest
rate per annum equal to the rate per annum at which deposits in U.S. dollars
are offered by the principal office of Citibank, N.A. in London, England to
prime banks in the London interbank market at 11:00 A.M. (London time) two
Business Days before the first day of such Fixed Period in an amount
substantially equal to the Purchaser Capital associated with such Fixed Period
on such first day and for a period equal to such Fixed Period.
"Eurodollar Rate Reserve Percentage" of any Purchaser for any
Fixed Period in respect of which Yield is computed by reference to the
Eurodollar Rate means the reserve percentage applicable two Business Days
before the first day of such Fixed Period under regulations issued from time to
time by the Board of Governors of the Federal Reserve System (or any successor)
(or if more than one such percentage shall be applicable, the daily average of
such percentages for those days in such Fixed Period during which any such
percentage shall be so applicable) for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or
other marginal reserve requirement) for such Purchaser with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the interest rate on Eurocurrency Liabilities is determined)
having a term equal to such Fixed Period.
"Excess Finance Charge Collections" has the meaning set forth
in Section 2.04 of the Agreement.
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"Facility Reduction Date" means September 15, 1994 (or such
later date as the Seller, the Subordinated Purchaser, the Owner, the Servicer
and the Agent may mutually agree in writing).
"Facility Termination Date" means the earliest of (i)
September 15, 1996 (or such later date as the Seller, the Subordinated
Purchaser, the Owner, the Servicer and the Agent may mutually agree in writing,
which in any event, shall not be later than December 24, 1997) or (ii) the date
determined pursuant to Section 3.02 or (iii) the date the Purchase Limit
reduces to zero pursuant to Section 1.01(c) or (iv) September 10, 1995, if on
or prior to September 15, 1994 the Owner shall not have obtained extensions to
or replacements for such of the Interest Rate Agreements as may be necessary so
as to be in compliance with clause (iii)(y) of the first sentence of the
definition of Interest Rate Agreements.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by it.
"Fee Letter" has the meaning set forth in Section 1.04 of the
Agreement.
"Final Distribution Date" means the date on which (i) the
Purchaser Capital of all Purchaser Receivable Interests and Yield thereon have
been paid in full, (ii) all other amounts payable hereunder to the Purchasers
or the Agent with respect thereto are paid in full, (iii) the Subordinated
Purchaser Capital of all Subordinated Receivable Interests have been paid in
full, and (iv) the aggregate amount of all unreimbursed Purchaser Charge-Offs
with respect thereto have been reimbursed; provided, that the Final
Distribution Date shall in any event occur one year after all amounts payable
pursuant to clauses (i), (ii) and (iv) above have been paid in full even if all
unreimbursed Purchaser Charge-Offs with respect thereto have not been
reimbursed; this is the "Series Termination Date" referred to in the Pooling
and Servicing Agreement.
"Finance Charge Receivables" means all amounts billed to the
Obligors on any Account in the ordinary course of the Owner's business in
respect of (a) periodic rate finance charges, (b) late payment fees, (c) annual
fees, if any, with respect to the Accounts (excluding any fees payable with
respect to the
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"Fashion Bug Gold Club" which fees shall be deemed to be Principal
Receivables), (d) returned check charges, and (e) any other fees with respect
to the Accounts designated by the Owner by notice to the Agent at any time and
from time to time to be included as Finance Charge Receivables.
Notwithstanding their treatment under the Pooling and Servicing Agreement,
Discount Option Receivables, shall, for the purposes of the Agreement, be
treated as Principal Receivables and not as Finance Charge Receivables, except
as otherwise expressly provided in the Agreement.
"Fixed Allocation Percentage" means, for each Due Period with
respect to the Amortization Period, the ratio (expressed as a percentage)
(which shall not be in excess of 100%) computed as at the close of business of
the Agent on the Business Day immediately preceding the Partial Amortization
Date or the Termination Date (whichever triggered the beginning of such
Amortization Period), by dividing (a) the sum of the Purchaser Capital and the
Subordinated Purchaser Capital on such Business Day by (b) the product of (i)
the Allocation Percentage for such Due Period and (ii) the total amount of
Principal Receivables on such Business Day minus the total amount of Discount
Option Receivables (if any) on such Business Day.
"Fixed Period" means, with respect to any Purchaser Receivable
Interest which is not funded through the issuance of commercial paper:
(a) initially the period commencing on the date
on which such Purchaser Receivable Interest is first funded
other than by the issuance of commercial paper and ending such
number of days as the Servicer shall select and the Agent
shall approve pursuant to the proviso below; and
(b) thereafter each period commencing on the last
day of the immediately preceding Fixed Period for such
Purchaser Receivable Interest and ending such number of days
as the Servicer shall select and the Agent shall approve
pursuant to the proviso below;
provided, that
(i) such Fixed Period shall be a period from one
to and including 29 days, or a period of one, two or three
months, as the Servicer may select and the agent shall approve
on notice received by the Agent (including notice by
telephone, confirmed in writing) not later than 11:00 A.M. on
(A) the third Business Day before the first day of such Fixed
Period (in the case of Fixed Periods of one, two or three
months) or
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(B) the first day of such Fixed Period (in the case of Fixed
Periods of one to 29 days);
(ii) any Fixed Period (other than of one day)
which would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day
(provided, however, if Yield in respect of such Fixed Period
is computed by reference to the Eurodollar Rate, and such
Fixed Period would otherwise end on a day which is not a
Business Day, and there is no subsequent Business Day in the
same calendar month as such day, such Fixed Period shall end
on the next preceding Business Day);
(iii) in the case of any Fixed Period of one day,
(A) if such Fixed Period is the initial Fixed Period for a
Purchaser Receivable Interest, such Fixed Period shall be the
day of purchase of such Purchaser Receivable Interest; (B) any
subsequently occurring Fixed Period which is one day shall, if
the immediately preceding Fixed Period is more than one day,
be the last day of such immediately preceding Fixed Period,
and, if the immediately preceding Fixed Period is one day, be
the day next following such immediately preceding Fixed
Period; and (C) if such Fixed Period occurs on a day
immediately preceding a day which is not a Business Day, such
Fixed Period shall be extended to the next succeeding Business
Day; and
(iv) in the case of any Fixed Period for any
Purchaser Receivable Interest which commences before the
Termination Date for such Purchaser Receivable Interest and
would otherwise end on a date occurring after such Termination
Date, such Fixed Period shall end on such Termination Date and
the duration of each Fixed Period which commences on or after
the Termination Date for such Purchaser Receivable Interest
shall be of such duration as shall be selected by the Agent.
"Floating Allocation Percentage" means, for each Due Period,
the ratio (expressed as a percentage) (which shall not be in excess of 100%)
computed as of the last day of the immediately preceding Due Period by dividing
(a) the sum of the Purchaser Capital and the Subordinated Purchaser Capital as
of such last day by (b) the product of (i) the Allocation Percentage for such
Due Period and (ii) the total amount of Principal Receivables on such last day
minus the total amount of Discount Option Receivables (if any) on such day;
provided, however, that during the initial Due Period, the Floating Allocation
Percentage will be equal to the ratio (expressed as a percentage) computed by
dividing (x) the sum of the initial Purchaser Capital and the
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initial Subordinated Purchaser Capital by (y) the product of (i) the Allocation
Percentage for such initial Due Period and (ii) the total amount of Principal
Receivables on the initial Cut-Off Date.
"FSC" means Fashion Service Corp., a Delaware corporation.
"Funding Rate" for any Settlement Period means (a) the
published yield per annum for one-month commercial paper issued by firms whose
bonds are rated AA by S&P (or the equivalent), which is reported for the date
two Business Days prior to the Distribution Date immediately following such
Settlement Period in "Selected Interest Rates" (Publication H.15(519), Federal
Reserve Statistical Release, published by the Board of Governors of the Federal
Reserve System (or successor publication) (or, if such yield is not published,
such other rate as the Agent and the Servicer shall agree to in writing) or
(b) such other rate as the Agent and the Servicer shall agree to in writing.
"GAAP" means generally accepted accounting principles in the
United States of America, applied on a consistent basis and applied to both
classification of items and amounts, and shall include but not be limited to
the official interpretations thereof by the Financial Accounting Standards
Board, its predecessors and successors.
"Holder of the Exchangeable Seller Certificate" shall have the
meaning ascribed to that term in the Pooling and Servicing Agreement.
"Initial Depositary Account" means the "Initial Depositary
Account" under the Pooling and Servicing Agreement.
"Insurance Proceeds" means any amounts received pursuant to
any credit life insurance policies, credit disability or unemployment insurance
policies covering any Obligor with respect to Pool Receivables under such
Obligor's Account to the extent such amounts are used to make payments on such
Account.
"Interest Rate Agreements" mean one or more interest rate cap
or interest rate swap agreements which shall (i) in the case of a cap
agreement, provide for payments to the Owner or an Owner Affiliate or the
Seller in the event the Funding Rate shall exceed 9% per annum, (ii) in the
case of a swap agreement, provide for payments to the Owner or an Owner
Affiliate at the Funding Rate in exchange for payments by the Owner or such
Owner Affiliate at a fixed interest rate not in excess of 9.0% per annum, (iii)
cover in the aggregate (x) a notional balance of at least $150,000,000 through
the Facility Reduction Date, which notional balance shall either (A) remain at
least at $150,000,000 during the ten months immediately following the Facility
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Reduction Date or (B) amortize on a straight-line basis to zero over not less
than 10 months commencing with the Facility Reduction Date and (y) an
additional notional balance of at least $100,000,000 through the Facility
Termination Date, which notional balance shall either (A) remain at least at
$100,000,000 during the ten months immediately following the Facility
Termination Date or (B) amortize on a straight-line basis to zero over not less
than 10 months immediately following the Facility Termination Date (provided
that prior to September 15, 1994, such additional notional balance of at least
$100,000,000 may have a termination date no earlier than July 10, 1996), (iv)
if entered into after September 20, 1993, comply with the provisions of
Sections 8(e) (to the extent there is, at the time entered into, an existing
swap or cap transaction with any of the counterparties to any of the Interest
Rate Agreements) and 8(f) of the Company Agreement, as amended, and (v) be with
such counterparties and contain such other terms and provisions as shall be
satisfactory to the Agent. The Interest Rate Agreements, which are limited to
those agreements specified in the Owner's officer's certificate in the form of
Annex G delivered from time to time in accordance with the Agreement, are the
"Enhancement" referred to in the Pooling and Servicing Agreement for the
Receivables Purchase Series arising in connection with the Agreement.
"Investor Certificate" has the meaning set forth in Section
1.1 of the Pooling and Servicing Agreement.
"Last Cycle Closing Date" means, for any month, the
latest-occurring Cycle Closing Date for all Cardholder Agreements in such
month.
"Liquidation Fee" means, for the Settlement Period or Fixed
Period during which the Termination Date occurs, the amount, if any, by which
(i) the additional Yield (calculated without taking into account any
Liquidation Fee or any shortened duration of such Settlement Period or Fixed
Period due to the occurrence of the Termination Date) which would have accrued
during such Settlement Period or Fixed Period on the reductions of Purchaser
Capital of the Purchaser Receivable Interests had such reductions remained as
Purchaser Capital, exceeds (ii) the income, if any, received by the Purchasers'
investing the proceeds of such reductions of Purchaser Capital.
"Loss Amount" for any Due Period means an amount (which shall
not be less than zero) equal to (a) the principal balance of any Account, or
any portion thereof, that has been written off or, consistent with the
Cardholder Guidelines, should have been written off the Seller's books as
uncollectible during such Due Period, minus (b) the amount of Recoveries
received in such Due Period with respect to Pool Receivables previously charged
off as uncollectible.
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"Master Trust Documents" means the Pooling and Servicing
Agreement and each other agreement, instrument or other document (other than
any "supplement" or "receivables purchase agreement" (in each case, as defined
therein)) delivered in connection with the Pooling and Servicing Agreement, in
each case as the same may be amended, modified or supplemented in accordance
with the terms thereof.
"Mellon Agreement" means the Amended and Restated Receivables
Purchase Agreement, dated as of November 14, 1991, among Spirit, as the seller,
FSC and Charming Shoppes, as Guarantors, and Mellon Bank, N.A., as the buyer.
"Minimum Seller Capital", at any time, means, an aggregate
Outstanding Balance of Principal Receivables that are Eligible Receivables in
the Receivables Pool at such time equal to (i) during the Revolving Period, the
product of (a) 2.0% and (b) the amount of the Purchaser Capital at such time
and (ii) during the Amortization Period, an amount equal to (a) 102% of the
amount of the Purchaser Capital at the close of business of the Agent on the
Business Day immediately preceding the Partial Amortization Date or the
Termination Date (whichever triggered the beginning of such Amortization
Period) minus (b) the amount of the Purchaser Capital at such time.
"Monthly Charge-Off Ratio" for any Due Period means the ratio
(expressed as a percentage) computed as of the last day of such Due Period by
dividing (i) an amount equal to twelve times the remainder of (x) the aggregate
Outstanding Balance of all Pool Receivables written off the Seller's books, or
which should have been written off the Seller's books during such Due Period
minus (y) the aggregate amount of Collections of Principal Receivables in the
Receivables Pool actually received during such Due Period in respect of Pool
Receivables that had been written off the Seller's books during a prior Due
Period by (ii) the Outstanding Balance of the Receivables in the Receivables
Pool as of the first day of such Due Period.
"Moody's" means Moody's Investors Service, Inc. or any
successor thereto.
"Net Excess Spread" means, as of the last day of each Due
Period, the Portfolio Yield for such Due Period minus the sum of (A) the
weighted average Yield Rate for such Due Period, (B) the Servicer Fee Rate for
such Due Period, (C) the fees payable under the Fee Letter for such Due Period
(each expressed as a percentage rate per annum) and (D) the Monthly Charge-Off
Ratio for such Due Period.
"Net Receivables Pool Balance" means, at any time, the
Outstanding Balance of all Eligible Receivables then in the Receivables Pool,
minus the entire principal balance of any
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Account if any Principal Receivable thereunder has become a Defaulted
Receivable.
"Obligor" means, with respect to any Account, the Person or
Persons obligated to make payments with respect to such Account pursuant to a
Cardholder Agreement, including any guarantor thereof.
"Opinion of Counsel" has the meaning set forth in Section 1.1
of the Pooling and Servicing Agreement.
"Original PSA" has the meaning set forth in the eleventh
Preliminary Statement to the Agreement.
"Original RPA" has the meaning set forth in the eleventh
Preliminary Statement to the Agreement.
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof.
"Owner Affiliate" means Charming Shoppes, FSC or any other
wholly owned direct or indirect subsidiary of Charming Shoppes which is
approved by the Agent.
"Parallel Purchase Commitment" means the Receivables Purchase
Agreement (Parallel Purchase Commitment), dated as of the date hereof, among
the Seller, the Servicer, the Owner, Citibank, N.A., the Subordinated Purchaser
and CNAI, individually and as Agent, as the same may, from time to time, be
amended, modified or supplemented.
"Partial Amortization Date" means the Facility Reduction Date
if on such date the Purchaser Capital exceeds $100,000,000.
"Partial Amortization Ending Date" means the first date,
following the occurrence of the Partial Amortization Date, on which Purchaser
Capital shall have been reduced to $100,000,000 and Subordinated Purchaser
Capital shall have been reduced to $9,890,110.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any political
subdivision or agency thereof.
"Pool Index File" means the file on the Owner's computer
system that identifies revolving credit card accounts of the Owner, which file
is designated by the Owner as its "Pool Index File".
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"Pool Receivables" means all Receivables existing on the
initial Cut-Off Date and all Receivables arising in the Accounts from time to
time after the applicable Cut Off Date until the Final Distribution Date.
"Pooling and Servicing Agreement" means the Amended and
Restated Pooling and Servicing Agreement dated as of December 24, 1992 as
amended and restated as of May 4, 1994 among Spirit, as the seller, Spirit as
the Servicer and First Fidelity Bank, National Association (formerly known as
First Fidelity Bank, N.A., Pennsylvania, and prior to that known as Fidelity
Bank, National Association), as the Trustee, as the same may, from time to
time, be amended, restated, modified or supplemented.
"Portfolio Yield" means, with respect to any Due Period, the
annualized percentage equivalent to the amount computed as of the last day of
such Due Period by dividing (i) the amount of Collections of Finance Charge
Receivables during such Due Period calculated on a cash basis by (ii) the total
amount of the Principal Receivables in the Receivables Pool as of the first day
of such Due Period.
"Principal Receivables" means (a) all amounts (other than
amounts which represent Finance Charge Receivables) billed to the Obligor on
any Account in the ordinary course of the Owner's business in respect of
purchases of merchandise or services and (b) all other fees (other than Finance
Charge Receivables) billed to Obligors on the Accounts. Notwithstanding their
treatment under the Pooling and Servicing Agreement, Discount Option
Receivables, shall, for the purposes of the Agreement, be treated as Principal
Receivables and not as Finance Charge Receivables, except as otherwise
expressly provided in the Agreement.
"Purchase Interests" means, collectively, the Purchaser
Receivable Interests, the Subordinated Receivable Interests, and the portion of
the Seller Interest arising in respect of the Minimum Seller Capital; this is
the "Receivables Purchase Interest" and "Receivables Purchase Series Interest"
referred to in the Pooling and Servicing Agreement.
"Purchase Limit" means (a) from the date of the Agreement to
October 5, 1993, $100,000,000, (b) from October 6, 1993 to the Facility
Reduction Date, $250,000,000, and (c) following the Facility Reduction Date,
$100,000,000, in each case as such amounts may be reduced pursuant to Section
1.01(c). References to the unused portion of the Purchase Limit shall mean, at
any time, the Purchase Limit, as then reduced pursuant to Section 1.01(c) or
pursuant to the next sentence, minus the sum of the then outstanding Purchaser
Capital and the then outstanding "Purchaser Capital" of "Purchaser Receivable
Interests" under the Parallel Purchase Commitment. Furthermore,
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on each day on which the Seller reduces the unused portion of (or terminates)
the "Commitment" under the Parallel Purchase Commitment, the Purchase Limit
automatically shall reduce by the same amount (or so terminate).
"Purchaser" means each of Ciesco, CAFCO and CRC and all other
owners by assignment or otherwise of a Purchaser Receivable Interest and, to
the extent of the undivided interests so purchased, shall include any
participants.
"Purchaser Capital" for any date means an amount equal to (a)
the aggregate initial Purchaser Capital of all Purchaser Receivable Interests
purchased by the Purchasers under the Agreement prior to such date (including
pursuant to reinvestments under Section 2.06(a) of the Agreement) minus (b) the
amount of distributions on account of Purchaser Capital made to the Purchasers
prior to such date and minus (c) the excess, if any, of the aggregate amount of
Purchaser Charge-Offs for all Distribution Dates preceding such date over the
aggregate amount of Purchaser Charge-Offs reimbursed prior to such date;
provided, however, that if Purchaser Capital shall have been reduced by any
distribution and thereafter all or a portion of such distribution is rescinded
or must otherwise be returned for any reason, such Purchaser Capital shall be
increased by the amount of such rescinded or returned distribution, as though
it had not been made.
"Purchaser Charge-Off" means any amount designated as such in
Section 2.05(d) or 2.07(a) of the Agreement.
"Purchaser Loss Amount" means, with respect to any
Distribution Date, the product of (a) the Floating Allocation Percentage of the
Allocated Loss Amount for the preceding Due Period and (b) the Purchaser
Percentage.
"Purchaser Percentage" means, with respect to any Distribution
Date, a fraction, the numerator of which is equal to the Purchaser Capital as
of the close of business on the last day of the second preceding Due Period and
the denominator of which is equal to the sum of the Purchaser Capital and the
Subordinated Purchaser Capital as of the close of business on such day.
"Purchaser Receivable Interest" means, at any time, the
undivided percentage ownership interests purchased by Ciesco, CAFCO, CRC or
their respective successors and assigns, under the Agreement, which shall
represent an undivided percentage ownership interest in all outstanding Pool
Receivables then existing or thereafter arising and all Collections with
respect to, and other proceeds of, such Pool Receivables (including, without
limitation, Insurance Proceeds and other amounts constituting Recoveries of
Pool Receivables and payments in respect of the Interest Rate Agreements).
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"Purchaser Representative" means, initially, CNAI, as the
Purchaser Representative pursuant to Section 6.01 of the Agreement, and each
other Person who shall succeed to the functions of CNAI as the Purchaser
Representative pursuant to Section 6.01(c) of the Agreement.
"Purchaser Servicer Fee", with respect to any Distribution
Date, means an amount equal to one-twelfth of the product of (a) the Servicing
Fee Rate and (b) the Purchaser Capital as of the last day of the Due Period
second preceding such Distribution Date.
"Quarterly Charge-Off Ratio" as of the last day of any Due
Period means the ratio (expressed as a percentage) computed by averaging the
Monthly Charge-Off Ratio for such Due Period with the two immediately preceding
Monthly Charge-Off Ratios.
"Receivable" has the meaning set forth in the third
Preliminary Statement to the Agreement.
"Receivable Interest" has the meaning set forth in the fourth
Preliminary Statement to the Agreement.
"Receivables Pool" means at any time the aggregation of each
then outstanding Pool Receivable.
"Receivables Purchase Series" has the meaning attributed
thereto in the Pooling and Servicing Agreement.
"Receivables Purchaser" has the meaning attributed thereto in
the Pooling and Servicing Agreement.
"Records" means correspondence, memoranda, computer programs,
tapes, discs, papers, books or other documents or transcribed information of
any type whether expressed in ordinary or machine readable language.
"Recoveries" means all amounts received (net of out-of-pocket
costs of collection), including Insurance Proceeds, with respect to Pool
Receivables which were previously charged off as uncollectible.
"Removal Date" has the meaning set forth in Section 1.1 of the
Pooling and Servicing Agreement.
"Removed Accounts" means Accounts designated by the Owner for
deletion and removal from the Trust for purposes of the Pooling and Servicing
Agreement pursuant to Section 2.7 thereof.
"Renumbered Account" means an Account with respect to which a
new credit account number has been issued by the Servicer or the Owner under
circumstances resulting from a lost or stolen
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credit card, from the transfer from one group to another group, from the
transfer from one Obligor to another Obligor or from the addition of any
Obligor and not requiring standard application and credit evaluation procedures
under the Cardholder Guidelines; and which in any case can be traced or
identified by reference to or by way of the computer files or microfiche or
written lists delivered to the Trustee pursuant to Section 2.1 or 2.6(c)(ii) of
the Pooling and Servicing Agreement as an Account which has been renumbered.
"Required Amount" has the meaning set forth in Section 2.05(a)
of the Agreement.
"Requirements of Law" means any law, treaty, rule or
regulation, or determination of an arbitrator or of the United States of
America, any state or other political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, whether federal, state or local
(including any usury law, the Federal Truth-in-Lending Act and Regulation Z of
the Board of Governors of the Federal Reserve System), and, when used with
respect to any Person, the certificate of incorporation and by-laws or other
charter or other governing documents of such Person.
"Responsible Officer" of the Seller, the Servicer, FSC or
Charming Shoppes, as the case may be, means the chief executive officer, chief
financial officer or controller thereof, or, with respect to the Owner, its
Vice President-Credit.
"Revolving Period" means (a) the period beginning on the date
of the Agreement and ending at the close of business of the Agent on the
Business Day immediately preceding the earlier of the Partial Amortization Date
and the Termination Date, and (b) the period (if any) beginning on the date the
Partial Amortization Ending Date occurs and ending at the close of business of
the Agent on the Business Day immediately preceding the Termination Date.
"S&P" means Standard & Poor's Corporation or any successor
thereto.
"Seller Account" means, initially, the account (account number
033009128001) of the Seller maintained at the office of the Trustee located at
123 South Broad Street, Philadelphia, Pennsylvania, or, upon 10 Business Days'
written notice from the Seller to the Agent, any other account established by
the Seller with a financial institution in New York, New York or Philadelphia,
Pennsylvania for the purpose of receiving amounts allocated and distributed by
the Servicer in respect of the Seller Interest.
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"Seller Interest" means, at any time, an undivided ownership
interest in the portion of the Pool Receivables and Collections with respect
thereto and other proceeds thereof (including, without limitation, Insurance
Proceeds and other amounts constituting Recoveries of Pool Receivables and
payments in respect of the Interest Rate Agreements) not allocated to the
Purchaser Receivable Interests or the Subordinated Receivable Interests
pursuant to the Agreement and not allocated to any other Person other than the
Holder of the Exchangeable Seller Certificate pursuant to a supplement to the
Pooling and Servicing Agreement or pursuant to any other receivables purchase
agreement that is subject to the Pooling and Servicing Agreement, including the
right to receive Collections with respect to the Pool Receivables and other
amounts at the times and in the amounts specified in Article II of the
Agreement to be paid to the Holder of the Exchangeable Seller Certificate on
behalf of the Seller Interest.
"Servicer" means at any time the Person then authorized
pursuant to the Agreement and the Pooling and Servicing Agreement to administer
and collect Pool Receivables.
"Servicer Fee" has the meaning set forth in Section 5.03 of
the Agreement; this is the "Receivables Purchaser Monthly Servicing Fee"
referred to in the Pooling and Servicing Agreement.
"Servicer Report" means a report, in substantially the form of
Annex A hereto, furnished by the Servicer to the Agent pursuant to paragraph
1(g) of Exhibit V.
"Servicing Fee Rate" has the meaning set forth in Section 5.03
of the Agreement; this is the "Series Servicing Fee Percentage" referred to in
the Pooling and Servicing Agreement.
"Settlement Period" means (a) initially, the period from and
including the date of the Agreement to but excluding the next following
Distribution Date and (b) thereafter, the period from and including a
Distribution Date to but excluding the next following Distribution Date.
"Statement" means, in respect of any Cardholder Agreement, the
periodic written notice to the related Obligor setting forth the previous
balance, payments and credits, finance charge, charges (including sales and
other charges), new balance, and minimum payment.
"Store" means:
(i) each retail location of the Owner or any Affiliate
of the Owner that is part of the "Fashion
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Bug" or "Fashion Bug Plus" chain of women's retail apparel
stores,
(ii) each other retail location of a chain of women's
retail apparel stores established de novo by the Owner or any
Affiliate of the Owner the primary business of which is the
retail sale of moderately priced women's apparel, and
(iii) any other retail location the primary business of
which is the retail sale of moderately priced women's apparel
that is consented to by the Agent.
"Store Account" means each account established by a Store for
the purpose of collecting Store Payments.
"Store Payment" means any payment by an Obligor of a Pool
Receivable made by means of cash or a check delivered in person by or on behalf
of such Obligor at any Store.
"Store Payment Notice" has the meaning set forth in paragraph
1(b)(xxiii) of Exhibit II to the Agreement.
"Subordinated Principal Collections" means, with respect to
each Distribution Date, (a) the product of (1) the Floating Allocation
Percentage, with respect to the Revolving Period, or the Fixed Allocation
Percentage, with respect to the Amortization Period, of Allocable Principal
Collections for the related Due Period (or any partial Due Period which occurs
as the first Due Period during the Amortization Period) and (2) the
Subordinated Purchaser Percentage for such Distribution Date, minus (b) the
aggregate amount (if any) of Total Principal Collections reinvested with the
Seller on behalf of the Subordinated Purchaser during such Due Period pursuant
to Section 2.06(a) of the Agreement; provided, that in no event shall
Subordinated Principal Collections be less than zero.
"Subordinated Purchaser Account" means the special account of
the Subordinated Purchaser established by the Subordinated Purchaser with a
financial institution in New York, New York or Philadelphia, Pennsylvania, and
specified to the Agent in writing, for the purpose of receiving amounts
allocated and distributed by the Servicer in respect of the Subordinated
Receivable Interest.
"Subordinated Purchaser Capital" for any date means an amount
equal to (a) the aggregate initial Subordinated Purchaser Capital of all
Subordinated Receivable Interests purchased by the Subordinated Purchaser under
the Agreement prior to such date (including pursuant to reinvestments under
Section 2.06(a) of the Agreement), minus (b) the amount of distributions on
account of
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<PAGE> 65
Subordinated Purchaser Capital actually received by the Subordinated Purchaser
prior to such date, minus (c) an amount equal to the aggregate amount by which
the Subordinated Purchaser Capital has been reduced as a result of Subordinated
Principal Collections for prior Distribution Dates having been used to fund the
Required Amount with respect to such Distribution Dates pursuant to Section
2.05(c) of the Agreement, minus (d) an amount equal to the aggregate amount by
which the Subordinated Purchaser Capital has been reduced to fund the Purchaser
Loss Amount on all prior Distribution Dates pursuant to Section 2.05(d) of the
Agreement, minus (e) an amount equal to the aggregate amount by which
Subordinated Purchaser Capital has been reduced on all prior Distribution Dates
pursuant to Section 2.07(a) of the Agreement, and plus (f) the aggregate amount
of Excess Finance Charge Collections applied on all prior Distribution Dates
for the purposes of reimbursing amounts deducted pursuant to the foregoing
clauses (c), (d) and (e).
"Subordinated Purchaser Loss Amount" means, with respect to
any Distribution Date, the product of (a) the Floating Allocation Percentage of
the Allocated Loss Amount for the preceding Due Period and (b) the Subordinated
Purchaser Percentage as of such Distribution Date.
"Subordinated Purchaser Percentage" means, with respect to any
Distribution Date, a fraction, the numerator of which is equal to the
Subordinated Purchaser Capital as of the close of business on the last day of
the second preceding Due Period and the denominator of which is equal to the
sum of the Purchaser Capital and the Subordinated Purchaser Capital at the
close of business on such day.
"Subordinated Purchaser Rate" means, for any period, a per
annum rate equal to the Yield Rate for such period plus 0.25%.
"Subordinated Purchaser Servicer Fee", with respect to any
Distribution Date, means an amount equal to one-twelfth of the product of (a)
the Servicing Fee Rate and (b) the Subordinated Purchaser Capital as of the
last day of the Due Period second preceding such Distribution Date.
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"Subordinated Purchaser Yield" means, for each Subordinated
Receivable Interest for any Settlement Period,
<TABLE>
<S> <C>
SPR x SPC x ED
--
360
where:
SPR = the Subordinated Purchaser
Rate for such Subordinated
Receivable Interest for such
Settlement Period
SPC = the Subordinated Purchaser
Capital of the Subordinated
Receivable Interests during
such Settlement Period
ED = the actual number of days elapsed
during such Settlement Period;
</TABLE>
provided that no provision of the Agreement shall require the payment or permit
the collection of Subordinated Purchaser Yield in excess of the maximum
permitted by applicable law; and provided, further that Subordinated Purchaser
Yield for any Subordinated Receivable Interest shall not be considered paid by
any distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason.
"Subordinated Receivable Interest" means, at any time, the
undivided percentage ownership interests purchased by the Subordinated
Purchaser under the Agreement, which shall represent an undivided percentage
ownership interest, subordinated (to the extent set forth in Article II of the
Agreement) to the Purchaser Receivable Interests, in all outstanding Pool
Receivables then existing or thereafter arising and all Collections with
respect to, and other proceeds of, such Pool Receivables (including, without
limitation, Insurance Proceeds and other amounts constituting Recoveries of
Pool Receivables and payments in respect of the Interest Rate Agreements).
"Termination Date" means the earlier of (i) the Business Day
which the Seller or the Agent so designates by notice to the other (with a copy
to the Servicer) at least one Business Day in advance (including any date on
which the Agent terminates the reinvestment of Collections pursuant to
paragraph 2(b)(iii) of Exhibit II to the Agreement) and (ii) the Facility
Termination Date.
"Total Principal Collections" has the meaning set forth in
Section 2.02(b) of the Agreement.
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<PAGE> 67
"Total Systems Failure" means, in respect of any Distribution
Date, a total failure of the computer system (including but not limited to
off-site backup systems) of the Servicer or the Administrative Servicer which
contain Records relating to the Pool Receivables, the effect of which would
make it impossible or impracticable for the Servicer or the Administrative
Servicer to perform the acts required to be performed hereunder on or in
anticipation of such Distribution Date.
"Trust" means the trust created by the Pooling and Servicing
Agreement.
"Trustee" means, initially, First Fidelity Bank, National
Association (formerly known as First Fidelity Bank, N.A., Pennsylvania, and
prior to that known as Fidelity Bank, National Association), a national banking
association, as the trustee under the Pooling and Servicing Agreement, and each
other Person who shall succeed to the functions of First Fidelity Bank,
National Association pursuant to the terms of the Pooling and Servicing
Agreement.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the specified jurisdiction.
"Unallocated Net Receivables Pool Balance" means, at any time,
the Outstanding Balance of Principal Receivables that are Eligible Receivables
in the Receivables Pool that is not allocated to the Purchaser Receivable
Interests or the Subordinated Receivable Interests pursuant to the Agreement
and not allocated to any other Person other than the Holder of the Exchangeable
Seller Certificate pursuant to a supplement to the Pooling and Servicing
Agreement or pursuant to any other receivables purchase agreement that is
subject to the Pooling and Servicing Agreement.
"Yield" means:
(i) for each Purchaser Receivable Interest for
any Settlement Period to the extent the Purchaser will be
funding such Purchaser Receivable Interest on the first day of
such Settlement Period through the issuance of commercial
paper,
FR x C x ED + LF
--
360
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<PAGE> 68
(ii) for each Purchaser Receivable Interest for
any Fixed Period to the extent the Purchaser will not be
funding such Purchaser Receivable Interest on the first day of
such Fixed Period through the issuance of commercial paper,
<TABLE>
<S> <C>
AR x C x ED
--
360
where:
AR = the Assignee Rate for such
Purchaser Receivable Interest
for the applicable Fixed
Period
C = the Purchaser Capital of the
Purchaser Receivable
Interests during the
applicable Settlement Period
or Fixed Period
FR = the Funding Rate for the applicable
Settlement Period
ED = the actual number of days
elapsed during the applicable
Settlement Period or Fixed
Period
LF = the Liquidation Fee, if any, for
such Settlement Period;
</TABLE>
provided that no provision of the Agreement shall require the payment or permit
the collection of Yield in excess of the maximum permitted by applicable law;
and provided, further that Yield for any Purchaser Receivable Interest shall
not be considered paid by any distribution to the extent that at any time all
or a portion of such distribution is rescinded or must otherwise be returned
for any reason.
"Yield Rate" means, at any time, the Assignee Rate or the
Funding Rate with regard to which Yield is calculated at such time.
- - - - - -
2. Defined Terms from the Pooling and Servicing Agreement.
For purposes of the Pooling and Servicing Agreement:
"interest" at any time means the sum of the Yield and the
Subordinated Purchaser Yield at such time.
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<PAGE> 69
"Investor/Purchaser Percentage" means the Allocation
Percentage.
"principal" at any time means the sum of the Purchaser Capital
and the Subordinated Purchaser Capital at such time.
"Receivables Purchase Interest" and "Receivables Purchase
Series Interest" means the Purchase Interests.
"Receivables Purchaser Monthly Servicing Fee" means the
Servicer Fee.
"Series Servicing Fee Percentage" means the Servicing Fee Rate.
"Series Termination Date" means the Final Distribution Date.
3. Other Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. All terms used in
Article 9 of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.
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<PAGE> 70
EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The initial
purchase of a Purchaser Receivable Interest by the Purchasers under the
Agreement is subject to the conditions precedent that:
(a) on or before the date of such purchase, the Owner shall
have (i) indicated in the Pool Index File maintained in its computer files that
interests in the Receivables created in connection with the Accounts have been
sold by the Seller to the Purchasers pursuant to the Agreement by identifying
such Accounts in the Pool Index File with the designation "Attribute 300, 400,
700 or 800" and (ii) delivered to the Trustee, pursuant to Section 2.1 of the
Pooling and Servicing Agreement, a computer file or microfiche or written list
containing a true and complete list of all Accounts, identified by account
number, Obligor name and Obligor address and setting forth the Receivable
balance as of the applicable Cut Off Date; and
(b) the Agent shall have received on or before the date of
such purchase the following, each (unless otherwise indicated) dated such date,
in form and substance satisfactory to the Agent:
(i) Certified copies of any necessary corporate
action of the Trustee approving the Agreement and certified copies of
all documents evidencing other necessary governmental approvals, if
any, with respect to the Agreement.
(ii) a copy of (A) the Subordinated Purchaser's
Certificate of Incorporation, certified (as of a date reasonably near
the date of the initial purchase hereunder) by the Secretary of State
of the State of Delaware as being a true and correct copy thereof, (B)
the Subordinated Purchaser's By-Laws as in effect on the date of such
initial purchase, certified by the Subordinated Purchaser's President
or a Vice President and the Secretary or any Assistant Secretary of the
Subordinated Purchaser as being a true and correct copy thereof, (C)
the resolutions adopted by the Board of Directors of the Subordinated
Purchaser authorizing the Subordinated Purchaser's officers to enter
into, and to perform all necessary actions in connection with,
transactions of the type contemplated by the Agreement, certified by
the Subordinated Purchaser's Secretary or Assistant Secretary and (D) a
certificate of the Secretary or Assistant Secretary of the Subordinated
Purchaser certifying the names and true signatures of the officers of
the Subordinated Purchaser authorized to sign the Agreement on behalf
of the Subordinated Purchaser and
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the other documents to be delivered by the Subordinated Purchaser
thereunder.
(iii) Certified copies of the resolutions of the
Board of Directors of the Servicer and the Owner approving the
Agreement and certified copies of all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to the Agreement.
(iv) Certified copies of the resolutions of the Board
of Directors of each of FSC and Charming Shoppes approving the Company
Agreement and certified copies of all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to the Company Agreement.
(v) A certificate of the Secretary or Assistant
Secretary of the Trustee certifying the names and true signatures of
the officers of the Trustee authorized to sign the Agreement on behalf
of the Seller and the other documents to be delivered by the Seller
thereunder.
(vi) A certificate of the Secretary or Assistant
Secretary of the Servicer and the Owner certifying the names and true
signatures of the officers of the Servicer or the Owner, as the case
may be, authorized to sign the Agreement and the other documents to be
delivered by it thereunder.
(vii) A certificate of the Secretary or Assistant
Secretary of each of FSC and Charming Shoppes certifying the names and
true signatures of the officers thereof authorized to sign the Company
Agreement and the other documents to be delivered by it thereunder.
(viii) Acknowledgment copies, or time stamped receipt
copies, of proper financing statements, duly filed on or before the
date of such initial purchase under the UCC of all jurisdictions that
the Agent may deem necessary or desirable in order to perfect the
ownership interests contemplated by the Agreement.
(ix) Acknowledgment copies, or time stamped receipt
copies, of proper financing statements, if any, necessary to release
all security interests and other rights of any Person in the
Receivables or Cardholder Agreements previously granted by the Owner or
the Seller (other than Adverse Claims expressly permitted under the
Agreement).
(x) Completed requests for information, dated as of a
date reasonably near the date of such initial purchase, listing all
effective financing statements (other than the financing statements
referred to in subsection (viii) above)
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<PAGE> 72
filed in the jurisdictions referred to in subsection (vii) above that
name the Seller as debtor, together with copies of such other financing
statements (none of which shall cover any Receivables or Cardholder
Agreements).
(xi) A copy of each Depositary Agreement with each
Depositary Bank, duly executed by the Seller and duly acknowledged by
such Depositary Bank.
(xii) An instruction letter to the Administrative
Servicer, in form and substance satisfactory to the Agent, duly
executed and delivered by the Owner and duly acknowledged by the
Administrative Servicer, directing the Administrative Servicer to cause
the Obligors of the Pool Receivables, upon the occurrence of an Early
Amortization Event, to make all payments thereunder directly to the
Collection Account or to an Initial Depositary Account or otherwise in
accordance with the Trustee's instructions.
(xiii) The Company Agreement, duly executed and
delivered by each of FSC and Charming Shoppes.
(xiv) The Fee Letter, duly executed and delivered by
the Seller.
(xv) [Intentionally Omitted.]
(xvi) A certified copy of each Master Trust Document,
duly executed and delivered by each party thereto, and certified copies
of the resolutions of each such party approving each Master Trust
Document to which it is party, and all documents evidencing other
necessary corporate action and government approvals, if any, with
respect to the Master Trust Documents, and copies of a certificate of
the Secretary or an Assistant Secretary of each such party certifying
the names and true signatures of the officers of such party authorized
to sign each Master Trust Document to which it is or will be a party
and the other documents to be delivered thereunder and favorable
opinions of each such other party.
(xvii) A copy of the Cardholder Guidelines, certified
by a Responsible Officer of the Owner as being complete and accurate in
all material respects.
(xviii) A favorable opinion of Pepper, Hamilton &
Scheetz, counsel for the Trustee, substantially in the form of Annex C
hereto and as to such other matters as the Agent may reasonably
request.
(xix) A favorable opinion of:
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<PAGE> 73
(1) Morgan, Lewis & Bockius, New York
counsel for each of the Servicer, the Owner, the Subordinated
Purchaser, Charming Shoppes and FSC, substantially in the form
of Annex D-1 hereto and as to such other matters as the Agent
may reasonably request,
(2) Weil, Gotshal & Manges, special
regulatory counsel for the Owner and the Servicer,
substantially in the form of Annex D-2 hereto and as to such
other matters as the Agent may reasonably request, and
(3) Colin Stern, Esq., General Counsel for
each of the Servicer, the Owner and the Subordinated
Purchaser, substantially in the form of Annex D-3 hereto and
as to such other matters as the Agent may reasonably request.
(xx) A favorable opinion of Colin Stern, Esq.,
General Counsel for each of FSC and Charming Shoppes, substantially in
the form of Annex E hereto and as to such other matters as the Agent
may reasonably request.
(xxi) A favorable opinion of Kaye, Scholer, Fierman,
Hays & Handler, counsel for the Agent, as the Agent may reasonably
request.
(xxii) A favorable opinion of Kaye, Scholer, Fierman,
Hays & Handler, counsel for the Agent, addressed to CAFCO and the
dealer for the commercial paper of CAFCO, as to the correctness of the
representation and warranty of the Owner set forth in paragraph 2(l) of
Exhibit III, substantially in the form previously delivered by such
counsel to the Agent.
(xxiii) An undated notice (the "Store Payment
Notice"), duly executed by each of the Owner and Charming Shoppes, to
the manager of each Store, in substantially the form of Annex F hereto.
2. Conditions Precedent to All Purchases and Reinvestments.
Each purchase (including the initial purchase) of Purchaser Receivable
Interests by the Purchasers under the Agreement and each reinvestment pursuant
to Section 2.06(a) of the Agreement shall be subject to the further conditions
precedent that:
(a) in the case of each purchase, the Servicer shall have
delivered (i) to the Trustee, on or prior to such purchase, the then most
recent computer file or microfiche or written list of Accounts required
pursuant to Section 2.1 or 2.6(c)(ii) of the
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<PAGE> 74
Pooling and Servicing Agreement, and (ii) to the Agent, on or prior to such
purchase (except, in the case of the initial purchase, such delivery may occur
within 10 days after such purchase), in form and substance satisfactory to the
Agent, a completed Servicer Report dated within 31 days prior to the date of
such purchase together with such additional information as may reasonably be
requested by the Agent,
(b) on the date of such purchase or reinvestment the
following statements shall be true (and acceptance of the proceeds of such
purchase or reinvestment shall be deemed a representation and warranty by the
Seller that such statements are then true):
(i) The representations and warranties contained in
Exhibit III are correct on and as of the date of such purchase or
reinvestment as though made on and as of such date, and
(ii) No event has occurred and is continuing, or
would result from such purchase or reinvestment, that constitutes an
Early Amortization Event or that would constitute an Early Amortization
Event but for the requirement that notice be given or time elapse or
both, and
(iii) The Agent shall not have given the Seller and
the Servicer at least one Business Day's notice that the Purchasers
have terminated the reinvestment of Collections in Purchaser Receivable
Interests, and
(c) Charming Shoppes is deemed by the Agent, in its sole
discretion, to be of credit quality equivalent to at least Baa2 by Moody's and
at least BBB by S&P, and
(d) the Agent shall have received such other approvals,
opinions or documents as it may reasonably request.
3. Additional Conditions Precedent to Each Purchase by the
Purchasers. Each purchase (including the initial purchase) of a Purchaser
Receivable Interest by the Purchasers under the Agreement is subject to the
additional conditions precedent that:
(a) the Subordinated Purchaser shall have purchased one or
more Subordinated Receivable Interests from the Seller such that, after giving
effect to such purchase by the Purchasers, the aggregate original amounts paid
to the Seller by the Subordinated Purchaser for such Subordinated Receivable
Interest(s) will be equal to at least the product of the aggregate initial
Capital of all Purchaser Receivable Interests purchased by the Purchasers
multiplied by 9/91; and
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(b) after giving effect to such purchase, the Unallocated Net
Receivables Pool Balance shall be equal to or exceed the Minimum Seller
Capital.
4. Conditions Precedent to the Effectiveness of the
Certain Provisions of Amendment No. 1. The effectiveness of certain amendments
set forth in Amendment No. 1 dated as of September 20, 1993 to the Agreement is
subject to the condition precedent that the Agent shall have received each of
the following, in form and substance satisfactory to the Agent, on or prior to
October 15, 1993:
(a) Certified copies of any necessary corporate action
of the Trustee approving Amendment No. 1 and certified copies of all documents
evidencing other necessary government approvals, if any, with respect to
Amendment No. 1 and certification of the names and true signatures of the
officers of the Trustee authorized to sign Amendment No. 1 on behalf of the
Seller and the other documents to be delivered by the Seller hereunder;
(b) Certified copies of the resolutions of the Board of
Directors of the Subordinated Purchaser approving Amendment No. 1, and
certified copies of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to Amendment No. 1, and
certification of the names and true signatures of the officers of the
Subordinated Purchaser authorized to sign Amendment No. 1 and the other
documents to be delivered by the Subordinated Purchaser hereunder;
(c) Certified copies of the resolutions of the Board of
Directors of the Servicer and the Owner approving Amendment No. 1, and
certified copies of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to Amendment No. 1, and
certification of the names and true signatures of the officers of the Servicer
and the Owner authorized to sign Amendment No. 1 and the other documents to be
delivered by the Servicer and the Owner hereunder;
(d) Certified copies of the resolutions of the Board of
Directors of FSC approving Amendment No. 1, and certified copies of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to Amendment No. 1, and certification of the
names and true signatures of the officers of FSC authorized to sign Amendment
No. 1;
(e) Certified copies of the resolutions of the Board of
Directors of Charming Shoppes approving Amendment No. 1, and certified copies
of all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to Amendment No. 1, and certification of the
names and true
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signatures of the officers of Charming Shoppes authorized to sign Amendment No.
1;
(f) Favorable opinions of counsel for the Trustee, the
Owner, the Servicer, the Subordinated Purchaser, FSC and Charming Shoppes as to
such matters as the Agent may reasonably request;
(g) An amendment and restatement of the Fee Letter and
payment of all fees due thereunder;
(h) The documentation relating to the assignment of the
BancOhio Portfolio to the Owner;
(i) With respect to Additional Accounts arising in respect
of the BancOhio Portfolio, copies of the "Addition Notice," "Assignment" and
Owner's Officer's Certificate required to be delivered pursuant to Section
2.6(c) of the Pooling and Servicing Agreement;
(j) An officer's certificate of the Owner meeting the
requirements of Section 1.02(a)(iii) of the Original RPA;
(k) Evidence that the Owner shall have duly given the
notice to Mellon Bank, N.A. contemplated under Section 3 of the Agreement dated
as of December 24, 1992 among the Owner, the Agent and Mellon Bank, N.A.
relating to certain intercreditor arrangements;
(l) Assignments to the Seller of the benefits under each
of the Interest Rate Agreements in effect on October 6, 1993, together with any
necessary consents by the counterparties to such Interest Rate Agreements;
(m) Copies of each of the Interest Rate Agreements in
effect on October 6, 1993, together with a summary thereof in the form of Annex
G attached hereto, in each case certified by a Responsible Officer of the Owner
as being complete and correct;
(n) UCC financing statements relating to the Interest Rate
Agreements naming the Owner (or, if applicable, an Owner Affiliate) as debtor
and the Seller as secured party and UCC financing statement amendments relating
to the Interest Rate Agreements with respect to each UCC financing statement
filed pursuant to the Agreement;
(o) An officer's certificate of Charming Shoppes stating
that on October 6, 1993, none of Charming Shoppes, FSC or the Owner is a party
to or guarantor of any rate swap transaction (other than the Interest Rate
Agreements) with any of the counterparties to any of the Interest Rate
Agreements in effect on October 6, 1993; and
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(p) Such other approvals, opinions or documents as the
Agent may reasonably request.
5. Conditions Precedent to the Effectiveness of the
Amended and Restated Agreement. The effectiveness of the Agreement (as amended
and restated) is subject to the conditions precedent that the Agent shall have
received each of the following, in form and substance satisfactory to the
Agent, on or prior to the Effective Date:
(a) Certified copies of any necessary corporate action of
the Trustee approving the Pooling and Servicing Agreement (as amended and
restated on the Effective Date) and the Agreement (as amended and restated on
the Effective Date) and certified copies of all documents evidencing other
necessary government approvals, if any, with respect to the Pooling and
Servicing Agreement (as amended and restated on the Effective Date) and the
Agreement (as amended and restated on the Effective Date) and certification of
the names and true signatures of the officers of the Trustee authorized to sign
the Pooling and Servicing Agreement (as amended and restated on the Effective
Date) and the Agreement (as amended and restated on the Effective Date) on
behalf of the Seller and the other documents to be delivered by the Seller
hereunder;
(b) Certified copies of the resolutions of the Board of
Directors of the Subordinated Purchaser approving the Agreement (as amended and
restated on the Effective Date), and certified copies of all documents
evidencing other necessary corporate action and governmental approvals, if any,
with respect to the Agreement (as amended and restated on the Effective Date),
and certification of the names and true signatures of the officers of the
Subordinated Purchaser authorized to sign the Agreement (as amended and
restated on the Effective Date) and the other documents to be delivered by the
Subordinated Purchaser hereunder;
(c) Certified copies of the resolutions of the Board of
Directors of the Servicer and the Owner approving the Pooling and Servicing
Agreement (as amended and restated on the Effective Date) and the Agreement (as
amended and restated on the Effective Date), and certified copies of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the Pooling and Servicing Agreement (as
amended and restated on the Effective Date) and the Agreement (as amended and
restated on the Effective Date), and certification of the names and true
signatures of the officers of the Servicer and the Owner authorized to sign the
Pooling and Servicing Agreement (as amended and restated on the Effective Date)
and the Agreement (as amended and restated on the Effective Date) and the other
documents to be delivered by the Servicer and the Owner hereunder;
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(d) A fully executed copy of the Pooling and Servicing
Agreement (as amended and restated on the Effective Date);
(e) A copy of the Series 1994-1 Supplement to the Pooling and
Servicing Agreement;
(f) Favorable opinions of counsel for the Trustee, the Owner,
the Servicer and the Subordinated Purchaser as to the Pooling and Servicing
Agreement (as amended and restated on the Effective Date) and the Agreement (as
amended and restated on the Effective Date) and such other matters as the Agent
may reasonably request;
(g) An amendment to and confirmation of the Company
Agreement, duly executed by Charming Shoppes and FSC;
(h) An amendment to the Assignment of Interest Rate
Agreements, duly executed by FSC;
(i) UCC financing statement amendments reflecting the change
in the name of the Trustee and the Charming Shoppes Master Trust with respect
to each relevant UCC financing statement filed pursuant to the Original PSA and
the Original RPA;
(j) Consents from each bank which has entered into an asset
purchase agreement with the Agent with respect to the Agreement;
(k) A revised Store Payment Notice, duly executed by the
Owner;
(l) A letter agreement with respect to the Depositary
Agreement, duly executed by the Owner and the Seller and duly acknowledged by
each Depositary Bank; and
(m) such other approvals, opinions or documents as the Agent
may reasonably request.
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EXHIBIT III
REPRESENTATIONS AND WARRANTIES
1. Representations and Warranties of the Trustee. The
Trustee, not in its individual capacity but solely as the trustee for the
Charming Shoppes Master Trust, represents and warrants as follows:
(a) The Trustee is a national banking association duly
organized, validly existing and in good standing under the federal law of the
United States of America with full corporate trust power and authority to enter
into and perform its obligations under the Agreement, the Pooling and Servicing
Agreement and each other Master Trust Document to which the Trustee will be a
party.
(b) The execution and delivery by the Trustee of, and the
performance by the Trustee of the transactions contemplated by, the Agreement,
the Pooling and Servicing Agreement and each other Master Trust Document to
which the Trustee is a party, including the Trustee's use of the proceeds of
purchases and reinvestments, are within the Trustee's corporate trust powers,
have been duly authorized by all necessary corporate action of the Trustee, and
(a) do not contravene (i) the Trustee's charter or by-laws or (ii) any existing
federal or Pennsylvania law governing the trust powers of the Trustee.
(c) Each of the Agreement, the Pooling and Servicing
Agreement and each other Master Trust Document to which the Trustee is a party
has been duly executed and delivered by the Trustee, as the trustee for
Charming Shoppes Master Trust pursuant to the Pooling and Servicing Agreement,
and constitutes a legal, valid and binding obligation of the Trustee,
enforceable against the Trustee in accordance with its terms, subject to
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and to general principles of equity (whether considered in a
proceeding in equity or at law).
(d) No authorization or approval or other action by and no
notice to or filing with, any governmental authority or regulatory body under
any existing federal or Pennsylvania law governing the trust powers of the
Trustee, except such as have been obtained, made or taken, is required for the
due execution and delivery by the Trustee of, and the consummation of any of
the transactions by the Trustee contemplated by, the Agreement, the Pooling and
Servicing Agreement or each other Master Trust Document to which the Trustee is
a party or for the perfection of or the exercise by the Agent or the Purchasers
of their respective rights and remedies under the Agreement.
(e) There are no actions or proceedings pending or, to the
best knowledge of the Trustee, threatened against the Trustee before any court,
regulatory body, administrative agency or other
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tribunal, governmental instrumentality or arbitrator seeking to prevent the
consummation of any of the transactions contemplated by the Agreement, the
Pooling and Servicing Agreement or any other Master Trust Document, or seeking
and determination or ruling that, would materially and adversely affect the
performance by the Trustee of its obligations under the Agreement, the Pooling
and Servicing Agreement or any other Master Trust Document to which the Trustee
is a party, or seeking any determination or ruling that would materially and
adversely affect the legality, validity or enforceability of the Agreement, the
Pooling and Servicing Agreement or any other Master Trust Document.
(f) The principal place of business and chief executive
office of the Trustee and the office where the Trustee keeps its records
concerning the Pool Receivables are located at 123 South Broad Street, MBO,
18th Floor, Philadelphia, Pennsylvania 19109; the address of the Trustee where
notices and demands to or upon the Trustee in respect of the Pool Receivables,
the Agreement or the Pooling and Servicing Agreement may be served is First
Fidelity Bank, National Association, New York, 520 Madison Avenue, New York,
New York 10022, Attention: Corporate Trust Administration.
(g) All representations and warranties of the Trustee set
forth in the Pooling and Servicing Agreement and each other Master Trust
Document to which the Trustee is a party are true and correct in all material
respects (unless any such representation or warranty speaks as of a particular
date, in which case it is true and correct in all materials respects as of each
such date).
2. Representations and Warranties of the Owner. The Owner
represents and warrants as follows:
(a) The Owner is a national banking association, duly
organized, validly existing and in good standing under the laws of the United
States of America, and is duly qualified to do business, and is in good
standing, in every jurisdiction where the nature of its business requires it to
be so qualified.
(b) The execution, delivery and performance by the Owner of
the Agreement and each Master Trust Document to which it is or will be a party
and the other documents to be delivered by it thereunder, (i) are within the
Owner's corporate powers, (ii) have been duly authorized by all necessary
corporate action, (iii) do not contravene (1) the Owner's charter or by-laws,
(2) any Requirement of Law applicable to the Owner, (3) any indenture,
contract, agreement, mortgage, deed of trust or other instrument to which the
Owner is a party or by which it is bound (including, without limitation, the
Pooling and Servicing Agreement and any other Master Trust Document to which
the Owner is or will be a party), or (4) any order, writ, judgment, award,
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injunction or decree binding on or affecting the Owner or its property, and do
not result in or require the creation of any lien, security interest or other
charge or encumbrance upon or with respect to any of its properties (other than
the interests created by the Pooling and Servicing Agreement and the
Agreement). Each of the Agreement and each Master Trust Document to which the
Owner is or will be a party has been or will be duly executed and delivered by
the Owner.
(c) No authorization or approval or other action by, and,
except for the filing of financing statements to be filed pursuant to the
Pooling and Servicing Agreement and pursuant to the Agreement, no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by the Owner of the Agreement or any
Master Trust Document to which the Owner is or will be party or any other
document to be delivered thereunder.
(d) Each of the Agreement and each Master Trust Document to
which the Owner is or will be a party constitutes, or upon due execution and
delivery by the Owner will constitute, the legal, valid and binding obligation
of the Owner enforceable against the Owner in accordance with its terms, except
as such enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights generally
or by general principles of equity (whether considered in a proceeding in
equity or at law).
(e) There are no actions or proceedings pending or, to the
best knowledge of the Owner, threatened against the Owner before any court,
regulatory body, administrative agency or other tribunal, governmental
instrumentality or arbitrator seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any Master Trust Document, or
seeking any determination or ruling that, in the reasonable judgment of the
Owner, would materially and adversely affect the performance by the Owner of
its obligations under this Agreement or any Master Trust Document to which it
is or will be a party, or seeking any determination or ruling that would
materially and adversely affect the legality, validity or enforceability of
this Agreement or any Master Trust Document.
(f) Since February 1, 1992, (i) there has been no material
adverse change in the business, operations, property or financial or other
condition of the Owner which may materially adversely affect the Owner's
ability to collect Pool Receivables pursuant to the Agreement or the Pooling
and Servicing Agreement or otherwise perform its obligations under the
Agreement or the Master Trust Documents to which it is or will be a party and
(ii) there has not occurred any event which may materially adversely affect the
collectibility or value of the Receivables Pool.
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(g) (i) Immediately prior to the purchase by the Seller of
an interest therein under the Pooling and Servicing Agreement, the
Owner is the legal and beneficial owner of each Pool Receivable free
and clear of any Adverse Claims;
(ii) upon each purchase by the Trustee under the Pooling
and Servicing Agreement, the Trustee will acquire a valid and perfected
first priority ownership interest in the Pool Receivables and
Collections with respect thereto;
(iii) immediately prior to the purchase by each Purchaser
of an interest therein under the Agreement, the Trustee will be the
legal and beneficial owner of each Pool Receivable free and clear of
any Adverse Claims, except for the interests created therein pursuant
to the Pooling and Servicing Agreement (which interests will be pari
passu with the Purchasers' interests therein);
(iv) upon each purchase by a Purchaser and each
reinvestment on behalf of a Purchaser under the Agreement, such
Purchaser will acquire a valid and perfected first priority undivided
percentage ownership interest to the extent of the pertinent Purchaser
Receivable Interest in the Pool Receivables and in the Collections with
respect thereto, subject to the interests therein referred to clause
(iii) above;
(v) no effective financing statement or other
instrument similar in effect covering any Cardholder Agreement or any
Pool Receivable or Collections with respect thereto is on file in any
recording office, except those filed pursuant to the Pooling and
Servicing Agreement and those filed pursuant to the Agreement; and
(vi) except for any credit life insurance policies,
credit disability or unemployment insurance policies covering an
Obligor with respect to Pool Receivables under such Obligor's Account,
there are no guaranties, insurance, or other agreements, and no
security interests or liens, supporting or securing or purporting to
support or secure payment of any Receivable.
(h) The principal place of business and chief executive
office of the Owner and the office where the Owner keeps its records concerning
the Pool Receivables are located at the address or addresses referred to in
paragraph 2(b) of Exhibit IV.
(i) The names and addresses of all the Depositary Banks,
together with the account numbers of the Initial Depositary Accounts of the
Seller at such Depositary Banks, are specified in Schedule I hereto (or at such
other Depositary Banks
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and/or with such other Initial Depositary Accounts as have been notified to the
Agent in accordance with the Agreement).
(j) The Owner is in compliance with its regulatory capital
requirements under applicable rules and regulations of the
Office of the Comptroller of the Currency, the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System or other
appropriate governmental authorities.
(k) All representations and warranties of the Owner set
forth in the Pooling and Servicing Agreement and each other Master Trust
Document to which the Owner is a party are true and correct in all material
respects (unless any such representation or warranty speaks as of a particular
date, in which case it is true and correct in all materials respects as of each
such date).
(l) Each purchase of a Purchaser Receivable Interest and each
reinvestment of Collections in Pool Receivables will constitute (i) a "current
transaction" within the meaning of Section 3(a)(3) of the Securities Act of
1933, as amended, and (ii) a purchase or other acquisition of notes, drafts,
acceptances, open accounts receivable or other obligations representing part or
all of the sales price of merchandise, insurance or services within the meaning
of Section 3(c)(5) of the Investment Company Act of 1940, as amended.
(m) As of the applicable Cut Off Date, Schedule 1 to the
Pooling and Servicing Agreement and the related computer file or microfiche or
written list referred to in paragraph 1(a) of Exhibit II to the Agreement is an
accurate and complete listing in all material respects of all the Accounts, and
the information contained therein with respect to the identity of such Accounts
and the Receivables existing thereunder is true and correct in all material
respects as of such Cut Off Date, and as of the initial Cut Off Date, the
aggregate amount of Receivables in all the Accounts was at least $45,431,401,
all of which were Principal Receivables.
(n) On the date of each purchase of Purchaser Receivable
Interests by the Purchasers under the Agreement, after giving effect to the
purchase to be made by the Purchasers and by the Subordinated Purchaser on such
date, the Net Receivables Pool Balance minus the sum of (A) the aggregate
"Investor Interests" (as defined in the Pooling and Servicing Agreement) for
all Certificate Series issued pursuant to one or more supplements to the
Pooling and Servicing Agreement, (B) the aggregate "Receivables Purchase
Interests" (as defined in the Pooling and Servicing Agreement) for all
Receivables Purchase Series issued pursuant to any receivables purchase
agreement that is subject to the Pooling and Servicing Agreement (other than
the Agreement and the Parallel Purchase Commitment), (C) the Subordinated
Purchaser Capital, (D) the Minimum Seller Capital, (E) the "Subordinated
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Purchaser Capital" under the Parallel Purchase Commitment, (F) the "Minimum
Seller Capital" under the Parallel Purchase Commitment, and (G) the total
amount of Discount Option Receivables, if any, will be equal to or exceed the
sum of the aggregate outstanding Purchaser Capital of all Purchaser Receivable
Interests under the Agreement and the aggregate outstanding "Purchaser Capital"
of all "Purchaser Receivable Interests" under the Parallel Purchase Commitment;
and the Floating Allocation Percentage as of such day shall be less than or
equal to 98.213%.
(o) No proceeds of any purchase or reinvestment will be used
by the Owner, the Subordinated Purchaser or the Seller to acquire any equity
security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
(p) After giving effect to the Pooling and Servicing
Agreement and each purchase of Receivables from the Owner by the Trustee under
the Pooling and Servicing Agreement and the use of proceeds of each Purchase by
the Owner, (i) the Owner will have sufficient presently saleable assets, and
sufficient cash flow, to enable it to meet its debts as they mature (in each
case as such concepts are defined in applicable bankruptcy and related laws),
and (ii) the Owner does not have unreasonably small capital.
(q) The Owner is not entering into, and has not caused any
other Person to enter into, any of the transactions contemplated by the Pooling
and Servicing Agreement or the Agreement with the intent to hinder, delay or
defraud the creditors of the Owner.
(r) Each computer file or microfiche list which has been
delivered to the Trustee by the Owner pursuant to Section 2.1 or Section 2.6 of
the Pooling and Servicing Agreement contains a complete and accurate list of
Accounts identified by account number, Obligor name, Obligor address and
Receivable balance as of the applicable Cut Off Date.
3. Representations and Warranties of the Servicer. The
Servicer represents and warrants as follows:
(a) The Servicer is a national banking association, duly
organized, validly existing and in good standing under the laws of the United
States of America, and is duly qualified to do business, and is in good
standing, in every jurisdiction where the nature of its business requires it to
be so qualified.
(b) The execution, delivery and performance by the Servicer
of the Agreement and each Master Trust Document to which it is or will be a
party and the other documents to be delivered by it thereunder, (i) are within
the Servicer's corporate powers, (ii) have been duly authorized by all
necessary corporate action,
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(iii) do not contravene (1) the Servicer's charter or by-laws, (2) any
Requirement of Law applicable to the Servicer, (3) any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which the Servicer is
a party or by which it is bound (including, without limitation, the Pooling and
Servicing Agreement and any other Master Trust Document to which the Servicer
is or will be a party), or (4) any order, writ, judgment, award, injunction or
decree binding on or affecting the Servicer or its property, and do not result
in or require the creation of any lien, security interest or other charge or
encumbrance upon or with respect to any of its properties (other than the
interests created by the Pooling and Servicing Agreement and the Agreement).
Each of the Agreement and each Master Trust Document to which the Servicer is
or will be a party has been or will be duly executed and delivered by the
Servicer.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Servicer of the
Agreement or any Master Trust Document to which the Servicer is or will be
party or any other document to be delivered thereunder.
(d) Each of the Agreement and each Master Trust Document to
which the Servicer is or will be party constitutes, or upon due execution and
delivery by the Servicer will constitute, the legal, valid and binding
obligation of the Servicer enforceable against the Servicer in accordance with
its terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting
creditors' rights generally or by general principles of equity (whether
considered in a proceeding in equity or at law).
(e) There are no actions or proceedings pending or, to the
best knowledge of the Servicer, threatened against the Servicer before any
court, regulatory body, administrative agency or other tribunal, governmental
instrumentality or arbitrator seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any Master Trust Document, or
seeking any determination or ruling that, in the reasonable judgment of the
Servicer, would materially and adversely affect the performance by the Servicer
of its obligations under this Agreement or any Master Trust Document to which
it is or will be a party, or seeking any determination or ruling that would
materially and adversely affect the legality, validity or enforceability of
this Agreement or any Master Trust Document.
(f) The principal place of business and chief executive
office of the Servicer and the office where the Servicer keeps its records
concerning the Pool Receivables are located at the address or addresses
referred to in paragraph 2(b) of Exhibit IV.
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(g) All representations and warranties of the Servicer set
forth in the Pooling and Servicing Agreement and each other Master Trust
Document to which the Servicer is a party are true and correct in all material
respects (unless any such representation or warranty speaks as of a particular
date, in which case it is true and correct in all materials respects as of each
such date).
4. Representations and Warranties of the Subordinated
Purchaser. The Subordinated Purchaser represents and warrants as follows:
(a) The Subordinated Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and is duly qualified to do business, and is in good standing, in
every jurisdiction where the nature of its business requires it to be so
qualified.
(b) The execution, delivery and performance by the
Subordinated Purchaser of the Agreement and the other documents to be delivered
by it thereunder, (i) are within the Subordinated Purchaser's corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii) do not
contravene (1) the Subordinated Purchaser's charter or by-laws, (2) any
Requirement of Law applicable to the Subordinated Purchaser, (3) any indenture,
contract, agreement, mortgage, deed of trust or other instrument to which the
Subordinated Purchaser is a party or by which it is bound or (4) any order,
writ, judgment, award, injunction or decree binding on or affecting the
Subordinated Purchaser or its property, and do not result in or require the
creation of any lien, security interest or other charge or encumbrance upon or
with respect to any of its properties. The Agreement has been duly executed
and delivered by the Subordinated Purchaser.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Subordinated
Purchaser of the Agreement or any other document to be delivered thereunder.
(d) The Agreement constitutes the legal, valid and binding
obligation of the Subordinated Purchaser enforceable against the Subordinated
Purchaser in accordance with its terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally or by general principles of
equity (whether considered in a proceeding in equity or at law).
(e) There are no actions or proceedings pending or, to the
best knowledge of the Subordinated Purchaser, threatened against the
Subordinated Purchaser before any court, regulatory body, administrative agency
or other tribunal, governmental
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instrumentality or arbitrator seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any Master Trust Document, or
seeking any determination or ruling that, in the reasonable judgment of the
Subordinated Purchaser, would materially and adversely affect the performance
by the Subordinated Purchaser of its obligations under this Agreement or any
Master Trust Document to which it is or will be a party, or seeking any
determination or ruling that would materially and adversely affect the
legality, validity or enforceability of this Agreement or any Master Trust
Document.
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EXHIBIT IV
COVENANTS
1. Covenants of the Trustee. The Trustee, not in its
individual capacity but solely as the trustee for the Charming Shoppes Master
Trust, agrees that, until the later of (x) the Facility Termination Date or (y)
the Final Distribution Date:
(a) Compliance with Laws, Etc. The Trustee will comply in
all material respects with all applicable laws, rules, regulations and orders
and preserve and maintain its existence, rights, franchises, qualifications,
and privileges except to the extent that the failure so to comply with such
laws, rules and regulations or the failure so to preserve and maintain such
existence, rights, franchises, qualifications, and privileges would not
materially adversely affect the collectibility of the Receivables Pool or the
ability of the Trustee to perform its obligations under the Agreement or the
Master Trust Documents.
(b) Offices, Records and Books of Account. The Trustee will
keep its principal place of business and chief executive office and the office
where it keeps its records concerning the Pool Receivables at 123 Broad Street,
Philadelphia, Pennsylvania 19109 or, upon 30 days' prior written notice to the
Agent, at any other locations in jurisdictions where all actions reasonably
requested by the Agent to protect and perfect the interest in the Pool
Receivables have been taken and completed. The Trustee shall maintain in the
Borough of Manhattan, the City of New York, an office or offices where notices
and demands to or upon the Trustee in respect of the Pool Receivables, the
Agreement or the Pooling and Servicing Agreement may be served.
(c) Further Assurances. The Trustee shall, from time to
time, at the Servicer's expense, promptly execute and deliver all further
instruments and documents, and take all further actions, that may be necessary
or desirable, or that the Agent may reasonably request, to perfect, protect or
more fully evidence the Receivable Interests purchased under the Agreement, or
to enable the Purchasers or the Agent to exercise and enforce their respective
rights and remedies under the Agreement. Without limiting the foregoing, the
Trustee:
(i) will upon the request of the Agent (x) execute
and file such financing or continuation statements, or amendments
thereto, and such other instruments and documents, that may be
necessary or desirable, or that the Agent may reasonably request, to
perfect, protect or evidence such Receivable Interests; (y) ensure that
all Records evidencing Pool Receivables and related Cardholder
Agreements in its possession are marked conspicuously with a legend,
acceptable to the Agent,
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evidencing that Receivable Interests therein have been sold in
accordance with the Agreement; and (z) ensure that any data processing
records evidencing such Pool Receivables and related Cardholder
Agreements in its possession are marked with such a legend; and
(ii) authorizes the Agent to file financing or
continuation statements, and amendments thereto, relating to such
Receivable Interests without the signature of the Trustee where
permitted by law and agrees that a photocopy or other reproduction of
the Agreement shall be sufficient as a financing statement where
permitted by law.
Notwithstanding the foregoing, so long as any Investor Certificates shall be
outstanding, the Trustee and the Agent shall not file any financing statements
pursuant to this Section (other than continuation statements, amendments
reflecting name changes or changes of office location or financing statements
relating solely to an Enhancement for the benefit of the Receivables Purchase
Series arising in connection with the Agreement or the Parallel Purchase
Commitment) unless the Agent shall have obtained and delivered to the Trustee
an Opinion of Counsel to the effect that such filing shall not materially and
adversely affect the interests of the holders of the Investor Certificates.
(d) Interest Rate Agreements. The Trustee shall not
consent to any modification or amendment of the Interest Rate Agreements
without the prior written consent of the Agent in each instance, which consent
shall not be unreasonably withheld by the Agent.
(e) Store Payment Notice. If the Trustee shall be
notified by any Person (other than the Agent) to deliver the Store Payment
Notice, the Trustee shall promptly notify the Agent thereof.
2. Covenants of the Owner. In addition to the duties of the
Servicer set forth in Exhibit V hereto, until the later of (x) the Facility
Termination Date or (y) the Final Distribution Date:
(a) Compliance with Laws, Etc. The Owner will comply in all
material respects with all applicable laws, rules, regulations and orders and
preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such existence, rights, franchises, qualifications, and privileges
would not materially adversely affect the collectibility of the Receivables
Pool or the ability of the Owner to
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perform its obligations under the Agreement or the Master Trust Documents.
(b) Offices, Records and Books of Account. The Owner will
keep its principal place of business and chief executive office and the office
where it keeps its records concerning the Pool Receivables at 745 Center
Street, Milford, Ohio 45150 or, upon 30 days' prior written notice to the
Agent, at any other locations in jurisdictions where all actions reasonably
requested by the Agent to protect and perfect the interest in the Pool
Receivables have been taken and completed. The Owner also will maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Pool Receivables and
related Cardholder Agreements in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other
information reasonably necessary or advisable for the collection of all Pool
Receivables (including, without limitation, records adequate to permit the
daily identification of each Pool Receivable and all Collections of and
adjustments to each existing Pool Receivable).
(c) Change in Cardholder Guidelines, Etc.
(i) Except (x) as otherwise required by any
Requirements of Law or (y) as is deemed by the Owner to be necessary in
order for it to maintain its credit card business on a competitive
basis based on a good faith assessment by it of the nature of the
competition in the credit card business and only if the change giving
rise to such reduction is made applicable to the comparable segment of
revolving credit card accounts owned or serviced by it which have
characteristics similar to the Accounts which are the subject of such
change, it shall not at any time permit the Portfolio Yield to be less
than the Funding Rate; and
(ii) unless the Agent consents in writing, the Owner
shall not otherwise alter the Cardholder Guidelines in any manner which
the Owner reasonably believes might have a material adverse effect on
the collectibility or value of Pool Receivables and shall apply its
Cardholder Guidelines to each of the Pool Receivables; provided,
however, that if any such alteration made without the Agent's consent
is later determined by the Agent or the Owner to have had an adverse
effect on the collectibility or value of Pool Receivables, then the
Owner shall promptly revise the Cardholder Guidelines in order to
prevent any such adverse effect from occurring thereafter and any loss
suffered by the Purchasers as a result of such alteration shall be
subject to Section 4.01 of the Agreement;
provided, however, that the Owner shall, within 10 Business Days following any
material change to the Cardholder Guidelines, give
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the Agent written notice of such change; and provided, further, that the Owner
(x) shall not make any material adverse change in the minimum monthly payment
required to be made by an Obligor in respect of any Pool Receivable without the
prior written consent of the Agent (which consent will not be unreasonably
withheld), (y) shall not make any change in the duration of the Cycles used to
bill Obligors of the Receivables such that any such Cycle is more than 32 days
and (z) shall ensure that the entire principal balance of any Account any
portion of which remains unpaid for 180 days or more is written off the
Seller's books as uncollectible.
(d) Sales, Liens, Etc. The Owner will not, prior to the
Final Distribution Date, (i) suffer to exist any Adverse Claim upon or with
respect to any portion of the Minimum Seller Capital, or (ii) sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, any of the Accounts or (iii)
assign (by operation of law or otherwise) or otherwise dispose of, or create or
suffer to exist any Adverse Claim upon or with respect to any account to which
any Collections of any Pool Receivable are sent, or assign any right to receive
income in respect thereof, other than pursuant to the Pooling and Servicing
Agreement.
(e) Interest Rate Hedging. The Owner shall maintain, or
cause to be maintained, the Interest Rate Agreements in full force and effect
and shall obtain, or cause to be obtained, extensions to or replacements for
the Interest Rate Agreements from time to time so that the then effective
Interest Rate Agreements are at all times in compliance with the first sentence
of the definition of "Interest Rate Agreements"; provided, however, that the
failure of the Owner to obtain, prior to September 15, 1994, extensions to or
replacements for those Interest Rate Agreements having a termination date of
July 10, 1996 shall not constitute an Early Amortization Event, so long as such
Interest Rate Agreements are otherwise then in compliance with the first
sentence of the definition of "Interest Rate Agreements." Whenever the Owner
shall obtain, or cause to be obtained, an extension to or replacement for any
Interest Rate Agreement, the Owner shall immediately furnish the Agent with an
updated Annex G incorporating such extension or replacement and a copy of such
extension or replacement, in each case certified by a Responsible Officer of
the Owner as being complete and correct. With respect to each Interest Rate
Agreement to which the Seller is not a party, the Owner shall cause all monies
due or to become due to the Owner (or, if applicable, an Owner Affiliate) under
such Interest Rate Agreement to be assigned to the Seller.
(f) Administrative Servicer. (i) Unless the Agent consents
in writing, the Owner will not amend, modify or supplement the
Administrative Servicer Agreement in any
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manner which the Owner reasonably believes might have a material
adverse effect on the collectibility or value of Pool Receivables;
provided, however, that if any amendment, modification or amendment
made without the Agent's consent is later determined by the Agent or
the Owner to have had an adverse effect on the collectibility or value
of Pool Receivables, then the Owner shall use its best efforts to
promptly amend, modify or supplement the Administrative Servicer
Agreement in order to prevent any such adverse effect from occurring
thereafter and any loss suffered by the Purchasers as a result of such
amendment, modification or supplement shall be subject to Section 4.01
of the Agreement; and provided, however, that the Owner shall, within
10 Business Days following any amendment, modification or supplement to
the Administrative Servicer Agreement, give the Agent written notice
thereof such change.
(ii) The Owner will not replace the Administrative
Servicer without the prior written consent of the Agent, which consent
will not be unreasonably withheld.
(g) Information. The Owner shall provide to (i) the Servicer
(if other than Spirit) on a timely basis all information needed for the
administration of the Pool Receivables, including notice of the commencement of
the Amortization Period and (ii) to the Agent, as soon as possible and in any
event within two Business Days after receipt thereof, copies of all notices,
reports, information, documents, instruments and records delivered to the
Trustee which relate to the Pool Receivables or the Pooling and Servicing
Agreement.
(h) Further Assurances. The Owner shall, from time to time,
at its expense, promptly execute and deliver all further instruments and
documents, and take all further actions, that may be necessary or desirable, or
that the Agent may reasonably request, to perfect, protect or more fully
evidence the Receivable Interests purchased under the Agreement, or to enable
the Purchasers or the Agent to exercise and enforce their respective rights and
remedies under the Agreement. Without limiting the foregoing, the Owner:
(i) will upon the request of the Agent (x) execute
and file such financing or continuation statements, or amendments
thereto, and such other instruments and documents, that may be
necessary or desirable, or that the Agent may reasonably request, to
perfect, protect or evidence such Receivable Interests; (y) mark
conspicuously the Records evidencing each Pool Receivable and the
related Cardholder Agreement with a legend, acceptable to the Agent,
evidencing that Receivable Interests therein have been sold in
accordance with the
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Agreement; and (z) mark its master data processing records evidencing
such Pool Receivables and related Cardholder Agreements with such a
legend; and
(ii) authorizes the Agent to file financing or
continuation statements (solely with respect to the Agreement), and
amendments thereto, relating to such Receivable Interests without the
signature of the Owner where permitted by law and agrees that a
photocopy or other reproduction of the Agreement shall be sufficient as
a financing statement where permitted by law.
Notwithstanding the foregoing, so long as any Investor Certificates shall be
outstanding, the Owner and the Agent shall not file any financing statements
pursuant to this Section (other than continuation statements, amendments
reflecting name changes or changes of office location or financing statements
relating solely to an Enhancement for the benefit of the Receivables Purchase
Series arising in connection with the Agreement or the Parallel Purchase
Commitment) unless the Agent shall have obtained and delivered to the Trustee
an Opinion of Counsel to the effect that such filing shall not materially and
adversely affect the interests of the holders of the Investor Certificates.
(i) Annual Compliance Certificate. The Owner will provide to
the Agent (in multiple copies, if requested by the Agent), as soon as possible
and in any event within 30 days after the close of each fiscal year of the
Owner, a certificate, signed by the President or a Vice President of the Owner,
stating that (i) the Owner is in compliance with its regulatory capital
requirements under applicable rules and regulations of the Office of the
Comptroller of the Currency, the Federal Deposit Insurance Corporation, the
Board of Governors of the Federal Reserve System or other appropriate
governmental authorities and (ii) a review of the activities of the Owner and
its subsidiaries during the fiscal year in respect of which such statement was
delivered has been made under his or her supervision and that no Early
Amortization Event or condition or event which, with notice or lapse of time or
both, would constitute an Early Amortization Event has occurred, or, if such
has occurred, specifying the nature and status thereof.
(j) No Alteration of File Designation. The Owner shall
not alter the file designation referenced in clause (i) of paragraph 1(a) of
Exhibit II to the Agreement during the term of this Agreement for any Account
unless and until such Account becomes a Removed Account.
(k) Pool Receivables Not to be Evidenced by Instruments,
Etc. The Owner will take no action to cause any Pool Receivable to be
evidenced by any instrument (as defined in the UCC as in effect in each of the
States of New York, Ohio,
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Pennsylvania). Each Pool Receivable shall be payable pursuant to a contract
which does not create a lien on any goods purchased thereunder. The Owner will
take no action to cause any Pool Receivable to be anything other than an
"account", or a "general intangible" or the "proceeds" of either for purposes
of the UCC as in effect in each of the States of New York, Ohio and
Pennsylvania.
(l) Addition of Accounts. The Owner will not, without the
prior written consent of the Agent, add to the Trust pursuant to Section 2.6 of
the Pooling and Servicing Agreement Eligible Accounts which have been acquired
by the Owner from third parties (as distinguished from Accounts originated by
the Owner or an Affiliate of the Owner) ("Third-Party Accounts") to the extent
that:
(i) the number of such Third-Party Accounts plus
the total number of all Third-Party Accounts theretofore added
to the Trust in the same calendar year shall exceed 5% of the
total number of Accounts in the Trust as of the end of the
prior calendar year; or
(ii) the sum of the Outstanding Balance of the
Receivables in such Third-Party Accounts as of the Addition
Date plus the Outstanding Balance of the Receivables in all
other Third-Party Accounts theretofore added to the Trust in
the same calendar year shall exceed 5% of the Outstanding
Balance of all Receivables in the Receivables Pool as of the
end of the prior calendar year.
(m) Merger, Consolidation, Etc. The Owner will not
consolidate with or merge into any other Person or convey or transfer its
properties and assets substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into
which the Owner is merged or which acquires by conveyance or transfer
the properties of the Owner substantially as an entirety shall be a
state or national banking or savings association or other entity which
is not subject to the bankruptcy laws of the United States of America
and, if the Owner is not the surviving entity, shall expressly assume,
by an agreement executed and delivered to the Agent and in form and
substance satisfactory to the Agent, the performance of every covenant
and obligation of the Owner hereunder;
(ii) the Owner shall have delivered to the Agent (A) an
officer's certificate of a Responsible Officer of the Owner certifying
that such consolidation, merger, conveyance or transfer and such
agreement comply with this paragraph
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(n) and that all conditions precedent herein provided for relating to
such transaction have been complied with and (B) an opinion of counsel,
from counsel reasonably acceptable to the Agent and addressed to the
Agent, that such agreement is legal, valid and binding with respect to
the Owner and the surviving entity;
(iii) the Owner shall have given at least 10 Business
Days' prior notice to the Agent of such consolidation, merger,
conveyance or transfer; and
(iv) the Agent shall have consented to such
consolidation, merger, conveyance or transfer in writing (such consent
not to be unreasonably withheld).
(n) List of Stores. Within 30 days following the date of the
Agreement, and on or prior to May 31 of each year, commencing May 31, 1994, the
Owner shall furnish to the Agent a complete and accurate list of the names and
addresses of all of the Stores.
(o) Confidentiality Agreement. The Owner shall use its best
efforts to effectuate a confidentiality agreement between the Agent and the
Administrative Servicer as promptly as possible following the date of the
Agreement so that the Owner can deliver, and the Owner will thereupon deliver,
to the Agent, a certified copy of the Administrative Servicer Agreement, duly
executed and delivered by each of the Administrative Servicer, FSC and the
Servicer.
3. Covenants of the Servicer. In addition to the duties of
the Servicer set forth in Exhibit V hereto, until the later of (x) the Facility
Termination Date or (y) the Final Distribution Date:
(a) Compliance with Laws, Etc. The Servicer will comply in
all material respects with all applicable laws, rules, regulations and orders
and preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such existence, rights, franchises, qualifications, and privileges
would not materially adversely affect the collectibility of the Receivables
Pool or the ability of the Servicer to perform its obligations under the
Agreement, the Pooling and Servicing Agreement or the other Master Trust
Documents.
(b) Offices, Records and Books of Account. The Servicer will
keep its principal place of business and chief executive office and the office
where it keeps its records concerning the Pool Receivables at 745 Center
Street, Milford, Ohio 45150 or, upon 30 days' prior written notice to the
Agent,
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at any other locations in jurisdictions where all actions reasonably requested
by the Agent to protect and perfect the interest in the Pool Receivables have
been taken and completed. The Servicer also will maintain and implement
administrative and operating procedures (including, without limitation, an
ability to recreate records evidencing Pool Receivables and related Cardholder
Agreements in the event of the destruction of the originals thereof), and keep
and maintain all documents, books, records and other information reasonably
necessary or advisable for the collection of all Pool Receivables (including,
without limitation, records adequate to permit the daily identification of each
Pool Receivable and all Collections of and adjustments to each existing Pool
Receivable).
(c) Further Assurances. The Servicer shall, from time to
time, at its expense, promptly execute and deliver all further instruments and
documents, and take all further actions, that may be necessary or desirable, or
that the Agent may reasonably request, to perfect, protect or more fully
evidence the Receivable Interests purchased under the Agreement, or to enable
the Purchasers or the Agent to exercise and enforce their respective rights and
remedies under the Agreement. Without limiting the foregoing, the Servicer
will upon the request of the Agent (x) execute such instruments and documents
that may be necessary or desirable, or that the Agent may reasonably request,
to perfect, protect or evidence the Receivable Interests purchased under the
Agreement; (y) mark conspicuously the Records evidencing each Pool Receivable
and the related Cardholder Agreement with a legend, acceptable to the Agent,
evidencing that Receivable Interests therein have been sold in accordance with
the Agreement; and (z) mark its master data processing records evidencing such
Pool Receivables and related Cardholder Agreements with such a legend.
Notwithstanding the foregoing, so long as any Investor Certificates shall be
outstanding, the Servicer and the Agent shall not file any financing statements
pursuant to this Section (other than continuation statements, amendments
reflecting name changes or changes of office location or financing statements
relating solely to an Enhancement for the benefit of the Receivables Purchase
Series arising in connection with the Agreement or the Parallel Purchase
Commitment) unless the Agent shall have obtained and delivered to the Trustee
an Opinion of Counsel to the effect that such filing shall not materially and
adversely affect the interests of the holders of the Investor Certificates.
(d) Servicer Will Not Resign. The Servicer shall not
resign from the obligations and duties imposed by it under the Agreement except
as permitted pursuant to Section 8.5 of the Pooling and Servicing Agreement.
(e) Merger, Consolidation, Etc. The Servicer will not
consolidate with or merge into any other Person or convey or
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transfer its properties and assets substantially as an entirety to any Person,
unless:
(i) the Person formed by such consolidation or into
which the Servicer is merged or which acquires by conveyance or
transfer the properties of the Servicer substantially as an entirety
shall be a state or national banking or savings association or other
entity which is not subject to the bankruptcy laws of the Untied States
of America and, if the Servicer is not the surviving entity, shall
expressly assume, by an agreement executed and delivered to the Agent
and in form and substance satisfactory to the Agent, the performance of
every covenant and obligation of the Servicer hereunder;
(ii) the Servicer shall have delivered to the Agent (A)
an officer's certificate of a Responsible Officer of the Servicer
certifying that such consolidation, merger, conveyance or transfer and
such agreement comply with this paragraph (e) and that all conditions
precedent herein provided for relating to such transaction have been
complied with and (B) an opinion of counsel, from counsel reasonably
acceptable to the Agent and addressed to the Agent, that such agreement
is legal, valid and binding with respect to the Servicer and the
surviving entity;
(iii) the Servicer shall have given at least 10 Business
Days' prior notice to the Agent of such consolidation, merger,
conveyance or transfer; and
(iv) the Agent shall have consented to such
consolidation, merger, conveyance or transfer in writing (such consent
not to be unreasonably withheld).
4. Covenants of the Subordinated Purchaser. In addition to
the undertaking of the Subordinated Purchaser set forth in Section 1.01(b) of
the Agreement, until the later of (x) the Facility Termination Date or (y) the
Final Distribution Date:
(a) Sale, Liens, Etc. The Subordinated Purchaser shall not
(i) on or before December 24, 1993, sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any Adverse
Claim upon or with respect to, any Subordinated Receivable Interest, or assign
any right to receive income in respect thereof, or (ii) thereafter, take any of
the foregoing actions without the prior written consent of the Agent.
(b) Observance of Corporate Procedures, Etc. The
Subordinated Purchaser (i) shall observe the corporate procedures required by
its certificate of incorporation, its by-laws and the corporate law of the
State of Delaware, including, without
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limitation, holding separate director and shareholder meetings from those of
any other Person and otherwise ensure at all times that it is maintained as a
separate corporate entity from any other Person and (ii) shall not amend or
modify any provision of its Certificate of Incorporation or by-laws without the
prior written consent of the Agent (such consent not to be unreasonably
withheld).
(c) Board of Directors' Authorization, Etc. The Subordinated
Purchaser shall (i) ensure that its Board of Directors duly authorizes all of
its corporate actions, and (ii) keep correct and complete books and records of
account separate from those of any other Person, and correct and complete
minutes of the meetings and other proceedings of its stockholders and Board of
Directors, and (iii) where necessary, obtain proper authorization from its
directors or stockholders, as appropriate, for corporate action.
(d) Operating Expenses; Separate Accounts. The Subordinated
Purchaser shall provide for its operating expenses and liabilities from its own
funds and maintain deposit accounts and other bank accounts separate from those
of the Owner, the Servicer or the Seller, or any of their respective
Affiliates.
(e) Corporate Action. The Subordinated Purchaser shall act
solely in its corporate name and through its duly authorized officers or agents
in the conduct of its business and ensure that neither the Owner nor the
Servicer nor any of their respective Affiliates controls any corporate
decisions made by it.
(f) Arm's-Length Transactions. To the extent it obtains any
services from the Owner or the Servicer or any of their respective Affiliates,
the Subordinated Purchaser shall ensure that the terms of such arrangements are
comparable to those that would be obtained in an arm's-length transaction.
(g) No Commingling. The Subordinated Purchaser shall ensure
that its assets are not commingled with those of the Owner, the Servicer, the
Seller or any other Person.
(h) Separate Records. The Subordinated Purchaser shall
maintain separate corporate records and books of account from those of the
Owner, the Servicer or any other Person.
(i) Conduct of Business. The Subordinated Purchaser shall
not conduct any business or engage in any activities other than (i) the
ownership of the Subordinated Purchaser Capital and the performance of its
obligations under the Agreement and (ii) the ownership of "subordinated
purchaser capital" and the performance of its obligations under any receivables
purchase agreement that is subject to the Pooling and Servicing Agreement.
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(j) Separate Existence, Etc. The Subordinated Purchaser (i)
shall not hold itself out, or permit itself to be held out, as having agreed to
pay, or as being liable for, the debts of the Owner, the Servicer, or any other
Person; (ii) shall maintain an arm's-length relationship with the Owner and the
Servicer and their respective Affiliates with respect to any transactions
between itself and such other Person; and (iii) shall continuously maintain as
official records the resolutions, agreements and other instruments underlying
the transactions contemplated by the Agreement.
(k) Merger, Consolidation, Etc. The Subordinated Purchaser
will not consolidate with or merge into any other Person or convey or transfer
its properties and assets substantially as an entirety to any Person.
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EXHIBIT V
ADMINISTRATION AND COLLECTION
OF POOL RECEIVABLES
1. Duties of the Servicer. Until the later of (x) the
Facility Termination Date or (y) the Final Distribution Date:
(a) In General. The Servicer shall take or cause to be taken
all such actions as may be necessary or advisable to service and administer the
Pool Receivables and collect all payments due under the Pool Receivables from
time to time in accordance with its customary and usual servicing procedures
for servicing credit card receivables comparable to the Pool receivables and in
accordance with applicable laws, rules and regulations, with reasonable care
and diligence, and in accordance with the Cardholder Guidelines, the Agreement
and the Pooling and Servicing Agreement. The Servicer shall not be obligated
to use separate servicing procedures, offices, employees or accounts for
servicing the Pool Receivables from the procedures, offices, employees and
accounts used by the Servicer in connection with servicing other credit card
receivables.
(b) Audits. At any reasonable time and from time to time at
the Agent's reasonable request upon reasonable notice to the Servicer and, if
applicable, the Administrative Servicer, the Servicer shall permit the Agent,
or its agents or representatives, to visit the offices and properties of the
Servicer for the purpose of examining Records relating to the Servicer's credit
card-related operations and/or the Pool Receivables, internal controls and
procedures maintained by the Administrative Servicer (including, without
limitation, all Files, File Extracts and Masterfiles, as such terms are defined
in the Administrative Servicing Agreement in effect from time to time) and to
take copies and extracts therefrom, and to discuss the Servicer's affairs with
its officers, employees and independent accountants.
(c) [Intentionally Omitted]
(d) Change in Payment Instructions to Obligors. The Servicer
will not add or terminate any bank as a Depositary Bank from those listed in
Schedule I to the Agreement, or, except as requested by the Trustee pursuant to
the Pooling and Servicing Agreement, make any change in its instructions to
Obligors regarding the method by which payments are to be made in respect of
Pool Receivables, unless the Agent shall have received notice of such addition,
termination or change and the Trustee shall have received copies of Depositary
Agreements with each new Depositary Bank, duly executed by the Seller and duly
acknowledged by such Depositary Bank, or such other notice or acknowledgements
as the Trustee may reasonably request.
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(e) Reporting Requirements. The Servicer will provide to the
Agent (in multiple copies, if requested by the Agent) the following:
(i) as soon as possible and in any event within five
days after the occurrence of each Early Amortization Event or event
which, with the giving of notice or lapse of time, or both, would
constitute an Early Amortization Event, a statement of the chief
financial officer of the Servicer setting forth details of such Early
Amortization Event or event and the action that the Servicer has taken
and proposes to take with respect thereto;
(ii) within 30 days after the end of each calendar
year, a certificate of a Responsible Officer of the Servicer to the
effect that no Early Amortization Event (including, without limitation,
an Early Amortization Event described in paragraph (m) of Exhibit VI),
or event which, with the giving of notice or lapse of time, or both,
would constitute an Early Amortization Event, has occurred and is
continuing;
(iii) at least 10 Business Days prior to any change
in the Seller's name or the Servicer's name, a notice setting forth the
new name and the effective date thereof; and
(iv) such other information respecting the Pool
Receivables or the condition or operations, financial or otherwise, of
the Seller, the Servicer or any of their respective Affiliates required
to be delivered to the "Receivables Purchasers" under the Pooling and
Servicing Agreement or as the Agent may from time to time reasonably
request.
(f) Calculation of Allocated Amounts. The Servicer shall,
from time to time at the reasonable request of the Agent, furnish to the Agent
(promptly after any such request) a calculation of the amounts set aside for
the Purchasers pursuant to Article II of the Agreement.
(g) Delivery of Servicer Reports. The Servicer shall prepare
and forward to the Agent, at least 2 Business Days prior to each Distribution
Date, a Servicer Report relating to the Purchaser Receivable Interests
outstanding on the last day of the immediately preceding Due Period, together
with an analysis of the aging of the Pool Receivables outstanding on such last
day, and each such Servicer Report will be accurate in all material respects as
of its date.
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(h) Total Systems Failure. The Servicer shall promptly
notify the Agent of any Total Systems Failure and shall advise the Agent of the
estimated time required in order to remedy such Total Systems Failure and of
the estimated date on which a Servicer Report can be delivered. Until a Total
Systems Failure is remedied, the Servicer will (i) furnish to the Agent such
periodic status reports and other information relating to such Total Systems
Failure as the Agent may reasonably request and (ii) promptly notify the Agent
if the Servicer believes that such Total Systems Failure cannot be remedied by
the estimated date, which notice shall include a description of the
circumstances which gave rise to such delay, and the action proposed to be
taken in response thereto, and a revised estimate of the date on which a
Servicer Report can be delivered. The Servicer shall promptly notify the Agent
when a Total Systems Failure has been remedied.
(i) Servicer Remains Liable. The exercise by the Agent and
by any Purchaser of their rights under the Agreement shall not release the
Servicer or the Owner from any of their duties or obligations with respect to
any Pool Receivables or under the related Cardholder Agreements. Neither the
Agent nor any Purchaser nor the Subordinated Purchaser shall have any
obligation or liability with respect to any Pool Receivables or related
Cardholder Agreements, nor shall any of them be obligated to perform the
obligations of any party thereunder.
2. Certain Rights of the Agent.
(a) Notification of Obligors. The Agent may at any time
following the termination or transfer of the rights and obligations of both the
Servicer under the Pooling and Servicing Agreement and the Administrative
Servicer under the Administrative Servicer Agreement, upon ten days prior
written notice to the Owner and the Servicer, instruct the Trustee to, and upon
such instruction the Trustee shall, direct the Servicer to notify the Obligors
of Pool Receivables, at the Servicer's expense (if the Servicer is then Spirit,
the Seller or a designee of either of them), of the Agent's security interest
in the Pool Receivables pursuant to the Agreement, such notification to be made
(i) by means of statement to the foregoing effect contained in or enclosed with
the monthly billing statement sent by the Servicer to the Obligors of Pool
Receivables and (ii) within the next 32 days. If the Servicer fails to notify
Obligors as required pursuant to the foregoing sentence, then the Agent itself
may, by any means reasonably determined by the Agent to be consistent with
market practice and otherwise desirable to accomplish the purpose of this
subsection and at the Servicer's expense (if the Servicer is then Spirit, the
Seller or a designee of either of them), so notify such Obligors.
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(b) Initial Depositary Account, Etc.
(i) At any time following the occurrence of an Early
Amortization Event, the Agent is authorized to instruct the
Trustee to, and upon such instruction, the Trustee shall,
assume control of the Initial Depositary Accounts by sending
the Notice of Effectiveness pursuant to the Depositary
Agreement.
(ii) At any time following the institution of insolvency
proceedings by or against any Store or Charming Shoppes, the
Agent is authorized to instruct the Trustee to, and upon such
instruction the Trustee shall, at the Servicer's expense, date
and deliver the Store Payment Notice to the manager of each
Store by or against which such a proceeding has been
instituted, or in the case of such a proceeding by or against
Charming Shoppes, to the managers of all Stores.
(iii) Each of the Trustee, the Seller, the Servicer, the
Owner, CNAI and the Purchasers hereby authorizes the Agent, if
appointed Successor Servicer under the Pooling and Servicing
Agreement, to take any and all steps in the Trustee's name and
on behalf of the Trustee and the Purchasers that are necessary
or desirable, in the determination of the Agent, to collect
amounts due under the Pool Receivables, including, without
limitation, indorsing the name of the Owner or the Seller, as
appropriate, on checks and other instruments representing
Collections of Pool Receivables and enforcing the Pool
Receivables and the related Cardholder Agreements.
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EXHIBIT VI
EARLY AMORTIZATION EVENTS
Each of the following (whether occurring before or after the
commencement of the Amortization Period) shall be an "Early Amortization
Event":
(a) (i) The Servicer shall fail to perform or observe any
term, covenant or agreement on its part to be performed or observed under the
Agreement (other than as referred to in clause (ii) below) and such failure
shall remain unremedied for 10 Business Days after written notice thereof shall
have been given to the Servicer by the Agent; or (ii) the Servicer shall fail
to make when due any payment or deposit to be made by it under the Agreement
and such failure shall remain unremedied for 1 Business Day after written
notice thereof shall have been given to the Servicer by the Agent; or
(b) (i) The Owner shall fail to make any deposit into the
Collection Account or the Agent's Account pursuant to Sections 2.4(d) or 2.4(e)
of the Pooling and Servicing Agreement or pursuant to Section 2.07 or 4.03(b)
of the Agreement, or (ii) the Seller shall fail to make any other payment
required under the Agreement; and, in the case of either clause (i) or clause
(ii) of this subsection (b), such failure shall remain unremedied for one
Business Day after written notice thereof shall have been given to the Owner or
the Seller, as the case may be, by the Agent; or
(c) Any representation or warranty made or deemed made by the
Seller, the Owner, the Servicer, FSC or Charming Shoppes (or any of their
respective officers) under or in connection with the Agreement, any Master
Trust Document or the Company Agreement or any information or report (other
than any Servicer Report) delivered by the Seller, the Owner, the Servicer, FSC
or Charming Shoppes pursuant to the Agreement, any Master Trust Document or the
Company Agreement shall prove to have been incorrect or untrue in any material
respect when made or deemed made or delivered; or
(d) The Seller, the Owner, FSC or Charming Shoppes shall fail
to perform or observe any other term, covenant or agreement contained in the
Agreement, any Master Trust Document or the Company Agreement on its part to be
performed or observed and any such failure shall remain unremedied for 10
Business Days after written notice thereof shall have been given to the Seller,
the Owner, FSC or Charming Shoppes, as the case may be, by the Agent; or
VI-1
<PAGE> 105
(e) (i) Spirit, in its capacity as the seller or the
Servicer under the Pooling and Servicing Agreement or Spirit or any
Affiliate of Spirit, in any capacity under any other Master Trust
Document, shall fail to perform or observe any term, covenant or
agreement contained in the Pooling and Servicing Agreement or such
other Master Trust Document, on its part to be performed or observed
and (A) any such failure shall continue for 10 Business Days after
written notice thereof shall have been given to the Servicer by the
Trustee or any Purchaser Representative (as defined in the Pooling and
Servicing Agreement) or (B) any such failure under the Pooling and
Servicing Agreement or other Master Trust Document shall constitute an
"early amortization event" or similar event under any Certificate
Series or Receivables Purchase Series (as defined in the Pooling and
Servicing Agreement), or
(ii) any "Servicer Default" shall occur under the
Pooling and Servicing Agreement, or
(iii) any other event shall occur or condition shall exist
under the Pooling and Servicing Agreement or other Master Trust
Document that constitutes an "Amortization Event" or a "Trust Early
Amortization Event" thereunder or would constitute an "Amortization
Event" or a "Trust Early Amortization Event" thereunder but for the
requirement that notice be given or time elapse or both; or
(f) Any purchase or any reinvestment pursuant to the
Agreement shall for any reason (other than pursuant to the terms hereof) cease
to create, or any Purchaser Receivable Interest shall for any reason cease to
be, a valid and perfected first priority undivided percentage ownership
interest to the extent of the pertinent Purchaser Receivable Interest in each
applicable Pool Receivable and the Collections with respect thereto; or
(g) The Seller, the Owner, FSC or Charming Shoppes shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against the Seller, the Owner, FSC or Charming Shoppes seeking to adjudicate it
a bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, conservatorship or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors (including any law relating to the
conservatorship or liquidation of national banking associations), or seeking
the entry of an order for relief or the appointment of a receiver, trustee,
custodian, conservator, sequestrator or other similar
VI-2
<PAGE> 106
official for it or for any substantial part of its property and, in the case of
any such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 30 days,
or any of the actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a receiver,
trustee, custodian, conservator, sequestrator or other similar official for, it
or for any substantial part of its property) shall occur; or the Seller, the
Owner, FSC or Charming Shoppes shall take any corporate action to authorize any
of the actions set forth above in this paragraph (g); or
(h) As of the last day of any Due Period, either the
Delinquency Ratio shall exceed 10% or the Quarterly Charge-Off Ratio shall
exceed 12%; or
(i) The Net Receivables Pool Balance minus the sum of (A) the
aggregate "Investor Interests" (as defined in the Pooling and Servicing
Agreement) for all Certificate Series issued pursuant to any supplement to the
Pooling and Servicing Agreement, (B) the aggregate "Receivables Purchase
Interests" (as defined in the Pooling and Servicing Agreement) for all
Receivables Purchase Series issued pursuant to any receivables purchase
agreement that is subject to the Pooling and Servicing Agreement (other than
the Agreement and the Parallel Purchase Commitment), (C) the Subordinated
Purchaser Capital, (D) the Minimum Seller Capital, (E) the "Subordinated
Purchaser Capital" under the Parallel Purchase Commitment, (F) the "Minimum
Seller Capital" under the Parallel Purchase Commitment, and (G) the total
amount of Discount Option Receivables, if any, shall, as of the last day of any
Due Period, be less than the sum of the aggregate outstanding Purchaser Capital
of all Purchaser Receivable Interests under the Agreement and the aggregate
outstanding "Purchaser Capital" of all "Purchaser Receivable Interests" under
the Parallel Purchase Commitment; or the Floating Allocation Percentage as of
the last day of any Due Period shall be greater than 98.213%; and, in either
case, such condition shall continue until the first Distribution Date
immediately following such day; or
(j) Charming Shoppes shall cease to own, directly or
indirectly, all shares of each class of the issued and outstanding shares of
capital stock of FSC; or FSC shall cease to own, directly or indirectly, all
shares of each class of the issued and outstanding shares of capital stock of
Spirit; or
(k) The Net Excess Spread (averaged over any three
consecutive Due Periods) shall be less than 2.5%; or
VI-3
<PAGE> 107
(l) Charming Shoppes shall at any time be deemed by the
Agent, in its sole discretion, to be of credit quality not equivalent to at
least Baa2 by Moody's and at least BBB by S&P; or
(m) Spirit shall not be in compliance with its regulatory
capital requirements under applicable rules and regulations of the Office of
the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the
Board of Governors of the Federal Reserve System or other appropriate
governmental authorities; or
(n) The Company Agreement shall cease to be in full force and
effect.
VI-4
<PAGE> 108
Schedule I
Depositary Banks
NationsBank:
ABA # 11 000 025
Account # 711-463980-3
I-1
<PAGE> 109
ANNEX G
Summary of Interest Rate Agreements as of [Date]
<TABLE>
<CAPTION>
Refer- Date
0ence Amorti-
No. or zation of
Date of Type Fixed Rate Notional
Confir- (Swap Notional or Cap Effective Amount Termination
Counterparty mation or Cap) Amount Rate Date Begins Date
- ------------ ------ ------- -------- ------ --------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
The Owner Affiliate party to each of the above Agreements is [FSC].
The Index for floating rate payments for each of the above Agreements
is ["USD-CP-H.15"] for one month maturities.
<PAGE> 1
EXHIBIT 10.1.12
AMENDMENT NO. 2 TO THE
RECEIVABLES PURCHASE AGREEMENT
(PARALLEL PURCHASE COMMITMENT)
AND THE COMPANY AGREEMENT
AMENDMENT AGREEMENT dated as of May ___, 1994 among FIRST
FIDELITY BANK, NATIONAL ASSOCIATION (formerly known as First Fidelity Bank,
N.A., Pennsylvania, and prior to that known as Fidelity Bank, National
Association), a national banking association, solely in its capacity as the
trustee (the "Trustee") for CHARMING SHOPPES MASTER TRUST (formerly known as
Spirit of America Master Trust) (the "Seller"), FASHION SPC, INC., a Delaware
corporation (the "Subordinated Purchaser"), SPIRIT OF AMERICA NATIONAL BANK, a
national banking association ("Spirit"), as the owner (in such capacity, the
"Owner") and the servicer (in such capacity, the "Servicer"), CITIBANK, N.A.
("Citibank"), a national banking association, and CITICORP NORTH AMERICA, INC.,
a Delaware corporation ("CNAI"), as agent for Citibank (the "Agent") and, as to
Sections 2 and 5(b) hereof only, CHARMING SHOPPES, INC., a Pennsylvania
corporation ("Charming Shoppes"), and FASHION SERVICE CORP., a Delaware
corporation ("FSC").
Preliminary Statements. (1) The Seller and the Owner are
parties to a Pooling and Servicing Agreement dated as of December 24, 1992 (the
"Original PSA"), which the Seller and the Owner desire to amend and restate as
of the date hereof pursuant to an Amended and Restated Pooling and Servicing
Agreement dated as of December 24, 1992 (the "Restated PSA") in order to
facilitate the issuance of Investor Certificates (as such term is defined in
the Restated PSA);
(2) The Seller, the Subordinated Purchaser, the Owner, the
Servicer, Citibank and CNAI as Agent, are parties to a Receivables Purchase
Agreement (Parallel Purchase Commitment) dated as of December 24, 1992, as
amended by Amendment No. 1 dated as of September 20, 1993 (the "PPC";
capitalized terms not otherwise defined herein shall have the meanings
attributed to them in the PPC);
(3) FSC and Charming Shoppes have executed a Company
Agreement dated December 24, 1992, as amended by Amendment No. 1 dated as of
September 20, 1993 (the "Company Agreement"), in favor of Citibank and CNAI, as
agent for Citibank; and
(4) The parties hereto desire to amend the PPC and the
Company Agreement to reflect certain terms of the Amended and Restated PSA and
to make certain other changes as set forth in Sections 1 and 2 hereof
respectively.
<PAGE> 2
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Amendments to PPC. The PPC shall be amended as
follows, which amendments shall be effective on the date on which all of the
conditions precedent set forth in Section 3 shall be satisfied (the "Effective
Date"):
(a) As a result of the change of name of Spirit
of America Master Trust, all references in the PPC to the "Spirit of
America Master Trust" shall be replaced by "Charming Shoppes Master
Trust."
(b) As a result of the change of name of the
Trustee, all references in the PPC to "First Fidelity Bank, N.A.,
Pennsylvania" shall be replaced by "First Fidelity Bank, National
Association."
(c) Paragraph (9) of the Preliminary Statements is
hereby amended by deleting the word "are" in line 8 and inserting in
place thereof the word "is", and by deleting the phrase "this
Agreement or in any such certificate or other document shall control"
in lines 12 to 13 and inserting in place thereof the following:
"the Pooling and Servicing Agreement shall control, except
that with respect to any such inconsistency between any such
provision and Section 2 of this Agreement (including the
defined terms used in such Section 2), this Agreement shall
control."
(d) Paragraph (10) of the Preliminary Statements is
hereby amended by deleting the phrase "the Agreement" in line 5 and
inserting in place thereof the phrase "this Agreement."
(e) Section 1.06(a) is hereby amended by deleting
the word "Servicer" in line 13 and inserting in place thereof the word
"Owner."
(f) Section 1.06(b) is hereby amended by deleting
the word "Servicer" in line 11 and inserting in place thereof the word
"Owner."
(g) Section 1.07(a) is hereby amended by deleting
the word "Servicer" in line 1 and inserting in place thereof the word
"Owner."
(h) Section 1.07(b) is hereby amended by deleting
the word "Servicer" in line 8 and inserting in place thereof the word
"Owner" and by deleting the word "Owner" in line 9 and inserting in
place thereof the word "Servicer."
2
<PAGE> 3
(i) Article III is hereby amended by deleting the
phrase "; SERVICING TRANSFER NOTICE" at the end of the Article caption
thereof.
(j) Section 3.02 is hereby amended by deleting the
text following the word "UCC" in line 16 thereof and inserting in
place thereof the following:
"with respect to the Receivable Interests purchased by them
hereunder and under other applicable law, which rights and
remedies shall be cumulative; provided, however, that so long
as any Investor Certificates shall be outstanding, the Agent
and the Banks shall not exercise such other rights and
remedies under the UCC and other applicable law unless the
Agent shall have obtained and delivered to the Trustee an
Opinion of Counsel to the effect that the exercise of such
rights and remedies shall not materially and adversely affect
the interests of the holders of the Investor Certificates."
(k) Section 3.03 is hereby amended by deleting it in
its entirety.
(l) Section 4.01(i) is hereby amended by inserting
the term "RPA" between the words "Eligible" and "Receivable" in line 5
thereof.
(m) Section 4.02(vi) is amended by deleting it in
its entirety.
(n) Section 4.03 is amended by deleting it in its
entirety and by inserting in place thereof the following:
"SECTION 4.03. Incorporation by Reference. Section 4.03 of
the Receivables Purchase Agreement is hereby incorporated
herein by this reference."
(o) Section 4.04 is hereby added as follows:
"SECTION 4.04. Incorporation by Reference.
Section 4.04 of the Receivables Purchase Agreement is hereby
incorporated by this reference, except that each reference
therein to a "Purchaser" shall be deemed to be a reference to
a "Bank."
(p) Section 4.05 is hereby added as follows:
"SECTION 4.05. Repurchase of Purchaser
Receivable Interests. On any Distribution Date on or after
the Commitment Termination Date, the Owner may, upon 30 days'
prior notice to the Agent, purchase all, but not less than
all, of the Purchaser Receivable
3
<PAGE> 4
Interests outstanding on such Distribution Date, in
accordance with the terms specified in Section 12.2(a) of the
Pooling and Servicing Agreement, provided that on such
Distribution Date (a) the Subordinated Purchaser Capital has
not been reduced to zero, and (b) the sum of the Purchaser
Capital plus the Subordinated Purchaser Capital is equal to
or less than 5% of the highest Total Commitment theretofore
in effect under this Agreement. The deposit required in
connection with any such purchase shall be made to the Agent's
Account, for the account of the relevant Bank(s), and shall be
in an amount equal to the Purchaser Capital plus all Yield
accrued thereon through the date of such purchase. The Owner
shall also pay to the Agent, on the date of any such purchase,
for the account of the Agent and the relevant Bank(s), as the
case may be, all accrued fees, costs and expenses payable
hereunder to the Agent and/or the Bank."
(q) Section 6.01(a) is amended by deleting the
phrase "Series Representative" in line 3 and inserting in place
thereof the phrase "Purchaser Representative."
(r) Section 6.01(b) is amended by deleting the
phrase "Bank Representative" in line 5 and inserting in place thereof
the phrase "Purchaser Representative."
(s) Section 7.01 is hereby amended by deleting it in
its entirety and by inserting in place thereof the following:
"SECTION 7.01. Amendments, Waivers, Etc.
(a) No amendment or waiver of any provision of this Agreement
(including, without limitation any provision of the
Receivables Purchase Agreement which is incorporated herein by
reference) or consent to any departure by the Seller, the
Owner, the Servicer or the Subordinated Purchaser therefrom
shall be effective unless in a writing signed by the Owner,
the Seller, the Servicer, the Subordinated Purchaser and the
Agent, as agent for the Banks, and then such amendment, waiver
or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided that so
long as any Investor Certificates shall be outstanding, no
such amendment shall become effective unless (i) the Owner
shall have delivered an Opinion of Counsel to the Agent and
the Trustee to the effect that such amendment shall not
materially and adversely affect the interests of the holders
of the Investor Certificates or (ii) S&P and Moody's shall
have notified the Owner, the Servicer and the Trustee in
writing that such action will not result in a reduction or
withdrawal of their respective ratings on
4
<PAGE> 5
any Investor Certificates. In addition, and so long as any
Investor Certificates shall be outstanding, (y) if such
amendment relates to any of the provisions of Article II
hereof (and regardless of whether an Opinion of Counsel has
been delivered pursuant to clause (i) of the preceding
sentence), S&P shall have notified the Owner, the Servicer and
the Trustee in writing that such action will not result in a
reduction or withdrawal of its rating on any Investor
Certificates, and (z) if such amendment relates to any other
provisions of this Agreement (other than an amendment the sole
effect of which is to extend the Commitment Termination Date
or to modify the terms of an Enhancement which is for the sole
benefit of the Purchase Interests under this Agreement and the
"Purchase Interests" under the Receivables Purchase
Agreement), S&P shall have been given at least one Business
Day's prior written notice of such amendment and S&P shall not
have advised the Owner or the Servicer at the close of
business on the Business Day following receipt of such notice
that such action would result in a reduction or withdrawal of
its rating on any Investor Certificates. Defined terms which
are incorporated herein by reference from the Pooling and
Servicing Agreement shall not be altered or affected by any
subsequent amendment to the Pooling and Servicing Agreement
which relates to such terms, unless the Agent shall have
consented in writing to such amendment.
(b) No failure on the part of any Bank,
the Subordinated Purchaser or the Agent to exercise, and no
delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise
thereof or the exercise of any other right."
(t) Section 7.03(a) is hereby amended by deleting
the phrase "from the Seller" in line 7 thereof.
(u) Section 7.05(a) is hereby amended by inserting
the number "(i)" between the words "disclosed" and "to" and deleting
the number "(i)" between the words "to" and "third" in line 6 thereof,
and by deleting the phrase "and (ii) Mellon Bank, N.A.," in line 9 and
inserting in place thereof the following:
"(ii) to independent financial rating agencies in connection
with the rating of any Certificate Series issued or to be
issued pursuant to the Pooling and Servicing Agreement, and
(iii) to."
5
<PAGE> 6
(v) Section 7.08 is hereby amended by (i)
deleting the word "and" in line 2 and replacing it with a comma, and
(ii) adding the phrase "and 7.15" after the number "7.05" in line 2.
(w) Section 7.10 is hereby amended by deleting it in
its entirety and by inserting in place thereof the following:
SECTION 7.10. Duties of the Trustee. The Trustee
hereby agrees to (i) perform its duties and obligations as set
forth in the Pooling and Servicing Agreement and (ii) promptly
take each action which the Agent may specify (in accordance
with Section 11.14(a) (or any other applicable Section of the
Pooling and Servicing Agreement) to enforce the Pooling and
Servicing Agreement for the benefit of the Banks, any other
receivables purchasers, and any holders of Investor
Certificates, all with reasonable care and diligence and in
accordance with applicable laws, rules and regulations and the
Pooling and Servicing Agreement.
(x) Section 7.12 is hereby amended by deleting it in
its entirety and inserting in place thereof the following:
"SECTION 7.12. Third Party Beneficiaries. (a) Each
of the Seller and the Owner hereby acknowledge that the Agent,
for the ratable benefit of the Banks, and the Banks are, to
the extent of the Banks' rights and obligations under this
Agreement, intended to be third party beneficiaries under
Section 13.13 of the Pooling and Servicing Agreement.
(b) No "Investor Certificateholder" or "Enhancement Provider"
(in each case as defined in the Pooling and Servicing
Agreement) shall be a third-party beneficiary of this
Agreement or have any benefit or any legal or equitable right,
remedy or claim under this Agreement."
(y) New Sections 7.14, 7.15 and 7.16 are hereby
added as follows:
"SECTION 7.14. No Proceedings. Each of the
Agent, the Owner, the Servicer, each Bank, each assignee of a
Purchaser Receivable Interest or any interest therein and each
entity which enters into a commitment to purchase Purchaser
Receivable Interests or interests therein hereby agrees that
it will not institute against the Trust any proceeding of the
type referred to in paragraph (g) of Exhibit VI so long as any
Investor Certificate shall be outstanding or there shall not
have elapsed one year plus one day since the
6
<PAGE> 7
last day on which any Investor Certificate shall have been
outstanding.
SECTION 7.15. Limited Recourse. (a) In no
event will any Bank have any right or interest in the Trust to
the extent allocated to the holder of Investor Certificates or
attributable to the receivables purchase interest of any other
Receivables Purchaser. Notwithstanding any other provision
herein or in any other agreement or instrument, the Agent, on
behalf of each Bank, confirms that it and each Bank has no
interest in and will make no claim on, or otherwise interfere
with, distributions of Collections allocated to any Investor
Certificates or attributable to any other Receivables
Purchasers under the Pooling and Servicing Agreement, any
Supplement or any other receivables purchase agreement.
(b) Notwithstanding any claim that any Bank
or the Agent may have hereunder, no such claim shall be
payable from any Collections other than those attributable to
the Purchase Interests pursuant to Section 2.01 and, as to all
claims that any Bank or the Agent may have hereunder against
the Trust, no such claim shall be payable other than from
Allocable Finance Charge Collections, Allocable Principal
Collections and the Allocation Percentage of Recoveries of
Pool Receivables attributable to the Purchase Interests
pursuant to Section 2.01. Nothing contained in this Section,
however, shall limit or affect any claim that any Bank or the
Agent may have hereunder against the Owner or the Servicer for
any obligations under this Agreement which are direct
obligations of the Owner or the Servicer.
Section 7.16. Limitation on Rights of
Banks. It is understood and intended, and upon the purchase
of each Purchaser Receivable Interest the Agent and each Bank
shall be deemed to have expressly covenanted and agreed with
every other Receivables Purchaser and holder of an Investor
Certificate and the Trustee, that the Purchaser Receivable
Interests and the Investor Certificates shall rank pari passu
among one another and amongst themselves (except for any
Enhancement that may apply to only the Purchaser Receivable
Interests or one series of Investor Certificates) and neither
the Agent nor any Bank shall have any right hereunder or under
the Pooling and Servicing Agreement (i) to surrender, waive,
impair, disturb or prejudice the rights of any other
Receivables Purchasers or the holders of the Investor
Certificates, (ii) to obtain or seek to obtain priority over
or preference to any other
7
<PAGE> 8
Receivables Purchaser or holder of an Investor Certificate or
(iii) to enforce any right under this Agreement or the Pooling
and Servicing Agreement against the Seller, except in the
manner provided in the Pooling and Servicing Agreement and for
the equal, ratable and common benefit of all Receivables
Purchasers and holders of Investor Certificates and except (x)
as otherwise expressly provided in the Pooling and Servicing
Agreement or (y) to the extent this Agreement creates
independent and non-duplicative rights against the Seller.
For the protection and enforcement of the provisions of this
Section, each and every Receivables Purchaser and holder of an
Investor Certificate and the Trustee shall be entitled to such
relief as can be given either at law or in equity."
(z) Exhibit I, paragraph (1) is amended as follows:
(i) The definition of "Agent's Account" is
amended by adding at the end thereof the sentence:
"The Agent's Account is the "Series Account" referred
to in the Pooling and Servicing Agreement for the
Receivables Purchase Series arising in connection
with the Agreement."
(ii) The definition of "Pooling and
Servicing Agreement" is amended by deleting it in its
entirety and by adding in place thereof the
following:
"'Pooling and Servicing Agreement' means the
Amended and Restated Pooling and Servicing
Agreement dated as of December 24, 1992 as
amended and restated as of May 4, 1994 among
Spirit, as the seller, Spirit as the Servicer
and First Fidelity Bank, National Association
(formerly known as First Fidelity Bank, N.A.,
Pennsylvania, and prior to that known as
Fidelity Bank, National Association), as the
Trustee, as the same may, from time to time,
be amended, restated, modified or
supplemented."
(iii) The definition of "Purchase Interests"
is hereby amended by inserting the phrase "and
'Receivables Purchase Series Interest'" in line 5
thereof after the phrase "Receivables Purchase
Interest."
(iv) The definition of "Receivables Purchase
Agreement" is amended by adding the phrase "as
8
<PAGE> 9
amended and restated as of May __, 1994" following
the word "hereof" in line 2.
(v) The definition of "Subordinated
Purchaser Capital" is amended by deleting the phrase
"and plus (e)" in line 17 and inserting in place
thereof the clause "minus (e) an amount equal to the
aggregate amount by which Subordinated Purchaser
Capital has been reduced on all prior Distribution
Dates pursuant to Section 2.07(a) of the Agreement,
and plus (f)," and by deleting the phrase "and (d)"
at the end thereof and inserting in place thereof the
phrase ", (d) and (e)."
(vi) The definition of "Trustee" is amended
by deleting it in its entirety and adding in place
thereof the following:
"'Trustee' means, initially, First Fidelity
Bank, National Association (formerly known as
First Fidelity Bank, N.A., Pennsylvania, and
prior to that known as Fidelity Bank,
National Association), a national banking
association, as the trustee under the Pooling
and Servicing Agreement, and each other
Person who shall succeed to the functions of
First Fidelity Bank, National Association
pursuant to the terms of the Pooling and
Servicing Agreement."
(aa) Exhibit I, paragraph 2 is amended by adding the
following sentence after the third sentence thereof:
"The reference to the "Parallel Purchase Commitment"
in the definition of "Collection" incorporated in the
Agreement by reference shall be deemed to be a
reference to the Receivables Purchase Agreement."
(bb) Exhibit I, paragraph (3) is amended by adding
the following definitions:
"Investor/Purchaser Percentage" means the Allocation
Percentage.
"Receivables Purchase Interest" and "Receivables
Purchase Series Interest" mean the Purchase Interests.
"Receivables Purchaser Monthly Servicing Fee" means
the Servicer Fee.
9
<PAGE> 10
"Series Servicing Fee Percentage" means the Servicing
Fee Rate.
"Series Termination Date" means the Final
Distribution Date.
(cc) Exhibit IV is amended by deleting the word
"and" in line 4 and adding the following clause at the end thereof:
"and (iii) each reference therein to the "Parallel
Purchase Commitment" shall be deemed to be a
reference to the "Receivables Purchase Agreement."
SECTION 2. Amendments to the Company Agreement. (a)
The Company Agreement shall be amended, effective as of the Effective Date, as
follows:
(i) As a result of the change of name of Spirit
of America Master Trust, all references in the Company Agreement to
the "Spirit of America Master Trust" shall be replaced by "Charming
Shoppes Master Trust."
(ii) As a result of the change of name of the
Trustee, all references in the Company Agreement to "First Fidelity
Bank, N.A., Pennsylvania" shall be replaced by "First Fidelity Bank,
National Association."
(iii) Sections 1, 2, 3 and 4 of the Company
Agreement are each amended by inserting the words "the Owner",
immediately before each appearance of the words "the Servicer" in such
Sections.
(iv) Each reference in the Company Agreement to "the
PPC", "thereunder", "thereof" or words of like import referring to the
PPC shall mean and be a reference to the PPC, as amended by this
Amendment Agreement, and as the same may be further amended or
restated from time to time.
(b) Each of Charming Shoppes and FSC (i) agrees that
the Company Agreement applies to the PPC, as amended by this Amendment
Agreement, and (ii) ratifies and confirms the Company Agreement in all respects
(subject, in the case of representations and warranties, to Section 3 (b) of
this Amendment Agreement) and agrees that the Company Agreement, as amended
hereby, shall remain in full force and effect in accordance with its terms.
SECTION 3. Conditions Precedent. The effectiveness of the
amendments set forth in Section 1 is subject to the conditions precedent that
the Agent shall have received each of the following, in form and substance
satisfactory to the Agent:
10
<PAGE> 11
(a) Certified copies of any necessary corporate action of
the Trustee approving the Restated PSA and this Amendment Agreement and
certified copies of all documents evidencing other necessary government
approvals, if any, with respect to the Restated PSA and this Amendment
Agreement and certification of the names and true signatures of the officers of
the Trustee authorized to sign the Restated PSA and this Amendment Agreement on
behalf of the Seller and the other documents to be delivered by the Seller
hereunder;
(b) Certified copies of the resolutions of the Board of
Directors of the Subordinated Purchaser approving this Amendment Agreement, and
certified copies of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to this Amendment Agreement,
and certification of the names and true signatures of the officers of the
Subordinated Purchaser authorized to sign this Amendment Agreement and the
other documents to be delivered by the Subordinated Purchaser hereunder;
(c) Certified copies of the resolutions of the Board of
Directors of the Servicer and the Owner approving the Restated PSA and this
Amendment Agreement, and certified copies of all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
the Restated PSA and this Amendment Agreement, and certification of the names
and true signatures of the officers of the Servicer and the Owner authorized to
sign the Restated PSA and this Amendment Agreement and the other documents to
be delivered by the Servicer and the Owner hereunder;
(d) A fully executed copy of the Restated PSA;
(e) A copy of the Series 1994-1 Supplement to the Pooling and
Servicing Agreement;
(f) Favorable opinions of counsel for the Trustee, the Owner,
the Servicer and the Subordinated Purchaser as to the Restated PSA and this
Amendment Agreement and such other matters as the Agent may reasonably request;
(g) UCC financing statement amendments reflecting the change
in the name of the Trustee and the Charming Shoppes Master Trust with respect
to each relevant UCC financing statement filed pursuant to the Original PSA and
the Receivables Purchase Agreement;
(h) Consents from each bank which has entered into a parallel
asset purchase agreement with the Agent with respect to the PPC;
(i) A revised Store Payment Notice, duly executed by the
Owner;
11
<PAGE> 12
(j) A letter agreement with respect to the Depositary
Agreement, duly executed by the Owner and the Seller and duly acknowledged by
each Depositary Bank; and
(k) such other approvals, opinions or documents as the Agent
may reasonably request.
SECTION 4. Consent to Restated PSA. Pursuant to Section
13.1(b) of the Original PSA, the Agent, as the Bank Representative under the
PPC, consents as of the Effective Date to the amendments effected pursuant to
the Restated PSA.
SECTION 5. Representations and Warranties. (a) Each of the
Trustee, the Owner, the Servicer and the Subordinated Purchaser confirms that
each of the representations and warranties made by it contained in Exhibit III
to the PPC, as amended by this Amendment Agreement, is correct on and as of the
date hereof as though made on and as of this date.
(b) Each of Charming Shoppes and FSC confirms that each of
the representations and warranties made by it contained in Section 5 of the
Company Agreement, after giving effect to this Amendment Agreement, is correct
on and as of the date hereof as though made on and as of this date.
SECTION 6. Costs and Expenses. The Owner agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution and delivery of this Amendment Agreement and the other documents to
be delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent.
SECTION 7. Confirmation of PPC. Except as herein expressly
amended, the PPC is ratified and confirmed in all respects and shall remain in
full force and effect in accordance with its terms. Each reference in the PPC
to "this Agreement" shall mean the PPC as amended by this Amendment Agreement,
and as hereinafter amended or restated. In accordance with the last sentence
of paragraph 2 of Exhibit I to the PPC, the Agent hereby consents to the
Amendment and Restatement as of the Effective Date of the Receivables Purchase
Agreement.
SECTION 8. GOVERNING LAW. THIS AMENDMENT AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
12
<PAGE> 13
SECTION 9. Execution in Counterparts. This Amendment
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same Agreement. Delivery of an executed counterpart of
a signature page to this Amendment Agreement by telecopier shall be effective
as delivery of a manually executed counterpart of this Amendment Agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
SELLER: FIRST FIDELITY BANK, NATIONAL ASSOCIATION
(formerly known as Fidelity Bank,
National Association),
not in its individual capacity but
solely as the Trustee for
CHARMING SHOPPES MASTER TRUST
(formerly known as Spirit of America
Master Trust)
By:
---------------------------------
Title: Vice President
SUBORDINATED
PURCHASER: FASHION SPC, INC.
By:
---------------------------------
Title:
--------------------------
OWNER/SERVICER: SPIRIT OF AMERICA NATIONAL BANK,
as the Owner and the Servicer
By:
---------------------------------
Title:
--------------------------
13
<PAGE> 14
AGENT: CITICORP NORTH AMERICA, INC.,
as Agent
By:
---------------------------------
Vice President
CITIBANK: CITIBANK, N.A.
By: Citicorp North America, Inc.,
as Attorney-in-Fact
By:
---------------------------------
Vice President
ACKNOWLEDGED AND AGREED AS TO
SECTIONS 2 AND 5(b) ONLY:
CHARMING SHOPPES: CHARMING SHOPPES, INC.
By:
---------------------------------
Title:
--------------------------
FSC: FASHION SERVICE CORP.
By:
---------------------------------
Title:
--------------------------
14
<PAGE> 1
EXHIBIT 10.1.14
- --------------------------------------------------------------------------------
SPIRIT OF AMERICA NATIONAL BANK
Seller and Servicer
and
FIRST FIDELITY BANK, NATIONAL ASSOCIATION
Trustee
on behalf of the Series 1994-2 Certificateholders
--------------------------------------
SERIES 1994-2 SUPPLEMENT
Dated as of August 15, 1994
to
AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of December 24, 1992
As Amended and Restated as of May 4, 1994
--------------------------------------
$14,000,000
CHARMING SHOPPES MASTER TRUST
SERIES 1994-2
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
SECTION 1. Designation . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 3. Reassignment and Transfer Terms . . . . . . . . . . . . . . . 12
SECTION 4. Delivery and Payment for the Series 1994-2
Certificates; Transfer. . . . . . . . . . . . . . . . . . . . 12
SECTION 5. Form of Delivery of Series 1994-2 Certificates . . . . . . . 13
SECTION 6. Article IV of Agreement . . . . . . . . . . . . . . . . . . . 13
SECTION 7. Article V of the Agreement . . . . . . . . . . . . . . . . . 23
SECTION 8. Series 1994-2 Early Amortization Events . . . . . . . . . . . 26
SECTION 9. Series 1994-2 Termination . . . . . . . . . . . . . . . . . . 28
SECTION 10. Distributions from Series 1994-1 . . . . . . . . . . . . . . 28
SECTION 11. Representations and Warranties of the Seller
and the Servicer . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 12. Obligations Unaffected . . . . . . . . . . . . . . . . . . . 28
SECTION 13. Conditions to Effectiveness of This Supplement . . . . . . . 29
SECTION 14. Ratification of Agreement . . . . . . . . . . . . . . . . . 30
SECTION 15. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 16. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 17. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 18. No Petition . . . . . . . . . . . . . . . . . . . . . . . . 31
EXHIBITS
EXHIBIT A Form of Class A Certificate
EXHIBIT B Form of Class B Certificate
EXHIBIT C Form of Monthly Payment Instructions and
Notification to the Trustee
EXHIBIT D Form of Monthly Certificateholders' Statement
EXHIBIT E-1 Form of Transferor Letter
EXHIBIT E-2 Form of Transferee Letter
-i-
<PAGE> 3
SERIES 1994-2 SUPPLEMENT, dated as of August 15, 1994
(this "Supplement"), by and between SPIRIT OF AMERICA NATIONAL BANK, a national
banking association, as Seller and Servicer, and FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Trustee under the Amended and Restated Pooling and Servicing
Agreement dated as of December 24, 1992 between Spirit of America National Bank
and the Trustee (as amended and restated on May 4, 1994, the "Agreement").
Section 6.9 of the Agreement provides, among other
things, that, subject to certain conditions, the Seller and the Trustee may at
any time and from time to time enter into a supplement to the Agreement for the
purpose of authorizing the delivery by the Trustee to the Seller for the
execution and redelivery to the Trustee for authentication of one or more
Series of Certificates.
Pursuant to this Supplement, the Seller and the Trust
shall create a new Series of Investor Certificates and shall specify the
Principal Terms thereof.
SECTION 1. Designation. There is hereby created a
Series of Investor Certificates to be issued pursuant to the Agreement and this
Supplement to be known as the "Series 1994-2 Certificates". The Series 1994-2
Certificates shall be issued in two Classes, which shall respectively be known
as "Class A Certificates, Series 1994-2" (the "Class A Certificates") and the
"Class B Certificates, Series 1994-2" (the "Class B Certificates"). Series
1994-2 shall be included in Group One. Except as provided herein, Series
1994-2 shall not be subordinated to any other Series.
SECTION 2. Definitions.
In the event that any term or provision contained herein
shall conflict with or be inconsistent with any provision contained in the
Agreement, the terms and provisions of this Supplement shall govern with
respect to this Series. All Article, Section or Section references herein
shall mean Article, Section or Sections of the Agreement, except as otherwise
provided herein. All capitalized terms not otherwise defined herein are
defined in the Agreement. Each capitalized term defined herein shall relate
only to the Series 1994-2 Certificates and no other Series of Certificates or
Receivables Purchase Series issued by the Trust.
"Accrual Period" shall mean the period from and including
a Distribution Date (or in the case of the initial Accrual Period, the Issuance
Date) to but excluding the succeeding Distribution Date.
"Adjusted Class A Invested Amount" shall mean, as of any
date, the Class A Invested Amount on such date less the amount on deposit in
the Principal Funding Account allocable to
<PAGE> 4
2
the Class A Certificates on such date of determination pursuant to Section 4.8
hereof.
"Adjusted Class B Invested Amount" shall mean, as of any
date, the Class B Invested Amount as of such date less the amount on deposit in
the Principal Funding Account allocable to the Class B Certificates on such
date pursuant to Section 4.8 hereof.
"Adjusted Investor Interest" shall mean, with respect to
any date of determination, an amount equal to the Investor Interest less the
Principal Funding Account Balance on such date of determination.
"Available Class A Excess Spread Account Amount" shall
mean, with respect to any Distribution Date occurring after the Class A Excess
Spread Account Funding Date, the lesser of (a) the amount on deposit in the
Class A Excess Spread Account on such date (before giving effect to any deposit
to be made to the Class A Excess Spread Account on such date) and (b) the
Required Class A Excess Spread Account Amount for such Distribution Date.
"Available Funds" shall mean, with respect to any
Distribution Date, the sum of (i) the Floating Allocation Percentage of
Collections of Finance Charge Receivables allocated to the Series 1994-2
Certificateholders for the related Due Period (including any investment
earnings that are to be treated as Collections of Finance Charge Receivables in
accordance with the Agreement and this Supplement), (ii) the amount of
Principal Funding Investment Proceeds, if any, with respect to such
Distribution Date, (iii) amounts paid to the Trustee under the Caps and (iv)
all amounts available pursuant to Section 4.6(h) of the Series 1994- 1
Supplement.
"Available Principal Collections" shall mean, with
respect to any Distribution Date, the sum of (i) the Principal Allocation
Percentage of all Collections of Principal Receivables for the related Due
Period, (ii) any Shared Principal Collections with respect to other Series in
Group One that are allocated to Series 1994-2 in accordance with Section 4.11
for such Distribution Date, (iii) any reimbursements of Investor Loss Amounts
as provided in Section 4.6(c), (iv) any reimbursement of Class A Charge-Offs
and Class B Charge-Offs as provided in Section 4.6(d) and (v) any other amounts
which pursuant to Section 4.6 are to be treated as Collections of Principal
Receivables for such Distribution Date.
"Average Principal Balance" shall mean, for a Due Period
in which an Addition Date or Removal Date occurs, the weighted average of the
Principal Receivables in the Trust at the end of the day on the last day of the
prior Due Period and the Principal Receivables in the Trust at the end of the
day on the related Addition Date or Removal Date, weighted, respectively, by a
fraction, the numerator of which is the number of days from and
<PAGE> 5
3
including the first day of such Due Period to but excluding the related
Addition Date or Removal Date, and the denominator of which is the number of
days in such Due Period, and by a fraction, the numerator of which is the
number of days from and including the related Addition Date or Removal Date to
and including the last day of such Due Period, and the denominator of which is
the number of days in such Due Period.
"Base Rate" shall mean, for any Due Period, (i) the sum
of Certificate Interest on the Series 1994-2 Certificates for the related
Distribution Date and the Investor Monthly Servicing Fee for such Due Period
minus any amounts paid to the Trustee under the Caps, divided by (ii) the
Investor Interest as of the last day of such Due Period, times (iii) 12.
"Cap Agreement" shall mean the agreement or agreements
between the parties named therein and the Trust, substantially in the form of
Exhibit A, pursuant to which the Trust entered into the Caps, and all
amendments thereof and supplements thereto.
"Cap Counterparties" shall mean the persons so designated
in the Cap Agreement and any permitted assignees of such parties' obligations
under the Caps from time to time as contemplated by the Cap Agreement.
"Caps" shall mean, as of any date, the interest rate cap
or caps entered into in an aggregate notional amount initially equal to
$10,000,000, in each case among the Trust, the Cap Counterparties and the other
parties named therein pursuant to the Cap Agreement.
"Certificate Interest" shall have the meaning assigned
in Section 4.6(a).
"Class A Certificate" shall mean a certificate executed
by the Seller and authenticated by the Trustee, substantially in the form of
Exhibit A.
"Class A Certificate Rate" shall have the meaning
specified in that letter agreement, dated as of August 15, 1994, between the
Seller and Servicer and the Trustee.
"Class A Certificateholder" shall mean each holder of an
interest in the Class A Certificates.
"Class A Charge-Off" shall have the meaning assigned in
Section 4.5.
"Class A Deficiency Amount" shall have the meaning
assigned in Section 4.6(a).
"Class A Excess Spread Account" shall have the meaning
specified in Section 4.12(a).
<PAGE> 6
4
"Class A Excess Spread Account Funding Date" shall mean
the earliest of (a) the first Distribution Date on which the Excess Yield
Percentage is less than two percent (2%) and (b) the Distribution Date
following an Economic Early Amortization Event.
"Class A Interest" shall mean that portion of the
Floating Rate Certificateholders' Interest in the Trust Assets evidenced by the
Class A Certificates.
"Class A Invested Amount" shall mean, on any date of
determination, an amount equal to (a) the Initial Class A Invested Amount,
minus (b) the aggregate amount of principal payments to the Class A
Certificateholder pursuant to Section 4.8 prior to such date of determination,
minus (c) the excess, if any, of the aggregate amount of Class A Charge-Offs
over Class A Charge-Offs reimbursed prior to such date of determination, minus
(d) the excess, if any, of the aggregate amount of Class A Reductions made
pursuant to Section 4.9(a) over reductions of the Class A Invested Amount
reimbursed prior to such date of determination pursuant to Section 4.9(b).
"Class A Loss Amount" shall mean the ratable portion of
the Investor Loss Amount allocable to the Class A Certificate.
"Class A Reduction" shall have the meaning specified in
Section 4.9(a).
"Class B Certificate" shall mean a certificate executed
by the Seller and authenticated by the Trustee, substantially in the form of
Exhibit B.
"Class B Certificateholder" shall mean each holder of a
Class B Certificate.
"Class B Charge-Off" shall have the meaning assigned in
Section 4.5.
"Class B Interest" shall mean that portion of the
Floating Rate Certificateholders' Interest in the Trust Assets evidenced by the
Class B Certificates.
"Class B Invested Amount" shall mean, on any date of
determination, an amount equal to (a) the Initial Class B Invested Amount,
minus (b) the aggregate amount of principal payments to the Class B
Certificateholders pursuant to Section 4.8 prior to such date of determination,
minus (c) the excess, if any, of the aggregate amount of Class B Charge-offs
over Class B Charge-offs reimbursed prior to such date of determination, minus
(d) the excess, if any, of the aggregate amount of Class B Reductions made
pursuant to Section 4.9(a) over reductions of the Class B Invested Amount
reimbursed prior to such date of determination pursuant to Section 4.9(b).
<PAGE> 7
5
"Class B Loss Amount" shall mean the ratable portion of
the Investor Loss Amount allocable to the Class B Certificate.
"Class B Reduction" shall have the meaning assigned in
Section 4.9(a).
"Closing Date" shall have the meaning specified in
Section 13.
"Collection Account Shortfall" shall have the meaning
assigned in Section 4.12(c).
"Covered Amount" shall mean, for any Distribution Date
with respect to the Scheduled Amortization Period, the product of the Class A
Certificate Rate for the Accrual Period related to such Distribution Date,
calculated on the basis of the actual days elapsed in such Accrual Period
divided by 360, and the Principal Funding Account Balance on the last day of
the preceding Due Period.
"Distribution Date" shall mean August 15, 1994 and the
fifteenth day of each calendar month thereafter, or if such fifteenth day is
not a Business Day, the next succeeding Business Day.
"Early Amortization Period" shall mean an Amortization
Period commencing at the close of business on the Business Day immediately
preceding the day on which an Early Amortization Event with respect to Series
1994-2 is deemed to have occurred, and ending on the Series 1994-2 Termination
Date.
"Economic Early Amortization Distribution Date" shall
mean the first Distribution Date following the occurrence of an Economic Early
Amortization Event.
"Economic Early Amortization Event" shall mean the Series
1994-2 Early Amortization Event set forth in Section 8(c) of this Supplement.
"Excess Finance Charge Collections" shall have the
meaning specified in Section 4.6(f).
"Expected Final Payment Date" shall mean the April 1999
Distribution Date.
"Excess Loan Agreement Funds" shall mean those funds
payable to the Seller and Servicer pursuant to Section 2.2(b)(iv) of the Loan
Agreement, which amounts shall instead be deposited by the Trustee into the
Collection Account for distribution in accordance with Section 4.6.
"Excess Yield Percentage" shall mean, with respect to any
Distribution Date (as defined in the Series 1994-1 Supplement), the result
(expressed as a percentage) of a
<PAGE> 8
6
fraction, the numerator of which is the product of (a) twelve, by (b) the
Excess Finance Charge Collections (as defined in the Series 1994-1 Supplement)
for such Distribution Date (as defined in the Series 1994-1 Supplement), minus
the sum of (i) Shared Excess Finance Charge Collections (as defined in the
Series 1994-1 Supplement), (ii) Principal Funding Investment Proceeds (as
defined in the Series 1994-1 Supplement) and (iii) amounts withdrawn from the
Reserve Account (as defined in the Series 1994-1 Supplement), included in the
calculation of Excess Finance Charge Collections (as defined in the Series
1994-1 Supplement) for such Distribution Date (as defined in the Series 1994-1
Supplement), and the denominator of which is the Adjusted Investor Interest (as
defined in the Series 1994-1 Supplement) and the Enhancement Invested Amount
(as defined in the Series 1994-1 Supplement), if any, for such Distribution
Date (as defined in the Series 1994-1 Supplement).
"Finance Charge Shortfall" shall have the meaning
specified in Section 4.10.
"Fixed Principal Allocation Date" shall mean the earlier
of (a) the date on which an Early Amortization Event with respect to Series
1994-2 occurs and (b) a date selected by the Servicer before the Expected Final
Payment Date, if any. If the Servicer establishes a Fixed Principal Allocation
Date pursuant to clause (b) of the preceding sentence, the Servicer shall
provide notification of such date to the Seller, the Trustee and the Rating
Agencies no later than two Business Days prior to such date.
"Floating Allocation Percentage" shall mean, with respect
to any Due Period (including any day within such Due Period), the percentage
equivalent of a fraction, the numerator of which is the Adjusted Investor
Interest at the end of the day on the last day of the prior Due Period (or with
respect to the first Due Period, the Initial Investor Interest) and the
denominator of which is the greater of (x) the sum of (i) the aggregate amount
of Principal Receivables in the Trust at the end of the day on such date (or
with respect to the first Due Period, as of the end of the day on the Closing
Date) and (ii) the Excess Funding Amount as of the close of business of the
last day of the prior Due Period, and (y) the sum of the numerators used to
calculate the Investor/Purchaser Percentages for such Due Period with respect
to Finance Charge Receivables, Principal Receivables or Loss Amounts, as
applicable, for all Series of Certificates and Receivable Purchase Series
outstanding; provided, that with respect to any Due Period in which an Addition
Date or Removal Date occurs, the amount in (x)(i) above shall be (1) the
aggregate amount of Principal Receivables in the Trust at the end of the day on
the last day of the prior Due Period for the period from and including the
first day of such Due Period to but excluding the related Addition Date or
Removal Date and (2) the aggregate amount of Principal Receivables in the Trust
at the end of the day on the related Addition Date or Removal Date for the
<PAGE> 9
7
period from and including the related Addition Date or Removal Date to and
including the last day of such Due Period; provided further, that with respect
to any Due Period in which an Addition Date or a Removal Date occurs and the
Servicer need not make daily deposits of Collections into the Collection
Account, the amount in (x)(i) above shall be the Average Principal Balance.
"Group One" shall mean Series 1994-2 and each other
Series specified in the related Supplement to be included in Group One.
"Initial Class A Invested Amount" shall mean $10,000,000.
"Initial Class B Invested Amount" shall mean $4,000,000.
"Initial Investor Interest" shall mean the sum of the
Initial Class A Invested Amount and the Initial Class B Invested Amount.
"Interest Payment Date" shall mean the fifteenth day
of each month (or if such day is not a Business Day, the next succeeding
Business Day) and the Expected Final Payment Date.
"Invested Amount" shall mean, as of any date, the sum of
(a) the Class A Invested Amount and (b) the Class B Invested Amount.
"Investor Charge-Offs" shall mean the sum of the Class A
Charge-offs and Class B Charge-offs.
"Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Initial Investor Interest, minus (b)
the aggregate amount of payments of Certificate Principal paid to the Series
1994-2 Certificateholders pursuant to Section 4.8 prior to such date of
determination, minus (c) the excess, if any, of the aggregate amount of
Investor Charge-Offs over Investor Charge-Offs reimbursed prior to such date of
determination, minus (d) the excess, if any, of the aggregate amount of Class A
Reductions and Class B Reductions over the sum of the Class A Reductions and
the Class B Reductions reimbursed prior to such date of determination.
"Investor Loss Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the aggregate of the
Loss Amounts for the related Due Period and (b) the Floating Allocation
Percentage for such Due Period.
"Investor/Purchaser Percentage" shall mean, with respect
to Collections of Principal Receivables, the Principal Allocation Percentage,
and with respect to Collections of Finance
<PAGE> 10
8
Charge Receivables or Loss Amounts, the Floating Allocation Percentage.
"Issuance Date" shall mean the date on which the Class A
Certificate and the Class B Certificate is delivered as provided in Section 4.
"LIBOR" shall mean, with respect to any Accrual Period,
the offered rates for deposits in Dollars for a period of one month commencing
on the first day of such Period which appear on Page 3750 of the Telerate
screen as of 11:00 A.M., London time, on the LIBOR Determination Date. On any
LIBOR Determination Date on which no offered rate appears on the Page 3750 of
the Telerate screen, LIBOR will be determined at approximately 11:00 A.M.,
London time, on such LIBOR Determination Date on the basis of the rates at
which deposits in Dollars are offered to prime banks in the London interbank
market by London Reference Banks for a period of one month, commencing on the
first day of the related Accrual Period and in a principal amount equal to an
amount of not less than $10,000,000 that is representative for a single
transaction in such market at such time. The Trustee will request the
principal London office of each of such London Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, LIBOR in
respect of such LIBOR Determination Date will be the arithmetic mean (rounded
upward, if necessary, to the nearest one hundred-thousandth of a percentage
point) of such quotations. If fewer than two such quotations are provided by
the London Reference Banks, LIBOR in respect of such LIBOR Determination Date
will be the arithmetic mean (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point) of the rates quoted at approximately
11:00 A.M., New York City time, on the LIBOR Determination Date by the New York
Reference Banks for loans in Dollars to leading European banks for a period of
one month commencing on the first day of such Accrual Period and in a principal
amount equal to an amount of not less than $10,000,000 that is representative
for a single transaction in such market at such time. The Trustee will request
the principal New York office of each of such New York Reference Banks to
provide a quotation of its rate. If at least two such quotations are provided,
LIBOR in respect of such LIBOR Determination Date will be the arithmetic mean
(rounded upward, if necessary, to the nearest one hundred- thousandth of a
percentage point) of such quotations. If the New York Reference Banks do not
provide at least two quotations, LIBOR with respect to such LIBOR Determination
Date will be LIBOR as reflected in the interest rate on the Class A
Certificates in effect on the previous LIBOR Determination Date.
"LIBOR Determination Date" shall mean, with respect to
any Accrual Period, the second Business Day preceding the first day of such
Accrual Period.
<PAGE> 11
9
"Loan Agreement" shall mean the agreement among the
Seller, the Servicer, the Trustee, the Banks named therein, and the Agent named
therein, dated as of May 4, 1994, as amended or modified from time to time.
"London Reference Banks" shall mean Swiss Bank
Corporation, New York Branch, and Banque Francaise du Commerce Exterieur, New
York Branch.
"Minimum Seller Interest" shall mean $280,000.
"Monthly Servicing Fee" shall mean, with respect to any
Due Period, an amount equal to one-twelfth of the product of the Series
Servicing Fee Percentage and the Adjusted Investor Interest as of the last day
of the preceding Due Period.
"New York Reference Banks" shall mean Swiss Bank
Corporation, New York Branch, and Banque Francaise du Commerce Exterieur, New
York Branch.
"Payment Date" shall mean any Interest Payment Date and
any Special Payment Date.
"Portfolio Yield" shall mean, with respect to any Due
Period, the annualized percentage equivalent of a fraction, the numerator of
which is an amount equal to the sum of (i) the Floating Allocation Percentage
of Collections of Finance Charge Receivables allocated to the Series 1994-2
Certificates for such Due Period, (ii) the amount of any Principal Funding
Investment Proceeds for the related Distribution Date and (iii) any Shared
Excess Finance Charge Collections that are allocated to Series 1994-2 pursuant
to Section 4.10 for the related Distribution Date, such sum to be calculated on
a cash basis after subtracting the Investor Loss Amount for such Due Period,
and the denominator of which is the Investor Interest as of the last day of the
preceding Due Period (or with respect to the initial Due Period, the Initial
Investor Interest).
"Principal Allocation Percentage" shall mean, (A) with
respect to any Due Period (including any day within such Due Period) occurring
prior to the Fixed Principal Allocation Date, the Floating Allocation
Percentage for such Due Period, and (B) with respect to any Due Period
(including any day within such Due Period) occurring on or after the Fixed
Principal Allocation Date, the percentage equivalent of a fraction, the
numerator of which is the Adjusted Investor Interest as of the end of the day
of the last day of the Due Period occurring immediately prior to the Fixed
Principal Allocation Date and the denominator of which is the greater of (x)
the sum of (i) the aggregate amount of Principal Receivables in the Trust at
the end of the day on the last day of the prior Due Period and (ii) the Excess
Funding Amount as of the close of business of the last day of the prior Due
Period, and (y) the sum of the numerators used to calculate the
Investor/Purchaser Percentages for such Due Period with
<PAGE> 12
10
respect to Principal Receivables for all Series of Certificates and Receivable
Purchase Series outstanding; provided, that with respect to any Due Period in
which an Addition Date or Removal Date occurs, the amount in (x)(i) above shall
be (1) the aggregate amount of Principal Receivables in the Trust at the end of
the day on the last day of the prior Due Period for the period from and
including the first day of such Due Period to but excluding the related
Addition Date or Removal Date and (2) the aggregate amount of Principal
Receivables in the Trust at the end of the day on the related Addition Date or
Removal Date for the period from and including the related Addition Date or
Removal Date to and including the last day of such Due Period; provided
further, that with respect to any Due Period in which an Addition Date or a
Removal Date occurs and the Servicer need not make daily deposits of
Collections into the Collection Account, the amount in (x)(i) above shall be
the Average Principal Balance.
"Principal Funding Account" shall have the meaning
specified in Section 4.13(a).
"Principal Funding Account Balance" shall mean, with
respect to any date of determination during the Scheduled Amortization Period
or the Early Amortization Period, the principal amount, if any, on deposit in
the Principal Funding Account on such date of determination.
"Principal Funding Investment Proceeds" shall mean, with
respect to each Due Period during the Scheduled Amortization Period or the
Early Amortization Period, the investment earnings on funds in the Principal
Funding Account.
"Principal Funding Investment Shortfall" shall mean, with
respect to each Due Period during the Scheduled Amortization Period or the
Early Amortization Period, the amount, if any, by which the Principal Funding
Investment Proceeds are less than the Covered Amount.
"Principal Reductions" shall have the meaning specified
in Section 4.9(a).
"Principal Shortfall" shall mean on any Distribution Date
with respect to the Early Amortization Period, the amount by which the sum of
(i) the Adjusted Class A Invested Amount and (ii) the Adjusted Class B Invested
Amount exceeds the Available Principal Collections for such Distribution Date
(excluding any portion thereof attributable to Shared Principal Collections).
"Rating Agency" shall mean Moody's and Standard & Poor's.
"Required Amount" shall have the meaning specified in
Section 4.6.
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"Required Class A Excess Spread Account Amount" shall
mean, with respect to any Distribution Date on or after the Class A Excess
Spread Account Funding Date, $80,000.
"Required Series 1994-2 Invested Amount" shall mean an
amount equal to the product of 5% and the Adjusted Investor Interest (as
defined in the Series 1994-1 Supplement).
"Revolving Period" shall mean the period from and
including the Closing Date to, but not including, the earlier of (i) the day
the Scheduled Amortization Period commences or (ii) the day the Early
Amortization Period commences.
"Scheduled Amortization Period" shall mean the
Accumulation Period (as defined in the Series 1994-1 Supplement).
"Seller Affiliate" shall mean Charming Shoppes, Inc.,
Fashion Service Corp., a Delaware corporation, or any other wholly owned direct
or indirect subsidiary of Charming Shoppes, Inc.
"Series Investor Interest" shall mean, as of any date of
determination, an amount equal to the Initial Investor Interest less the amount
of any principal payments deposited in the Principal Funding Account through
such date of determination prior to the Fixed Principal Allocation Date.
"Series 1994-1 Supplement" shall mean the Series 1994-1
Supplement, dated as of May 4, 1994, by and between the Seller and Servicer and
the Trustee.
"Series 1994-2" shall mean the Series of the Charming
Shoppes Master Trust represented by the 1994-2 Certificates.
"Series 1994-2 Certificateholder" shall mean the Holder
of record of any Series 1994-2 Certificate.
"Series 1994-2 Early Amortization Event" shall have the
meaning specified in Section 8 of this Supplement.
"Series 1994-2 Termination Date" shall mean the earliest
to occur of (i) the Distribution Date on which the Series 1994-2 Certificates
are paid in full, (ii) the April 2003 Distribution Date, or (iii) the date of
termination of the Trust pursuant to Section 12.1 of the Agreement.
"Series Servicing Fee Percentage" shall mean 2.0%.
"Shared Excess Finance Charge Collections" shall mean,
with respect to any Distribution Date, as the context requires, either (i) the
amount described in Sections 4.6(g) allocated to the Series 1994-2 Certificates
but available to cover Finance Charge Shortfalls for other Series in Group One,
if any, or (ii) the aggregate amount of Collections of Finance Charge
Receivables
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and other amounts allocable to other Series in Group One in excess of the
amounts necessary to make required payments with respect to such Series, if
any, and available to cover any Finance Charge Shortfall with respect to the
Series 1994-2 Certificates as described in Section 4.10.
"Shared Principal Collections" shall mean, as the context
requires, either (i) the amount allocated to the Series 1994-2 Certificates
which may be applied to cover Principal Shortfalls with respect to other
outstanding Series in Group One, or (ii) the amounts allocated to the Investor
Certificates of other Series in Group One that the applicable Supplements for
such Series specify are to be treated as "Shared Principal Collections" and
which may be applied to cover Principal Shortfalls with respect to the Series
1994-2 Certificates pursuant to Section 4.11.
"Shortfall" shall have the meaning assigned in Section
4.5.
"Special Payment Date" shall mean each Distribution Date
with respect to the Scheduled Amortization Period and the Early Amortization
Period.
SECTION 3. Reassignment and Transfer Terms. The Series
1994-2 Certificates shall be subject to repurchase to the Seller at its option,
in accordance with the terms specified in Section 12.2(a) of the Agreement, on
any Distribution Date on or after the Distribution Date on which the Investor
Interest is reduced to an amount less than or equal to 5% of the Initial Class
A Invested Amount. The deposit required in connection with any such repurchase
shall be equal to the sum of the Investor Interest plus accrued and unpaid
interest on the Class A Certificates through the day preceding the Distribution
Date on which the repurchase occurs.
SECTION 4. Delivery and Payment for the Series 1994-2
Certificates; Transfer. (a) The Seller shall execute and deliver the Series
1994-2 Certificates to the Trustee for authentication in accordance with
Section 6.1 of the Agreement. The Trustee shall deliver the Series 1994-2
Certificates when authenticated in accordance with Section 6.2 of the
Agreement.
(b) Anything to the contrary in this Supplement or the
Agreement notwithstanding, no Series 1994-2 Certificate may be sold or
transferred to any Person unless (i) the Series 1994-2 Certificate is
transferred pursuant to a valid registration statement or (ii) pursuant to an
exemption from the registration requirements of the Securities Act of 1933, as
amended (the "1933 Act"). The initial transferee of the Class A Certificates
shall execute a certificate in the form of Exhibit E-1 or shall provide an
opinion of counsel, reasonably satisfactory to the Trustee, setting forth the
applicable exemption under the 1933 Act. With respect to any subsequent
transfer, if the transfer is to be made
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in reliance on any exemption from the registration requirements of the 1933 Act
pursuant to Rule 144A promulgated under the Act, the proposed transferee shall
have furnished to the Seller and Servicer and the Trustee a Transferee Letter,
in the form of Exhibit E-2, signed by such transferee and the transferor, at
its own expense. Additionally, if such exemption is not available or does not
apply to such proposed transferee, the transferee, at its own expense, shall
have provided to the Seller and Servicer and the Trustee an opinion of counsel
in form and substance reasonably satisfactory to the Trustee with respect to
the availability of any other exemption to the 1933 Act. Notwithstanding
anything herein to the contrary, the provisions of this Section 4(b) shall not
apply to any transfer of the Class B Certificates which is made to an affiliate
of the Seller.
(c) Until the date which is three years after the
Issuance Date, the legend appearing on the cover of the Series 1994-2
Certificates may not be removed unless the Seller and Servicer and the Trustee
have received an opinion of counsel satisfactory to them, in form and substance
satisfactory to them, to the effect that such paragraph may be removed.
(d) No Certificates may be transferred to a person who is
(i) an "employee benefit plan" as defined in Section 3(3) of ERISA, (ii) a
"plan" subject to Section 4975(e)(1) of the Code, or (iii) any entity whose
underlying assets includes assets of any of the foregoing by reason of its
investment in such entity excluding any investment company that is registered
under the 1940 Act.
SECTION 5. Form of Delivery of Series 1994-2
Certificates. The Class A Certificates shall be issued in definitive form in a
denomination equal to the Initial Class A Invested Amount and the Class B
Certificates shall be issued in definitive form in a denomination equal to the
Initial Class B Invested Amount.
SECTION 6. Article IV of Agreement. Sections 4.1, 4.2
and 4.3 of the Agreement shall be read in their entirety as provided in the
Agreement. Article IV of the Agreement (except for Sections 4.1, 4.2 and 4.3
thereof) shall read in its entirety as follows and shall be applicable only to
the Series 1994-2 Certificates:
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND RECEIVABLES
PURCHASERS AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.4. Allocations to Series 1994-2
Certificateholders.
(a) Allocations During the Revolving Period.
During the Revolving Period, the Servicer shall, prior to the close of business
on the day any Collections are deposited in the
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Collection Account, allocate to the Series 1994-2 Certificateholders, the
Certificateholders of other Series or the Holder of the Exchangeable Seller
Certificate the following amounts as set forth below:
(i) Allocate to the Series 1994-2 Certificateholders an
amount equal to the product of (A) the Floating Allocation Percentage
on such date and (B) the aggregate amount of Collections processed in
respect of Finance Charge Receivables on such date.
(ii) An amount equal to the product of (A) the Principal
Allocation Percentage on such date and (B) the aggregate amount of
such Collections processed in respect of Principal Receivables on such
date shall be held in the Collection Account for application as Shared
Principal Collections on the related Distribution Date.
(b) Allocations During the Scheduled Amortization
Period. During the Scheduled Amortization Period, the Servicer shall, prior to
the close of business on the day any Collections are deposited in the
Collection Account, allocate to the Series 1994-2 Certificateholders, the
Certificateholders of other Series or the Holder of the Exchangeable Seller
Certificate the following amounts as set forth below:
(i) Allocate to the Series 1994-2 Certificateholders an
amount equal to the product of (A) the Floating Allocation Percentage
on such date and (B) the aggregate amount of Collections processed in
respect of Finance Charge Receivables on such date.
(ii) Allocate to the Series 1994-2 Certificateholders an
amount, if any, equal to the product of (A) the Principal Allocation
Percentage on such date and (B) the aggregate amount of such
Collections processed in respect of Principal Receivables on such date
(for any such date, a "Percentage Allocation"); provided, however,
that after the date on which an amount of such Collections equal to
the Adjusted Investor Interest as of such day, if any, has been
deposited into the Collection Account and allocated to the Series
1994-2 Certificateholders, the amount determined in accordance with
this subparagraph (ii) shall be held in the Collection Account for
application as Shared Principal Collections on the related
Distribution Date.
(c) Allocations During the Early Amortization
Period. During the Early Amortization Period, the Servicer shall, prior to the
close of business on the day any Collections are deposited in the Collection
Account, allocate to the Series 1994-2 Certificateholders the following amounts
as set forth below:
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(i) Allocate to the Series 1994-2 Certificateholders an
amount equal to the product of (A) the Floating Allocation Percentage
on such date and (B) the aggregate amount of Collections processed in
respect of Finance Charge Receivables on such date.
(ii) Allocate to the Series 1994-2 Certificateholders an
amount equal to the product of (A) the Principal Allocation Percentage
on such date and (B) the aggregate amount of such Collections
processed in respect of Principal Receivables on such date; provided,
however, that after the date on which an amount of such Collections
equal to the Adjusted Investor Interest as of such day, if any, has
been deposited into the Collection Account and allocated to the Series
1994-2 Certificateholders, the amount determined in accordance with
this subparagraph (ii) shall be held in the Collection Account for
application as Shared Principal Collections on the related
Distribution Date.
SECTION 4.5. Investor Loss Amount. On each
Determination Date, the Servicer shall calculate the Investor Loss Amount for
the preceding Due Period. If on such date the Required Amount exceeds zero on
the related Distribution Date (such deficiency, the "Shortfall"), the Class B
Invested Amount will be reduced by the lesser of (i) the Investor Loss Amount
and (ii) such Shortfall (a "Class B Charge-Off"). In the event that such
reduction would cause the Class B Invested Amount to be a negative number, the
Class B Invested Amount shall be zero, and the Class A Invested Amount will be
reduced by an amount equal to the excess of such reduction over the Class B
Invested Amount prior to the reduction (a "Class A Charge-Off").
SECTION 4.6. Monthly Payments. On each Determination
Date, the Servicer shall instruct the Trustee to withdraw, and on the
succeeding Distribution Date the Trustee acting in accordance with such
instructions shall withdraw, the amounts required to be withdrawn from the
Collection Account pursuant to Sections 4.6(a), (b), (c), (d), (e), (f) and
(g). On each Determination Date, the Servicer shall also determine the amount
(the "Required Amount"), if any, by which the sum of (a) Certificate Interest
for the following Distribution Date, plus (b) the Monthly Servicing Fee for the
following Distribution Date, plus (c) the Investor Loss Amount for the
preceding Due Period exceeds the sum of Available Funds and any Shared Excess
Finance Charge Collections allocable to the Series 1994-2 Certificateholders
and any Excess Loan Agreement Funds on such Distribution Date.
(a) Certificate Interest. On each Distribution
Date, the Trustee, acting in accordance with instructions from the Servicer,
shall withdraw from the Collection Account and allocate to the Paying Agent, to
the extent of Available Funds and any Shared Excess Finance Charge Collections
allocable to the Series 1994-2 Certificates and any Excess Loan Agreement Funds
on such Distribution Date, first, Certificate Interest in an amount equal
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to the product of the Class A Certificate Rate for the related Accrual Period,
calculated on the basis of the actual days elapsed in such Accrual Period
divided by 360, and the Class A Invested Amount (without giving effect to
clauses (c) and (d) in the definition thereof) (the "Certificate Interest");
and second, an amount equal to the amount of any unpaid Class A Deficiency
Amounts, as defined below. If the amounts described in this Section 4.6(a) are
insufficient to allocate to the Paying Agent such interest in respect of any
Distribution Date, the allocation will be reduced by the amount of such
deficiency. The amount, if any, of such deficiency for any Distribution Date
shall be referred to as the "Class A Deficiency Amount."
(b) Servicing Fee. On each Distribution Date,
the Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account, to the extent of Available Funds and any
Shared Excess Finance Charge Collections allocable to the Series 1994-2
Certificates and any Excess Loan Agreement Funds on such Distribution Date,
after giving effect to the withdrawals pursuant to Section 4.6(a), an amount
equal to the Monthly Servicing Fee accrued in respect of the preceding Due
Period plus all accrued and unpaid Monthly Servicing Fees in respect of
previous Due Periods, and the Trustee shall pay such amount to the Servicer.
(c) Loss Amounts. On each Distribution Date, the
Trustee, acting in accordance with instructions from the Servicer, shall
withdraw from the Collection Account, to the extent of Available Funds and any
Shared Excess Finance Charge Collections allocable to the Series 1994-2
Certificates and any Excess Loan Agreement Funds on such Distribution Date,
after giving effect to the withdrawals pursuant to Sections 4.6(a) and (b), an
amount equal to the Investor Loss Amount for the preceding Due Period, and the
Trustee shall (A) during the Revolving Period, apply such amount in accordance
with Section 4.4(a)(ii) and (B) during the Scheduled Amortization Period or the
Early Amortization Period, deposit such amount in accordance with Section
4.4(b)(ii) or 4.4(c)(ii), respectively, in each case as if such amounts were
Collections of Principal Receivables allocable to the Series 1994-2
Certificates.
(d) Reimbursement of Investor Charge-Offs. On
each Distribution Date, the Trustee, acting in accordance with instructions of
the Servicer, shall withdraw from the Collection Account, to the extent of
Available Funds and any Shared Excess Finance Charge Collections allocable to
the Series 1994-2 Certificates and any Excess Loan Agreement Funds on such
Distribution Date, after giving effect to the withdrawals pursuant to Sections
4.6(a), (b) and (c), an amount equal to the aggregate amount of Investor
Charge-Offs, if any, which have not theretofore been reimbursed pursuant to
this Section 4.6(d), and shall during the Early Amortization Period deposit
such amount in accordance with Section 4.4(c)(ii), as if such amounts were
Collections of Principal Receivables allocable to the Series
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1994-2 Certificates. Reimbursements of Investor Charge-Offs shall be applied
first to the Class A Certificate and second, to the extent amounts are
available following the reimbursement of the Class A Certificate, to the Class
B Certificate.
(e) Reimbursement of Investor Reductions. On
each Distribution Date, the Trustee, acting in accordance with instructions of
the Servicer, shall withdraw from the Collection Account, to the extent of
Available Funds and any Shared Excess Finance Charge Collections allocable to
the Series 1994-2 Certificates and any Excess Loan Agreement Funds on such
Distribution Date, after giving effect to the withdrawals pursuant to Sections
4.6(a), (b), (c) and (d), an amount equal to the aggregate amount of Class A
Reductions, Principal Reductions and Class B Reductions, if any, which have not
theretofore been reimbursed pursuant to this Section 4.6(e), and shall during
the Early Amortization Period deposit such amount in accordance with Section
4.4(c)(ii), as if such amounts were Collections of Principal Receivables
allocable to the Series 1994-2 Certificates. Reimbursements of Class A
Reductions, Principal Reductions and Class B Reductions shall be applied first
to the Class A Certificate and the Principal Reductions and second, to the
extent amounts are available following the reimbursement of the Class A
Certificate and the Principal Reductions, to the Class B Certificate.
(f) Transfers to the Class A Excess Spread
Account. On each Distribution Date, the Trustee, acting in accordance with
instructions from the Servicer, shall withdraw from the Collection Account the
remaining amount of Available Funds and any Shared Excess Finance Charge
Collections allocable to the Series 1994-2 Certificates and any Excess Loan
Agreement Funds on such Distribution Date, after giving effect to the
withdrawals from the Collection Account pursuant to Sections 4.6(a), (b), (c),
(d) and (e) (such remaining funds, the "Excess Finance Charge Collections").
The Trustee shall on each Distribution Date from and after the Class A Excess
Spread Account Funding Date, but prior to the date on which the Class A Excess
Spread Account terminates pursuant to Section 4.12(d), deposit an amount equal
to the excess, if any, of the Required Class A Excess Spread Account Amount
over the Available Class A Excess Spread Account Amount into the Class A Excess
Spread Account.
(g) Shared Excess Finance Charge Collections.
The balance of any Available Funds after giving effect to Sections 4.6(a), (b),
(c), (d), (e) and (f) will constitute a portion of Shared Excess Finance Charge
Collections and will be available for allocation to other Series in Group One
or to the Holder of the Exchangeable Seller Certificate as described in Section
4.3(g).
SECTION 4.7. Payment of Certificate Interest. On each
Payment Date, the Paying Agent shall pay in accordance with
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Section 5.1 to the Class A Certificateholder all amounts allocated to the
Paying Agent in accordance with Section 4.6(a).
SECTION 4.8. Payment of Certificate Principal; Excess
Spread.
(a) On each Distribution Date with respect to the
Scheduled Amortization Period or Early Amortization Period the Trustee, acting
in accordance with instructions from the Servicer, shall withdraw from the
Collection Account and deposit into the Principal Funding Account, to the
extent of Available Principal Collections for such Distribution Date, an amount
up to the Adjusted Investor Interest. On each Special Payment Date, the
Servicer shall instruct the Trustee to withdraw, and the Trustee shall
withdraw, from the Principal Funding Account all amounts on deposit therein,
provided that such withdrawal shall not reduce the Adjusted Class A Invested
Amount below the Required Series 1994-2 Invested Amount, and distribute such
amounts to the Paying Agent, and the Paying Agent shall pay such amounts in
accordance with Section 5.1 to the Class A Certificateholder.
(b) If, after giving effect to the payments to the Class
A Certificateholder pursuant to Section 4.8(a) the Class A Invested Amount
shall be zero, the Servicer on the Expected Final Payment Date shall instruct
the Trustee to withdraw, and the Trustee shall withdraw, from the Principal
Funding Account any remaining amounts on deposit therein and distribute such
amounts, if any, to the Paying Agent, and the Paying Agent shall pay such
amounts to the Class B Certificateholder up to the Class B Invested Amount, and
the remainder, if any, shall be paid to the Seller.
SECTION 4.9. Seller's or Servicer's Failure to Make a
Deposit or Payment.
(a) If, at the end of any Due Period, the
reduction of the Seller Interest by the Series Dilution Amount applicable to
Series 1994-1 and Series 1994-2, if any, after giving effect to any deposit to
the Excess Funding Account or conveyance of Receivables as provided in the
second sentence of Section 4.3(d) of the Agreement results in the Seller
Interest being less than zero, the Servicer shall cause the Trustee to reduce
the Class B Invested Amount by the lesser of (x) the Series Dilution Amount
applicable to Series 1994-1 and Series 1994-2 after giving effect to the
reduction of the Seller Interest to zero and (y) $400,000 plus the amount on
deposit in the Excess Funding Account (a "Class B Reduction"), and such amount
shall be allocated as Principal Receivables (as defined in the Series 1994-1
Supplement) pursuant to Section 4.4 of the Series 1994-1 Supplement. In the
event that such reduction would cause the Class B Invested Amount to be a
negative number, the Class B Invested Amount shall be zero, and the Class A
Invested Amount will be reduced by an amount equal to the excess of the Series
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Dilution Amount applicable to Series 1994-1 and Series 1994-2 over the Class B
Invested Amount prior to the reduction or, in the event that such a reduction
would cause the Class B Invested Amount to be a positive number, the Class A
Invested Amount will be reduced by the excess, if any, of the Series Dilution
Amount applicable to Series 1994-1 and Series 1994-2 over such Class B
Reduction, (in either case, a "Class A Reduction") and such amount shall be
allocated as Principal Receivables (as defined in the Series 1994-1 Supplement)
pursuant to Section 4.4 of the Series 1994-1 Supplement. In the event that
such reduction would cause the Class A Invested Amount to be a negative number,
the Class A Invested Amount shall be zero, and the amounts on deposit in the
Principal Funding Account, if any, up to the excess of the Series Dilution
Amount applicable to Series 1994-1 and Series 1994-2 over the sum of the Class
B Invested Amount and the Class A Invested Amount prior to the reductions
thereof, will be withdrawn from the Principal Funding Account by the Trustee
and deposited in the Collection Account and allocated as Principal Receivables
(as defined in the Series 1994-1 Supplement) pursuant to Section 4.4 of the
Series 1994-1 Supplement.
(b) If the Class B Invested Amount, the Class A
Invested Amount or any amounts on deposit in the Principal Funding Account are
reduced pursuant to Section 4.9(a) because of a failure of the Servicer or the
Seller to make, or give instructions to make, any payment or deposit required
to be made or given by the Seller pursuant to Section 4.3(d) of the Agreement,
the Seller shall, as appropriate, as promptly as possible but in no event later
than five Business Days following such withdrawal, deposit or cause to be
deposited in the Principal Funding Account an amount equal to the required
payment, deposit or transfer. If, at any time, the Seller shall deposit or
cause to be deposited in the Principal Funding Account such required payment,
deposit or transfer, the deposit shall be applied by the Trustee first to
reimburse the Class A Certificateholder for any Class A Reductions, second to
reimburse the Principal Funding Account for any Principal Reductions and third
to reimburse the Class B Certificateholder for any Class B Reductions. The
Seller shall be obligated to deposit or cause to be deposited in the Principal
Funding Account an amount equal to such required payment, deposit or transfer
notwithstanding any reimbursement of Class A Reductions, Principal Reductions
or Class B Reduction pursuant to Section 4.6(e).
(c) If the Servicer or the Seller fails to make,
or give instructions to make, any payment or deposit required to be made or
given by the Servicer or Seller, respectively, at the time specified in the
Agreement (including applicable grace periods), the Trustee shall make such
payment or deposit from the applicable account without instruction from the
Servicer or Seller in an amount equal to the amount of such payment or deposit
(for amounts owing pursuant to Section 4.6). The Trustee shall be required to
make any such payment, deposit or withdrawal hereunder only to the extent that
the Trustee has sufficient
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information to allow it to determine the amount thereof; provided, however,
that the Trustee shall in all cases be deemed to have sufficient information to
determine the amount of interest payable to the Series 1994-2
Certificateholders on each Distribution Date. The Servicer shall, upon request
of the Trustee, promptly provide the Trustee with all information necessary to
allow the Trustee to make such payment, deposit or withdrawal. Such funds or
the proceeds of such withdrawal shall be applied by the Trustee in the manner
in which such payment or deposit should have been made by the Seller or the
Servicer, as the case may be.
SECTION 4.10. Shared Excess Finance Charge Collections.
Series 1994-2 shall be included in Group One. Subject to Section 4.3(g) of the
Agreement, Shared Excess Finance Charge Collections with respect to the Series
in Group One for any Distribution Date will be allocated to Series 1994-2 in an
amount equal to the product of (x) the aggregate amount of Shared Excess
Finance Charge Collections with respect to all Series in Group One for such
Distribution Date and (y) a fraction, the numerator of which is the Finance
Charge Shortfall for Series 1994-2 for such Distribution Date and the
denominator of which is the aggregate amount of Finance Charge Shortfalls for
all Series in Group One for such Distribution Date. The "Finance Charge
Shortfall" for Series 1994-2 for any Distribution Date will be equal to the
excess, if any, of (a) the full amount required to be paid, without
duplication, pursuant to Sections 4.6(a)-(f) on such Distribution Date over (b)
the Available Funds and Excess Loan Agreement Funds for such Distribution Date.
SECTION 4.11. Shared Principal Collections. Subject to
Section 4.3(f) of the Agreement, Shared Principal Collections for any
Distribution Date will be allocated to Series 1994-2 in an amount equal to the
product of (x) the aggregate amount of Shared Principal Collections with
respect to all Series in Group One that are Principal Sharing Series for such
Distribution Date and (y) a fraction, the numerator of which is the Principal
Shortfall for Series 1994-2 for such Distribution Date and the denominator of
which is the aggregate amount of Principal Shortfalls for all Series in Group
One that are Principal Sharing Series for such Distribution Date.
SECTION 4.12. Class A Excess Spread Account.
(a) The Servicer shall establish and maintain
with a Qualified Depository Institution, which may be the Trustee, in the name
of the Trustee, on behalf of the Trust, for the benefit of the Class A
Certificateholder, a segregated trust account with the corporate trust
department of such Qualified Depository Institution (the "Class A Excess Spread
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Class A Certificateholder. The Trustee
shall possess all right, title and interest in all funds on deposit from time
to time in the Class A Excess Spread Account
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and in all proceeds thereof. The Class A Excess Spread Account shall be under
the sole dominion and control of the Trustee for the benefit of the Class A
Certificateholder. If at any time the institution holding the Class A Excess
Spread Account ceases to be a Qualified Depository Institution the Trustee (or
the Servicer on its behalf) shall within 10 Business Days establish a new Class
A Excess Spread Account meeting the conditions specified above with a Qualified
Depository Institution, and shall transfer any cash or any investments to such
new Class A Excess Spread Account. The Trustee, at the direction of the
Servicer, shall (i) make withdrawals from the Class A Excess Spread Account
from time to time in an amount up to the Available Class A Excess Spread
Account Amount at such time for the purposes set forth in this Supplement, and
(ii) on each Distribution Date (from and after the Class A Excess Spread
Account Funding Date) prior to termination of the Class A Excess Spread
Account, as the case may be, make a deposit into the Class A Excess Spread
Account in the amount specified in, and otherwise in accordance with, Section
4.6(f), as applicable.
(b) Funds on deposit in the Class A Excess Spread
Account shall be invested at the direction of the Servicer by the Trustee in
Permitted Investments. Funds on deposit in the Class A Excess Spread Account
on any Distribution Date, after giving effect to any withdrawals from the Class
A Excess Spread Account on such Distribution Date, shall be invested in such
investments that will mature so that such funds will be available for
withdrawal on or prior to the following Distribution Date. The Trustee shall
maintain for the benefit of the Class A Certificateholder possession of the
negotiable instruments or securities, if any, evidencing such Permitted
Investments. No Permitted Investment shall be disposed of prior to its
maturity (except as may be necessary in connection with the establishment of a
new Class A Excess Spread Account as provided in Section 4.12(a)). On each
Distribution Date, all interest and earnings (net of losses and investment
expenses) accrued since the preceding Distribution Date on funds on deposit in
the Class A Excess Spread Account shall be retained in the Class A Excess
Spread Account (to the extent that the Available Class A Excess Spread Account
Amount is less than the Required Class A Excess Spread Account Amount) and the
balance, if any, shall constitute a portion of the Shared Excess Finance Charge
Collections. For purposes of determining the availability of funds or the
balance in the Class A Excess Spread Account for any reason under this
Supplement, except as otherwise provided in the preceding sentence, investment
earnings on such funds shall be deemed not to be available or on deposit.
(c) On any Distribution Date to the extent that
the amounts required to be withdrawn from the Collection Account pursuant to
Section 4.6(a) exceed the sum of Available Funds and any Shared Excess Finance
Charge Collections allocable to the Series 1994-2 Certificateholders and any
Excess Loan Agreement Funds on such Distribution Date (such shortfall being the
<PAGE> 24
22
"Collection Account Shortfall"), an amount equal to the lesser of (i) the
Available Class A Excess Spread Account Amount and (ii) the Collection Account
Shortfall shall be withdrawn from the Class A Excess Spread Account on such
Distribution Date by the Trustee (acting in accordance with the instructions of
the Servicer), and the Trustee shall apply such amount in the order of priority
established in Section 4.6(a).
(d) Upon the earliest to occur of (i) the termination of
the Trust pursuant to Article XII of the Agreement, (ii) the day on which the
Class A Invested Amount is paid in full to the Class A Certificateholder, (iii)
if the Scheduled Amortization Period has not commenced, the occurrence of an
Early Amortization Event with respect to Series 1994-2 and (iv) if the
Scheduled Amortization Period has commenced, the earlier of the first Special
Payment Date and the Expected Final Payment Date, the Trustee, acting in
accordance with the instructions of the Servicer, after the prior payment of
all amounts owing to the Class A Certificateholder that are payable from the
Class A Excess Spread Account as provided herein, shall withdraw any remaining
amounts from the Class A Excess Spread Account and deposit such amounts in the
Collection Account whereupon such amounts will be available for allocation to
other Series in Group One or to the Holder of the Exchangeable Seller
Certificate.
SECTION 4.13. The Principal Funding Account.
(a) The Trustee, for the benefit of the Class A
Certificateholder, shall establish or shall cause to be established and
maintained with a Qualified Depository Institution in the name of the Trustee,
on behalf of the Trust, a segregated trust account (the "Principal Funding
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Series 1994-2 Certificateholders. The
Principal Funding Account shall be under the sole dominion and control of the
Trustee for the benefit of the Series 1994-2 Certificateholders and, to the
extent provided in Section 4.9(a), the Series 1994-1 Certificateholders, as
their interests may appear. If, at any time, the institution holding the
Principal Funding Account ceases to be a Qualified Depository Institution, the
Trustee shall, within twenty Business Days establish a new Principal Funding
Account meeting the conditions specified above with a Qualified Depository
Institution, transfer any cash or any investments to such new Principal Funding
Account and from the date such new Principal Funding Account is established, it
shall be the "Principal Funding Account." Neither the Seller nor the Servicer,
nor any Person claiming by, through or under the Seller or Servicer, shall have
any right, title or interest in, or any right to withdraw any amount from, the
Principal Funding Account except to the extent provided in this Supplement and
the Agreement. Pursuant to the authority granted to the Servicer in Section
3.1(b) of the Agreement, the Servicer shall have the revocable power to
instruct the Trustee to make withdrawals and payments from the Principal
Funding
<PAGE> 25
23
Account for the purposes of carrying out the Servicer's duties under this
Supplement.
(b) Funds on deposit in the Principal Funding
Account shall be invested by the Trustee at the direction of the Servicer in
Permitted Investments that will mature so that such funds will be available
prior to the Distribution Date following such investment. Any request by the
Servicer to invest funds on deposit in the Principal Funding Account shall be
in writing and shall certify that the requested investment is a Permitted
Investment that matures at or prior to the time required hereby. The Trustee
shall maintain possession of the negotiable instruments or securities, if any,
evidencing the Permitted Investments described in clause (a) of the definition
thereof from the time of purchase thereof until maturity.
(c) On each Distribution Date with respect to the
Scheduled Amortization Period or Early Amortization Period, the Trustee, acting
at the Servicer's direction given on the related Determination Date, shall
transfer from the Principal Funding Account to the Collection Account the
Principal Funding Investment Proceeds on such date, for application as
Available Funds for such Distribution Date. Principal Funding Investment
Proceeds shall not be considered to be principal amounts on deposit in the
Principal Funding Account for purposes of this Supplement.
SECTION 7. Article V of the Agreement. Article V of the
Agreement shall read in its entirety as follows and shall be applicable only to
the Series 1994-2 Certificates:
ARTICLE V
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION 5.1. Distributions. On each Payment
Date, the Paying Agent shall distribute (in accordance with the certificate
delivered by the Servicer to the Trustee pursuant to Section 3.4(b) of the
Agreement) to each Series 1994-2 Certificateholder of record on the immediately
preceding Record Date (other than as provided in Section 12.3 of the Agreement
respecting a final distribution) such Certificateholder's pro rata share (based
on the aggregate Undivided Trust Interests represented by Series 1994-2
Certificates held by such Certificateholder) of amounts as are payable to the
Series 1994-2 Certificateholders pursuant to Sections 4.6, 4.7 and 4.8 by wire
transfer to each Series 1994-2 Certificateholder.
SECTION 5.2. Monthly Certificateholders' Statement.
(a) On or before each Distribution Date, the
Paying Agent shall forward to each Series 1994-2 Certificateholder and each
Rating Agency a statement substantially in the form of
<PAGE> 26
24
Exhibit D to this Supplement prepared by the Servicer stating whether an Early
Amortization Event has occurred and setting forth, among other things, the
following information (which, in the case of subclauses (i), (ii) and (iii)
below, shall be stated on the basis of an original principal amount of $1,000
per Series 1994-2 Certificate and, in the case of subclauses (x) through (xiii)
shall be stated on an aggregate basis and on the basis of an original principal
amount of $1,000 per Series 1994-2 Certificate):
(i) the total amount distributed;
(ii) the total amount (1) distributed in respect of
interest to the Class A Certificateholders and (2) distributed in
respect of principal to the Class A Certificateholders;
(iii) the total amount distributed in respect of principal
to the Class B Certificateholders;
(iv) the amount deposited in the Principal Funding Account
allocable to the Class A Certificates;
(v) the amount deposited in the Principal Funding Account
allocable to the Class B Certificates;
(vi) the amount of Collections of Principal Receivables
processed during the preceding Due Period and allocated in respect of
the Series 1994-2 Certificates;
(vii) the amount of Collections of Finance Charge
Receivables processed during the preceding Due Period and allocated in
respect of the Series 1994-2 Certificates;
(viii) the aggregate amount of Principal Receivables, the
Investor Interest, the Adjusted Investor Interest and the Adjusted
Investor Interest as a percentage of the aggregate amount of Principal
Receivables in the Trust, in each case as of the end of the day on the
last day of the preceding Due Period and the Floating Allocation
Percentage and the Principal Allocation Percentage for the preceding
Due Period;
(ix) the aggregate outstanding balance of Accounts which
were 30 to 59, 60 to 89, 90 to 119, and 120 or more days delinquent as
of the end of the day on the last day of the preceding Due Period;
(x) the Investor Loss Amount;
(xi) the Class A Loss Amount for the preceding Due Period;
<PAGE> 27
25
(xii) the Class B Loss Amount for the preceding Due Period;
(xiii) the aggregate amount of Class A Charge-Offs for the
preceding Due Period;
(xiv) the aggregate amount of Class B Charge-Offs for the
preceding Due Period;
(xv) the aggregate amount of Class A Charge-Offs
reimbursed on such Distribution Date;
(xvi) the aggregate amount of Class B Charge-Offs
reimbursed on such Distribution Date;
(xvii) the aggregate amount of Class A Reductions for the
preceding Due Period;
(xviii) the aggregate amount of Class B Reductions for the
preceding Due Period;
(xix) the aggregate amount of Class A Reductions reimbursed
on such Distribution Date;
(xx) the aggregate amount of Class B Reductions reimbursed
on such Distribution Date;
(xxi) the amount of the Monthly Servicing Fee for the
preceding Due Period;
(xxii) the Portfolio Yield for the preceding Due Period;
(xxiii) the Portfolio Yield (excluding clause (iii) of the
definition thereof) for the preceding Due Period;
(xxiv) the Base Rate for the preceding Due Period;
(xxv) the excess of the Portfolio Yield (excluding clause
(iii) of the definition thereof) over the Base Rate;
(xxvi) the Principal Funding Account Balance on such
Distribution Date;
(xxvii) the Covered Amount for such Distribution Date;
(xxviii) the Available Class A Excess Spread Account Amount
and the Required Class A Excess Spread Account Amount, if any;
(xxix) the Principal Shortfall and the Finance Charge
Shortfall for such Distribution Date, if any;
<PAGE> 28
26
(xxx) the Available Funds and the Available Principal
Collections on such Distribution Date;
(xxxi) the Available Funds on such Distribution Date (1)
pursuant to clause (i) of the definition thereof; (2) pursuant to
clause (ii) of the definition thereof; (3) pursuant to clause (iii)
thereof; (4) pursuant to clause (iv) of the definition thereof;
(xxxii) Excess Loan Agreement Funds for such Distribution
Date;
(xxxiii) Shared Excess Finance Charge Collections on such
Distribution Date;
(xxxiv) Available Principal Collections on such Distribution
Date;
(xxxv) Shared Principal Collections and Shared Excess
Finance Charge Collections allocable to the Series 1994-1 Certificates
on such Distribution Date;
(xxxvi) Shared Principal Collections and Shared Excess
Finance Charge Collections allocable to the Series 1994-2 Certificates
on such Distribution Date;
(xxxvii) the Pool Factor as of the preceding Record Date; and
(xxxviii) such other items as are set forth on Exhibit D to
this Supplement.
(b) Annual Certificateholders' Tax Statement. On or
before January 31 of each calendar year, beginning with calendar year 1995, the
Trustee shall distribute to each Person who at any time during the preceding
calendar year was a Series 1994-2 Certificateholder, a statement prepared by
the Servicer containing the information required to be contained in the regular
monthly report to Series 1994-2 Certificateholders, as set forth in subclauses
(i) through (v) above, aggregated for such calendar year or the applicable
portion thereof during which such Person was a Series 1994-2 Certificateholder,
together with such other customary information (consistent with the treatment
of the Certificates as debt) as the Servicer deems necessary or desirable to
enable the Series 1994-2 Certificateholders to prepare their tax returns
(consistent with the treatment of the Certificates as debt). Such obligations
of the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time in effect.
SECTION 8. Series 1994-2 Early Amortization Events. If any
one of the following events shall occur with respect to the Series 1994-2
Certificates:
<PAGE> 29
27
(a) failure on the part of the Seller (i) to make any
payment or deposit required by the terms of (A) the Agreement, or (B)
this Supplement, on or before the date occurring five days after the
date such payment or deposit is required to be made herein or (ii)
duly to observe or perform in any material respect any covenants or
agreements of the Seller set forth in the Agreement or this Supplement
(including, without limitation, the covenants of the Seller contained
in Sections 10 and 11 of this Supplement), which failure has a
material adverse effect on the Series 1994-2 Certificateholders and
which continues unremedied for a period of 60 days after the date on
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Trustee, or to
the Seller and the Trustee by the Holders of Series 1994-2
Certificates evidencing Undivided Trust Interests aggregating not less
than 50% of the Investor Interest of this Series 1994-2, and continues
to affect materially and adversely the interests of the Series 1994-2
Certificateholders for such period;
(b) any representation or warranty made by the Seller in
the Agreement or this Supplement, or any information contained in a
computer file or microfiche or written list required to be delivered
by the Seller pursuant to Section 2.1 or 2.6 of the Agreement, (i)
shall prove to have been incorrect in any material respect when made
or when delivered, which continues to be incorrect in any material
respect for a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been
given to the Seller by the Trustee, or to the Seller and the Trustee
by the Holders of the Series 1994-2 Certificates evidencing Undivided
Interests aggregating more than 50% of the Investor Interest of this
Series 1994-2, and (ii) as a result of which the interests of the
Series 1994-2 Certificateholders are materially and adversely affected
and continue to be materially and adversely affected for such period;
provided, however, that a Series 1994-2 Early Amortization Event
pursuant to this Section 8(b) shall not be deemed to have occurred
hereunder if the Seller has accepted reassignment of the related
Receivable, or all of such Receivables, if applicable, during such
period in accordance with the provisions of the Agreement;
(c) the average Portfolio Yield (which amount shall not
include clause (iii) in the definition of Portfolio Yield for the
purposes of this Section 8(c)) for any three consecutive Due Periods
is reduced to a rate which is less than the average Base Rate (an
"Economic Early Amortization Event") for such period;
(d) the Seller shall fail to convey Receivables arising
under Additional Accounts to the Trust, as required by Section 2.6(a)
of the Agreement;
<PAGE> 30
28
(e) any Servicer Default shall occur which would have a
material adverse effect on the Series 1994-2 Certificateholders;
(f) the Investor Interest shall not be paid in full on
the Expected Final Payment Date;
(g) an Early Amortization Event (as defined in the Series
1994-1 Supplement) shall have occurred.
then, in the case of any event described in subparagraph (a), (b) or (e), after
the applicable grace period set forth in such subparagraphs, either the Trustee
or the Holders of Series 1994-2 Certificates evidencing Undivided Trust
Interests aggregating more than 50% of the Investor Interest of this Series
1994-2 by notice then given in writing to the Seller and the Servicer (and to
the Trustee if given by the Certificateholders) may declare that an early
amortization event (a "Series 1994-2 Early Amortization Event") has occurred as
of the date of such notice, and in the case of any event described in
subparagraphs (c), (d) or (f), a Series 1994-2 Early Amortization Event shall
occur without any notice or other action on the part of the Trustee or the
Series 1994- 2 Certificateholders immediately upon the occurrence of such
event.
SECTION 9. Series 1994-2 Termination. The right of the
Series 1994-2 Certificateholders to receive payments from the Trust will
terminate on the first Business Day following the Series 1994-2 Termination
Date.
SECTION 10. Distributions from Series 1994-1. The Seller
and Servicer and the Trustee hereby agree that, notwithstanding the terms of
any Supplement relating to another Series, all amounts which may be applied to
a Series pursuant to Section 4.6(h) of the Series 1994-1 Supplement shall be
applied first to Series 1994-2 and included in Available Funds as provided
herein.
SECTION 11. Representations and Warranties of the Seller and
the Servicer. The Seller and the Servicer each hereby represents and warrants
to the Trustee and each Class A Certificateholder that each and every one of
its respective representations and warranties contained in the Agreement and
this Supplement is true and correct in all material respects as of the date
hereof (or if such representation or warranty applies to another date, as of
such date).
SECTION 12. Obligations Unaffected. The obligations of the
Seller and the Servicer to the Trustee and the Class A Certificateholder under
this Supplement shall not be affected by reason of any invalidity, illegality
or irregularity of any of the Receivables or any sale of any of the
Receivables.
<PAGE> 31
29
SECTION 13. Conditions to Effectiveness of This Supplement.
This Supplement shall become effective on the date that the Trustee shall have
received a certificate from the Seller that the following conditions precedent
have been satisfied (the "Closing Date"):
(a) Supplement. This Supplement, executed and delivered by a
duly authorized officer of each of the Seller, the Servicer and the
Trustee.
(b) Class A Certificates and Class B Certificates. (i) For
the Class A Certificateholder on the Closing Date, a Class A
Certificate conforming to the requirements hereof and (ii) for the
Seller [or its Affiliate], a Class B Certificate conforming to the
requirements hereof, in each case duly executed by the Seller and
properly authenticated by the Trustee.
(c) Corporate Proceedings of the Seller and the Servicer. A
copy of the resolutions, in form and substance satisfactory to the
Trustee, of the Board of Directors of each of the Seller and the
Servicer authorizing the execution, delivery and performance of this
Supplement and the other Series 1994-2 Documents to which it is a
party, certified by the Secretary or an Assistant Secretary of such
Person, which certificate shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded.
(d) Incumbency. A certificate of the Secretary or an
Assistant Secretary of each of the Seller and the Servicer certifying
the names and true signatures of the officers authorized on its behalf
to sign this Supplement, the Series 1994- 2 Certificates (in the case
of the Seller) and the other Series 1994-2 Documents to be delivered
by such Person hereunder;
(e) Representations and Warranties. The representations and
warranties made by each of the Seller and the Servicer in each Series
1994-2 Document to which it is a party and any other agreements
delivered by such Person in connection therewith are true and correct
in all material respects on and as of such date;
(f) No Violation. The consummation of the transactions
contemplated by any of the 1994-2 Documents shall not contravene,
violate or conflict with, as to the Seller or the Servicer, any
material Requirement of Law applicable to such Person.
(g) Consents, Licenses and Approvals. All material consents,
licenses, approvals and authorizations, as required, shall have been
obtained and shall be in full force and effect as of the Closing Date.
<PAGE> 32
30
(h) Cap Agreement. The Seller or a Seller Affiliate
shall have obtained the Caps pursuant to the Cap Agreement for the
benefit of the Trustee on behalf of the Class A Certificateholders and
has prepaid or will prepay, as the case may be, out of the capital of
the Seller, in full all fees, premiums and other amounts due to the
Cap Counterparty under the Cap Agreement.
(i) No Early Amortization Event. On and as of the
Closing Date, no Early Amortization Event shall have occurred and be
continuing with respect to any Series of Investor Certificates issued
by the Trust.
(j) Officer's Certificate. Each of the Seller and the
Servicer shall have delivered to the Trustee an Officer's Certificate
dated as of the Closing Date stating that to the best of such
officer's knowledge the conditions set forth in Sections 13(e), (f),
(g) and (h) have been satisfied.
(k) Class A Certificates Treated as Debt. Morgan, Lewis &
Bockius shall have delivered a Tax Opinion with respect to the Class A
Certificates.
(l) Legal Opinions. (i) The Trustee and the Class A
Certificateholder shall have received from Morgan, Lewis & Bockius,
special counsel to the Seller and the Servicer, a favorable opinion or
opinions dated as of the Closing Date, in a form that is reasonably
satisfactory to the Trustee and the Class A Certificateholder, and
(ii) the Trustee shall have caused its special counsel, Pepper,
Hamilton & Scheetz, to deliver a favorable opinion, dated as of the
Closing Date and addressed to the Class A Certificateholder, in a form
that is reasonably satisfactory to such Class A Certificateholder.
(m) Rating Agency. The Seller shall have received a letter
from the Rating Agency confirming that, after giving effect to the
execution and delivery of this Supplement and the issuance of the
Class A Certificates by the Trust, the Rating Agency Condition will be
satisfied.
(n) Other Matters. The Seller and the Servicer shall have
furnished or caused to be furnished to the Trustee at the Closing Date
such additional certificates, letters or opinions as the Trustee or
the Class A Certificateholder may reasonably request.
SECTION 14. Ratification of Agreement. As supplemented by
this Supplement, the Agreement is in all respects ratified and confirmed and
the Agreement as so supplemented by this Supplement shall be read, taken, and
construed as one and the same instrument.
<PAGE> 33
31
SECTION 15. Counterparts. This Supplement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and
the same instrument.
SECTION 16. Amendments. This Supplement may be amended,
changed, waived, discharged, or terminated without the written consent of the
Cash Collateral Depositor (as defined in the Series 1994-1 Supplement) only if,
(i) in the Opinion of Counsel from the outside counsel of the Seller, such
amendment, change, waiver, discharge or termination would not be materially
adverse to the Cash Collateral Depositor, and (ii) the Seller shall have
delivered to the Trustee an Officer's Certificate stating that such amendment,
change, waiver, discharge or termination would not be materially adverse to the
Cash Collateral Depositor.
SECTION 17. Governing Law. THIS SUPPLEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 18. No Petition. The Seller, the Servicer and the
Trustee, by entering into this Supplement and each Certificateholder, by
accepting a Series 1994-2 Certificate hereby covenant and agree that they will
not at any time institute against the Trust, or join in any institution against
the Trust of, any bankruptcy proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Series 1994-2 Certificates, the Agreement or this Supplement.
<PAGE> 34
32
IN WITNESS WHEREOF, the Seller and Servicer and the Trustee
have caused this Series 1994-2 Supplement to be duly executed by their
respective officers as of the day and year first above written.
SPIRIT OF AMERICA NATIONAL BANK,
Seller and Servicer
By:
-----------------------------
Name:
Title:
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, Trustee
By:
-----------------------------
Name:
Title:
<PAGE> 35
Exhibit E-1
Spirit of America National Bank
c/o Charming Shoppes, Inc.
450 Winks Lane
Bensalem, PA 19020
Attn: Kirk Simme
First Fidelity Bank,
National Association
123 South Broad Street, M.B.O.
18th Floor
Philadelphia, PA 19109
Attn: Corporate Trust Administration
Re: Charming Shoppes Master Trust,
Series 1994-2 Certificates
Dear Sirs:
I refer to Section 4 of the Series 1994-2 Supplement, dated as
of August 15, 1994 (as amended or supplemented from time to time, the
"Supplement"), among Spirit of America National Bank (the "Seller and
Servicer") and First Fidelity Bank, National Association, not in its individual
capacity but solely as trustee (the "Trustee") to the Amended and Restated
Pooling and Servicing Agreement, dated as of December 24, 1992 as amended and
restated as of May 4, 1994 (as amended or supplemented from time to time, the
"Agreement"), among the Seller and Servicer and the Trustee.
In connection with the transfer of Series 1994-2, Class [A/B]
Certificates (the "Certificates") issued by Charming Shoppes Master Trust (the
"Trust") in the maximum principal amount set forth on the signature page hereof
to the undersigned (the "Purchaser"), the Purchaser hereby represents and
warrants to you as follows:
1. The Purchaser has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of the purchase of the Certificates. The purchaser is an "accredited
investor" within the meaning of Regulation D promulgated under the 1933 Act.
2. The Purchaser's intention is to acquire the Certificates
(a) for investment in the Purchaser's own account, or (b) for resale to
"qualified institutional buyers" in transactions under Rule 144A promulgated
under the 1933 Act ("Rule 144A") and not in any event with the view to, or for
resale in connection with, any distribution thereof. It understands that the
Certificates have not been registered under the 1933 Act, by reason of a
specified exemption from the
<PAGE> 36
registration provisions of the 1933 Act which depends upon, among other things,
the bona fide nature of the Purchaser's investment intent (or intent to resale
only in Rule 144A transactions) as expressed herein.
3. The purchaser acknowledges that the Certificates are being
purchased pursuant to an exemption under the 1933 Act and may not be
transferred unless an exemption from the registration requirements of the 1933
Act (including but not limited to the exemption contained in Rule 144A) is
available.
4. (i) The Purchaser is not (i) an "employee benefit plan" as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA");(ii) a "plan" subject to Section 4975(e)(1) of the
Internal Revenue Code of 1986, as amended; or (iii) any entity whose underlying
assets include assets of any of the foregoing by reason of its investment in
such entity excluding any investment company that is registered under the
Investment Company Act of 1940, as amended (the "1940 Act").
5. The Certificates being purchased by the Purchaser will be
deemed to be beneficially owned by not more than one person for purposes of
Section 3(c)(1) of the 1940 Act.
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Agreement.
Very truly yours,
Date:
------------------------- -------------------------------------
[The Purchaser]
By:
----------------------------------
Name:
Title:
<PAGE> 37
Exhibit E-2
Spirit of America National Bank
c/o Charming Shoppes, Inc.
450 Winks Lane
Bensalem, PA 19020
Attn: Kirk Simme
First Fidelity Bank,
National Association
123 South Broad Street, M.B.O.
18th Floor
Philadelphia, PA 19109
Attn: Corporate Trust Administration
Re: Charming Shoppes Master Trust,
Series 1994-2 Certificates
Dear Sirs:
We refer to Section 4 of the Series 1994-2 Supplement, dated
as of August 15, 1994 (as amended or supplemented from time to time, the
"Supplement"), among Spirit of America National Bank (the "Seller and
Servicer") and First Fidelity Bank, National Association, not in its individual
capacity but solely as trustee (the "Trustee") to the Amended and Restated
Pooling and Servicing Agreement, dated as of December 24, 1992 as amended and
restated as of May 4, 1994 (as amended or supplemented from time to time, the
"Agreement"), among the Seller and Servicer and the Trustee.
In connection with our proposed purchase of Series 1994-2,
Class [A/B] Certificates (the "Certificates"), issued by Charming Shoppes
Master Trust (the "Trust") in the maximum principal amount set forth on the
signature page hereof, we represent, warrant and confirm that:
(i) we understand that the Certificates have not
been and 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 which exemption depends upon,
among other things, the bona fide nature of our investment intent as expressed
herein;
(ii) any information we have requested concerning
the Certificates or any other matter relevant to our decision to purchase the
Certificates is or has been made available to us;
(iii) 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 are able to bear the
economic risk of an investment in the Certificates;
<PAGE> 38
2
we are an "accredited investor" (as such term is defined in Rule 501(a)(1), (2)
or (3) of Regulation D under the 1933 Act);
(iv) We are a "qualified institutional buyer" within the
meaning of Rule 144A.
(v) We understand that the Seller may rely on the exemption
from the provisions of Section 5 of the 1933 Act provided by Rule 144A in
connection with the transfer.
(vi) [Version I: The chief financial officer, a person
fulfilling an equivalent function, or another executive officer has specified
in a certificate substantially in the form attached as Appendix A hereto, the
amount of securities owned and invested on a discretionary basis by the us as
of [a specific date on or since the close of our most recent fiscal year)].
[OR]
[Version II: We are a member of a family of investment
companies for purposes of Rule 144A, and an executive officer of the investment
adviser has specified in a certificate substantially in the form attached as
Appendix A hereto the amount of securities owned by the family of investment
companies as of [a specified date on or since the close of our most recent
fiscal year)].
(vii) we acknowledge either (a) that it has not requested from
any person the information required to be received by the Purchase, upon
request, pursuant to Rule 144A(d)(4)(i) (the "Required Information"), or (b)
that it has requested and received the Required Information from the Trustor.
(viii) (a) we are not (i) an "employee benefit plan" as
defined in Section 3(3) of The Employee Retirement Income Security Act of 1974,
as amended; (b) or "plan" subject to Section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended; or (c) any entity whose underlying assets include
assets of any of the foregoing by reason of its investment in such entity
excluding any investment company that is registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
(ix) we are acquiring the Certificates for our own account and
not with a view to any distribution of the Certificates, subject, nevertheless,
to the understanding that the disposition of our property shall at all times be
and remain within our control;
(x) we agree that the Certificates must be held indefinitely
by us unless subsequently registered under the 1933 Act or any exemption from
any registration requirements of that Act and any applicable state securities
law is available;
(xi) we understand and agree that:
<PAGE> 39
3
(A) the Certificates represent a beneficial interest in
the Trust only and do not represent an interest in or obligation of
the Seller and Servicer, the Trustee or any Affiliate thereof and no
recourse may be had against such parties or their assets, except as
may be expressly set forth or contemplated in the Agreement, the
Supplement or the Certificates; and
(B) the Certificates are not guaranteed by any
governmental agency or instrumentality and are limited in right of
payment to certain Collections with respect to the Receivables (and
certain other amounts), all as more specifically set forth in
Agreement, the Supplement and the Certificates.
(xii) we understand and agree that by accepting the
benefits of the Agreement that we agree that we will not at any time institute
against the Seller, or join in any institution against the Seller of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation;
(xiii) we agree that in the event that at some future time
we wish to transfer or otherwise dispose of any of the Certificates
(such transfer or disposition not being currently foreseen or contemplated), we
will not transfer or otherwise dispose of any of the Certificates unless:
(A) (1) a letter to substantially the same effect as this letter is
executed promptly by the transferee (or, in the case of a transfer by
us pursuant to Rule 144A, under the 1933 Act, a letter in
substantially the form set forth in Exhibit E-1 to the Supplement is
executed promptly by the transferor) and (2) all offers or
solicitations in connection with the sale, whether directly or through
any agent acting on our behalf, are limited only to Eligible
Purchasers and are not made by means of any form of general
solicitation or general advertising whatsoever; or
(B) the Certificates are transferred or otherwise
disposed of pursuant to Rule 144 under the 1933 Act by us after we
have held them for more than three years; or
(C) the Certificates are transferred or otherwise
disposed of in any other transaction that does not require
registration under the 1933 Act and, if the Seller and Servicer or the
Trustee so requests, we have theretofore furnished to such party an
opinion of counsel, satisfactory to such party in form and substance,
to such effect.
"Eligible Purchaser" means a corporation, partnership or other
entity which we have reasonable grounds to believe and do believe can make
representations with respect to itself to substantially the same effect as the
representations set forth herein.
<PAGE> 40
4
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Pooling and Servicing Agreement.
Very truly yours,
Date:
--------------------------- ---------------------------------------
[transferee]
By:
------------------------------------
Name:
Title:
Transferee Information:
United States Taxpayer
Identification Number:
-----------------------------------
Principal Amount of the
Certificates issued by the
Trust:
-----------------------------------
Certificate(s) are to
be registered in name
of (indicate Nominee,
if applicable):
-----------------------------------
cc:
------------------------
[transferor]
<PAGE> 41
5
APPENDIX A--VERSION I
OFFICER'S CERTIFICATE OF PURCHASER
FOR PURPOSES OF RULE 144A
The undersigned ______________________, chief financial
officer of ___________________ (the "Purchaser") hereby certifies that the
amount of securities owned and invested on a discretionary basis by the
Purchaser as of [insert a specified date on or since the close of the
Purchaser's most recent fiscal year] was $ ___________. I understand that this
Certificate is provided to the Trustee for the purpose of establishing that the
Purchaser is a "qualified institutional buyer" for purposes of Rule 144A
promulgated under the Securities Act of 1933, as amended, and that the Trustee
intends to rely on this Certificate in connection therewith.
IN WITNESS WHEREOF, I have hereto signed my name as of the
_______ day of _________, ____.
--------------------------------
Name:
Title: Chief Financial Officer
<PAGE> 42
6
APPENDIX A--VERSION II
OFFICER'S CERTIFICATE OF PURCHASER
FOR PURPOSES OF RULE 144A
The undersigned ______________________, hereby certifies that
he is an executive officer of ____________, the investment advisor to the
family of investment companies of which ____________(the "Purchaser") is member
for purposes of Rule 144A ("Rule 144A") promulgated under the Securities Act of
1933, as amended, and the amount of securities owned by the family of
investment companies of which the Purchaser is a member was $___________ as of
[insert a specific date on or since the close of the Purchaser's most recent
fiscal year]. I understand that this Certificate is provided to the Trustee
for the purpose of establishing that the Purchaser is a "qualified
institutional buyer" for purposes of Rule 144A and that the Trustee intends to
rely on this Certificate in connection therewith.
IN WITNESS WHEREOF, I have hereto signed my name as of the
___day of ______, ____.
-----------------------------
Name:
Title:
Purchaser Information:
United States Taxpayer
Identification Number:
-------------------------------------
Principal Amount of the
Certificates issued by the
Trust:
-------------------------------------
Certificate(s) are to
be registered in name
of (indicate Nominee,
if applicable):
-------------------------------------
<PAGE> 1
EXHIBIT 10.1.15
EXECUTION COUNTERPART
AMENDMENT NO. 1 TO THE
RECEIVABLES PURCHASE AGREEMENT
AMENDMENT AGREEMENT dated as of November 15, 1994 among FIRST
FIDELITY BANK, NATIONAL ASSOCIATION, (formerly known as First Fidelity Bank,
N.A., Pennsylvania, and prior to that known as Fidelity Bank, National
Association), a national banking association, solely in its capacity as the
trustee (the "Trustee") for CHARMING SHOPPES MASTER TRUST (formerly known as
Spirit of America Master Trust) (the "Seller"), FASHION SPC, INC., a Delaware
corporation (the "Subordinated Purchaser"), SPIRIT OF AMERICA NATIONAL BANK, a
national banking association ("Spirit"), as the originator or the owner (in
such capacity, the "Owner") and the servicer (in such capacity, the
"Servicer"), and CIESCO L.P., a New York limited partnership ("Ciesco"),
CORPORATE ASSET FUNDING COMPANY, INC., a Delaware corporation ("CAFCO") and
CORPORATE RECEIVABLES CORPORATION, a California corporation ("CRC"; Ciesco,
CAFCO and CRC being collectively referred to as the "Purchasers"), CITICORP
NORTH AMERICA, INC., a Delaware corporation ("CNAI"), as agent for the
Purchasers (the "Agent") and, as to Sections 2 and 4(b) hereof only, CHARMING
SHOPPES, INC., a Pennsylvania corporation ("Charming Shoppes"), and FASHION
SERVICE CORP., a Delaware corporation ("FSC").
Preliminary Statements. (1) The Seller, the Subordinated
Purchaser, the Owner, the Servicer, the Purchasers and CNAI as Agent, are
parties to a Receivables Purchase Agreement dated as of December 24, 1992, as
amended and restated as of May 4, 1994, and as further modified pursuant to a
letter agreement dated September 14, 1994 and a letter agreement dated October
15, 1994 (the "RPA"; capitalized terms not otherwise defined herein shall have
the meanings attributed to them in the RPA), pursuant to which a Purchaser may,
in its sole discretion, purchase Receivable Interests from the Seller;
(2) Charming Shoppes and FSC are parties to a Company
Agreement dated as of December 24, 1992, as amended as of September 20, 1993
and May 4, 1994 (the "Company Agreement") in favor of the Purchasers and the
Agent, pursuant to which Charming Shoppes and FSC agree, among other things, to
cause the performance and observance by each of the Owner, the Servicer and the
Seller and their respective successors and assigns of all of the terms,
covenants, conditions, agreements and undertakings on the part of the Owner,
the Servicer and the Seller, respectively, to be performed or observed under
the RPA;
(3) The Seller, the Subordinated Purchaser, the Owner, the
Servicer, the Purchasers and the Agent desire to amend the RPA to extend the
Facility Reduction Date, modify certain other definitions and make certain
other changes as set forth below; and
<PAGE> 2
(4) Charming Shoppes, FSC and the Agent desire to amend the
Company Agreement and confirm that the Company Agreement continues to apply to
the RPA, as amended hereby;
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Amendments to RPA. The RPA shall be amended as
follows, effective as of the date on which all of the conditions precedent set
forth in Section 3 shall be satisfied (the "Effective Date"), provided that the
amendment set forth in paragraph (v) below shall not become effective until the
Agent shall have received consents, in form and substance satisfactory to the
Agent, from each bank which has entered into an asset purchase agreement with
the Agent with respect to the RPA:
(i) The definition of "Company Agreement" in
Exhibit I to the RPA is amended by adding the phrase, ", as the same
may, from time to time, be amended, modified or supplemented" at the
end thereof.
(ii) The definition of "Facility Reduction Date"
in Exhibit I to the RPA is amended by replacing the date "November 15,
1994" in the first line thereof with the date "September 20, 1995."
(iii) Clause (iv) of the definition of "Facility
Termination Date" in Exhibit I to the RPA is amended in its entirety
to read as follows:
"June 1, 1996, if on or prior to June 1, 1996 the
additional interest rate cap required under Section 8(g) of
the Company Agreement shall not have been obtained."
(iv) The definition of "Interest Rate Agreements"
in Exhibit I to the RPA is amended by (x) replacing the percentage
"9%" in clause (i) thereof with the percentage "10%", (y) replacing
the percentage "9.0%" in clause (ii) thereof with the percentage
"10.0%" and (z) replacing the date "September 15, 1994" in clause
(iii) thereof with the date "October 12, 1994."
(v) The definition of "Net Receivables Pool
Balance" in Exhibit I to the RPA is amended in its entirety to read as
follows:
"Net Receivables Pool Balance" means, at any time,
the Outstanding Balance of all Eligible Receivables then in
the Receivables Pool, minus the sum of (x) the Allocation
Percentage at such time multiplied by the aggregate principal
balance of all Accounts in which any Principal Receivable has
become a Defaulted Receivable, plus (y) in the case of each
Certificate
2
<PAGE> 3
Series and each Receivables Purchase Series issued pursuant to
or subject to the Pooling and Servicing Agreement the
supplement or other documentation for which contains a
receivables coverage test similar to that contained in
paragraph (i) of Exhibit VI, the "Investor/Purchaser
Percentage" for such Series (as such term is defined in the
Pooling and Servicing Agreement) multiplied by the aggregate
principal balance of all "Defaulted Receivables" (or similar
term) as defined for such Series.
(vi) Paragraph 1(f) of Exhibit III to the RPA is
amended by replacing the words "18th Floor" appearing in the fourth
line thereof with the words "12th Floor" and by deleting the words
"New York" following the words "National Association" in the eighth
line thereof.
(vii) Paragraph 2(e) of Exhibit IV to the RPA is
amended by replacing the date "September 15, 1994" appearing in the
ninth line thereof with the date "October 12, 1994".
(viii) Notwithstanding anything to the contrary
contained in Paragraph 2(e) of Exhibit IV to the RPA, the Agent hereby
waives the requirements of the first sentence of such paragraph to the
following limited extent only: on or prior to June 1, 1996, the
Interest Rate Agreements need not include agreements providing for
payment on the Distribution Date occurring on August 15, 1996 and
meeting the requirements of clause (iii)(y) of the definition of
Interest Rate Agreements.
(ix) Notwithstanding anything to the contrary
contained in Section 7.06(a) of the RPA, this Amendment Agreement,
if deemed by the Owner or its Affiliates to be a "material contract"
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), may be filed by the Owner with the Securities and Exchange
Commission as an exhibit to an annual report on Form 10-K or a
quarterly report on Form 10-Q under the Exchange Act, in each case
without any special confidentiality requirement.
SECTION 2. Amendment to and Confirmation of the Company
Agreement. (a) The Company Agreement shall be amended, effective as of the
Effective Date, as follows: a new subsection (g) is added to Section 8 of the
Company Agreement reading as follows:
"(g) Additional Cap. Obtain an interest rate cap
agreement on or prior to June 1, 1996 which shall comply with
clauses (i), (iv) and (v) of the definition of "Interest Rate
Agreements" in the RPA and shall be for a notional balance of
at least $100,000,000 payable on the Distribution Date
occurring on August 15, 1996."
3
<PAGE> 4
(b) At the request of Charming Shoppes during the 30-day
period prior to June 1, 1996, the Agent agrees to duly consider, based on then
prevailing interest rates and market conditions, waiving compliance by Charming
Shoppes and FSC with Section 8(g) of the Company Agreement (it being understood
that the Agent shall have no obligation to grant such waiver).
(c) Each of Charming Shoppes and FSC agrees that the
Company Agreement (i) applies to the RPA as amended by this Amendment Agreement
and (ii) ratifies and confirms the Company Agreement in all respects (subject,
in the case of representations and warranties, to Section 4(b) of this
Amendment Agreement) and agrees that the Company Agreement, as amended hereby,
shall remain in full force and effect in accordance with its terms, except that
on and after the date hereof, each reference in the Company Agreement to "the
RPA", "thereunder", "thereof" or words of like import referring to the RPA
shall mean and be a reference to the RPA as amended by this Amendment
Agreement.
SECTION 3. Conditions Precedent. The effectiveness of the
amendments set forth in Sections 1 and 2 is subject to the conditions precedent
that the Agent shall have received each of the following, in form and substance
satisfactory to the Agent, on or prior to November 15, 1994:
(a) Certified copies of any necessary corporate
action of the Trustee approving this Amendment Agreement and certified
copies of all documents evidencing other necessary government
approvals, if any, with respect to this Amendment Agreement and
certification of the names and true signatures of the officers of the
Trustee authorized to sign this Amendment Agreement on behalf of the
Seller and the other documents to be delivered by the Seller
hereunder;
(b) Certified copies of the resolutions of the
Board of Directors of the Subordinated Purchaser approving this
Amendment Agreement, and certified copies of all documents evidencing
other necessary corporate action and governmental approvals, if any,
with respect to this Amendment Agreement, and certification of the
names and true signatures of the officers of the Subordinated
Purchaser authorized to sign this Amendment Agreement and the other
documents to be delivered by the Subordinated Purchaser hereunder;
(c) Certified copies of the resolutions of the
Board of Directors of the Servicer and the Owner approving this
Amendment Agreement, and certified copies of all documents evidencing
other necessary corporate action and governmental approvals, if any,
with respect to this Amendment Agreement, and certification of the
names and true signatures of the officers of the Servicer and the
Owner authorized to sign this Amendment Agreement and the other
4
<PAGE> 5
documents to be delivered by the Servicer and the Owner hereunder;
(d) Certified copies of the resolutions of the
Board of Directors of FSC approving this Amendment Agreement, and
certified copies of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this
Amendment Agreement, and certification of the names and true
signatures of the officers of FSC authorized to sign this Amendment
Agreement;
(e) Certified copies of the resolutions of the
Board of Directors of Charming Shoppes approving this Amendment
Agreement, and certified copies of all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to this Amendment Agreement, and certification of the names
and true signatures of the officers of Charming Shoppes authorized to
sign this Amendment Agreement;
(f) Favorable opinions of counsel for the
Trustee, the Owner, the Servicer, the Subordinated Purchaser, FSC and
Charming Shoppes as to such matters as the Agent may reasonably
request;
(g) An amendment to the Assignment of Interest
Rate Agreements, duly executed by FSC, together with any necessary
consents by the counterparties to any replacement or amended Interest
Rate Agreements;
(h) Copies of any replacement or amended Interest
Rate Agreements, to the extent not previously delivered to the Agent,
together with a summary thereof in the form of Annex G attached to the
RPA, in each case certified by a Responsible Officer of the Owner as
being complete and correct;
(i) An amendment and restatement of the Fee Letter
and payment of all fees due thereunder;
(j) An amendment to the Interest Rate Agreement
with The Fuji Bank, Limited which complies with Section 8(f) of the
Company Agreement;
(k) Evidence of compliance with the provisions of
Section 7.01(a) of the RPA with respect to this Amendment Agreement;
and
(l) Such other approvals, opinions or documents as
the Agent may reasonably request.
SECTION 4. Representations and Warranties. (a) Each of the
Trustee, the Owner, the Servicer and the Subordinated
5
<PAGE> 6
Purchaser confirms that each of the representations and warranties made by it
contained in Exhibit III to the RPA, as amended by this Amendment Agreement, is
correct on and as of the date hereof as though made on and as of this date.
(b) Each of Charming Shoppes and FSC confirms that each of
the representations and warranties made by it contained in Section 5 of the
Company Agreement, after giving effect to this Amendment Agreement, is correct
on and as of the date hereof as though made on and as of this date.
SECTION 5. Costs and Expenses. The Owner agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution and delivery of this Amendment Agreement and the other documents to
be delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent.
SECTION 6. Confirmation of RPA. Except as herein expressly
amended, the RPA is ratified and confirmed in all respects and shall remain in
full force and effect in accordance with its terms. Each reference in the RPA
to "this Agreement" shall mean the RPA as amended by this Amendment Agreement,
and as hereinafter amended or restated.
SECTION 7. GOVERNING LAW. THIS AMENDMENT AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 8. Execution in Counterparts. This Amendment
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same Agreement. Delivery of an executed counterpart of
a signature page to this Amendment Agreement by telecopier shall be effective
as delivery of a manually executed counterpart of this Amendment Agreement.
6
<PAGE> 7
IN WITNESS WHEREOF, the parties have caused this Amendment
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
SELLER: FIRST FIDELITY BANK, NATIONAL ASSOCIATION
(formerly known as First Fidelity
Bank, N.A., Pennsylvania, and prior to
that known as Fidelity Bank, National
Association), not in its individual
capacity but solely as the Trustee for
CHARMING SHOPPES MASTER TRUST
(formerly known as Spirit of America
Master Trust)
By:
------------------------------
Title: Vice President
SUBORDINATED
PURCHASER: FASHION SPC, INC.
By:
------------------------------
Title:
---------------------
OWNER/SERVICER: SPIRIT OF AMERICA NATIONAL BANK,
as the Owner and the Servicer
By:
------------------------------
Title:
---------------------
AGENT: CITICORP NORTH AMERICA, INC.,
as Agent
By:
------------------------------
Vice President
7
<PAGE> 8
ACKNOWLEDGED AND AGREED AS TO
SECTIONS 2 AND 4(b) ONLY:
CHARMING SHOPPES: CHARMING SHOPPES, INC.
By:
------------------------------
Title:
---------------------
FSC: FASHION SERVICE CORP.
By:
------------------------------
Title:
---------------------
8
<PAGE> 1
EXHIBIT 10.1.16
EXECUTION COUNTERPART
AMENDMENT NO. 3 TO THE
RECEIVABLES PURCHASE AGREEMENT
(PARALLEL PURCHASE COMMITMENT)
AMENDMENT AGREEMENT dated as of November 15, 1994 among FIRST
FIDELITY BANK, NATIONAL ASSOCIATION (formerly known as First Fidelity Bank,
N.A., Pennsylvania, and prior to that known as Fidelity Bank, National
Association), a national banking association, solely in its capacity as the
trustee (the "Trustee") for CHARMING SHOPPES MASTER TRUST (formerly known as
Spirit of America Master Trust) (the "Seller"), FASHION SPC, INC., a Delaware
corporation (the "Subordinated Purchaser"), SPIRIT OF AMERICA NATIONAL BANK, a
national banking association ("Spirit"), as the originator or the owner (in
such capacity, the "Owner") and the servicer (in such capacity, the
"Servicer"), CITIBANK, N.A. ("Citibank"), a national banking association, and
CITICORP NORTH AMERICA, INC., a Delaware corporation ("CNAI"), as agent for
Citibank (the "Agent") and, as to Sections 2 and 4(b) hereof only, CHARMING
SHOPPES, INC., a Pennsylvania corporation ("Charming Shoppes"), and FASHION
SERVICE CORP., a Delaware corporation ("FSC").
Preliminary Statements. (1) The Seller, the Subordinated
Purchaser, the Owner, the Servicer, Citibank and CNAI as Agent, are parties to
a Receivables Purchase Agreement (Parallel Purchase Commitment) dated as of
December 24, 1992, as amended by Amendment No. 1 dated as of September 20, 1993
and Amendment No. 2 dated as of May 4, 1994, and as further modified pursuant
to a letter agreement dated September 14, 1994 and a letter agreement dated
October 15, 1994 (the "PPC"; capitalized terms not otherwise defined herein
shall have the meanings attributed to them in the PPC);
(2) Charming Shoppes and FSC are parties to a Company
Agreement dated as of December 24, 1992, as amended by Amendment No. 1 dated as
of September 20, 1993 and Amendment No. 2 dated as of May 4, 1994 (the "Company
Agreement") in favor of Citibank and the Agent;
(3) The Seller, the Subordinated Purchaser, the Owner,
the Servicer, the Purchasers and CNAI as Agent, are parties to a Receivables
Purchase Agreement dated as of December 24, 1992, as amended and restated as of
May 4, 1994, and as further modified pursuant to a letter agreement dated
September 14, 1994 and a letter agreement dated October 15, 1994 (the "RPA"),
which the
<PAGE> 2
parties thereto desire to amend pursuant to an Amendment No. 1 to the
Receivables Purchase Agreement dated as of the date hereof ("Amendment No. 1 to
the RPA") to modify certain defined terms and make certain other changes;
(4) The parties hereto desire to amend the PPC to reflect
certain terms of Amendment No. 1 to the RPA and to make certain other changes
as set forth in Section 1 hereof; and
(5) Charming Shoppes, FSC and the Agent desire to amend
the Company Agreement and confirm that the Company Agreement continues to apply
to the PPC, as amended hereby.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. Amendments to PPC. The PPC shall be amended as
follows, effective as of the date on which all of the conditions precedent set
forth in Section 3 shall be satisfied (the "Effective Date"):
(i) Notwithstanding anything to the contrary
contained in Section 7.05(a) of the PPC, this Amendment Agreement, if
deemed by the Owner or its Affiliates to be a "material contract"
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), may be filed by the Owner with the Securities and Exchange
Commission as an exhibit to an annual report on Form 10-K or a
quarterly report on Form 10-Q under the Exchange Act, in each case
without any special confidentiality requirement.
(ii) Clause (iv) of the definition of "Commitment
Termination Date" in Exhibit I to the PPC is amended in its entirety
to read as follows:
"June 1, 1996, if on or prior to June 1, 1996
the additional interest rate cap required under
Section 8(g) of the Company Agreement shall not have
been obtained."
(iii) The definition of "Company Agreement" in
Exhibit I to the PPC is amended by adding the phrase ",as the same
may, from time to time, be amended, modified or supplemented" at the
end thereof.
(iv) The definition of "Facility Reduction Date"
in Exhibit I to the PPC is amended by replacing the date "November 15,
1994" in the first line thereof with the date "September 20, 1995."
(v) Notwithstanding anything to the contrary
contained in Paragraph 2(e) of Exhibit IV to the PPC, the Agent hereby
waives the requirements of the first sentence of such paragraph to the
following limited extent only: on
2
<PAGE> 3
or prior to June 1, 1996, the Interest Rate Agreements need not include
agreements providing for payment on the Distribution Date occurring on August
15, 1996 and meeting the requirements of clause (iii)(y) of the definition of
Interest Rate Agreements.
SECTION 2. Amendment to and Confirmation of the Company
Agreement. (a) The Company Agreement shall be amended, effective as of the
Effective Date, as follows: a new subsection (g) is added to Section 8 of the
Company Agreement reading as follows:
"(g) Additional Cap. Obtain an interest
rate cap agreement on or prior to June 1, 1996 which
shall comply with clauses (i), (iv) and (v) of the
definition of "Interest Rate Agreements" in the RPA
and shall be for a notional balance of at least
$100,000,000 payable on the Distribution Date
occurring on August 15, 1996."
(b) At the request of Charming Shoppes during the 30-day
period prior to June 1, 1996, the Agent agrees to duly consider, based on then
prevailing interest rates and market conditions, waiving compliance by Charming
Shoppes and FSC with Section 8(g) of the Company Agreement (it being understood
that the Agent shall have no obligation to grant such waiver).
(c) Each of Charming Shoppes and FSC agrees that the
Company Agreement (i) applies to the PPC as amended by this Amendment Agreement
and (ii) ratifies and confirms the Company Agreement in all respects (subject,
in the case of representations and warranties, to Section 4(b) of this
Amendment Agreement) and agrees that the Company Agreement, as amended hereby,
shall remain in full force and effect in accordance with its terms, except that
on and after the date hereof, each reference in the Company Agreement to "the
PPC", "thereunder", "thereof" or words of like import referring to the PPC
shall mean and be a reference to the PPC as amended by this Amendment
Agreement.
SECTION 3. Conditions Precedent. The effectiveness of the
amendments set forth in Sections 1 and 2 is subject to the conditions precedent
that the Agent shall have received each of the following, in form and substance
satisfactory to the Agent on or prior to November 15, 1994:
(a) Certified copies of any necessary corporate action of
the Trustee approving Amendment No. 1 to the RPA and this Amendment Agreement
and certified copies of all documents evidencing other necessary government
approvals, if any, with respect to Amendment No. 1 to the RPA and this
Amendment Agreement and certification of the names and true signatures of the
officers of the Trustee authorized to sign Amendment No. 1 to
3
<PAGE> 4
the RPA and this Amendment Agreement on behalf of the Seller and the other
documents to be delivered by the Seller hereunder;
(b) Certified copies of the resolutions of the Board of
Directors of the Subordinated Purchaser approving Amendment No. 1 to the RPA
and this Amendment Agreement, and certified copies of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to Amendment No. 1 to the RPA and this Amendment Agreement, and
certification of the names and true signatures of the officers of the
Subordinated Purchaser authorized to sign Amendment No. 1 to the RPA and this
Amendment Agreement and the other documents to be delivered by the Subordinated
Purchaser hereunder;
(c) Certified copies of the resolutions of the Board of
Directors of the Servicer and the Owner approving Amendment No. 1 to the RPA
and this Amendment Agreement, and certified copies of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to Amendment No. 1 to the RPA and this Amendment Agreement, and
certification of the names and true signatures of the officers of the Servicer
and the Owner authorized to sign Amendment No. 1 to the RPA and this Amendment
Agreement and the other documents to be delivered by the Servicer and the Owner
hereunder;
(d) Certified copies of the resolutions of the Board of
Directors of FSC approving this Amendment Agreement, and certified copies of
all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Amendment Agreement, and certification
of the names and true signatures of the officers of FSC authorized to sign this
Amendment Agreement;
(e) Certified copies of the resolutions of the Board of
Directors of Charming Shoppes approving this Amendment Agreement, and certified
copies of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Amendment Agreement, and
certification of the names and true signatures of the officers of Charming
Shoppes authorized to sign this Amendment Agreement;
(f) A fully executed copy of Amendment No. 1 to the RPA;
(g) Favorable opinions of counsel for the Trustee, the Owner,
the Servicer, the Subordinated Purchaser, FSC and Charming Shoppes as to such
matters as the Agent may reasonably request;
(h) An amendment to the Assignment of Interest Rate
Agreements, duly executed by FSC, together with any necessary consents by the
counterparties to any replacement or amended Interest Rate Agreements;
4
<PAGE> 5
(i) Copies of any replacement or amended Interest Rate
Agreements, to the extent not previously delivered to the Agent, together with
a summary thereof in the form of Annex G attached to the RPA, in each case
certified by a Responsible Officer of the Owner as being complete and correct;
(j) An amendment and restatement of the Fee Letter and
payment of all fees due thereunder;
(k) An amendment to the Interest Rate Agreement with The
Fuji Bank, Limited which complies with Section 8(f) of the Company Agreement;
(l) Evidence of compliance with the provisions of Section
7.01(a) of the PPC with respect to this Amendment Agreement; and
(m) such other approvals, opinions or documents as the Agent
may reasonably request.
SECTION 4. Representations and Warranties. (a) Each of the
Trustee, the Owner, the Servicer and the Subordinated Purchaser confirms that
each of the representations and warranties made by it contained in Exhibit III
to the PPC, as amended by this Amendment Agreement, is correct on and as of the
date hereof as though made on and as of this date.
(b) Each of Charming Shoppes and FSC confirms that each of
the representations and warranties made by it contained in Section 5 of the
Company Agreement, after giving effect to this Amendment Agreement, is correct
on and as of the date hereof as though made on and as of this date.
SECTION 5. Costs and Expenses. The Owner agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution and delivery of this Amendment Agreement and the other documents to
be delivered hereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Agent.
SECTION 6. Consent to Amendment to RPA. In accordance with
the last sentence of Section 2 of Exhibit I of the PPC, the Agent hereby
consents to the amendments effected pursuant to Amendment No. 1 to the RPA.
SECTION 7. Confirmation of PPC. Except as herein expressly
amended, the PPC is ratified and confirmed in all respects and shall remain in
full force and effect in accordance with its terms. Each reference in the PPC
to "this Agreement" shall mean the PPC as amended by this Amendment Agreement,
and as hereinafter amended or restated.
5
<PAGE> 6
SECTION 8. GOVERNING LAW. THIS AMENDMENT AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 9. Execution in Counterparts. This Amendment
Agreement may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same Agreement. Delivery of an executed counterpart of
a signature page to this Amendment Agreement by telecopier shall be effective
as delivery of a manually executed counterpart of this Amendment Agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
SELLER: FIRST FIDELITY BANK, NATIONAL ASSOCIATION
(formerly known as First Fidelity Bank,
N.A., Pennsylvania, and prior to
that known as Fidelity Bank,
National Association), not in its
individual capacity but solely as
the Trustee for CHARMING SHOPPES
MASTER TRUST (formerly known as
Spirit of America Master Trust)
By:
------------------------------
Title: Vice President
SUBORDINATED
PURCHASER: FASHION SPC, INC.
By:
------------------------------
Title:
------------------------
OWNER/SERVICER: SPIRIT OF AMERICA NATIONAL BANK,
as the Owner and the Servicer
By:
------------------------------
Title:
------------------------
6
<PAGE> 7
AGENT: CITICORP NORTH AMERICA, INC.,
as Agent
By:
------------------------------
Vice President
CITIBANK: CITIBANK, N.A.
By:
------------------------------
Attorney-in-Fact
ACKNOWLEDGED AND AGREED
AS TO SECTIONS 2 AND
4(b) ONLY:
CHARMING SHOPPES: CHARMING SHOPPES, INC.
By:
------------------------------
Title:
------------------------
FSC: FASHION SERVICE CORP.
By:
------------------------------
Title:
------------------------
7
<PAGE> 1
EXHIBIT 21
Subsidiaries of Registrant
There is set forth a list of all subsidiaries of the company, each
of which is directly and wholly owned by its immediate parent, Charming
Shoppes, Inc., and all of which are included in the consolidated financial
statements of Charming Shoppes, Inc., and subsidiaries, except as noted.
<TABLE>
<S> <C> <C> <C>
BENTON #3015 DEVELOPMENT CO.,INC. (1) (2) AR
BURLESON #3012 DEVELOPMENT CO.,INC (1) (2) TX
CHARM-FIN STORES,INC. (2) DE
CHARMING SHOPPES OF CHESTER,INC. (2) PA
CHARMING SHOPPES OF COLONIAL PARK,INC. PA
CHARMING SHOPPES OF CUMBERLAND,INC. PA
CHARMING SHOPPES OF DELAWARE,INC. (2) PA
CHARMING SHOPPES OF ECHELON,INC. NJ
CHARMING SHOPPES OF FRANKFORD, INC (2) PA
CHARMING SHOPPES OF NORRISTOWN,INC. (2) PA
CHARMING SHOPPES OF TRENTON,INC. NJ
CHARMING SHOPPES OF WOODBURY, INC NJ
CHARMING SHOPPES,INC. (2) PA
CHARMING SHOPPES/FASHION BUG OF OLEAN,INC. (2) NY
COLUMBIA DEVELOPMENT CO.,INC. (2) TN
COLUMBIA #2589 DEVOLPMENT CO,INC. (2) TN
COLUMBIA #3054 DEVELOPMENT CO.,INC. (1) (2) SC
CS INSURANCE LTD. (2)
CSBC, INC. (2) DE
CSI CHARITIES (2) PA
CSI INDUSTRIES,INC. (2) DE
CSI INDUSTRIES,INC. (2) PA
CSI-DR,INC. (2) DR
C.S.A.C.,INC. (2) DE
C.S.F.CORP. (2) DE
C.S.I.C.,INC. (2) DE
DIVERSIFIED FASHIONS,INC. (2) PA
ERICOOL CO LTD. (2) HK
EVATONE TRADING LTD. (2) HK
EXECUTIVE FLIGHTS,INC. (2) DE
FASHION ACCEPTANCE CORP (2) DE
FASHION BUG OF 640 PLAZA, INC. TN
FASHION BUG OF AKRON, INC. (2) OH
FASHION BUG OF ALEXANDRIA, INC. (2) VA
FASHION BUG OF ALIQUIPPA, INC. (2) PA
FASHION BUG OF ALLENTOWN, INC. PA
FASHION BUG OF ALLIANCE,INC. OH
FASHION BUG OF ALPENA, INC. MI
FASHION BUG OF ALTOONA,INC. PA
FASHION BUG OF AMHERST PLAZA, INC. (2) NY
FASHION BUG OF AMHERST, INC. NY
FASHION BUG OF ANDORRA, INC. PA
FASHION BUG OF APPLE VALLEY SQUARE, INC. VA
FASHION BUG OF ARAMINGO,INC. (2) PA
FASHION BUG OF ARLINGTON HEIGHTS,INC. (2) IL
FASHION BUG OF ASBURY PARK, INC. NJ
FASHION BUG OF ASHEVILLE, INC. (2) NC
FASHION BUG OF ASH-HAN,INC. VA
FASHION BUG OF ASHLAND,INC. (2) KY
FASHION BUG OF ASHTABULA,INC. (2) OH
FASHION BUG OF ATHENS,INC. (2) OH
FASHION BUG OF AUDUBON,INC. NJ
FASHION BUG OF AURORA, INC. IL
FASHION BUG OF BARBERTON, INC. OH
FASHION BUG OF BEAVER FALLS, INC. (2) PA
FASHION BUG OF BECKLEY,INC. WV
FASHION BUG OF BELDEN VILLAGE, INC. (2) OH
FASHION BUG OF BELLEVILLE, INC. MI
FASHION BUG OF BELMONT, INC. MI
FASHION BUG OF BELVEDERE PLAZA, INC. (2) GA
FASHION BUG OF BETHLEHEM, INC. PA
FASHION BUG OF BINGHAMTON, INC. (2) NY
FASHION BUG OF BIRMINGHAM, INC. AL
</TABLE>
<PAGE> 2
<TABLE>
<S> <C> <C>
FASHION BUG OF BLOOMSBURG,INC. PA
FASHION BUG OF BLUE ASH, INC. OH
FASHION BUG OF BLUEFIELD, INC. WV
FASHION BUG OF BOARDMAN PLAZA, INC. OH
FASHION BUG OF BOLINGBROOK, INC. IL
FASHION BUG OF BOND, INC. PA
FASHION BUG OF BORDENTOWN,INC. NJ
FASHION BUG OF BOWLING GREEN,INC. (2) OH
FASHION BUG OF BRADFORD,INC. PA
FASHION BUG OF BRICKTOWN PLAZA,INC. NJ
FASHION BUG OF BRIDGEVIEW, INC. IL
FASHION BUG OF BRIDGEVILLE,INC. (2) PA
FASHION BUG OF BRISTOL, CT, INC. CT
FASHION BUG OF BRISTOL,INC. PA
FASHION BUG OF BRUNSWICK,INC. NJ
FASHION BUG OF BUCYRUS,INC. OH
FASHION BUG OF BUFFALO, INC. NY
FASHION BUG OF BUTLER,INC. (2) PA
FASHION BUG OF CAMBRIDGE, INC. MD
FASHION BUG OF CAPE MAY, INC. NJ
FASHION BUG OF CARLISLE,INC. PA
FASHION BUG OF CARROLLTON,INC. MD
FASHION BUG OF CASSELBERRY, INC. FL
FASHION BUG OF CASTOR AVENUE,INC. PA
FASHION BUG OF CENTURY III MALL,INC. PA
FASHION BUG OF CHAMBERSBURG,INC. (2) PA
FASHION BUG OF CHARLOTTESVILLE, INC. VA
FASHION BUG OF CHESTER SPRINGS,INC. NJ
FASHION BUG OF CHESTERTOWN,INC. MD
FASHION BUG OF CHICOPEE, INC. (2) MA
FASHION BUG OF CHILLICOTHE,INC. OH
FASHION BUG OF CLARION, INC. PA
FASHION BUG OF CLARKSBURG,INC. WV
FASHION BUG OF CLEARFIELD,INC. PA
FASHION BUG OF CLEARVIEW MALL, INC. PA
FASHION BUG OF CLEVELAND, INC. OH
FASHION BUG OF CLINTON, INC. (2) MD
FASHION BUG OF COCKEYSVILLE, INC. (2) MD
FASHION BUG OF COLLEGE SQUARE,INC. DE
FASHION BUG OF COLUMBIA,INC. (2) MD
FASHION BUG OF COLUMBUS OHIO,INC. (2) OH
FASHION BUG OF CONCORD,INC. DE
FASHION BUG OF CONNELLSVILLE,INC. (2) PA
FASHION BUG OF CONNERSVILLE, INC. (2) IN
FASHION BUG OF CORBIN,INC. (2) KY
FASHION BUG OF CORTLAND, INC. (2) NY
FASHION BUG OF COSHOCTON, INC. (2) OH
FASHION BUG OF COTTMAN,INC. PA
FASHION BUG OF COUNTRYSIDE, INC. PA
FASHION BUG OF COVENTRY MALL,INC. PA
FASHION BUG OF COVINGTON, INC. (2) KY
FASHION BUG OF CRANBERRY, INC. PA
FASHION BUG OF CREST HILL, INC. (2) IL
FASHION BUG OF CROMWELL FIELD, INC. MD
FASHION BUG OF CRYSTAL LAKE, INC. IL
FASHION BUG OF CULPEPPER, INC. VA
FASHION BUG OF CUMBERLAND MALL,INC. (2) GA
FASHION BUG OF CUYAHOGA FALLS,INC. OH
FASHION BUG OF DADE CITY, INC. (2) FL
FASHION BUG OF DANBURY, INC. CT
FASHION BUG OF DANVILLE,INC. IL
FASHION BUG OF DAYTON MALL,INC. (2) OH
FASHION BUG OF DAYTON, INC. (2) OH
FASHION BUG OF DEARBORN,INC. MI
FASHION BUG OF DECATUR, INC. GA
FASHION BUG OF DEKALB, INC. IL
FASHION BUG OF DELAWARE SQUARE, INC. (2) OH
FASHION BUG OF DES PLAINES, INC. IL
FASHION BUG OF DEVON, INC. CT
FASHION BUG OF DIXIE MANOR, INC. (2) KY
FASHION BUG OF DOVER PLAZA,INC. NJ
FASHION BUG OF DOVER,INC. DE
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
FASHION BUG OF DUBOIS,INC. PA
FASHION BUG OF DUNBAR, INC. WV
FASHION BUG OF EAST HANOVER,INC. NJ
FASHION BUG OF EAST HARTFORD,INC. CT
FASHION BUG OF EAST MANSFIELD, INC. OH
FASHION BUG OF EAST PARK, INC. MD
FASHION BUG OF EAST WASHINGTON,INC. IN
FASHION BUG OF EAST WINDSOR, INC. NJ
FASHION BUG OF EASTON,INC. (2) MD
FASHION BUG OF EASTSIDE PLAZA, INC. IL
FASHION BUG OF EASTWOOD MALL, INC. OH
FASHION BUG OF EDGEWOOD,INC. MD
FASHION BUG OF EDWARDSVILLE,INC. PA
FASHION BUG OF EGG HARBOR, INC. (2) NJ
FASHION BUG OF ELDERSBURG,INC. MD
FASHION BUG OF ELGIN, INC. IL
FASHION BUG OF ELIZABETHTOWN, INC. (2) KY
FASHION BUG OF ELKIN, INC. WV
FASHION BUG OF ELKTON,INC. MD
FASHION BUG OF ELSTON PLAZA,INC. IL
FASHION BUG OF ELWOOD CITY, INC. PA
FASHION BUG OF ENGLISHTOWN, INC. (2) NJ
FASHION BUG OF EVANSVILLE, INC. IN
FASHION BUG OF EXTON,INC. (2) PA
FASHION BUG OF FAIR PLAZA, INC. (2) OH
FASHION BUG OF FAIRFIELD, INC. CT
FASHION BUG OF FAIRMONT,INC. WV
FASHION BUG OF FALL RIVER, INC. MA
FASHION BUG OF FALLS CHURCH, INC. VA
FASHION BUG OF FITCHBURG, INC. (2) MA
FASHION BUG OF FLEMINGTON,INC. NJ
FASHION BUG OF FLINT,INC. MI
FASHION BUG OF FOREST PARK MALL,INC. IL
FASHION BUG OF FOREST PLAZA, INC. IL
FASHION BUG OF FOREST SQUARE, INC. (2) GA
FASHION BUG OF FORESTVILLE,INC. (2) MD
FASHION BUG OF FORT LAUDERDALE, INC. (2) FL
FASHION BUG OF FORT SAGINAW, INC. (2) MI
FASHION BUG OF FOSTORIA,INC. OH
FASHION BUG OF FRACKVILLE, INC. PA
FASHION BUG OF FRANKFORT,INC. KY
FASHION BUG OF FRANKLIN COUNTY, INC. PA
FASHION BUG OF FRANKLIN,INC. PA
FASHION BUG OF FREDERICKSBURG,INC. VA
FASHION BUG OF FREEHOLD, INC. NJ
FASHION BUG OF FREEPORT, INC. (2) IL
FASHION BUG OF FRONT ROYAL, INC. VA
FASHION BUG OF FT. FINDLAY,INC. OH
FASHION BUG OF FT. MYERS,INC. FL
FASHION BUG OF FULLERTON, INC. MD
FASHION BUG OF GARFIELD HEIGHTS, INC. OH
FASHION BUG OF GEORIA SQUARE,INC. (2) GA
FASHION BUG OF GIBBSTOWN,INC. NJ
FASHION BUG OF GLEN BURNIE, INC. MD
FASHION BUG OF GLEN ELLYN, INC. IL
FASHION BUG OF GORHAM, INC. NH
FASHION BUG OF GREENBRIAR,INC. (2) GA
FASHION BUG OF GREENVILLE PLAZA, INC. PA
FASHION BUG OF GREENVILLE,INC. (2) SC
FASHION BUG OF GROVE CITY, INC. PA
FASHION BUG OF HACKENSACK,INC. NJ
FASHION BUG OF HACKETTSTOWN,INC. NJ
FASHION BUG OF HAGERSTOWN,INC. MD
FASHION BUG OF HAMDEN, INC. (2) CT
FASHION BUG OF HAMILTON SQUARE, INC. NJ
FASHION BUG OF HAMPTON,INC. VA
FASHION BUG OF HANNIBAL, INC. MO
FASHION BUG OF HANOVER,INC. PA
FASHION BUG OF HARFORD, INC. MD
FASHION BUG OF HARRISBURG, ILL, INC. (2) IL
FASHION BUG OF HARRISBURG,INC. PA
FASHION BUG OF HAZARD,INC. (2) KY
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
FASHION BUG OF HAZELTON,INC. PA
FASHION BUG OF HAZLET, INC. (2) NJ
FASHION BUG OF HENRIETTA,INC. (2) NY
FASHION BUG OF HERSHEY,INC. PA
FASHION BUG OF HIGHLAND HEIGHTS, INC. (2) KY
FASHION BUG OF HIGHLAND RIDGE,INC. OH
FASHION BUG OF HIGHLAND, INC. IN
FASHION BUG OF HILLSIDE, INC. (2) IL
FASHION BUG OF HINESVILLE, INC. GA
FASHION BUG OF HOFFMAN ESTATES, INC. (2) IL
FASHION BUG OF HOLYOKE, INC. MA
FASHION BUG OF HOMEWOOD, INC. (2) IL
FASHION BUG OF HONESDALE,INC. PA
FASHION BUG OF HOUGHTON,INC. MI
FASHION BUG OF HOWELL,INC. NJ
FASHION BUG OF HUNTINGTON PLAZA, INC. IN
FASHION BUG OF HUNTINGTON, INC. WV
FASHION BUG OF INDIANA, INC. PA
FASHION BUG OF IROQUOIS MANOR,INC. KY
FASHION BUG OF JACKSONVILLE,INC. IL
FASHION BUG OF JACKSON, INC. (2) TN
FASHION BUG OF JASPER, INC. IN
FASHION BUG OF JERSEY CITY, INC. (2) NJ
FASHION BUG OF JOHNSTON, INC. RI
FASHION BUG OF JOHNSTOWN, INC. (2) PA
FASHION BUG OF JOLIET, INC. IL
FASHION BUG OF KALAMAZOO,INC. (2) MI
FASHION BUG OF KANKAKEE, INC. (2) IL
FASHION BUG OF KEDZIE,INC. IL
FASHION BUG OF KENT, INC. OH
FASHION BUG OF KING OF PRUSSIA,INC. (2) PA
FASHION BUG OF KITTANING, INC. (2) PA
FASHION BUG OF KNOXVILLE, INC. (2) TN
FASHION BUG OF KOKOMO,INC. IN
FASHION BUG OF KUTZTOWN, INC. PA
FASHION BUG OF LAKE WALES, INC. FL
FASHION BUG OF LAKELAND, INC. FL
FASHION BUG OF LAKEMORE PLAZA, INC. OH
FASHION BUG OF LAKEWOOD,INC. (2) CO
FASHION BUG OF LANCASTER OHIO,INC. (2) OH
FASHION BUG OF LANCASTER,INC. PA
FASHION BUG OF LANGLEY PARK,INC. MD
FASHION BUG OF LANSING, INC. MI
FASHION BUG OF LATROBE,INC. (2) PA
FASHION BUG OF LAUREL, INC. MD
FASHION BUG OF LAVALE, INC. MD
FASHION BUG OF LAWRENCEVILLE,INC. NJ
FASHION BUG OF LEBANON,INC. PA
FASHION BUG OF LEDGEWOOD,INC. NJ
FASHION BUG OF LEESBURG, INC. VA
FASHION BUG OF LEETSDALE, INC. PA
FASHION BUG OF LENOIR,INC. (2) NC
FASHION BUG OF LENOX SQUARE,INC. (2) GA
FASHION BUG OF LEWISBURG,INC. PA
FASHION BUG OF LEWISTON, INC. ME
FASHION BUG OF LEWISTOWN,INC. (2) PA
FASHION BUG OF LEXINGTON, INC. KY
FASHION BUG OF LIMA,INC. (2) OH
FASHION BUG OF LINCOLN KNOLLS, INC. (2) OH
FASHION BUG OF LINCOLN, INC. (2) IL
FASHION BUG OF LIVONIA,INC. MI
FASHION BUG OF LOCK HAVEN, INC. (2) PA
FASHION BUG OF LOCKPORT,INC. NY
FASHION BUG OF LOGAN, INC. WV
FASHION BUG OF LONGMONT, INC. (2) CO
FASHION BUG OF LORAIN, INC. OH
FASHION BUG OF LOUISVILLE, INC. KY
FASHION BUG OF LOWER BURRELL, INC. PA
FASHION BUG OF LYNCHBURG, INC. VA
FASHION BUG OF LYNN, INC. MA
FASHION BUG OF MACDADE,INC. PA
FASHION BUG OF MANAHAWKIN, INC. NJ
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C> <C>
FASHION BUG OF MANASSAS,INC. VA
FASHION BUG OF MANCHESTER, INC. (2) CT
FASHION BUG OF MANCHESTER, N.H., INC. NH
FASHION BUG OF MANSFIELD, INC. (2) OH
FASHION BUG OF MAPLE HEIGHTS, INC. OH
FASHION BUG OF MARQUETTE, INC. MI
FASHION BUG OF MARTIN PLAZA,INC. MD
FASHION BUG OF MASON CITY,INC. IA
FASHION BUG OF MASSILLON,INC. OH
FASHION BUG OF MATTESON, INC. (2) IL
FASHION BUG OF MAULDIN,INC. SC
FASHION BUG OF MAYFAIR, INC. PA
FASHION BUG OF MAYFIELD HEIGHTS, INC. OH
FASHION BUG OF MCKEESPORT,INC. (2) PA
FASHION BUG OF MEADVILLE,INC. PA
FASHION BUG OF MEDFORD, INC. NJ
FASHION BUG OF MELROSE PARK, INC. (2) IL
FASHION BUG OF MERRILLVILLE,INC. IN
FASHION BUG OF MERRITT ISLAND, INC. FL
FASHION BUG OF MICHIGAN CITY,INC. (2) IN
FASHION BUG OF MIDDLESBORO,INC. KY
FASHION BUG OF MIDDLETOWN PLAZA, INC. NJ
FASHION BUG OF MIDDLETOWN,INC. (2) OH
FASHION BUG OF MIDLAND PLAZA,INC. MI
FASHION BUG OF MIDWAY, INC. MN
FASHION BUG OF MOBILE, INC. AL
FASHION BUG OF MONROEVILLE, INC. PA
FASHION BUG OF MONROEVILLE,INC. (2) PA
FASHION BUG OF MONROE, INC. NC
FASHION BUG OF MONTGOMERYVILLE, INC. PA
FASHION BUG OF MONTGOMERY, INC. (2) AL
FASHION BUG OF MONTPELIER, INC. VT
FASHION BUG OF MOORESTOWN MALL,INC. NJ
FASHION BUG OF MOOSIC,INC. PA
FASHION BUG OF MOREHEAD,INC. KY
FASHION BUG OF MORGANTOWN,INC. WV
FASHION BUG OF MORRIS COUNTY,INC. NJ
FASHION BUG OF MOUNT PLEASANT,INC. MI
FASHION BUG OF MOUNT VERNON, INC. IL
FASHION BUG OF MT. CLEMENS,INC. MI
FASHION BUG OF MUNDELEIN, INC. IL
FASHION BUG OF MURRAY, INC. KY
FASHION BUG OF MUSKEGON, INC. MI
FASHION BUG OF NANTICOKE,INC. PA
FASHION BUG OF NASHVILLE, INC. TN
FASHION BUG OF NATRONA,INC. PA
FASHION BUG OF NESHAMINY,INC. PA
FASHION BUG OF NEW BRITIAN, INC. CT
FASHION BUG OF NEW CASTLE,INC. PA
FASHION BUG OF NEW HAVEN,INC. (1) (2) CT
FASHION BUG OF NEW HOLLAND, INC. PA
FASHION BUG OF NEW LONDON,INC. CT
FASHION BUG OF NEW MARTINSVILLE,INC. (2) WV
FASHION BUG OF NEW PHILADELPHIA,INC. OH
FASHION BUG OF NEWARK, INC. (2) OH
FASHION BUG OF NILES, INC. (2) OH
FASHION BUG OF NORA, INC. (2) IN
FASHION BUG OF NORFOLK,INC. (2) VA
FASHION BUG OF NORMAL, INC. (2) IL
FASHION BUG OF NORTH ADAMS, INC. MA
FASHION BUG OF NORTH AVENUE, INC. (2) IL
FASHION BUG OF NORTH BRUNSWICK, INC. NJ
FASHION BUG OF NORTH CICERO,INC. IL
FASHION BUG OF NORTH EAST, INC. MD
FASHION BUG OF NORTH POINT,INC. MD
FASHION BUG OF NORTH TOWNE MALL, INC. IL
FASHION BUG OF NORTH VERSAILLES,INC. (2) PA
FASHION BUG OF NORTHLAKE MALL,INC. GA
FASHION BUG OF NORTHWEST PLAZA, INC. (2) OH
FASHION BUG OF NORWELL, INC. MA
FASHION BUG OF NORWIN, INC. PA
FASHION BUG OF NOVI, INC. MI
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
FASHION BUG OF N. ROANOKE,INC. VA
FASHION BUG OF OAK RIDGE,INC. TN
FASHION BUG OF OIL CITY, INC. PA
FASHION BUG OF OLD COLONY SQUARE,INC. NJ
FASHION BUG OF OLEAN,INC. NY
FASHION BUG OF OPELIKA, INC. (2) AL
FASHION BUG OF ORLAND PARK, INC. (2) IL
FASHION BUG OF OSHKOSH, INC. WI
FASHION BUG OF OTTAWA, INC. (2) IL
FASHION BUG OF OXON HILL, INC. MD
FASHION BUG OF PADUCAH,INC. KY
FASHION BUG OF PAINTSVILLE,INC. KY
FASHION BUG OF PAKA PLAZA,INC. MI
FASHION BUG OF PALM HARBOR, INC. FL
FASHION BUG OF PANAMA CITY,INC. FL
FASHION BUG OF PARKERSBURG,INC. WV
FASHION BUG OF PARKSIDE, INC. (2) MD
FASHION BUG OF PARLIN,INC. (2) NJ
FASHION BUG OF PATCHOQUE,INC. NY
FASHION BUG OF PENDLETON PIKE,INC. IN
FASHION BUG OF PENNSVILLE,INC. NJ
FASHION BUG OF PEORIA,INC. IL
FASHION BUG OF PERIMETER MALL,INC. (2) GA
FASHION BUG OF PERRING,INC. MD
FASHION BUG OF PETERSBURG, INC. (2) VA
FASHION BUG OF PHILLIPSBURG, INC. NJ
FASHION BUG OF PIKEVILLE,INC. KY
FASHION BUG OF PIQUA, INC. (2) OH
FASHION BUG OF PITTSTON,INC. PA
FASHION BUG OF PLYMOUTH MEETING,INC. (2) PA
FASHION BUG OF PONTIAC,INC. (2) MI
FASHION BUG OF PORTSMOUTH,INC. OH
FASHION BUG OF POTTSVILLE,INC. PA
FASHION BUG OF QUAKERTOWN,INC. (2) PA
FASHION BUG OF RACINE, INC. (2) WI
FASHION BUG OF RADCLIFF, INC. (2) KY
FASHION BUG OF RAVENSWOOD, INC. WV
FASHION BUG OF RAYNHAM, INC. MA
FASHION BUG OF READING MALL,INC. (2) PA
FASHION BUG OF REDFORD, INC. (2) MI
FASHION BUG OF REISTERTOWN, INC. MD
FASHION BUG OF REVERE, INC. MA
FASHION BUG OF REYNOLDSBURG, INC. OH
FASHION BUG OF RICHLAND, INC. (2) PA
FASHION BUG OF RICHMOND IND, INC. (2) IN
FASHION BUG OF RICHMOND,INC. (2) VA
FASHION BUG OF RIDGE VILLAGE, INC. (2) CO
FASHION BUG OF RISING SUN, INC. PA
FASHION BUG OF RIVERHEAD, INC. NY
FASHION BUG OF RIVERSIDE SQUARE, INC. IL
FASHION BUG OF RIVERTOWNE COMMONS,INC. MD
FASHION BUG OF ROANOKE RAPIDS, INC. NC
FASHION BUG OF ROCKFORD, INC. IL
FASHION BUG OF ROGERS PLAZA, INC. MI
FASHION BUG OF ROME, INC. (2) GA
FASHION BUG OF ROSWELL,INC. (2) GA
FASHION BUG OF ROYAL OAK, INC. MI
FASHION BUG OF RUMFORD, INC. (2) RI
FASHION BUG OF SAGINAW, INC. MI
FASHION BUG OF SALEM, INC. MA
FASHION BUG OF SALISBURY, INC. (2) MD
FASHION BUG OF SAUGUS,INC. MA
FASHION BUG OF SAUGUS,INC. (2) MA
FASHION BUG OF SAVANNAH, INC. GA
FASHION BUG OF SCOTTSDALE, INC. (2) IL
FASHION BUG OF SCRANTON,INC. PA
FASHION BUG OF SEAFORD,INC. DE
FASHION BUG OF SECURITY, INC. MD
FASHION BUG OF SEVERNA PARK,INC. (2) MD
FASHION BUG OF SHADY BROOK,INC. (2) TN
FASHION BUG OF SHARONVILLE,INC. OH
FASHION BUG OF SHARON,INC. PA
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
FASHION BUG OF SMYRNA, INC. GA
FASHION BUG OF SOLON, INC. OH
FASHION BUG OF SOMERS POINT, INC. NJ
FASHION BUG OF SOMERSET, INC. (2) KY
FASHION BUG OF SOUTH BEND, INC. IN
FASHION BUG OF SOUTH FLINT, INC. MI
FASHION BUG OF SOUTH HILLS VILLAGE,INC. (2) PA
FASHION BUG OF SOUTH PLAINFIELD,INC. NJ
FASHION BUG OF SOUTHFIELD, INC. MI
FASHION BUG OF SOUTHGATE PLAZA,INC. NH
FASHION BUG OF SOUTHGATE, INC. MI
FASHION BUG OF SOUTHLAKE MALL,INC. (2) GA
FASHION BUG OF SOUTHLAND,INC. (2) OH
FASHION BUG OF SPEEDWAY SHOPPING CENTER, INC. IN
FASHION BUG OF SPOTSYLVANIA,INC. VA
FASHION BUG OF SPRINGFIELD PLAZA, INC. MA
FASHION BUG OF SPRINGFIELD, INC. (2) PA
FASHION BUG OF STATE COLLEGE,INC. PA
FASHION BUG OF STATEN ISLAND,INC. NY
FASHION BUG OF STRATFORD,INC. CT
FASHION BUG OF STREAMWOOD, INC. (2) IL
FASHION BUG OF STROUDSBURG,INC. PA
FASHION BUG OF STRUTHERS, INC. OH
FASHION BUG OF STURGIS, INC. MI
FASHION BUG OF ST. ALBANS,INC. WV
FASHION BUG OF ST. CLAIR SHORES, INC. MI
FASHION BUG OF SUN RAY, INC. MN
FASHION BUG OF SUNBURY PLAZA, INC. PA
FASHION BUG OF TALLAHASSEE MALL, INC. FL
FASHION BUG OF TAYLOR, INC. MI
FASHION BUG OF TECH PLAZA, INC. MI
FASHION BUG OF THE CITADEL, INC. (2) CO
FASHION BUG OF THE GALLERY, INC. PA
FASHION BUG OF THE MARKET PLACE,INC. TN
FASHION BUG OF THE PALISADES OF BIRMINGHAM,INC. AL
FASHION BUG OF THORNDALE, INC. PA
FASHION BUG OF TIFFIN, INC. OH
FASHION BUG OF TITUSVILLE,INC. FL
FASHION BUG OF TOLEDO, INC. OH
FASHION BUG OF TOMS RIVER, INC. NJ
FASHION BUG OF TOPSHAM, INC. ME
FASHION BUG OF TOTOWA,INC. NJ
FASHION BUG OF TOWN & COUNTRY, INC. (2) OH
FASHION BUG OF TROY, INC. NY
FASHION BUG OF TRUMBULL PLAZA, INC. OH
FASHION BUG OF TUNKHANNOCK, INC. PA
FASHION BUG OF TURNERSVILLE,INC. NJ
FASHION BUG OF UNIONTOWN, INC. PA
FASHION BUG OF UNION, INC. NJ
FASHION BUG OF UNIVERSITY MALL,INC. OH
FASHION BUG OF UNIVERSITY PLAZA, INC. TN
FASHION BUG OF UPPER ARLINGTON, INC. (2) OH
FASHION BUG OF VALLEY PLAZA, INC. PA
FASHION BUG OF VAN BUREN, INC. OH
FASHION BUG OF VINELAND, INC. NJ
FASHION BUG OF VIRGINIA BEACH, INC. VA
FASHION BUG OF WALNUTPORT,INC. PA
FASHION BUG OF WARREN PLAZA, INC. OH
FASHION BUG OF WARRENTON,INC. VA
FASHION BUG OF WARREN, INC. PA
FASHION BUG OF WARSAW, INC. IN
FASHION BUG OF WATERBURY, INC. CT
FASHION BUG OF WATERWORKS,INC. PA
FASHION BUG OF WAUKEGAN, INC. IL
FASHION BUG OF WAYNESBURG, INC. PA
FASHION BUG OF WEBSTER,INC. MA
FASHION BUG OF WEIRTON,INC. WV
FASHION BUG OF WEST DEVON, INC. (2) IL
FASHION BUG OF WEST FRANKFORT, INC. IL
FASHION BUG OF WEST MANCHESTER, INC. PA
FASHION BUG OF WEST MIFFLIN,INC. PA
FASHION BUG OF WEST SPRINGFIELD, INC. (2) MA
</TABLE>
<PAGE> 8
<TABLE>
<S> <C> <C>
FASHION BUG OF WEST ST. PAUL, INC. MN
FASHION BUG OF WEST TOWN, INC. (2) IL
FASHION BUG OF WESTERNPORT,INC. (2) MD
FASHION BUG OF WESTMINSTER, INC. (2) CO
FASHION BUG OF WESTWOOD, INC. OH
FASHION BUG OF WHARTON SQUARE,INC. PA
FASHION BUG OF WHEATON,INC. (2) MI
FASHION BUG OF WHITMAN PLAZA, INC. PA
FASHION BUG OF WILKES BARRE,INC. PA
FASHION BUG OF WILLIAMSON, INC. KY
FASHION BUG OF WILLIAMSPORT, INC. PA
FASHION BUG OF WILLIAMSTOWN,INC. NJ
FASHION BUG OF WILLINGBORO,INC. NJ
FASHION BUG OF WILMINGTON, INC. MA
FASHION BUG OF WINSTON-SALEM, INC. NC
FASHION BUG OF WISCONSIN RAPIDS, INC. WI
FASHION BUG OF WOODBRIDGE,INC. NJ
FASHION BUG OF WOODHAVEN,INC. (2) PA
FASHION BUG OF WOODLYN, INC. PA
FASHION BUG OF WYNCOTE, INC. (2) PA
FASHION BUG OF XENIA, INC. (2) OH
FASHION BUG OF YORKSHIRE PLAZA, INC. (2) IL
FASHION BUG OF YORK,INC. (2) PA
FASHION BUG OF YOUNGSTOWN,INC. OH
FASHION BUG OF ZANESVILLE, INC. OH
FASHION BUG PLUS OF ADRIAN, INC. (2) MI
FASHION BUG PLUS OF AMERICAN MALL, INC. OH
FASHION BUG PLUS OF ANN ARBOR, INC. (2) MI
FASHION BUG PLUS OF APPLETON, INC. WI
FASHION BUG PLUS OF ASHTABULA PLAZA,INC. (2) OH
FASHION BUG PLUS OF AURORA, INC. (2) IL
FASHION BUG PLUS OF BALTIMORE, INC. MD
FASHION BUG PLUS OF BARTOW, INC. (2) FL
FASHION BUG PLUS OF BEAVER VALLEY, INC. (2) PA
FASHION BUG PLUS OF BECKLEY, INC. (2) WV
FASHION BUG PLUS OF BELOIT,INC. WI
FASHION BUG PLUS OF BLOOMINGTON,INC. MN
FASHION BUG PLUS OF BRADFORD, INC. (2) PA
FASHION BUG PLUS OF BRICKTOWN, INC. (2) NJ
FASHION BUG PLUS OF BRIDGEVILLE,INC. (2) PA
FASHION BUG PLUS OF BUCKINGHAM SQUARE, INC. (2) CO
FASHION BUG PLUS OF CAPITAL HEIGHTS,INC. (2) MD
FASHION BUG PLUS OF CAPITAL PLAZA,INC. (2) MD
FASHION BUG PLUS OF CARROLLTON, INC. (2) MD
FASHION BUG PLUS OF CENTERVILLE,INC. (2) OH
FASHION BUG PLUS OF CHAMPAIGN,INC. (2) IL
FASHION BUG PLUS OF CHARLESTON, INC. WV
FASHION BUG PLUS OF CINDERELLA CITY, INC. (2) CO
FASHION BUG PLUS OF CLARION, INC. (2) PA
FASHION BUG PLUS OF CLEVELAND HEIGHTS, INC. (2) OH
FASHION BUG PLUS OF CLEVELAND, INC. (2) OH
FASHION BUG PLUS OF COCOA,INC. (2) FL
FASHION BUG PLUS OF COLLEGE PLAZA, INC. (2) OH
FASHION BUG PLUS OF DEFIANCE,INC. (2) OH
FASHION BUG PLUS OF DERBY,INC. (2) CT
FASHION BUG PLUS OF DETROIT,INC. (2) MI
FASHION BUG PLUS OF DUBOIS, INC. PA
FASHION BUG PLUS OF DUNBAR, INC. (2) WV
FASHION BUG PLUS OF EAU CLAIRE,INC. (2) WI
FASHION BUG PLUS OF EDGEWOOD, INC. (2) MD
FASHION BUG PLUS OF ELKTON, INC. (2) MD
FASHION BUG PLUS OF ELLWOOD CITY,INC. (2) PA
FASHION BUG PLUS OF ERIE, INC. PA
FASHION BUG PLUS OF ESSEXVILLE, INC. MI
FASHION BUG PLUS OF FAIRMONT,INC. (2) WV
FASHION BUG PLUS OF FLINT,INC. MI
FASHION BUG PLUS OF FOND DU LAC, INC. (2) WI
FASHION BUG PLUS OF FORESTVILLE, INC. (2) MD
FASHION BUG PLUS OF FORT LAUDERDALE,INC. (2) FL
FASHION BUG PLUS OF FORT WAYNE, INC. (2) IN
FASHION BUG PLUS OF FREDERICK, INC. MD
FASHION BUG PLUS OF GALESBURG, INC. (2) IL
</TABLE>
<PAGE> 9
<TABLE>
<S> <C> <C>
FASHION BUG PLUS OF GRAFTON, INC. (2) WI
FASHION BUG PLUS OF GREENFIELD, INC. (2) WI
FASHION BUG PLUS OF HACKETTSTOWN, INC. (2) NJ
FASHION BUG PLUS OF HADLEY, INC. MA
FASHION BUG PLUS OF HAGERSTOWN, INC. MD
FASHION BUG PLUS OF HARRISBURG, INC. PA
FASHION BUG PLUS OF HARVARD SQUARE, INC. (2) MI
FASHION BUG PLUS OF HAZLET,INC. (2) NJ
FASHION BUG PLUS OF HICKORY POINT, INC. (2) IL
FASHION BUG PLUS OF HIGHLAND RIDGE,INC. (2) OH
FASHION BUG PLUS OF HOMEWOOD, INC. (2) IL
FASHION BUG PLUS OF HUNT VALLEY, INC. MD
FASHION BUG PLUS OF HUNTINGTON,INC. (2) NY
FASHION BUG PLUS OF HUTCHINSON,INC. (2) MN
FASHION BUG PLUS OF HYATTSVILLE, INC. MD
FASHION BUG PLUS OF JANESVILLE, INC. (2) WI
FASHION BUG PLUS OF LAKESIDE MALL, INC. (2) CO
FASHION BUG PLUS OF LANCASTER PLAZA, INC. PA
FASHION BUG PLUS OF LANCASTER, INC. (2) OH
FASHION BUG PLUS OF LAWNSIDE, INC. NJ
FASHION BUG PLUS OF LEO MALL, INC. (2) PA
FASHION BUG PLUS OF LINCOLN MALL, INC. (2) RI
FASHION BUG PLUS OF LIVONIA MALL, INC. MI
FASHION BUG PLUS OF LIVONIA,INC. (2) MI
FASHION BUG PLUS OF MANASSAS, INC. VA
FASHION BUG PLUS OF MANCHESTER, INC. NH
FASHION BUG PLUS OF MANITOWOC, INC. (2) WI
FASHION BUG PLUS OF MARION,INC. OH
FASHION BUG PLUS OF MARION,IND.,INC. (2) IN
FASHION BUG PLUS OF MARTIN PLAZA, INC. MD
FASHION BUG PLUS OF MEADVILLE, INC. (2) PA
FASHION BUG PLUS OF MELBOURNE, INC. (2) FL
FASHION BUG PLUS OF MELROSE PARK,INC. IL
FASHION BUG PLUS OF MEMPHIS,INC. (2) TN
FASHION BUG PLUS OF MICHIGAN CITY, INC. IN
FASHION BUG PLUS OF MONROEVILLE, INC. PA
FASHION BUG PLUS OF MT PLEASANT, INC. MI
FASHION BUG PLUS OF MT. GREENWOOD,INC. IL
FASHION BUG PLUS OF MUNCIE, INC. (2) IN
FASHION BUG PLUS OF NATRONA HEIGHTS, INC. (2) PA
FASHION BUG PLUS OF NEW BEDFORD,INC. (2) MA
FASHION BUG PLUS OF NEW HAVEN,INC. (2) CT
FASHION BUG PLUS OF NEW PHILADELPHIA,INC. (2) OH
FASHION BUG PLUS OF NORTH CICERO,INC. (2) IL
FASHION BUG PLUS OF NORTH FT MYERS, INC. FL
FASHION BUG PLUS OF NORTH VERSAILLES, INC. (2) PA
FASHION BUG PLUS OF NORTHWEST PLAZA, INC. OH
FASHION BUG PLUS OF ORLANDO, INC. FL
FASHION BUG PLUS OF OWENSBORO,INC. (2) KY
FASHION BUG PLUS OF PEKIN, INC, IL
FASHION BUG PLUS OF PERU, INC. (2) IL
FASHION BUG PLUS OF PHILLIPSBURG, INC. (2) NJ
FASHION BUG PLUS OF PITTSFIELD,INC. MA
FASHION BUG PLUS OF PITTSTON,INC. (2) PA
FASHION BUG PLUS OF PONTIAC,INC. MI
FASHION BUG PLUS OF PORTSMOUTH, INC. (2) OH
FASHION BUG PLUS OF RADCLIFF, INC. (2) KY
FASHION BUG PLUS OF RAINBOW CENTRE,INC. (2) NY
FASHION BUG PLUS OF RANDOLPH, INC. (2) MA
FASHION BUG PLUS OF ROCKLAND, INC. MA
FASHION BUG PLUS OF ROSEVILLE, INC. (2) MI
FASHION BUG PLUS OF SANDUSKY, INC. (2) OH
FASHION BUG PLUS OF SCRANTON, INC. (2) PA
FASHION BUG PLUS OF SHARON HILL, INC. PA
FASHION BUG PLUS OF SHARON, INC. (2) PA
FASHION BUG PLUS OF SHEBOYGAN,INC. WI
FASHION BUG PLUS OF SKOKIE,INC. (2) IL
FASHION BUG PLUS OF SOUTH ATTLEBORO, INC. MA
FASHION BUG PLUS OF SOUTH MALL,INC. (2) PA
FASHION BUG PLUS OF SOUTH STREET, INC. (2) PA
FASHION BUG PLUS OF SOUTHINGTON, INC. (2) CT
FASHION BUG PLUS OF SPRINGFIELD,INC. (2) MA
</TABLE>
<PAGE> 10
<TABLE>
<S> <C> <C> <C>
FASHION BUG PLUS OF ST AUGUSTINE, INC. (2) FL
FASHION BUG PLUS OF ST CLAIRSVILLE, INC. (2) OH
FASHION BUG PLUS OF ST. ALBANS,INC. (2) WV
FASHION BUG PLUS OF TECH PLAZA,INC. (2) MI
FASHION BUG PLUS OF THORNTON, INC. (2) CO
FASHION BUG PLUS OF TUNKHANNOCK,INC. (2) PA
FASHION BUG PLUS OF TURFLAND MALL, INC. KY
FASHION BUG PLUS OF VILLAGE MALL, INC. MA
FASHION BUG PLUS OF WALLKILL,INC. NY
FASHION BUG PLUS OF WASHINGTON,INC. (2) PA
FASHION BUG PLUS OF WEST END MALL,INC. (2) GA
FASHION BUG PLUS OF WESTWOOD PLAZA,INC. PA
FASHION BUG PLUS OF WHITEHAVEN,INC. TN
FASHION BUG PLUS OF WILKES BARRE, INC. (2) PA
FASHION BUG PLUS OF WORCESTER,INC. MA
FASHION BUG PLUS OF YOUNGSTOWN,INC. (2) OH
FASHION BUG PLUS #8001,INC. (1) (2) ND
FASHION BUG PLUS #8002,INC. (1) (2) SD
FASHION BUG PLUS #8003,INC. (1) (2) NE
FASHION BUG PLUS #8004,INC. (1) (2) NC
FASHION BUG PLUS #8005,INC. NJ
FASHION BUG PLUS #8006,INC. (2) NJ
FASHION BUG PLUS #8007,INC. (2) PA
FASHION BUG PLUS #8008,INC. (2) PA
FASHION BUG PLUS #8009,INC. (2) ME
FASHION BUG PLUS #8010 OF ROCKY POINT,INC. NY
FASHION BUG PLUS #8011,INC. (2) NJ
FASHION BUG PLUS #8012,INC. (2) IL
FASHION BUG PLUS #8013,INC. (2) IN
FASHION BUG PLUS #8014,INC. PA
FASHION BUG PLUS #8015 OF MEDFORD,INC. (1) (2) NY
FASHION BUG PLUS #8016,INC. (2) MN
FASHION BUG PLUS #8017 OF RIVERHEAD,INC. NY
FASHION BUG PLUS #8018 OF NORTH BABYLON,INC. (2) NY
FASHION BUG PLUS #8019,INC. PA
FASHION BUG PLUS #8020,INC. (1) (2) IN
FASHION BUG PLUS #8021,INC. (2) FL
FASHION BUG PLUS #8023,INC. VA
FASHION BUG PLUS #8024,INC. NJ
FASHION BUG PLUS #8025,INC. (2) IA
FASHION BUG PLUS #8026,INC. MD
FASHION BUG PLUS #8027,INC. (1) (2) OH
FASHION BUG PLUS #8028,INC. CT
FASHION BUG PLUS #8029,INC. (2) MI
FASHION BUG PLUS #8030,INC. (2) MD
FASHION BUG PLUS #8031,INC. (2) MI
FASHION BUG PLUS #8032,INC. (2) PA
FASHION BUG PLUS #8033,INC. (1) (2) IL
FASHION BUG PLUS #8034,INC. PA
FASHION BUG PLUS #8036,INC. (1) (2) NJ
FASHION BUG PLUS #8037,INC. (1) (2) NJ
FASHION BUG PLUS #8038,INC. MD
FASHION BUG PLUS #8039,INC. (1) (2) OH
FASHION BUG PLUS #8040,INC. PA
FASHION BUG PLUS #811,INC. MI
FASHION BUG PLUS #818 OF AUBURN,INC. NY
FASHION BUG PLUS #819,INC. (2) IN
FASHION BUG PLUS #824,INC. (1) (2) NJ
FASHION BUG PLUS #881,INC. MI
FASHION BUG PLUS #904, INC. FL
FASHION BUG PLUS #932,INC. KY
FASHION BUG PLUS #941,INC. (2) NJ
FASHION BUG PLUS #942,INC. (2) OH
FASHION BUG PLUS #950,INC. (2) MN
FASHION BUG PLUS #952,INC. (1) (2) WI
FASHION BUG PLUS #954,INC. (2) KY
FASHION BUG PLUS #955 OF FLUSHING,INC. (1) (2) NY
FASHION BUG PLUS #956,INC. (2) OH
FASHION BUG PLUS #957,INC. PA
FASHION BUG PLUS #958,INC. (2) SD
FASHION BUG PLUS #960,INC. (2) IA
FASHION BUG PLUS #961,INC. (1) (2) IN
</TABLE>
<PAGE> 11
<TABLE>
<S> <C> <C> <C>
FASHION BUG PLUS #962,INC. (2) WV
FASHION BUG PLUS #963,INC. MI
FASHION BUG PLUS #964,INC. OH
FASHION BUG PLUS #966,INC. WV
FASHION BUG PLUS #968,INC. (2) MI
FASHION BUG PLUS #969,INC. (2) MN
FASHION BUG PLUS #970,INC. GA
FASHION BUG PLUS #971,INC. NJ
FASHION BUG PLUS #972,INC. (2) IL
FASHION BUG PLUS #973,INC. (2) WI
FASHION BUG PLUS #974 OF E. ROCHESTER,INC. (2) NY
FASHION BUG PLUS #975 OF HORSEHEADS,INC. NY
FASHION BUG PLUS #976,INC. WI
FASHION BUG PLUS #977,INC. (2) CT
FASHION BUG PLUS #978,INC. (2) MN
FASHION BUG PLUS #979,INC. MO
FASHION BUG PLUS #980,INC. ME
FASHION BUG PLUS #981,INC. PA
FASHION BUG PLUS #982,INC. (2) KY
FASHION BUG PLUS #983,INC. (2) NJ
FASHION BUG PLUS #984,INC. (2) IA
FASHION BUG PLUS #985,INC. MN
FASHION BUG PLUS #986,INC. (2) SD
FASHION BUG PLUS #987,INC. PA
FASHION BUG PLUS #990,INC. (2) MD
FASHION BUG PLUS #991,INC. IA
FASHION BUG PLUS #992,INC. (2) IN
FASHION BUG PLUS #993,INC. (1) (2) NJ
FASHION BUG #108,INC. MI
FASHION BUG #123,INC. (2) NJ
FASHION BUG #131,INC. (2) OH
FASHION BUG #138,INC. (1) (2) IN
FASHION BUG #139,INC. (1) (2) IN
FASHION BUG #141,INC. NJ
FASHION BUG #142,INC. (2) VA
FASHION BUG #142,INC.(RE-OPENED DUE TO TORNATO) (2) VA
FASHION BUG #144,INC. (1) (2) IN
FASHION BUG #149,INC. (2) OH
FASHION BUG #157,INC. OH
FASHION BUG #168,INC. (1) (2) IN
FASHION BUG #2002 OF FISHKILL,INC. (2) NY
FASHION BUG #2003,INC. OH
FASHION BUG #2004,INC. MI
FASHION BUG #2005,INC. (2) MI
FASHION BUG #2006,INC. KY
FASHION BUG #2007,INC. (1) (2) LA
FASHION BUG #2008,INC. PA
FASHION BUG #2009,INC. PA
FASHION BUG #2010,INC. MI
FASHION BUG #2011,INC. MD
FASHION BUG #2012,INC. (1) (2) DE
FASHION BUG #2014,INC. MI
FASHION BUG #2015,INC. IN
FASHION BUG #2017,INC. (1) (2) OK
FASHION BUG #2018,INC. MI
FASHION BUG #2019,INC. ND
FASHION BUG #2020,INC. VA
FASHION BUG #2021,INC. OH
FASHION BUG #2022,INC. IN
FASHION BUG #2023,INC. PA
FASHION BUG #2024,INC. MA
FASHION BUG #2026,INC. PA
FASHION BUG #2027,INC. NE
FASHION BUG #2028,INC. GA
FASHION BUG #2029,INC. NH
FASHION BUG #2030,INC. PA
FASHION BUG #2031,INC. KS
FASHION BUG #2032,INC. MI
FASHION BUG #2033,INC. (1) (2) DE
FASHION BUG #2034,INC. MO
FASHION BUG #2035,INC. MA
FASHION BUG #2036,INC. OH
</TABLE>
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2037,INC. MI
FASHION BUG #2038,INC. (1) (2) KY
FASHION BUG #2038,INC. AL
FASHION BUG #2039,INC. OH
FASHION BUG #2040,INC. (1) (2) OH
FASHION BUG #2040,INC. KY
FASHION BUG #2042,INC. (1) (2) ND
FASHION BUG #2043,INC. IN
FASHION BUG #2044,INC. NC
FASHION BUG #2045 OF EAST GREENBUSH,INC. NY
FASHION BUG #2046 OF ONONDAGA PLAZA,INC. (2) NY
FASHION BUG #2047,INC. MA
FASHION BUG #2048,INC. KY
FASHION BUG #2049,INC. MD
FASHION BUG #204,INC. (2) MI
FASHION BUG #2050 OF MASSENA,INC. NY
FASHION BUG #2051,INC. IL
FASHION BUG #2052,INC. MN
FASHION BUG #2053,INC. MO
FASHION BUG #2054,INC. OH
FASHION BUG #2055,INC. NC
FASHION BUG #2055,INC. (1) (2) MA
FASHION BUG #2056,INC. (1) (2) OH
FASHION BUG #2056,INC. (1) (2) AL
FASHION BUG #2057,INC. CT
FASHION BUG #2058,INC. MA
FASHION BUG #2059,INC. (1) (2) NJ
FASHION BUG #2060,INC. (2) MN
FASHION BUG #2061,INC. (1) (2) DE
FASHION BUG #2062 OF RONKONKOMA,INC. (1) (2) NY
FASHION BUG #2063,INC. KS
FASHION BUG #2064,INC. (1) (2) KY
FASHION BUG #2064,INC. OH
FASHION BUG #2065,INC. GA
FASHION BUG #2066,INC. (2) GA
FASHION BUG #2067,INC. TN
FASHION BUG #2068,INC. ME
FASHION BUG #2069,INC. AR
FASHION BUG #2070 OF BROOKLYN,INC. NY
FASHION BUG #2071 OF FREEPORT,INC. NY
FASHION BUG #2072 OF ISLANDIA,INC. NY
FASHION BUG #2073,INC. MD
FASHION BUG #2074,INC. KY
FASHION BUG #2075,INC. IL
FASHION BUG #2076,INC. IL
FASHION BUG #2077,INC. MI
FASHION BUG #2078,INC. MI
FASHION BUG #2079,INC, OH
FASHION BUG #2080,INC. OH
FASHION BUG #2081 OF OGDENSBURG,INC. NY
FASHION BUG #2082,INC. NJ
FASHION BUG #2083,INC. GA
FASHION BUG #2084,INC. OH
FASHION BUG #2085,INC. KS
FASHION BUG #2086,INC. IL
FASHION BUG #2087,INC. (2) MI
FASHION BUG #2088,INC. CT
FASHION BUG #2089,INC. TN
FASHION BUG #2090,INC. FL
FASHION BUG #2091,INC. FL
FASHION BUG #2092,INC. WI
FASHION BUG #2093,INC. IL
FASHION BUG #2094,INC. (2) IL
FASHION BUG #2095,INC. OH
FASHION BUG #2096,INC. MI
FASHION BUG #2097,INC. NJ
FASHION BUG #2099,INC. FL
FASHION BUG #2100 OF BATAVIA,INC. NY
FASHION BUG #2101,INC. PA
FASHION BUG #2102,INC. WA
FASHION BUG #2103,INC. WA
FASHION BUG #2104,INC. (1) (2) MI
</TABLE>
<PAGE> 13
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2105,INC. NH
FASHION BUG #2106 OF DEPEW,INC. NY
FASHION BUG #2107,INC. (2) OH
FASHION BUG #2108,INC. (2) MI
FASHION BUG #2109,INC. GA
FASHION BUG #210,INC. (1) (2) KY
FASHION BUG #2110,INC. (1) (2) NJ
FASHION BUG #2111,INC. NJ
FASHION BUG #2112,INC. FL
FASHION BUG #2113,INC. GA
FASHION BUG #2114,INC. MO
FASHION BUG #2115,INC. WI
FASHION BUG #2116,INC. FL
FASHION BUG #2117,INC. (1) (2) OH
FASHION BUG #2117,INC. NJ
FASHION BUG #2118 OF NEWBURGH,INC. NY
FASHION BUG #2119,INC. OH
FASHION BUG #211,INC. (1) (2) MN
FASHION BUG #2120,INC. OH
FASHION BUG #2121,INC. IN
FASHION BUG #2122,INC. WA
FASHION BUG #2123,INC. VA
FASHION BUG #2124,INC. PA
FASHION BUG #2125,INC. WA
FASHION BUG #2126,INC. MI
FASHION BUG #2127,INC. MI
FASHION BUG #2128,INC. CT
FASHION BUG #2129,INC. OH
FASHION BUG #2130,INC. IL
FASHION BUG #2131,INC. WI
FASHION BUG #2132,INC. MO
FASHION BUG #2133,INC. WI
FASHION BUG #2134,INC. IL
FASHION BUG #2135,INC. VT
FASHION BUG #2136,INC. (1) (2) FL
FASHION BUG #2137,INC. IN
FASHION BUG #2138,INC. OH
FASHION BUG #2139,INC. OR
FASHION BUG #2140,INC. VA
FASHION BUG #2141,INC. MI
FASHION BUG #2142,INC. (2) CT
FASHION BUG #2143,INC. NE
FASHION BUG #2144,INC. VA
FASHION BUG #2145,INC. MI
FASHION BUG #2146,INC. (2) WI
FASHION BUG #2147,INC. WI
FASHION BUG #2148,INC. WI
FASHION BUG #2149,INC. MA
FASHION BUG #2150,INC. NH
FASHION BUG #2151,INC. NH
FASHION BUG #2152,INC. VA
FASHION BUG #2153,INC. TN
FASHION BUG #2154,INC. WI
FASHION BUG #2155,INC. OH
FASHION BUG #2156,INC. RI
FASHION BUG #2157 OF ONEIDA,INC. NY
FASHION BUG #2158,INC. MO
FASHION BUG #2159,INC. FL
FASHION BUG #2160,INC. WI
FASHION BUG #2161,INC. (1) (2) NE
FASHION BUG #2162,INC. NC
FASHION BUG #2163,INC. NC
FASHION BUG #2164,INC. FL
FASHION BUG #2165,INC. FL
FASHION BUG #2166,INC. IA
FASHION BUG #2167,INC. (1) (2) WA
FASHION BUG #2168,INC. (2) WA
FASHION BUG #2169,INC. WA
FASHION BUG #2170,INC. WA
FASHION BUG #2171,INC. PA
FASHION BUG #2172,INC. KY
FASHION BUG #2173,INC. IN
</TABLE>
<PAGE> 14
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2174,INC. MI
FASHION BUG #2175,INC. CA
FASHION BUG #2176,INC. PA
FASHION BUG #2177,INC. PA
FASHION BUG #2180,INC. FL
FASHION BUG #2181,INC. CA
FASHION BUG #2182,INC. CA
FASHION BUG #2183,INC. OH
FASHION BUG #2184 of WEBSTER,INC. NY
FASHION BUG #2185,INC. OH
FASHION BUG #2186,INC. OR
FASHION BUG #2187,INC. MN
FASHION BUG #2188,INC. MN
FASHION BUG #2189,INC. IN
FASHION BUG #2190,INC. WI
FASHION BUG #2191,INC. PA
FASHION BUG #2192,INC. OH
FASHION BUG #2193,INC. MA
FASHION BUG #2194,INC. WI
FASHION BUG #2195,INC. WV
FASHION BUG #2196 OF NEWARK,INC. NY
FASHION BUG #2197,INC. OH
FASHION BUG #2198,INC. IN
FASHION BUG #2199,INC. MD
FASHION BUG #2200,INC. OR
FASHION BUG #2201,INC. WA
FASHION BUG #2202,INC. CA
FASHION BUG #2203,INC. ME
FASHION BUG #2204 OF HORNELL, INC. (1) (2) NY
FASHION BUG #2204,INC. (1) (2) WI
FASHION BUG #2205,INC. MN
FASHION BUG #2206,INC. NH
FASHION BUG #2207,INC. VA
FASHION BUG #2208,INC. VA
FASHION BUG #2209,INC. IL
FASHION BUG #2210 OF KINGSTON,INC. NY
FASHION BUG #2211,INC. MD
FASHION BUG #2212,INC. WI
FASHION BUG #2213,INC. FL
FASHION BUG #2214,INC. MN
FASHION BUG #2215,INC. (1) (2) MA
FASHION BUG #2215,INC. FL
FASHION BUG #2216,INC. CA
FASHION BUG #2217,INC. ID
FASHION BUG #2218,INC. MN
FASHION BUG #2219,INC. WA
FASHION BUG #2220,INC. OH
FASHION BUG #2221,INC. OH
FASHION BUG #2222,INC. KY
FASHION BUG #2223,INC. ID
FASHION BUG #2224,INC. WA
FASHION BUG #2225,INC. (2) VT
FASHION BUG #2226,INC. MI
FASHION BUG #2227,INC. MI
FASHION BUG #2228,INC. WI
FASHION BUG #2229,INC. MI
FASHION BUG #2230,INC. MI
FASHION BUG #2231,INC. MI
FASHION BUG #2232,INC. MI
FASHION BUG #2233,INC. ME
FASHION BUG #2234,INC. MA
FASHION BUG #2235,INC. IN
FASHION BUG #2236,INC. MN
FASHION BUG #2237,INC. PA
FASHION BUG #2238,INC. MA
FASHION BUG #2239,INC. OR
FASHION BUG #2240,INC. ID
FASHION BUG #2241,INC. (2) ID
FASHION BUG #2242,INC. PA
FASHION BUG #2243,INC. WA
FASHION BUG #2244 OF CANANDAIGUA,INC. NY
FASHION BUG #2245,INC. MD
</TABLE>
<PAGE> 15
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2246,INC. MD
FASHION BUG #2247,INC. OH
FASHION BUG #2248,INC. MN
FASHION BUG #2249,INC. OH
FASHION BUG #2250,INC. OH
FASHION BUG #2251,INC. CA
FASHION BUG #2252 OF BAYSHORE,INC. NY
FASHION BUG #2253,INC. CA
FASHION BUG #2254,INC. WI
FASHION BUG #2255,INC. MD
FASHION BUG #2256,INC. CA
FASHION BUG #2257,INC. IL
FASHION BUG #2258,INC. IL
FASHION BUG #2259,INC. IL
FASHION BUG #2260,INC. IL
FASHION BUG #2261,INC. (1) (2) MD
FASHION BUG #2262,INC. WV
FASHION BUG #2263,INC. IN
FASHION BUG #2264,INC. OH
FASHION BUG #2265 OF STATEN ISLAND,INC. NY
FASHION BUG #2266,INC. IL
FASHION BUG #2268,INC. (1) (2) CA
FASHION BUG #2269 OF PLATTSBURGH,INC. (2) NY
FASHION BUG #2270,INC. OR
FASHION BUG #2271,INC. (1) (2) TX
FASHION BUG #2272,INC. (1) (2) TX
FASHION BUG #2273,INC. (1) (2) TX
FASHION BUG #2274,INC. CA
FASHION BUG #2275,INC. MI
FASHION BUG #2276,INC. MI
FASHION BUG #2277,INC. (1) (2) VA
FASHION BUG #2278,INC. NC
FASHION BUG #2279,INC. WI
FASHION BUG #2280,INC. WI
FASHION BUG #2281,INC. OH
FASHION BUG #2282,INC. IL
FASHION BUG #2283,INC. OH
FASHION BUG #2284,INC. OH
FASHION BUG #2285,INC. CA
FASHION BUG #2286,INC. WI
FASHION BUG #2287,INC. (1) (2) WI
FASHION BUG #2288,INC. WA
FASHION BUG #2289 OF GARDEN CITY,INC. NY
FASHION BUG #2290,INC. RI
FASHION BUG #2291,INC. IN
FASHION BUG #2292,INC. MI
FASHION BUG #2293,INC. OH
FASHION BUG #2295,INC. WI
FASHION BUG #2296,INC. MA
FASHION BUG #2297,INC. MI
FASHION BUG #2298,INC. (1) (2) WV
FASHION BUG #2299,INC. (1) (2) WV
FASHION BUG #229,INC. (2) MD
FASHION BUG #2300,INC. FL
FASHION BUG #2301,INC. FL
FASHION BUG #2302,INC. NC
FASHION BUG #2303,INC. (1) (2) NJ
FASHION BUG #2304,INC. VA
FASHION BUG #2305,INC. PA
FASHION BUG #2306,INC. CA
FASHION BUG #2308,INC. MI
FASHION BUG #2309,INC. IN
FASHION BUG #2310,INC. (1) (2) CA
FASHION BUG #2311,INC. GA
FASHION BUG #2313,INC. WA
FASHION BUG #2314,INC. IN
FASHION BUG #2315,INC. WI
FASHION BUG #2316,INC. VA
FASHION BUG #2317,INC. (2) PA
FASHION BUG #2318,INC. DE
FASHION BUG #2320,INC. TN
FASHION BUG #2321,INC. CA
</TABLE>
<PAGE> 16
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2322,INC. ME
FASHION BUG #2323,INC. CA
FASHION BUG #2324,INC. CA
FASHION BUG #2325,INC. MI
FASHION BUG #2326,INC. PA
FASHION BUG #2327,INC. (1) (2) KY
FASHION BUG #2328,INC. MN
FASHION BUG #2329,INC. CA
FASHION BUG #2330,INC. PA
FASHION BUG #2331,INC. VT
FASHION BUG #2332,INC. VA
FASHION BUG #2333,INC. FL
FASHION BUG #2334,INC. CA
FASHION BUG #2335,INC. CA
FASHION BUG #2336,INC. CA
FASHION BUG #2337,INC. OH
FASHION BUG #2338,INC. WI
FASHION BUG #2339,INC. RI
FASHION BUG #2340,INC. MI
FASHION BUG #2341,INC. (2) MI
FASHION BUG #2342 OF LONG ISLAND CITY,INC. NY
FASHION BUG #2343,INC. WI
FASHION BUG #2344,INC. FL
FASHION BUG #2345,INC. PA
FASHION BUG #2346,INC. CT
FASHION BUG #2347,INC. NH
FASHION BUG #2348,INC. WA
FASHION BUG #2349,INC. IN
FASHION BUG #2350,INC. NH
FASHION BUG #2351,INC. MN
FASHION BUG #2352,INC. WV
FASHION BUG #2353,INC. MI
FASHION BUG #2354,INC. CA
FASHION BUG #2355,INC. PA
FASHION BUG #2356,INC. GA
FASHION BUG #2357,INC. MI
FASHION BUG #2358,INC. ME
FASHION BUG #2359,INC. PA
FASHION BUG #2360,INC. PA
FASHION BUG #2361,INC. (1) (2) NJ
FASHION BUG #2362,INC. PA
FASHION BUG #2363,INC. FL
FASHION BUG #2364, OF NORTH TONAWANDA,INC. NY
FASHION BUG #2365,INC. (2) CA
FASHION BUG #2366,INC. NV
FASHION BUG #2367,INC. (1) (2) NJ
FASHION BUG #2368,INC. OH
FASHION BUG #2369,INC. SC
FASHION BUG #2370 OF MALONE,INC. NY
FASHION BUG #2371 OF POUGHKEEPSIE,INC. NY
FASHION BUG #2372,INC. (1) (2) CA
FASHION BUG #2373,INC. ME
FASHION BUG #2374,INC. WI
FASHION BUG #2375,INC. (1) (2) IL
FASHION BUG #2376,INC. IL
FASHION BUG #2377,INC. NH
FASHION BUG #2378,INC. NV
FASHION BUG #2379,INC. MA
FASHION BUG #2380,INC. NC
FASHION BUG #2381,INC. (1) (2) CA
FASHION BUG #2382,INC. TN
FASHION BUG #2383,INC. WI
FASHION BUG #2384 OF ROCHESTER,INC. NY
FASHION BUG #2385,INC. ME
FASHION BUG #2386 OF BROOKLYN,INC. NY
FASHION BUG #2387,INC. PA
FASHION BUG #2388,INC. OR
FASHION BUG #2389,INC. PA
FASHION BUG #2390,INC. ND
FASHION BUG #2391,INC. VA
FASHION BUG #2392,INC. NJ
FASHION BUG #2393,INC. VT
</TABLE>
<PAGE> 17
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2394,INC. IN
FASHION BUG #2395,INC. MD
FASHION BUG #2396 OF BIG FLATS,INC. NY
FASHION BUG #2397,INC. CT
FASHION BUG #2398,INC. NH
FASHION BUG #2399,INC. MI
FASHION BUG #2400,INC. (1) (2) CA
FASHION BUG #2401,INC. (1) (2) CA
FASHION BUG #2402,INC. CA
FASHION BUG #2403,INC. CT
FASHION BUG #2404,INC. MD
FASHION BUG #2405,INC. NC
FASHION BUG #2406,INC. MO
FASHION BUG #2407,INC. NH
FASHION BUG #2409,INC. PA
FASHION BUG #2410,INC. (1) (2) VA
FASHION BUG #2411,INC. MA
FASHION BUG #2412,INC. MA
FASHION BUG #2413,INC. CT
FASHION BUG #2414,INC. GA
FASHION BUG #2415,INC. PA
FASHION BUG #2416,INC. MA
FASHION BUG #2417,INC. (1) (2) MD
FASHION BUG #2418,INC. SC
FASHION BUG #2419,INC. NJ
FASHION BUG #2420,INC. MO
FASHION BUG #2421,INC. NV
FASHION BUG #2422,INC. WA
FASHION BUG #2423,INC. MA
FASHION BUG #2424,INC. MN
FASHION BUG #2425,INC. CT
FASHION BUG #2426 OF EAST AURORA,INC. NY
FASHION BUG #2427 OF GLENS FALLS,INC. (1) (2) NY
FASHION BUG #2428,INC. (1) (2) KY
FASHION BUG #2429,INC. IN
FASHION BUG #2430,INC. MN
FASHION BUG #2431,INC. SD
FASHION BUG #2432,INC. PA
FASHION BUG #2433,INC. FL
FASHION BUG #2434,INC. NC
FASHION BUG #2435,INC. OH
FASHION BUG #2436,INC. ME
FASHION BUG #2437,INC. PA
FASHION BUG #2438,INC. MA
FASHION BUG #2439,INC. MA
FASHION BUG #2440,INC. PA
FASHION BUG #2441,INC. CA
FASHION BUG #2442,INC. CA
FASHION BUG #2443,INC. MN
FASHION BUG #2444,INC. MN
FASHION BUG #2445,INC. SD
FASHION BUG #2446,INC. PA
FASHION BUG #2447,INC. (1) (2) ME
FASHION BUG #2448,INC. OH
FASHION BUG #2449,INC. NV
FASHION BUG #2450,INC. AL
FASHION BUG #2451,INC. (1) (2) AL
FASHION BUG #2452,INC. CT
FASHION BUG #2453,INC. MA
FASHION BUG #2454 OF SCHENECTADY,INC. NY
FASHION BUG #2455 OF WILTON,INC. NY
FASHION BUG #2456,INC. WA
FASHION BUG #2457,INC. VA
FASHION BUG #2458,INC. NH
FASHION BUG #2459,INC. MI
FASHION BUG #2460,INC. MA
FASHION BUG #2461,INC. SC
FASHION BUG #2461,INC. (1) (2) GA
FASHION BUG #2462,INC. OR
FASHION BUG #2463,INC. (1) (2) VA
FASHION BUG #2464,INC. WI
FASHION BUG #2466,INC. PA
</TABLE>
<PAGE> 18
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2467,INC. KY
FASHION BUG #2468 OF BATH,INC. NY
FASHION BUG #2469,INC. (1) (2) IN
FASHION BUG #2470 OF BINGHAMPTON,INC. NY
FASHION BUG #2471,INC. (2) MA
FASHION BUG #2472,INC. CT
FASHION BUG #2473,INC. MI
FASHION BUG #2474,INC. OH
FASHION BUG #2475,INC. MN
FASHION BUG #2476 OF MIDDLE ISLAND,INC. NY
FASHION BUG #2477,INC. MI
FASHION BUG #2478,INC. GA
FASHION BUG #2479,INC. IA
FASHION BUG #2480,INC. MN
FASHION BUG #2482,INC. IA
FASHION BUG #2483,INC. PA
FASHION BUG #2484,INC. WA
FASHION BUG #2485,INC. MD
FASHION BUG #2486,INC. IA
FASHION BUG #2487,INC. IN
FASHION BUG #2488,INC. MN
FASHION BUG #2489,INC. MN
FASHION BUG #2490 OF NEW HARTFORD,INC. (1) (2) NY
FASHION BUG #2491,INC. (2) MI
FASHION BUG #2492,INC. PA
FASHION BUG #2493,INC. WI
FASHION BUG #2494,INC. MN
FASHION BUG #2495 OF IRONDEQUIOT,INC. NY
FASHION BUG #2496,INC. MA
FASHION BUG #2497,INC. MA
FASHION BUG #2498,INC. CA
FASHION BUG #2499,INC. (1) (2) NV
FASHION BUG #2500,INC. NE
FASHION BUG #2501,INC. MI
FASHION BUG #2502,INC. WI
FASHION BUG #2503,INC. IL
FASHION BUG #2504,INC. VA
FASHION BUG #2505 OF HUDSON,INC. NY
FASHION BUG #2506,INC. ID
FASHION BUG #2507,INC. (1) (2) PA
FASHION BUG #2508,INC. MO
FASHION BUG #2509,INC. (1) (2) NJ
FASHION BUG #2510,INC. OH
FASHION BUG #2511,INC. IN
FASHION BUG #2512,INC. NH
FASHION BUG #2513,INC. ME
FASHION BUG #2514,INC. PA
FASHION BUG #2515,INC. (1) (2) SC
FASHION BUG #2516,INC. NJ
FASHION BUG #2517,INC. (1) (2) CT
FASHION BUG #2518,INC. NH
FASHION BUG #2519 OF FULTON,INC. NY
FASHION BUG #2520,INC. MA
FASHION BUG #2521,INC. GA
FASHION BUG #2522,INC. FL
FASHION BUG #2523,INC. FL
FASHION BUG #2524,INC. CA
FASHION BUG #2525,INC. AZ
FASHION BUG #2526,INC. CA
FASHION BUG #2527,INC. AZ
FASHION BUG #2528,INC. (1) (2) AZ
FASHION BUG #2529,INC. AZ
FASHION BUG #2530,INC. AZ
FASHION BUG #2531,INC. GA
FASHION BUG #2531,INC. (1) (2) FL
FASHION BUG #2532,INC. MN
FASHION BUG #2533,INC. NJ
FASHION BUG #2534,INC. NJ
FASHION BUG #2535,INC. (1) (2) PA
FASHION BUG #2536,INC. PA
FASHION BUG #2537,INC. KY
FASHION BUG #2538,INC. VA
</TABLE>
<PAGE> 19
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2539,INC. (1) (2) FL
FASHION BUG #2540,INC. FL
FASHION BUG #2541,INC. NC
FASHION BUG #2542,INC. PA
FASHION BUG #2543,INC. CT
FASHION BUG #2544,INC. (1) (2) VA
FASHION BUG #2545,INC. SC
FASHION BUG #2546,INC. (1) (2) NJ
FASHION BUG #2547,INC. VA
FASHION BUG #2548,INC. PA
FASHION BUG #2549,INC. NE
FASHION BUG #2550,INC. VA
FASHION BUG #2551 OF CLAY,INC. NY
FASHION BUG #2552,INC. NH
FASHION BUG #2553,INC. OH
FASHION BUG #2554,INC. IL
FASHION BUG #2555,INC. ME
FASHION BUG #2556,INC. OH
FASHION BUG #2557,INC. UT
FASHION BUG #2558,INC. UT
FASHION BUG #2559,INC. UT
FASHION BUG #255,INC. ME
FASHION BUG #2560,INC. UT
FASHION BUG #2561,INC. OH
FASHION BUG #2562,INC. OH
FASHION BUG #2563,INC. (1) (2) WI
FASHION BUG #2564,INC. KY
FASHION BUG #2565,INC. KY
FASHION BUG #2566,INC. ND
FASHION BUG #2567,INC. ND
FASHION BUG #2568,INC. FL
FASHION BUG #2569,INC. (1) (2) CA
FASHION BUG #2570,INC. (1) (2) AZ
FASHION BUG #2571,INC. OH
FASHION BUG #2572,INC. (1) (2) NJ
FASHION BUG #2573,INC. WI
FASHION BUG #2574,INC. NH
FASHION BUG #2575,INC. TN
FASHION BUG #2576,INC. (2) NC
FASHION BUG #2577,INC. KY
FASHION BUG #2578,INC. OH
FASHION BUG #2579,INC. PA
FASHION BUG #2580,INC. OH
FASHION BUG #2581,INC. NE
FASHION BUG #2582,INC. SC
FASHION BUG #2583,INC. (1) (2) WV
FASHION BUG #2584 OF CORTLAND,INC. NY
FASHION BUG #2585,INC. (1) (2) MD
FASHION BUG #2586,INC. OH
FASHION BUG #2587,INC. OH
FASHION BUG #2588,INC. RI
FASHION BUG #2589,INC. TN
FASHION BUG #258,INC. TN
FASHION BUG #2590,INC. TN
FASHION BUG #2591,INC. (1) (2) CA
FASHION BUG #2592,INC. CA
FASHION BUG #2593,INC. AZ
FASHION BUG #2594,INC. CA
FASHION BUG #2595,INC. (1) (2) AZ
FASHION BUG #2596,INC. NE
FASHION BUG #2597 OF COLONIE,INC. NY
FASHION BUG #2598,INC. CA
FASHION BUG #2599,INC. (1) (2) CA
FASHION BUG #2600,INC. (1) (2) ME
FASHION BUG #2601,INC. IN
FASHION BUG #2602,INC. IA
FASHION BUG #2603,INC. KY
FASHION BUG #2604 OF VESTAL,INC. NY
FASHION BUG #2605,INC. MD
FASHION BUG #2606,INC. OH
FASHION BUG #2607,INC. NJ
FASHION BUG #2608,INC. WI
</TABLE>
<PAGE> 20
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2609,INC. WI
FASHION BUG #2610,INC. MI
FASHION BUG #2611,INC. (1) (2) MI
FASHION BUG #2612,INC. AL
FASHION BUG #2613,INC. (1) (2) WV
FASHION BUG #2614,INC. MS
FASHION BUG #2615,INC. (1) (2) CT
FASHION BUG #2616,INC. MA
FASHION BUG #2617,INC. WA
FASHION BUG #2618,INC. VA
FASHION BUG #2619,INC. IL
FASHION BUG #2620,INC. GA
FASHION BUG #2621,INC. PA
FASHION BUG #2622,INC. (1) (2) MA
FASHION BUG #2623,INC. ID
FASHION BUG #2624,INC. (1) (2) IL
FASHION BUG #2625 OF PLATTSBURG,INC. NY
FASHION BUG #2626,INC. IL
FASHION BUG #2627 OF WEST SENECA,INC. NY
FASHION BUG #2628 OF NIAGRA FALLS,INC. NY
FASHION BUG #2629,INC. MI
FASHION BUG #2630,INC. (1) (2) NC
FASHION BUG #2631,INC. TN
FASHION BUG #2632,INC. FL
FASHION BUG #2633,INC. MN
FASHION BUG #2634,INC. CA
FASHION BUG #2635 OF GENESEO,INC. NY
FASHION BUG #2636,INC. NH
FASHION BUG #2637,INC. IA
FASHION BUG #2638,INC. RI
FASHION BUG #2639,INC. AZ
FASHION BUG #263,INC. OH
FASHION BUG #2640,INC. (1) (2) ID
FASHION BUG #2641,INC. (1) (2) MI
FASHION BUG #2642,INC. MN
FASHION BUG #2643,INC. OH
FASHION BUG #2644,INC. UT
FASHION BUG #2645,INC. MA
FASHION BUG #2646,INC. CA
FASHION BUG #2647,INC. CA
FASHION BUG #2648,INC. (1) (2) CA
FASHION BUG #2649,INC. NM
FASHION BUG #2650,INC. (1) (2) IA
FASHION BUG #2650,INC. IA
FASHION BUG #2651,INC. MN
FASHION BUG #2652,INC. PA
FASHION BUG #2653,INC. (1) (2) TN
FASHION BUG #2654,INC. CT
FASHION BUG #2655,INC. (1) (2) WI
FASHION BUG #2656,INC. WI
FASHION BUG #2657,INC. (1) (2) PA
FASHION BUG #2658,INC. PA
FASHION BUG #265,INC. ME
FASHION BUG #2660,INC. OH
FASHION BUG #2661 OF LAKEWOOD, INC. NY
FASHION BUG #2662,INC. (1) (2) NJ
FASHION BUG #2663,INC. PA
FASHION BUG #2664,INC. VA
FASHION BUG #2665,INC. WI
FASHION BUG #2666,INC. VA
FASHION BUG #2667,INC. (DUE TO TORNATO) (2) VA
FASHION BUG #2667,INC. (REOPENED) VA
FASHION BUG #2668,INC. (1) (2) IL
FASHION BUG #2669,INC. FL
FASHION BUG #2670,INC. MD
FASHION BUG #2671,INC. MI
FASHION BUG #2672,INC. (1) (2) MI
FASHION BUG #2673,INC. NC
FASHION BUG #2674,INC. MA
FASHION BUG #2675,INC. CO
FASHION BUG #2676,INC. OH
FASHION BUG #2677,INC. IL
</TABLE>
<PAGE> 21
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2678,INC. FL
FASHION BUG #2679,INC. CA
FASHION BUG #2680,INC. IA
FASHION BUG #2681,INC. OH
FASHION BUG #2682,INC. CO
FASHION BUG #2684,INC. UT
FASHION BUG #2685,INC. MO
FASHION BUG #2687,INC. TN
FASHION BUG #2688,INC. KY
FASHION BUG #2689,INC. UT
FASHION BUG #2690,INC. DE
FASHION BUG #2691,INC. (1) (2) OH
FASHION BUG #2692,INC. OH
FASHION BUG #2693,INC. GA
FASHION BUG #2694,INC. CT
FASHION BUG #2695,INC. WI
FASHION BUG #2696,INC. CA
FASHION BUG #2697,INC. MA
FASHION BUG #2698,INC. (1) (2) MA
FASHION BUG #2699,INC. MA
FASHION BUG #2700 OF PORT JEFFERSON,INC. NY
FASHION BUG #2701,INC. CA
FASHION BUG #2702,INC. IN
FASHION BUG #2703,INC. (1) (2) KY
FASHION BUG #2704,INC. MD
FASHION BUG #2705,INC. OH
FASHION BUG #2706,INC. TX
FASHION BUG #2707,INC. MD
FASHION BUG #2708,INC. OH
FASHION BUG #2709,INC. OH
FASHION BUG #2710,INC. MA
FASHION BUG #2711,INC. MI
FASHION BUG #2712,INC. (1) (2) MI
FASHION BUG #2713,INC. IA
FASHION BUG #2714,INC. GA
FASHION BUG #2715 OF SYRACUSE,INC. NY
FASHION BUG #2716,INC. IN
FASHION BUG #2717,INC. WI
FASHION BUG #2718,INC. GA
FASHION BUG #2719,INC. IA
FASHION BUG #2720,INC. WV
FASHION BUG #2721,INC. PA
FASHION BUG #2722,INC. IN
FASHION BUG #2723,INC. OH
FASHION BUG #2724,INC. IN
FASHION BUG #2725,INC. (1) (2) CT
FASHION BUG #2726,INC. (1) (2) CA
FASHION BUG #2727,INC. CA
FASHION BUG #2728,INC. MN
FASHION BUG #2729,INC. WI
FASHION BUG #2730,INC. DE
FASHION BUG #2731,INC. DE
FASHION BUG #2732,INC. GA
FASHION BUG #2733,INC. MO
FASHION BUG #2734,INC. (1) (2) IA
FASHION BUG #2735,INC. (1) (2) SD
FASHION BUG #2736,INC. MO
FASHION BUG #2737,INC. MI
FASHION BUG #2738,INC. KY
FASHION BUG #2739 OF ROTTERDAM,INC. NY
FASHION BUG #2740,INC. (1) (2) KS
FASHION BUG #2741,INC. OH
FASHION BUG #2742,INC. (1) (2) MA
FASHION BUG #2743,INC. (1) (2) CA
FASHION BUG #2744,INC. MA
FASHION BUG #2745,INC. MD
FASHION BUG #2748,INC. IL
FASHION BUG #2748,INC. (1) (2) IL
FASHION BUG #2749,INC. (1) (2) MN
FASHION BUG #2750,INC. PA
FASHION BUG #2751,INC. IN
FASHION BUG #2752,INC. AL
</TABLE>
<PAGE> 22
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2753,INC. MS
FASHION BUG #2754,INC. TN
FASHION BUG #2755,INC. (1) (2) MO
FASHION BUG #2755,INC. (1) (2) MO
FASHION BUG #2756,INC. ME
FASHION BUG #2757,INC. (1) (2) SC
FASHION BUG #2758,INC. GA
FASHION BUG #2759,INC. (1) (2) PA
FASHION BUG #2760,INC. NC
FASHION BUG #2761,INC. KY
FASHION BUG #2762,INC. NJ
FASHION BUG #2763,INC. PA
FASHION BUG #2764,INC. (1) (2) KY
FASHION BUG #2765,INC. (1) (2) WA
FASHION BUG #2766,INC. OH
FASHION BUG #2767,INC. PA
FASHION BUG #2768,INC. (1) (2) IN
FASHION BUG #2769,INC. WY
FASHION BUG #2770,INC. UT
FASHION BUG #2771,INC. ID
FASHION BUG #2772,INC. (1) (2) OR
FASHION BUG #2773,INC. ID
FASHION BUG #2774,INC. (1) (2) NV
FASHION BUG #2775,INC. IN
FASHION BUG #2775,INC. (1) (2) IN
FASHION BUG #2777,INC. (1) (2) MI
FASHION BUG #2778,INC. GA
FASHION BUG #2778,INC. (1) (2) GA
FASHION BUG #2779,INC. OH
FASHION BUG #2780,INC. (1) (2) MI
FASHION BUG #2781,INC. NC
FASHION BUG #2782,INC. TX
FASHION BUG #2783,INC. MN
FASHION BUG #2784,INC. (1) (2) MO
FASHION BUG #2785,INC. (1) (2) AL
FASHION BUG #2786,INC. NH
FASHION BUG #2787,INC. ME
FASHION BUG #2788,INC. CA
FASHION BUG #2789,INC. VA
FASHION BUG #2790,INC. WA
FASHION BUG #2791,INC. OH
FASHION BUG #2792,INC. CA
FASHION BUG #2793,INC. CA
FASHION BUG #2794,INC. NV
FASHION BUG #2795,INC. WI
FASHION BUG #2796 OF COBLESKILL, INC. (1) (2) NY
FASHION BUG #2797,INC. (1) (2) NJ
FASHION BUG #2798,INC. FL
FASHION BUG #2799,INC. (1) (2) FL
FASHION BUG #2799,INC. (1) (2) FL
FASHION BUG #279,INC. OH
FASHION BUG #2800,INC. (1) (2) NC
FASHION BUG #2800,INC. NC
FASHION BUG #2802,INC. PA
FASHION BUG #2803,INC. TX
FASHION BUG #2804,INC. TX
FASHION BUG #2805,INC. TX
FASHION BUG #2806,INC. (1) (2) VT
FASHION BUG #2807,INC. IN
FASHION BUG #2807,INC. (1) (2) IN
FASHION BUG #2808,INC. KS
FASHION BUG #2809,INC. IN
FASHION BUG #2810,INC. OH
FASHION BUG #2811,INC. NJ
FASHION BUG #2812,INC. (1) (2) TX
FASHION BUG #2813,INC. (1) (2) NJ
FASHION BUG #2814,INC. WY
FASHION BUG #2815,INC. (1) (2) FL
FASHION BUG #2816,INC. MA
FASHION BUG #2817,INC. (1) (2) MO
FASHION BUG #2818,INC. IL
FASHION BUG #2819,INC. (1) (2) IL
</TABLE>
<PAGE> 23
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2820,INC. CT
FASHION BUG #2821,INC. VA
FASHION BUG #2822,INC. (1) (2) MI
FASHION BUG #2822,INC. MI
FASHION BUG #2823,INC. (1) (2) CA
FASHION BUG #2824,INC. AZ
FASHION BUG #2825,INC. (1) (2) CT
FASHION BUG #2826,INC. RI
FASHION BUG #2827,INC. (1) (2) KY
FASHION BUG #2828,INC. OH
FASHION BUG #2829,INC. OH
FASHION BUG #2830,INC. WA
FASHION BUG #2831,INC. (1) (2) ME
FASHION BUG #2832,INC. (1) (2) ME
FASHION BUG #2833,INC. IA
FASHION BUG #2834,INC. (1) (2) MI
FASHION BUG #2835,INC. NE
FASHION BUG #2836,INC. UT
FASHION BUG #2836,INC. (1) (2) UT
FASHION BUG #2837,INC. (1) (2) GA
FASHION BUG #2837,INC. (1) (2) GA
FASHION BUG #2838,INC. OR
FASHION BUG #2839,INC. (1) (2) CA
FASHION BUG #2840,INC. (1) (2) NV
FASHION BUG #2841,INC. IN
FASHION BUG #2842,INC. IL
FASHION BUG #2843,INC. TX
FASHION BUG #2844,INC. PA
FASHION BUG #2845,INC. CA
FASHION BUG #2846,INC. (1) (2) NM
FASHION BUG #2848,INC. NJ
FASHION BUG #2849,INC. RI
FASHION BUG #2850,INC. MI
FASHION BUG #2851,INC. NJ
FASHION BUG #2852,INC. CO
FASHION BUG #2853 OF ROME, INC. NY
FASHION BUG #2854,INC. CO
FASHION BUG #2855,INC. IL
FASHION BUG #2856,INC. WI
FASHION BUG #2857,INC. OH
FASHION BUG #2858,INC. CA
FASHION BUG #2859,INC. (1) (2) GA
FASHION BUG #2860,INC. (1) (2) CA
FASHION BUG #2861,INC. AL
FASHION BUG #2862,INC. (1) (2) CA
FASHION BUG #2863,INC. MA
FASHION BUG #2864,INC. OH
FASHION BUG #2865,INC. (1) (2) TX
FASHION BUG #2866,INC. (1) (2) IA
FASHION BUG #2867,INC. (1) (2) AZ
FASHION BUG #2868,INC. (1) (2) AZ
FASHION BUG #2869,INC. MD
FASHION BUG #2870,INC. CA
FASHION BUG #2871 OF ALBANY,INC. (1) (2) NY
FASHION BUG #2872,INC. WI
FASHION BUG #2873,INC. (1) (2) GA
FASHION BUG #2874,INC. IN
FASHION BUG #2876,INC. IA
FASHION BUG #2877,INC. AL
FASHION BUG #2878,INC. (1) (2) OH
FASHION BUG #2879,INC. OR
FASHION BUG #2880,INC. CA
FASHION BUG #2881,INC. NH
FASHION BUG #2883,INC. (1) (2) WV
FASHION BUG #2884,INC. TX
FASHION BUG #2885,INC. (1) (2) TX
FASHION BUG #2886,INC. IL
FASHION BUG #2887,INC. TX
FASHION BUG #2888,INC. TX
FASHION BUG #2889,INC. (1) (2) VT
FASHION BUG #2890,INC. TN
FASHION BUG #2891,INC. TX
</TABLE>
<PAGE> 24
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2892,INC. ID
FASHION BUG #2893,INC. MT
FASHION BUG #2894,INC. IL
FASHION BUG #2895,INC. TN
FASHION BUG #2896,INC. (1) (2) UT
FASHION BUG #2897,INC. FL
FASHION BUG #2898,INC. CA
FASHION BUG #2899,INC. WA
FASHION BUG #2900,INC. (1) (2) CA
FASHION BUG #2901,INC (1) (2) CA
FASHION BUG #2902,INC. IA
FASHION BUG #2903,INC. NE
FASHION BUG #2904,INC. (1) (2) SD
FASHION BUG #2905,INC. IN
FASHION BUG #2906,INC. IN
FASHION BUG #2907,INC. IL
FASHION BUG #2908,INC. (1) (2) PA
FASHION BUG #2909,INC. (1) (2) PA
FASHION BUG #2910 OF POUGHKEEPSIE, INC. (1) (2) NY
FASHION BUG #2911,INC. (1) (2) TN
FASHION BUG #2912 OF VICTOR,INC. NY
FASHION BUG #2913,INC. (1) (2) PA
FASHION BUG #2914,INC. (1) (2) PA
FASHION BUG #2915,INC. MA
FASHION BUG #2916,INC. (1) (2) NJ
FASHION BUG #2917,INC. GA
FASHION BUG #2918,INC. FL
FASHION BUG #2919,INC. FL
FASHION BUG #2920,INC. WA
FASHION BUG #2921,INC. TX
FASHION BUG #2922,INC. (1) (2) PA
FASHION BUG #2923 OF AMSTERDAM,INC. (1) (2) NY
FASHION BUG #2924,INC. WI
FASHION BUG #2925,INC. (1) (2) KS
FASHION BUG #2926,INC. KS
FASHION BUG #2927,INC. NJ
FASHION BUG #2928,INC. (1) (2) RI
FASHION BUG #2929,INC. MA
FASHION BUG #2930,INC. IL
FASHION BUG #2931,INC. (1) (2) IN
FASHION BUG #2932,INC. MA
FASHION BUG #2934,INC. CA
FASHION BUG #2936,INC. NC
FASHION BUG #2937,INC. GA
FASHION BUG #2940,INC (1) (2) TX
FASHION BUG #2941,INC. DE
FASHION BUG #2942,INC. (1) (2) UT
FASHION BUG #2943,INC. (1) (2) UT
FASHION BUG #2944,INC. CA
FASHION BUG #2945 OF MEDIA,INC. NY
FASHION BUG #2946 OF EAST AURORA,INC. (1) (2) NY
FASHION BUG #2947,INC. (1) (2) GA
FASHION BUG #2948,INC. (1) (2) FL
FASHION BUG #2949,INC. (1) (2) MI
FASHION BUG #2950,INC. CA
FASHION BUG #2951,INC. NC
FASHION BUG #2952,INC. OH
FASHION BUG #2953,INC. IL
FASHION BUG #2954,INC. MI
FASHION BUG #2955,INC. (1) (2) VA
FASHION BUG #2956,INC. MI
FASHION BUG #2957,INC. (1) (2) MA
FASHION BUG #2958,INC. MI
FASHION BUG #2959 OF BUFFALO,INC. NY
FASHION BUG #2960 OF HENRIETTA,INC. NY
FASHION BUG #2961 OF LOCKPORT,INC. (1) (2) NY
FASHION BUG #2962 OF HAMBURG,INC. (1) (2) NY
FASHION BUG #2963 OF BUFFALO,INC. (1) (2) NY
FASHION BUG #2964,INC. (1) (2) CA
FASHION BUG #2965,INC. (1) (2) TN
FASHION BUG #2966,INC. (1) (2) IN
FASHION BUG #2967,INC. (1) (2) MN
</TABLE>
<PAGE> 25
<TABLE>
<S> <C> <C> <C>
FASHION BUG #2968,INC. OR
FASHION BUG #2969,INC. WY
FASHION BUG #2970,INC. (1) (2) PA
FASHION BUG #2971,INC. CT
FASHION BUG #2972,INC. TX
FASHION BUG #2973,INC. TX
FASHION BUG #2974,INC. MI
FASHION BUG #2975,INC. (1) (2) MO
FASHION BUG #2976,INC. (1) (2) KY
FASHION BUG #2977,INC. (1) (2) TX
FASHION BUG #2978,INC. OH
FASHION BUG #2979,INC. (1) (2) TX
FASHION BUG #2980,INC. FL
FASHION BUG #2981,INC. (1) (2) FL
FASHION BUG #2982,INC. VT
FASHION BUG #2983,INC. ME
FASHION BUG #2984,INC. (1) (2) TX
FASHION BUG #2985,INC. TX
FASHION BUG #2986,INC. TX
FASHION BUG #2987,INC. IN
FASHION BUG #2988,INC. IN
FASHION BUG #2989,INC. IN
FASHION BUG #2990,INC. (1) (2) WI
FASHION BUG #2991,INC. (1) (2) MD
FASHION BUG #2992,INC. CO
FASHION BUG #2993,INC. (1) (2) IN
FASHION BUG #2994,INC. VA
FASHION BUG #2995,INC. (1) (2) OH
FASHION BUG #2996,INC. (1) (2) MD
FASHION BUG #2997,INC. (1) (2) SC
FASHION BUG #2998,INC. (1) (2) PA
FASHION BUG #2999,INC. (1) (2) NC
FASHION BUG #3000,INC. KS
FASHION BUG #3001,INC. VA
FASHION BUG #3002,INC. (1) (2) NH
FASHION BUG #3003,INC. MT
FASHION BUG #3004,INC. (1) (2) PA
FASHION BUG #3005,INC. OH
FASHION BUG #3006,INC. AZ
FASHION BUG #3007,INC (1) (2) IL
FASHION BUG #3008,INC. (1) (2) MA
FASHION BUG #3009,INC. WI
FASHION BUG #3010,INC. (1) (2) NM
FASHION BUG #3011,INC. PA
FASHION BUG #3012,INC. (1) (2) MO
FASHION BUG #3013, INC. (1) (2) IA
FASHION BUG #3014,INC. (1) (2) NC
FASHION BUG #3016,INC. (1) (2) OH
FASHION BUG #3017 OF ROCKY POINT,INC. (1) (2) NY
FASHION BUG #3018,INC. (1) (2) WV
FASHION BUG #3019,INC. (1) (2) WA
FASHION BUG #3020,INC. MA
FASHION BUG #3021,INC. (1) (2) CA
FASHION BUG #3022,INC. IL
FASHION BUG #3023,INC. (1) (2) WI
FASHION BUG #3024,INC. IL
FASHION BUG #3025,INC. (1) (2) IN
FASHION BUG #3026,INC. (1) (2) WV
FASHION BUG #3027,INC. (1) (2) UT
FASHION BUG #3028,INC. (1) (2) FL
FASHION BUG #3029,INC. (1) (2) IL
FASHION BUG #3030,INC. AZ
FASHION BUG #3031,INC. (1) (2) CA
FASHION BUG #3032,INC. (1) (2) TX
FASHION BUG #3033,INC. NH
FASHION BUG #3034,INC. (1) (2) MO
FASHION BUG #3035,INC. (1) (2) KY
FASHION BUG #3036,INC. (1) (2) AZ
FASHION BUG #3037,INC. (1) (2) CT
FASHION BUG #3038,INC. (1) (2) VT
FASHION BUG #3039,INC. (1) (2) PA
FASHION BUG #3040,INC. MO
</TABLE>
<PAGE> 26
<TABLE>
<S> <C> <C> <C>
FASHION BUG #3041,INC. (1) (2) OR
FASHION BUG #3042,INC. (1) (2) IN
FASHION BUG #3043,INC. (1) (2) WI
FASHION BUG #3044,INC. (1) (2) GA
FASHION BUG #3045,INC. (1) (2) AL
FASHION BUG #3046,INC. (1) (2) GA
FASHION BUG #3047,INC. (1) (2) TN
FASHION BUG #3048 OF WELLSVILLE ,INC. (1) (2) NY
FASHION BUG #3049,INC. CT
FASHION BUG #3050,INC. MA
FASHION BUG #3051,INC. (1) (2) CA
FASHION BUG #3052,INC. (1) (2) MO
FASHION BUG #3053,INC. (1) (2) OH
FASHION BUG #3054,INC. (1) (2) IL
FASHION BUG #3055,INC. (1) (2) WI
FASHION BUG #3056,INC. (1) (2) GA
FASHION BUG #3057,INC. (1) (2) PA
FASHION BUG #3058,INC. CT
FASHION BUG #3059,INC. (1) (2) MA
FASHION BUG #3060,INC. SD
FASHION BUG #3061,INC. (1) (2) DE
FASHION BUG #3062,INC. (1) (2) GA
FASHION BUG #3063,INC. (1) (2) VA
FASHION BUG #3064,INC. (1) (2) MI
FASHION BUG #3065,INC. (1) (2) TN
FASHION BUG #3066,INC. (1) (2) MI
FASHION BUG #3067,INC (1) (2) TX
FASHION BUG #3068,INC. (1) (2) MN
FASHION BUG #3070,INC. (1) (2) MO
FASHION BUG #3071,INC. (1) (2) WA
FASHION BUG #3072,INC. (1) (2) AR
FASHION BUG #3073,INC. (1) (2) WA
FASHION BUG #3074,INC. (1) (2) PA
FASHION BUG #3076,INC. (1) (2) MI
FASHION BUG #3077,INC. (1) (2) IL
FASHION BUG #3078,INC. (1) (2) IL
FASHION BUG #3079,INC. (1) (2) MO
FASHION BUG #3080,INC. (1) (2) ME
FASHION BUG #3081,INC. (1) (2) PA
FASHION BUG #3082,INC. (1) (2) CT
FASHION BUG #3083,INC. (1) (2) VT
FASHION BUG #3084,INC. (1) (2) NJ
FASHION BUG #3085,INC. (1) (2) NJ
FASHION BUG #3086,INC. (1) (2) MO
FASHION BUG #3087,INC. (1) (2) NJ
FASHION BUG #3088,INC. (1) (2) WA
FASHION BUG #3089,INC. (1) (2) NJ
FASHION BUG #3090,INC. (1) (2) PA
FASHION BUG #3093,INC. (1) (2) MA
FASHION BUG #336,INC. (1) (2) IN
FASHION BUG #418,INC. NJ
FASHION BUG #429,INC. MN
FASHION BUG #42,INC. (1) (2) MO
FASHION BUG #44,INC. PA
FASHION BUG #461,INC. (2) OK
FASHION BUG #467 OF LEVITTOWN,INC. (2) NY
FASHION BUG #471,INC. MN
FASHION BUG #47,INC. (1) (2) IN
FASHION BUG #47,INC. IN
FASHION BUG #507, INC. (2) NY
FASHION BUG #508, INC. IL
FASHION BUG #519, INC. WV
FASHION BUG #520, INC. MA
FASHION BUG #527,INC. KS
FASHION BUG #529 OF HAMBURG,INC. NY
FASHION BUG #533, INC. (2) MI
FASHION BUG #534,INC. IN
FASHION BUG #535, INC. (2) MI
FASHION BUG #538,INC. ME
FASHION BUG #544,INC. (2) OH
FASHION BUG #545, INC. VT
FASHION BUG #548, INC. ME
</TABLE>
<PAGE> 27
<TABLE>
<S> <C> <C> <C>
FASHION BUG #554,INC. PA
FASHION BUG #558,INC. TN
FASHION BUG #560 OF GLOVERSVILLE, INC. NY
FASHION BUG #561,INC. FL
FASHION BUG #562,INC. NJ
FASHION BUG #563,INC. IL
FASHION BUG #564,INC. MO
FASHION BUG #565,INC. MI
FASHION BUG #566,INC. IN
FASHION BUG #567,INC. IL
FASHION BUG #568,INC. WI
FASHION BUG #569,INC. (2) IL
FASHION BUG #570 OF CLIFTON PARK,INC. NY
FASHION BUG #571,INC. TN
FASHION BUG #572,INC. (2) LA
FASHION BUG #573,INC. PA
FASHION BUG #574 OF SYRACUSE,INC. NY
FASHION BUG #575,INC. MN
FASHION BUG #576,INC. NJ
FASHION BUG #577,INC. (2) MI
FASHION BUG #578,INC. (2) PA
FASHION BUG #579,INC. (2) ME
FASHION BUG #580,INC. ME
FASHION BUG #581,INC. NH
FASHION BUG #582,INC. (2) VA
FASHION BUG #583,INC. KY
FASHION BUG #584 OF YONKERS,INC. NY
FASHION BUG #585,INC. NJ
FASHION BUG #586,INC. NJ
FASHION BUG #587,INC. (2) MI
FASHION BUG #588,INC. IL
FASHION BUG #589,INC. IL
FASHION BUG #591,INC. MO
FASHION BUG #592,INC. IL
FASHION BUG #593 OF SELDEN,INC. NY
FASHION BUG #594,INC. KS
FASHION BUG #595,INC. IN
FASHION BUG #596,INC. CT
FASHION BUG #597,INC. MN
FASHION BUG #599,INC. MA
FASHION BUG #600,INC. PA
FASHION BUG #601,INC. SC
FASHION BUG #602,INC. PA
FASHION BUG #603 OF HUDSON AVENUE,INC. (1) (2) NY
FASHION BUG #604,INC. (1) (2) IA
FASHION BUG #605,INC. MI
FASHION BUG #606,INC. MI
FASHION BUG #607,INC. MI
FASHION BUG #608,INC. (2) FL
FASHION BUG #609,INC. (2) MA
FASHION BUG #610,INC. (1) (2) RI
FASHION BUG #611,INC. (1) (2) AL
FASHION BUG #612,INC. OH
FASHION BUG #613,INC. PA
FASHION BUG #614,INC. MA
FASHION BUG #615,INC. PA
FASHION BUG #616,INC. (2) CT
FASHION BUG #617,INC. MA
FASHION BUG #618,INC. SC
FASHION BUG #619,INC. (2) PA
FASHION BUG #620,INC. (1) (2) IL
FASHION BUG #621,INC. PA
FASHION BUG #622,INC. WI
FASHION BUG #623,INC. IL
FASHION BUG #624,INC. MO
FASHION BUG #625,INC. (2) PA
FASHION BUG #626,INC. MD
FASHION BUG #627,INC. OH
FASHION BUG #628,INC. MI
FASHION BUG #629,INC. NJ
FASHION BUG #630,INC. IN
FASHION BUG #631,INC. PA
</TABLE>
<PAGE> 28
<TABLE>
<S> <C> <C> <C>
FASHION BUG #632,INC. (2) KY
FASHION BUG #633 OF DEWITT, INC. (2) NY
FASHION BUG #634,INC. (2) VA
FASHION BUG #635,INC. PA
FASHION BUG #636,INC. IL
FASHION BUG #637,INC. TN
FASHION BUG #638,INC. MI
FASHION BUG #639,INC. MD
FASHION BUG #640,INC. (1) (2) NJ
FASHION BUG #641,INC. NJ
FASHION BUG #642,INC. PA
FASHION BUG #643,INC. PA
FASHION BUG #644,INC. GA
FASHION BUG #645,INC. MI
FASHION BUG #646,INC. OH
FASHION BUG #647,INC. ME
FASHION BUG #648,INC. (2) OH
FASHION BUG #649,INC. PA
FASHION BUG #650,INC. VA
FASHION BUG #651,INC. MI
FASHION BUG #652,INC. (2) LA
FASHION BUG #653,INC. NJ
FASHION BUG #654,INC. AL
FASHION BUG #655,INC. (1) (2) WA
FASHION BUG #656,INC. FL
FASHION BUG #657,INC. MO
FASHION BUG #658,INC. MA
FASHION BUG #659,INC. MN
FASHION BUG #660 OF ALBANY,INC. NY
FASHION BUG #661,INC. WV
FASHION BUG #662,INC. PA
FASHION BUG #663,INC. PA
FASHION BUG #664,INC. CO
FASHION BUG #665,INC. (2) CO
FASHION BUG #666,INC. (1) (2) MI
FASHION BUG #667,INC. MI
FASHION BUG #668 OF SHIRLEY,INC. NY
FASHION BUG #669,INC. (2) MI
FASHION BUG #670,INC. MA
FASHION BUG #671,INC. (1) (2) VA
FASHION BUG #672,INC. MI
FASHION BUG #673,INC. KY
FASHION BUG #674,INC. IL
FASHION BUG #675,INC. (2) LA
FASHION BUG #676 OF OZONE PARK,INC. NY
FASHION BUG #677,INC. (2) FL
FASHION BUG #678,INC. OH
FASHION BUG #679 OF WATERTOWN,INC. NY
FASHION BUG #680,INC. (2) PA
FASHION BUG #681,INC. IN
FASHION BUG #682,INC. (2) GA
FASHION BUG #683,INC. WI
FASHION BUG #684,INC. NC
FASHION BUG #685,INC. (2) OH
FASHION BUG #686,INC. IL
FASHION BUG #687,INC. IL
FASHION BUG #688,INC. (2) PA
FASHION BUG #689,INC. PA
FASHION BUG #690,INC. (2) OH
FASHION BUG #691,INC. MD
FASHION BUG #692,INC. (2) MO
FASHION BUG #693,INC. MI
FASHION BUG #694,INC. MI
FASHION BUG #695,INC. OH
FASHION BUG #696,INC. VA
FASHION BUG #697,INC. OH
FASHION BUG #698,INC. OH
FASHION BUG #699,INC. NJ
FASHION BUG #712,INC. (2) IA
FASHION BUG #716, INC. RI
FASHION BUG #717,INC. MI
FASHION BUG #718,INC. (2) IL
</TABLE>
<PAGE> 29
<TABLE>
<S> <C> <C> <C>
FASHION BUG #719,INC. OH
FASHION BUG #720 OF OSWEGO,INC. NY
FASHION BUG #721,INC. MA
FASHION BUG #722,INC. (2) LA
FASHION BUG #723,INC. AL
FASHION BUG #724,INC. NH
FASHION BUG #725,INC. (1) (2) FL
FASHION BUG #726,INC. KS
FASHION BUG #727,INC. ME
FASHION BUG #728,INC. (2) AL
FASHION BUG #729,INC. MI
FASHION BUG #730,INC. OH
FASHION BUG #731,INC. IL
FASHION BUG #732,INC. MI
FASHION BUG #733,INC. IN
FASHION BUG #734 OF DUNKIRK,INC. NY
FASHION BUG #735,INC. (2) TN
FASHION BUG #736,INC. (2) MO
FASHION BUG #737,INC. MA
FASHION BUG #738,INC. NC
FASHION BUG #739,INC. OH
FASHION BUG #740,INC. WI
FASHION BUG #741,INC. OH
FASHION BUG #742,INC. OH
FASHION BUG #743,INC. OH
FASHION BUG #744,INC. (1) (2) FL
FASHION BUG #745,INC. MI
FASHION BUG #746,INC. (2) LA
FASHION BUG #747,INC. (2) LA
FASHION BUG #748,INC. OH
FASHION BUG #749,INC. (2) CT
FASHION BUG #750,INC. (2) ME
FASHION BUG #751,INC. MI
FASHION BUG #752,INC. VT
FASHION BUG #753 OF RIDGEMONT PLAZA,INC. (2) NY
FASHION BUG #754,INC. PA
FASHION BUG #755,INC. ME
FASHION BUG #756,INC. CT
FASHION BUG #757 OF BROCKPORT,INC. NY
FASHION BUG #758,INC. WI
FASHION BUG #759,INC. MI
FASHION BUG #760 OF PINE PLAZA,INC. NY
FASHION BUG #761,INC. MO
FASHION BUG #762,INC. MO
FASHION BUG #763,INC. MO
FASHION BUG #764,INC. IL
FASHION BUG #765 OF LACKAWANNA,INC. (2) NY
FASHION BUG #766,INC. OH
FASHION BUG #767,INC. WV
FASHION BUG #768,INC. VA
FASHION BUG #769,INC. OH
FASHION BUG #770,INC. (1) (2) MI
FASHION BUG #771,INC. MI
FASHION BUG #772 OF MIDDLETOWN,INC. NY
FASHION BUG #773,INC. TN
FASHION BUG #774,INC. PA
FASHION BUG #775,INC. VT
FASHION BUG #776,INC. KY
FASHION BUG #778,INC. PA
FASHION BUG #779,INC. KY
FASHION BUG #780,INC. (2) VA
FASHION BUG #781,INC. OH
FASHION BUG #782,INC. (2) IN
FASHION BUG #784,INC. VA
FASHION BUG #785,INC. MI
FASHION BUG #786,INC. CT
FASHION BUG #787,INC. RI
FASHION BUG #788,INC. MA
FASHION BUG #789,INC. (2) MO
FASHION BUG #790,INC. OH
FASHION BUG #791,INC. (2) IL
FASHION BUG #792,INC. NC
</TABLE>
<PAGE> 30
<TABLE>
<S> <C> <C> <C>
FASHION BUG #793,INC. VA
FASHION BUG #794,INC. (2) OK
FASHION BUG #795,INC. MI
FASHION BUG #796,INC. (2) OH
FASHION BUG #797,INC. KS
FASHION BUG #798,INC. (2) OH
FASHION BUG #799,INC. VA
FASHION BUG #84 OF QUEENS,INC. NY
FASHION BUG #863,INC. (1) (2) IN
FASHION BUG #95,INC.(907) MD
FASHION BUG & FASHION BUG PLUS #2179,INC. FL
FASHION BUG#2882,INC. (1) (2) NH
FASHION BUG#3091,INC. (1) (2) PA
FASHION SERVICE CORP (2) DE
FASHOIN BUG #2408 OF BRUNSWICK,INC. (1) (2) NY
FB APPAREL (2) IN
FB CLOTHING,INC. (1) (2) IN
FB DISTRO (2) IN
FESTUS DEVELOPMENT CO.,INC. (2) MO
FESTUS #2733 DEVELOPMENT CO. INC. (2) MO
FSC SERVICE CORP. (2) PA
FSHC,INC. (2) DE
F.B. PLUS WOMEN'S APPAREL OF JOHNSON CITY, INC. NY
F.B. PLUS WOMEN'S APPAREL OF KINGSTON, INC. NY
F.B. PLUS WOMEN'S APPAREL OF PINE PLAZA, INC. (2) NY
F.B. PLUS WOMEN'S APPAREL OF RIVERSIDE,INC. (2) NY
F.B. PLUS WOMEN'S APPAREL OF RIVERSIDE,INC. (2) NY
F.B. PLUS WOMEN'S APPAREL OF WEST SENECA, INC. (2) NY
F.B. WOMEN'S APPAREL OF AMSTERDAM, INC. NY
F.B. WOMEN'S APPAREL OF CAMILLUS,INC. (2) NY
F.B. WOMEN'S APPAREL OF CLAY, INC. NY
F.B. WOMEN'S APPAREL OF COLONIE, INC. (2) NY
F.B. WOMEN'S APPAREL OF DELMAR, INC. NY
F.B. WOMEN'S APPAREL OF DEPEW, INC. NY
F.B. WOMEN'S APPAREL OF ONEONTA,INC. NY
F.B. WOMEN'S APPAREL OF PANORAMA PLAZA, INC. NY
F.B. WOMEN'S APPAREL OF RIVERSIDE,INC. (2) NY
F.B. WOMEN'S APPAREL OF SARATOGA SPRINGS, INC. (2) NY
F.B. WOMEN'S APPAREL OF SCHENECTADY, INC. (2) NY
F.B. WOMEN'S APPAREL OF SHOP CITY, INC. NY
F.B. WOMEN'S APPAREL OF UTICA,INC. (2) NY
F.B. WOMEN'S APPAREL OF YORKTOWN HEIGHTS, INC. NY
F.B. WOMEN'S APPAREL #2481 OF RIVERSIDE,INC. NY
HOUGHTON LAKE #2611 DEVELOPMENT CO.,INC. (1) (2) MI
INTERNATIONAL APPAREL (2) PA
J.G.RYCE OF LEVITTOWN,INC. (2) PA
J.G.RYCE OF SANDY PLAZA,INC. (2) NY
J.M. BALTER CO (2) PA
J.P.A. SERVICE CO. (2) GA
KAFCO DEVELOPMENT CO., INC. (2) PA
KIRKSTONE LTD (2) HK
LEWISVILLE #2782 DEVELOPMENT CO.,INC. (2) TX
MACOMB #2619 DEVELOPMENT CO., INC. (2) IL
ORLE (2) DE
OWENSBORO #2976 DEVELOPMENT CO.,INC. (1) (2) KY
PRESQUE ISLE #2756 DEVELOPMENT CO.,INC. (2) ME
PRICE APPEAL #5000,INC. (2) NJ
PRICE APPEAL #5001 OF STATEN ISLAND,INC. (1) (2) NY
PRICE APPEAL #5002,INC. (2) PA
PRICE APPEAL #5003,INC. (2) DE
PRICE APPEAL #5004,INC. (2) NJ
PRICE APPEAL #5005,INC. (2) MD
PRICE APPEAL #5006,INC. (2) MA
PRICE APPEAL #5007,INC. (2) MA
PRICE APPEAL #5008,INC. (2) MD
PRICE APPEAL #5009,INC. (2) VA
PRICE APPEAL #5010,INC. (2) MD
PRICE APPEAL #5011,INC. (2) NY
PRICE APPEAL #5012,INC. (2) MD
PRICE APPEAL #5013,INC. (2) PA
PRICE APPEAL #5014,INC. (2) CT
PRICE APPEAL #5015,INC. (1) (2) NJ
</TABLE>
<PAGE> 31
<TABLE>
<S> <C> <C> <C>
PRICE APPEAL #5016,INC. (2) PA
PRICE APPEAL #5017,INC. (2) NJ
PRICE APPEAL #5018,INC. (2) NJ
PRICE APPEAL #5019,INC. (1) (2) NJ
PRICE APPEAL #5020,INC. (1) (2) OH
PRICE APPEAL #5021,INC. (1) (2) NJ
PRICE APPEAL #5022,INC. (1) (2) OH
PRICE APPEAL #5023,INC. (2) OH
PRICE APPEAL #5024,INC. (1) (2) NJ
PRICE APPEAL #5025,INC. (1) (2) OH
PRICE APPEAL #5026,INC. (1) (2) VA
PRICE APPEAL #5027,INC. (1) (2) PA
PRICE APPEAL #5028,INC. (1) (2) NJ
PRICE APPEAL #5029,INC. (1) (2) PA
PRICE APPEAL #5030,INC. (2) NJ
PRICE APPEAL #5031,INC. (2) IL
PRICE APPEAL #5032,INC. (2) IL
PRICE APPEAL #5033,INC. (2) OH
PRICE APPEAL #5034,INC. (2) IL
PRICE APPEAL #5035,INC. (2) IL
PRICE APPEAL #5037,INC. (2) PA
PRICE APPEAL #5038,INC. (2) NJ
PRICE APPEAL #5039,INC. (2) PA
PRICE APPEAL #5041,INC. (2) VA
PRICE APPEAL #5042,INC. (2) MD
PRICE APPEAL #5043,INC. (2) MD
PRICE APPEAL #5044,INC. (2) MD
PRICE APPEAL #5045,INC. (2) OH
PRICE APPEAL #5046,INC. (2) PA
PRICE APPEAL #5047,INC. (2) MD
PRICE APPEAL #5048,INC. (2) MI
PRICE APPEAL #5049,INC. (2) MI
PRICE APPEAL #5050,INC. (2) MI
PRICE APPEAL #5051,INC. (2) MA
PRICE APPEAL #5052,INC. (1) (2) DC
PRICE APPEAL #5053,INC. (1) (2) MD
PRICE APPEAL #5054,INC. (1) (2) MD
PRICE APPEAL #5055,INC. (1) (2) OH
PRICE APPEAL #5056,INC. (1) (2) MD
PRICE APPEAL #5057,INC. (1) (2) MD
PRICE APPEAL #5058,INC. (2) OH
PRICE APPEAL #5059,INC. (2) OH
PRICE APPEAL #5060,INC. (1) (2) MI
PRICE APPEAL #5061,INC. (2) DC
P'ZAZZ FASHIONS OF BARBOURSVILLE,INC. (2) WV
P'ZAZZ FASHIONS OF FRANKLIN,INC. (1) (2) PA
P'ZAZZ FASHIONS OF FT LAUDERDALE, INC. (2) FL
P'ZAZZ FASHIONS OF HAGERSTOWN, INC. (2) MD
P'ZAZZ FASHIONS OF HARRISBURG EAST MALL,INC. (1) (2) PA
P'ZAZZ FASHIONS OF KALAMAZOO,INC. (2) MI
P'ZAZZ FASHIONS OF OZONE,INC. (2) NY
P'ZAZZ FASHIONS OF SCRANTON,INC. (2) PA
P'ZAZZ FASHIONS OF SEAFORD, INC. (2) DE
P'ZAZZ FASHIONS OF ST ALBANS, INC. (2) WV
P'ZAZZ FASHIONS OF TOWER MALL,INC. (2) VA
P'ZAZZ FASHIONS OF TOWER MALL,INC. (2) VA
P'ZAZZ FASHIONS OF UNIONTOWN,INC. (2) PA
P'ZAZZ FASHIONS OF WYNCOTE,INC. (2) PA
ROLLA DEVELOPMENT CO.,INC. (2) MO
ROLLA #2685 DEVELOPMENT CO., INC. (2) MO
S A FUNDING,INC. (2) DE
SALINA #2926 DEVELOPMENT CO.,INC. (2) KS
SAN ANGELO #2973 DEVELOPMENT CO.,INC. (2) TX
SENTANI TRADING LTD. (2) HK
SIKESTON #2736 DEVELOPMENT CO., (2) MO
SPECIALTY FIXTURES,INC. (2) PA
SPIRIT OF AMERICA NATIONAL BANK (2) PA
ST JOSEPH #2784 DEVELOPMENT CO.,INC. (1) (2) MO
VICTORIA #2972 DEVELOPMENT CO.,INC. (2) TX
WINDHAM #3037 DEVELOPMENT CO,INC. (1) (2) CT
WINKS LANE,INC. (2) PA
W.L. DISTRIBUTORS,INC. (2) PA
</TABLE>
<PAGE> 32
<TABLE>
<S> <C> <C>
YARDARM TRADING LTD. (2) HK
YUCCA #2524 DEVELOPMENT CO.,INC. (2) CA
</TABLE>
NOTES:
(1) These companies are not included in the consolidated financial
statements for the fiscal year ended January 28, 1995, as they had
not then commenced operations and the original capitalization was
not then paid in.
(2) These companies do not currently operate stores.
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Registration Statement (Form
S-8, No.33-56145) and Registration Statement (Form S-8, No. 33- 56147), dated
October 25, 1994, Registration Statement (Form S-8, No.33-39558), dated March
25, 1991, Registration Statement (Form S-8 No. 2- 92975) dated September 17,
1984 and Registration Statement (Form S-3, No. 33-00074) dated September 25,
1985 of our report dated March 7, 1995 with respect to the consolidated
financial statements and schedules of Charming Shoppes, Inc. included in this
Annual Report (Form 10-K) for the year ended January 28, 1995.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
April 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
CHARMING SHOPPES, INC.
FINANCIAL DATA SCHEDULE
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-28-1995
<PERIOD-END> JAN-28-1995
<CASH> 43,923
<SECURITIES> 40,180
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 258,552
<CURRENT-ASSETS> 431,715
<PP&E> 483,372
<DEPRECIATION> 197,119
<TOTAL-ASSETS> 840,809
<CURRENT-LIABILITIES> 239,900
<BONDS> 17,298
<COMMON> 10,289
0
0
<OTHER-SE> 548,533
<TOTAL-LIABILITY-AND-EQUITY> 840,809
<SALES> 1,272,693
<TOTAL-REVENUES> 1,272,693
<CGS> 932,138
<TOTAL-COSTS> 932,138
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,304
<INCOME-PRETAX> 62,519
<INCOME-TAX> 17,830
<INCOME-CONTINUING> 44,689
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44,689
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0
</TABLE>
