<PAGE>
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
For the fiscal year ended January 29, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-7258
CHARMING SHOPPES, INC.
(Exact name of registrant as specified in its charter)
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)
Registrant's telephone number, including area code (215) 245-9100
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)
(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 (Sec. 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 April 17, 2000, 100,993,140 common shares were outstanding. The
aggregate market value of the common shares (based upon the closing price
on April 17, 2000), held by non-affiliates was approximately $550 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.
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CHARMING SHOPPES, INC.
2000 FORM 10-K ANNUAL REPORT
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TABLE OF CONTENTS
PART I
<S> <C>
Item 1 Business
General...................................................... 1
Merchandising and Marketing.................................. 2
Purchasing................................................... 5
Distribution................................................. 6
Stores....................................................... 6
Store Management and Employees............................... 7
Trademarks and Servicemarks.................................. 8
Cautionary Statement for Purposes of the "Safe
Harbor" Provisions of the Private Securities
Litigation Reform Act of 1995.............................. 8
Item 2 Properties..................................................... 9
Item 3 Legal Proceedings.............................................. 10
Item 4 Submission of Matters to a Vote of Security Holders............ 10
Item 4a Executive Officers of the Registrant........................... 11
PART II
Item 5 Market for the Registrant's Common Equity and
Related Stockholder Matters.................................. 13
Item 6 Selected Financial Data........................................ 14
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 16
Forward-Looking Statements................................... 16
Acquisitions................................................. 16
Results of Operations........................................ 18
Financial Condition.......................................... 25
Item 7a Quantitative and Qualitative Disclosures About Market Risk..... 31
Item 8 Financial Statements and Supplementary Data.................... 32
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure..................................... 62
PART III
Item 10 Directors and Executive Officers of the Registrant............. 63
Item 11 Executive Compensation......................................... 63
Item 12 Security Ownership of Certain Beneficial Owners and Management. 63
Item 13 Certain Relationships and Related Transactions................. 63
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K 64
</TABLE>
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PART I
Item 1. Business
General
Charming Shoppes, Inc., a Pennsylvania corporation formed in 1969, operates
through its subsidiary corporations 1,740 women's specialty apparel stores
in 48 states, under the names Fashion Bug, Fashion Bug Plus, Catherine's,
PS...Plus Sizes, Added Dimensions, The Answer, and Modern Woman (as of
January 29, 2000). 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 1,185 Fashion Bug stores specialize in selling, at moderate
and popular prices, a wide variety of large-size, misses, junior, and
girls-size sportswear, dresses, coats, lingerie, accessories, and casual
footwear. The stores sell both brand-name merchandise and specially
manufactured garments under one of the Company's private labels. The
majority of these stores are located in the Northeast quadrant of the
United States.
During the fiscal year ended January 29, 2000 ("Fiscal 2000"), the Company
acquired the Catherine's Stores chain of 436 retail stores and the Modern
Woman chain of 136 retail stores. As of January 29, 2000, Catherine's
Stores operated 433 retail stores in 41 states and the District of
Columbia, specializing in large-size women's apparel, under the names
Catherine's, PS...Plus Sizes, Added Dimensions, and The Answer. These
stores are located primarily in the Southeast, Mid-Atlantic, and Eastern
Central regions of the United States. As of January 29, 2000, Modern Woman
operated 122 retail stores in 22 states throughout the United States,
specializing in large-size women's apparel. These stores are located
primarily in the West Coast, Midwest, and New Jersey/Long Island markets.
The Company plans to consolidate the Modern Woman chain into Catherine's
Stores and to operate Catherine's Stores as a nationwide chain of more than
500 women's large-size specialty apparel stores.
The Company's real estate strategy is focused on locating stores in strip
shopping centers. As of the end of Fiscal 2000, approximately 85% of the
Company's stores were located in strip shopping centers. The Company
believes that its customers visit strip shopping centers more frequently
than malls for their shopping needs as a result of the mix of the tenants
in, and the convenience of, strip shopping centers. In addition, the
Company benefits from substantially lower occupancy costs as compared to
store occupancy costs in malls.
The Company's Fashion Bug stores average 9,000 square feet in size. During
Fiscal 2000, the Company opened 74 Fashion Bug stores while closing 24
stores. The Company's Catherine's, PS...Plus Sizes, Added Dimensions, The
Answer, and Modern Woman stores average 4,000 square feet in size. Since
the dates of acquisition of Catherine's Stores and Modern Woman, the
(1)
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Company opened 1 Modern Woman store and closed 3 Catherine's and 15 Modern
Woman stores. The Company continues to seek new locations that meet its
financial and operational objectives.
The Company employs a business strategy that focuses efforts on providing
fashion apparel and related merchandise which meet the demands of its
primary customers. For Fashion Bug stores, such customers are generally in
the 20 to 49 year old age group, generally shop in the lower to moderate
price range, and tend to follow, rather than set, fashion trends.
Generally, the targeted Catherine's customer wears size 14 and larger, is
over 35 years of age, generally shops in the moderate to better price
range, has traditional but fashion-conscious tastes, and is primarily
concerned with fit and value in apparel selection.
The Company responds to the needs of its customers by providing a variety
of choices in its merchandise assortment. The Company offers an assortment
of both casual and career-oriented products. Merchandise that complements
these areas, such as accessories, intimate apparel, and footwear, are also
featured.
Product assortments are generally tailored to the demographics of an area,
and merchandise is available for six seasons -- spring, summer,
transitional, fall, holiday, and transitional. The Company maintains
quality standards with respect to merchandise fabrication, construction,
and fit. Realistic initial pricing is also part of the business strategy.
The pricing provides sufficient margin to permit merchandise discounts in
order to stimulate customer purchases. In addition, the Company's
advertising expenditures are focused on stimulating customer traffic
through targeted direct mail advertising to preferred customers. These
customers are selected from a database of customer purchase information
that includes approximately 2.8 million active proprietary credit card
customers, as well as customers who utilize cash and third-party credit
cards. The Company also may use radio, television, and newspaper
advertising to stimulate traffic at certain strategic times of the year.
In order to meet the demands of its primary customers, the Company utilizes
the domestic wholesale apparel marketplace for a significant portion of its
purchases. This allows management to maintain short lead times, respond
quickly to current fashion trends, and quickly replenish merchandise
inventory as necessary. The Company uses its overseas sourcing operation
and agency relationships to procure basic low-risk commodity merchandise,
which generally requires longer lead times.
Merchandising and Marketing
The Company employs a merchandise strategy that emphasizes a variety of
choices in its merchandise assortment. The Company utilizes domestic
fashion market guidance, fashion advisory services, and in-store testing to
determine the optimal product assortment for its customer base. Management
believes that this strategy results in a higher degree of accuracy in
predicting consumer preferences while reducing the Company's inventory
investment and risk. The purpose of this strategy is to enable the Company
to provide merchandise assortments to meet its customers' preferences.
(2)
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The Company offers an assortment of both casual and career-oriented
products, in plus (large-size), misses, petite, junior, and girls sizes.
Merchandise that complements these areas, such as accessories, intimate
apparel, and footwear, are also featured. In addition, Catherine's Stores
offers a broad assortment of merchandise in extended sizes (over size 26),
making the Company one of the few retailers to emphasize these sizes.
Product assortments are generally tailored to the demographics of an area,
and merchandise is available for six seasons -- spring, summer,
transitional, fall, holiday, and transitional. In addition, the Company
maintains quality standards with respect to merchandise fabrication,
construction and fit. The Company also continues to redefine its
merchandise assortments to reflect the needs and demands of diverse
customer groups. The Company has distribution systems in place whereby
stores that are identified as having certain customer profiles can be
merchandised with products specifically targeted to such customers. In
addition, the Company continues to work to improve inventory turnover by
better managing the inventory receipt flow of seasonal merchandise to its
stores across all geographic regions. Further, the Company addresses the
different lifestyle needs of its customers with respect to fashion by
varying the depth and assortments of career and casual merchandise.
The Company employs a realistic pricing strategy that is aimed at setting
the initial price markup of fashion merchandise in order to increase the
percentage of sales at the ticketed price. Management believes this
strategy has resulted in a greater degree of credibility with the customer,
reducing the need for aggressive price promotions. The pricing does allow
sufficient margin to permit merchandise discounts in order to stimulate
customer purchases when necessary. The Company expects to continue to
achieve a higher initial markup in the basic low-risk commodity merchandise
that is purchased through its overseas sourcing operations.
The Company continues to be promotionally oriented. The Company's
advertising expenditures are focused on stimulating customer traffic
through targeted direct mail advertising to customers. These customers are
selected from a database of more than 18 million proprietary credit card,
third-party credit card, and cash customers. The Company also may use
radio, television, and newspaper advertising to stimulate traffic at
certain strategic times of the year. Pricing policies, displays, store
promotions, and convenient store hours are also used to attract customers.
With the planning and guidance 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.
In order to meet the demands of its primary customers, the Company utilizes
the domestic wholesale apparel marketplace for a significant portion of its
purchases. This allows management to maintain short lead times, respond
quickly to current fashion trends, and quickly replenish merchandise
inventory as necessary. The Company uses its overseas sourcing operation
to procure basic low-risk commodity merchandise, which generally requires
longer lead times. In Fiscal 2000, the Company purchased approximately 70%
of its merchandise in the domestic market, with the remainder being
(3)
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developed by the Company's sourcing organization. Catherine's Stores has
purchased approximately 85% of its merchandise in the domestic marketplace.
The Company anticipates a reduction in the percentage of domestically-
sourced product for Catherine's to a level closer to the Company's overall
domestic sourcing percentage of 70%.
The retail sale of women's apparel is a highly competitive business with
numerous competitors, including moderate-price department stores, discount
department stores, other low- to moderate-price, moderate-price, and
moderate-to-better-price specialty apparel stores, and mail-order
companies. 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's Fashion Bug stores experience a normal seasonal sales pattern
for the retail apparel industry, with peak sales occurring during the
Easter, Labor Day, and Christmas seasons. 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 seasonal merchandise over
from one season to another. Sales for Fashion Bug for the four quarters of
Fiscal 2000, as a percent of total Fashion Bug sales, were 22.7%, 27.4%,
22.6% and 27.3%, respectively. The acquisitions of Catherine's Stores and
Modern Woman are not expected to have a material impact on the Company's
overall seasonal sales pattern.
The Company accelerated merchandise production schedules and the receipt of
inventories from January 2000 to December 1999, and shipped additional
merchandise to its stores to help protect against possible disruptions
resulting from the Year 2000 computer problem. The Company did not
experience any significant disruptions as a result of the Year 2000
problem.
The Company encourages sales through its proprietary credit cards. The
Company's proprietary credit card programs have approximately 2.8 million
active accounts, which accounted for approximately 34% of retail sales in
Fiscal 2000. The Company believes that the credit card is a promotional
vehicle in itself, engendering customer loyalty, creating a substantial
base for targeted direct mail promotion, and encouraging incremental sales.
The Company controls and services its entire Fashion Bug proprietary credit
card file, and has entered into various agreements whereby it securitizes
and sells all of these receivables. In each securitization, the
receivables are transferred by the Company's credit card bank to a trust,
which issues certificates representing ownership interests in the trust.
Under these agreements, the Company continues 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
(4)
<PAGE>
affected by the securitization agreements. During the second quarter of
Fiscal 2000, the Company, through the trust, completed an offering of $150
million of asset-backed certificates with a five-year term to replace its
five-year facility that matured in April 1999.
The Company's Fashion Bug proprietary credit card portfolio is administered
by Spirit of America National Bank, a national banking association that is
a wholly-owned subsidiary of the Company. Spirit of America National Bank
approves credit applications and a third party performs all billing and
collection activities. The Company's proprietary credit card customers
tend to be a higher credit risk than bank-issued credit card customers.
Catherine's Stores also offers its customers the convenience of a private-
label credit card. The Company uses a third-party bank to finance and
service the Catherine's private-label credit card program. This third-
party bank provides new account approval, credit authorization, billing,
and account collection services. Under a non-recourse agreement with the
third-party bank, the Company is reimbursed daily with respect to sales
generated by the Catherine's Stores private-label credit card. The
agreement may require the Company to repurchase receivables from the third-
party bank under certain conditions relating to a change in control of the
Company.
The Company's stores feature wall and selling-floor displays that
coordinate merchandise in order to promote multiple sales. The stores,
which the Company believes must present a fresh, contemporary shopping
environment, are redecorated or remodeled as necessary. 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.
Purchasing
Purchasing is conducted on a departmental basis for each of the Fashion Bug
and Catherine's 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 that 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 merchandise information systems that utilize point-of-sale
terminals. Through these terminals, 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 needed, including re-order, markdowns, and
changes in the buying plans for upcoming seasons.
(5)
<PAGE>
During Fiscal 2000, the Company's Fashion Bug stores purchased merchandise
from approximately 700 suppliers, none of which accounted for more than 5%
of its purchases. Catherine's Stores purchased merchandise from
approximately 630 suppliers, none of which accounted for more than 5% of
its purchases. The Company purchased approximately 70% of its merchandise
in the domestic market on an open account basis, with the remainder being
obtained through the Company's sourcing organization. During Fiscal 2000,
the Company conducted its sourcing operations in 21 countries through its
offices in Hong Kong and Singapore. Merchandise purchases outside the
United States are done via letter of credit with third party vendors, with
the Company being the importer of record. To date, the Company has not
experienced difficulties in purchasing merchandise overseas or importing
such merchandise into the United States. Should political instability
result in a disruption of normal activities in a country with which the
Company does business, the Company believes it would have adequate
alternative sources of supply.
Distribution
For its Fashion Bug stores, the Company operates a distribution center in
Greencastle, Indiana. The 150-acre tract of land contains a building of
approximately 900,000 square feet. The Company estimates that, by
operating multiple shifts, it would have the ability to service over 2,000
stores from this distribution center. For Catherine's Stores, the Company
operates a 213,000 square foot distribution center in Memphis, Tennessee,
which is designed to handle up to approximately 1,000 stores.
The majority of merchandise purchased by the Company is received at the
Greencastle and Memphis facilities, 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 sorting system in these distribution centers
enhances the flow of merchandise from receipt to shipment. Merchandise is
shipped to each store by trucks operated principally by common carriers.
The Company utilizes computerized automated distribution models that
enhance the efficiency of the distribution operations. These models enable
the distribution operations to build various customer profiles into each
store's plan. These profiles determine not only the number of units, but
also the type of unit to be distributed to each store.
The Company's merchandise and purchasing strategy, and enhancements to the
Company's inventory management, facilitate the timely and orderly purchase
and flow of merchandise. This enables the Company's stores to offer fresh
product assortments on a regular basis.
Stores
The Company's 1,740 stores (as of January 29, 2000) are primarily located
in suburban areas and small towns. Approximately 85% of these stores are
located in strip shopping centers, while the balance are located in
(6)
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community and regional malls. Typically, stores are open seven days per
week, eleven hours per day Monday through Saturday, and seven hours on
Sunday.
The Company's Fashion Bug stores range in size, generally, from 5,000
square feet to 15,000 square feet, averaging approximately 9,000 square
feet. The Company's Catherine's Stores range in size, generally, from
2,000 square feet to 8,000 square feet, averaging approximately 4,000
square feet. Total leased space was 12,911,000 square feet as of the end
of Fiscal 2000, as compared to 10,462,000 square feet as of the end of the
fiscal year ended January 30, 1999 ("Fiscal 1999").
The Company plans to open approximately 115 stores, remodel approximately
50 stores, and relocate approximately 50 stores during the fiscal year
ending February 3, 2001 ("Fiscal 2001").
The Company's store openings and closings over the past five fiscal years
are set forth in the following table:
<TABLE>
<CAPTION>
Year Ended
Jan. 29, Jan. 30, Jan. 31, Feb. 1, Feb. 3,
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Number of Stores
Open at beginning
of period.............. 1,135 1,135 1,134 1,301 1,428
Opened during period..... 75 65 25 5 47
Acquired during period... 572 0 0 0 0
Closed or combined
during period.......... (42) (65) (24) (172) (174)
----- ----- ----- ----- -----
1,740 1,135 1,135 1,134 1,301
===== ===== ===== ===== =====
Store Type
Fashion Bug.............. 1,185 1,135 1,135 1,134 1,301
Catherine's and
Modern Woman........... 555 0 0 0 0
----- ----- ----- ----- -----
1,740 1,135 1,135 1,134 1,301
===== ===== ===== ===== =====
</TABLE>
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 has district managers, who travel to all stores in
their district on a frequent basis, to supervise store operations. Each
(7)
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district manager has responsibility for an average of approximately 11
stores. Regional managers, who report to a Director of Stores, supervise
the district managers. Generally, store managers are appointed from the
group of assistant managers, and district managers are appointed from the
group of store managers. The Company's policy is 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 the end of Fiscal 2000, the Company employed approximately 18,000
people, which included approximately 11,000 part-time employees. In
addition, a number of temporary employees are hired during the Christmas
season. Some of the Company's Memphis, Tennessee distribution center
employees are represented by the Upholstery and Allied Industries Division
of the United Steelworkers of America. The Company and the union have
ratified their contract, which expires in 2001. There have been no
material effects on the Company's operations to date as a result of the
union representation.
Trademarks and Servicemarks
The Company owns, or is in the process of obtaining, all rights to the
trademarks and trade names it believes are necessary to conduct its
business as presently operated. "Fashion Bug" (R), "Fashion Bug Plus" (R),
"Glitter" (R), "Maggie Lawrence" (R), "Stefano" (R), "L.A. Blues" (R),
"Catherine's" (R), "PS...Plus Sizes, Plus Savings," "Added Dimensions" (R),
"The Answer Large Sizes for Less" (R), "The Answer the Elegant Large-Size
Discounter" (R), "CST Studio" (R), "CST Sport," "Maggie Barnes" (R), "Kathy
White" (R), "Liz & Me" (R), "AD Sport" (R), "Grove Avenue" (R), "Jon
Lawrence" (R), "Capistrano" (R), "Fitting Image" (R), and "Modern Woman"
(R) and several other trademarks and servicemarks of lesser importance to
the Company have been registered or are in the process of being registered
with the United States Patent and Trademark Office and in other countries.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 1995
The Company has made in this report, and from time to time may otherwise
make, forward-looking statements concerning the Company's operations,
performance and financial condition. This report includes, in particular,
forward-looking statements regarding the Company's expectations of future
performance following its acquisitions, restructurings, and expense
reduction initiatives, and the expected benefits thereof. In addition, the
information contained herein includes certain forward-looking statements
regarding sales and earnings performance, store openings and closings, cost
savings, capital requirements, management's expectations for Year 2000
compliance, the Company's exposure to fluctuations in interest rates, and
other matters. Such forward-looking statements are subject to various
(8)
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risks and uncertainties that could cause actual results to differ
materially from those currently anticipated due to a number of factors,
including those identified below.
Dependence on Key Management
The Company's success and its ability to successfully execute its business
strategy depends largely on the efforts and abilities of Dorrit J. Bern,
the Company's Chairman of the Board, President and Chief Executive Officer,
and her management team. The loss of the services of one or more of such
key personnel could have a material adverse effect on the Company's
business and financial results. The Company does not maintain key-man
insurance policies with respect to any of its employees.
Other Factors
Actual results could also differ materially from those currently
anticipated due to (i) rapid changes in or miscalculation of fashion
trends, (ii) extreme or unseasonable weather conditions, (iii) economic
downturns, a weakness in overall consumer demand, inflation, and cyclical
variations in the retail market for women's fashion apparel, (iv) a further
increase in the Federal (or State) Minimum Wage, (v) an acceleration in the
rate of business failures in the retail industry, (vi) the loss of certain
or all of the collateral pledged under the Company's credit facilities,
(vii) the availability and/or cost of receivables securitization
arrangements, (viii) an increase in the rate of bad debt expense among the
Company's proprietary credit card customers, (ix) the risks attendant to
the sourcing of the Company's merchandise needs abroad, including exchange
rate fluctuations, political instability, trade sanctions or restrictions,
changes in quota and duty regulations, delays in shipping, or increased
costs of transportation, (x) the interruption of merchandise flow to the
Company's retail stores from its centralized distribution facilities, (xi)
the availability and cost of external financing, (xii) competitive
pressures, (xiii) failure to realize merger-related synergies, (xiv)
disruptions to operations as a result of Year 2000 compliance issues, and
(xv) the imposition of more onerous payment terms for merchandise
purchases. In addition, the market price of the Company's Common Stock,
which is quoted on the Nasdaq National Market, may be subject to
significant fluctuation in response to quarter-to-quarter variations in the
Company's revenues and earnings, variations in monthly sales figures, and
general stock market volatility unrelated to the Company's operating
performance.
Item 2. Properties
The Company leases all store premises, with the exception of 6 stores,
which the Company owns. Typically, store leases have initial terms of 5 to
20 years and contain provisions for renewal options, additional rental
charges based on sales performance, and payment of real estate taxes and
common area charges.
(9)
<PAGE>
With respect to leased stores open as of January 29, 2000, 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> <C>
2000 51
2001 - 2005 502
2006 - 2010 268
2011 - 2015 270
2016 - 2020 246
2021 - 2025 307
Thereafter 96
</TABLE>
The Company owns a 900,000 square foot distribution center in Greencastle,
Indiana that services the Company's Fashion Bug stores. In 1998, the
Company closed its 515,000 square foot distribution center in Bensalem,
Pennsylvania in conjunction with the decision to consolidate the Company's
distribution center operations in Greencastle. In 1999, the Company sold
the Bensalem distribution center, retaining 91,000 square feet of office
space under a lease expiring in March 2004.
As a result of the acquisition of Catherine's Stores, the Company owns a
213,000 square foot distribution center that services the Company's
Catherine's stores and a buying office in New York City that occupies
13,000 square feet of leased space.
The Company also owns approximately 22 acres in Bensalem, Pennsylvania,
with a 145,000 square foot office building housing the Company's data
processing facility and additional administrative offices. Spirit of
America National Bank, the Company's wholly-owned credit card bank
subsidiary, occupies 30,000 square feet of leased office space in Miami
Township, Ohio. The Company owns or leases a total of 50,000 square feet
of office and warehouse space in Asia.
Item 3. Legal Proceedings
There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business, to which the Company or any
of its subsidiaries is a party or of which any of their property is the
subject.
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 covered by this report.
(10)
<PAGE>
Item 4a. Executive Officers of the Registrant
The following list contains certain information relative to Executive
Officers of the Company as of April 17, 2000. There are no family
relationships among any Executive Officers. 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 2000, or until their successors are duly elected and qualified.
Dorrit J. Bern, 49, has served as Chairman of the Board of Directors since
January 1997. Prior to that, she served as Vice Chairman of the Board of
Directors from September 1995 to January 1997. She has also served as
President and Chief Executive Officer since September 1995. Prior to that,
she served as Group Vice President of Women's Apparel and Home Fashions for
Sears, Roebuck & Co. from December 1993 to August 1995. Ms. Bern's term as
a Director expires in 2002.
Anthony A. DeSabato, 51, has served as Executive Vice President and Cor-
porate Director of Human Resources for more than five years.
Eric M. Specter, 42, has served as Executive Vice President - Chief
Financial Officer since January 1997. He also served as Treasurer from
February 1998 to March 2000. Prior to that he served as Vice President -
Chief Financial Officer from December 1995 to January 1997. Prior to that,
he served as Vice President - Corporate Controller for more than five
years.
Colin D. Stern, 51, has served as Executive Vice President and General
Counsel for more than five years. He has also served as Secretary since
February 1998.
Elizabeth Williams, 46, was appointed President of Fashion Bug in December
1999. Prior to that, she served as Executive Vice President -
Merchandising from October 1995 to December 1999. Prior to that, she
served as Divisional Vice President - Misses Sportswear and Special Sizes
for Sears, Roebuck & Co. from February 1994 to October 1995.
Erna Zint, 56, has served as Executive Vice President - Sourcing since
January 1996. Prior to that, she served as Corporate Vice President -
Southeast Asia Operations for Leslie Fay Companies, Inc. from December 1990
to December 1995.
Carmen Monaco, 53, has served as Vice President - Marketing since May 1997.
Prior to that he served as Senior Vice President - Marketing/Advertising
for Goody's Family Clothing Inc. from August 1992 to May 1997.
John J. Sullivan, 53, has served as Vice President - Corporate Controller
since October 1998. Prior to that, he served as Senior Vice President and
Chief Financial Officer for National Media Corp. from January 1998 to
October 1998 and from September 1991 to April 1995, and as Senior Vice
President of Administration from April 1995 to January 1998.
(11)
<PAGE>
Jeffery A. Warzel, 43, has served as Senior Vice President - Infrastructure
Operations and Strategic Planning since January 2000. Prior to that, he
served as Vice President - Operations Support and Business Development for
Western Auto, a subsidiary of Sears Roebuck & Co. from August 1996 to
December 1999. Prior to that, he served as Vice President - Process
Improvement for Melville Corporation from 1992 to 1996.
Jonathon Graub, 41, has served as Senior Vice President - Real Estate,
since December 1999. Prior to that, he served as Vice President - Real
Estate for more than five years.
(12)
<PAGE>
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
(a) Principal Market: The Company's Common Stock is traded on the over-
the-counter market and quoted on the Nasdaq National Market under the
symbol CHRS.
(b) The following table sets forth the high and low sale prices for the
Company's Common Stock during the indicated periods, as reported by Nasdaq.
<TABLE>
<CAPTION>
Fiscal 2000 Fiscal 1999
High Low High Low
---- --- ---- ---
<S> <C> <C> <C> <C>
1st Quarter.... $4 5/8 $2 13/16 $5 1/8 $4
2nd Quarter.... 7 1/16 3 9/16 5 3/4 4 1/2
3rd Quarter.... 6 13/16 4 9/16 5 3 1/4
4th Quarter.... 8 1/4 5 4 5/8 3 3/8
</TABLE>
On October 2, 1995, the Company's Board of Directors announced an
indefinite suspension of dividends on the Company's Common Stock. On
November 30, 1995, the Company entered into borrowing agreements that
require, among other things, that the Company not pay dividends on its
Common Stock (see "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Item 8. Financial
Statements and Supplementary Data; Notes to Consolidated Financial
Statements - Debt" below).
(c) Approximate Number of Holders of Common Stock:
The approximate number of holders of record of the Company's Common
Stock as of April 17, 2000 was 2,383. This number excludes individual
stockholders holding stock under nominee security position listings.
(d) Recent Sales of Unregistered Securities
Not applicable.
(13)
<PAGE>
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 3, 1996 through January
29, 2000. 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.
Financial Statements and Supplementary Data" of this Form 10-K.
<TABLE>
<CAPTION>
CHARMING SHOPPES, INC. AND SUBSIDIARIES
FIVE-YEAR COMPARATIVE SUMMARY
Year Ended
(in thousands, except Jan. 29, Jan. 30, Jan. 31, Feb. 1, Feb. 3,
per share amounts) 2000(1) 1999 1998 1997 1996(2)
------- ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
Net sales.............. $1,196,529 $1,035,160 $1,016,537 $1,016,297 $1,102,384
Restructuring charge
(credit)............ (3,471)(3) 54,246(4) 0 0 103,000(5)
Non-recurring gain from
demutualization of
insurance company.... 6,700(6) 0 0 0 0
Non-recurring gain from
asset securitization. 0 0 13,018(7) 0 0
Extraordinary gain on
early retirement
of debt, net of tax.. 1,232 0 0 0 0
Net income (loss)...... 45,059 (20,135) 19,334 (7,237) (139,241)
Basic net income (loss)
Per share............ .46 (.20) .18 (.07) (1.35)
Net income (loss)
per share, assuming
dilution............. .43 (.20) .18 (.07) (1.35)
Cash dividends per
common share(8)...... .00 .00 .00 .00 .045
At year end:
Total assets........... $784,796 $684,649 $709,738 $710,397 $681,746
Current portion -
Long-term debt....... 1,920 16 16 16 57,691
Long-term debt......... 105,213 119,475 138,116 138,128 38,102
Working capital........ 161,376 192,274 163,208 224,144 199,457
Stockholders' equity... 436,263 353,572 416,810 421,035 419,029
</TABLE>
[FN]
(1) Results for the fiscal year ended January 29, 2000 ("Fiscal 2000")
include the results of Catherines Stores Corporation, acquired January 7,
2000, and Modern Woman Holdings, Inc., acquired August 2, 1999, from the
dates of their respective acquisitions (See "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations;
Acquisitions" and "Item 8. Financial Statements and Supplementary Data;
Notes to Consolidated Financial Statements -- Acquisitions" below.)
(2) The fiscal year ended February 3, 1996 consisted of 53 weeks.
(14)
<PAGE>
(3) During Fiscal 2000, the Company revised its estimates of costs
recognized during the fiscal year ended January 30, 1999 ("Fiscal 1999")
relating to the closing of the Company's Bensalem distribution center and
elimination of the Company's men's business (see note (4) below). As a
result, the Company recognized pre-tax restructuring credits of $2,834,000
relating to the closing of the distribution center and $2,096,000 relating
to the elimination of the men's business. In addition, the Company
recognized a pre-tax restructuring charge of $1,459,000 in Fiscal 2000 in
conjunction with the consolidation of the Modern Woman chain of stores into
the Catherine's Stores chain. (See "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations; Acquisitions"
and "Results of Operations -- Restructuring Charge (Credit)" and "Item 8.
Financial Statements and Supplementary Data; Notes to Consolidated
Financial Statements -- Restructuring Charge (Credit)" below.)
(4) During Fiscal 1999, the Company's Board of Directors approved a
restructuring plan in conjunction with the elimination of the Company's
men's business, which resulted in a pre-tax charge of $34,000,000. In
addition, the Company's Board of Directors approved a restructuring plan in
conjunction with the decision to consolidate the Company's distribution
center operations, which resulted in a pre-tax charge of $20,246,000. (See
"Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations; Results of Operations -- Restructuring Charge
(Credit)" and "Item 8. Financial Statements and Supplementary Data; Notes
to Consolidated Financial Statements -- Restructuring Charge (Credit)"
below.)
(5) During the fiscal year ended February 3, 1996, the Company's Board of
Directors approved a restructuring plan which resulted in a pre-tax charge
of $103,000,000.
(6) During Fiscal 2000, the Company received a stock distribution from one
of its mutual insurance carriers in connection with the carrier's
conversion to a publicly-held corporation (demutualization). The Company
recorded the distribution at its fair value and recognized the resulting
non-recurring gain in income from continuing operations (see "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations; Results of Operations -- Non-recurring Gain from
Demutualization of Insurance Company" and "Item 8. Financial Statements
and Supplementary Data; Notes to Consolidated Financial Statements -- Non-
recurring Gain from Demutualization of Insurance Company" below).
(7) During the fiscal year ended January 31, 1998 ("Fiscal 1998"), the
Company recorded a non-recurring gain of $13,018,000 as a result of the
adoption of SFAS No. 125 as related to the sale of credit card receivables
during Fiscal 1998 (see "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations; Results of Operations --
Non-recurring Gain from Asset Securitization" and "Item 8. Financial
Statements and Supplementary Data; Notes to Consolidated Financial
Statements -- Asset Securitization" below).
(15)
<PAGE>
(8) On October 2, 1995, the Company's Board of Directors announced an
indefinite suspension of dividends on the Company's Common Stock. In
addition, the Company's revolving credit facility requires that the Company
not pay dividends on its Common Stock. (See "Item 5. Market for the
Registrant's Common Equity and Related Stockholders' Matters" above).
</FN>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
This Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the financial
statements and the notes thereto included under "Item 8. Financial
Statements and Supplementary Data" of this Form 10-K.
FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial Condition and
Results of Operations contains certain forward-looking statements
concerning the Company's operations, performance, and financial condition.
In particular, it includes forward-looking statements regarding sales and
earnings performance, store openings and closings, cost savings, capital
requirements, management's expectations for Year 2000 compliance, the
Company's exposure to fluctuations in interest rates, and other matters.
Such forward-looking statements are subject to various risks and
uncertainties that could cause actual results to differ materially from
those indicated in the forward-looking statements. Such risks and
uncertainties may include, but are not limited to, (i) rapid changes in, or
miscalculation of, fashion trends, (ii) extreme or unseasonable weather
conditions, (iii) economic downturns, a weakness in overall consumer
demand, inflation, and cyclical variations in the retail market for women's
fashion apparel, (iv) the risks attendant to the sourcing of the Company's
merchandise needs abroad, including exchange rate fluctuations, political
instability, trade sanctions or restrictions, changes in quota and duty
regulations, delays in shipping, or increased costs of transportation, (v)
competitive pressures, (vi) failure to realize merger-related synergies,
(vii) fluctuations in interest rates, and (viii) disruption to operations
as a result of Year 2000 compliance issues. These, and other risks and
uncertainties are detailed further in this Item 7, in "Part I, Item 1 -
Business: Cautionary Statement for Purposes of the Safe Harbor Provisions
of the Private Securities Litigation Reform Act of 1995," and in the
Company's reports filed with the Securities and Exchange Commission from
time to time.
ACQUISITIONS
On August 2, 1999, the Company completed the acquisition of 100% of the
outstanding stock of Modern Woman Holdings, Inc. ("Modern Woman") for $8.7
million net of cash acquired. Modern Woman operated 136 retail apparel
stores in 24 states, specializing in large-size women's apparel. The
acquisition has been accounted for as a purchase, and Modern Woman's
(16)
<PAGE>
results of operations are included in the Company's financial statements as
of the acquisition date. Prior-period results have not been restated. The
fair value of the net assets acquired exceeded the purchase price, and the
excess has been applied to reduce the fair value of non-current assets.
The recorded values of assets acquired and liabilities assumed are subject
to adjustment, pending final determination of their acquisition values.
The final allocation of the purchase price is not expected to differ
materially from the allocations used to prepare these financial statements.
The acquisition was financed through the use of internally-generated funds.
On January 7, 2000, the Company completed the acquisition of 100% of the
outstanding stock of Catherines Stores Corporation ("Catherine's Stores")
for $136.6 million net of cash acquired. The Company also assumed $11.2
million of short-term and long-term debt and capital lease obligations.
The acquisition was funded from the Company's existing cash and available-
for-sale securities. Catherine's Stores operated 436 retail apparel stores
in 40 states and the District of Columbia, specializing in large-size
women's apparel. The Company plans to consolidate its Modern Woman stores
into its Catherine's Stores. In addition, the Company expects to realize
merger-related cost savings of $4-$5 million in the fiscal year ended
February 3, 2001 ("Fiscal 2001") and $8-$10 million in the fiscal year
ended February 2, 2002 ("Fiscal 2002"). The acquisition has been accounted
for as a purchase, and Catherine's Stores results of operations are
included in the Company's financial statements as of the acquisition date.
Prior-period results have not been restated. Assets acquired and
liabilities assumed have been recorded at their estimated fair values, and
are subject to adjustment pending final determination of their acquisition
values. The final allocation of the purchase price is not expected to
differ materially from the allocations used to prepare these financial
statements. The purchase price exceeded the fair value of identifiable net
assets acquired, and the excess, approximately $97.7 million, has been
accounted for as goodwill, and will be amortized over a 20-year period.
In connection with the consolidation of the Modern Woman stores into
Catherine's Stores, the Company recorded a restructuring charge of $1.4
million in the fourth quarter of Fiscal 2000. The restructuring charge was
primarily for lease termination costs related to the closing of 11
geographically overlapping Modern Woman stores.
(17)
<PAGE>
RESULTS OF OPERATIONS
Financial Summary
The following table sets forth certain financial data expressed as a per-
centage of net sales and on a comparative basis:
<TABLE>
<CAPTION>
Percentage Increase
(Decrease)
Percentage of Net Sales From Prior Year
Fiscal Fiscal Fiscal Fiscal Fiscal
2000 1999 1998 2000-1999 1999-1998
---- ---- ---- --------- ---------
<S> <C> <C> <C> <C> <C>
Net sales.............. 100.0% 100.0% 100.0% 15.6% 1.8%
Cost of goods sold,
buying, and occupancy 71.4 74.5 76.0 10.9 (0.2)
Selling, general, and
administrative....... 23.6 23.8 22.9 14.7 5.9
Non-recurring gain from
demutualization of
insurance company.... 0.6 -- -- ** --
Non-recurring gain from
asset securitization. -- -- 1.3 -- (100.0)
Restructuring charge
(credit)............. (0.3) 5.2 -- (106.4) **
Interest expense....... 0.6 1.0 1.0 (27.3) (3.3)
Income tax provision
(benefit)............ 2.2 (1.0) 1.0 ** **
Income (loss) before
extraordinary item... 3.7 (1.9) 1.9 ** **
Gain on early
retirement of debt,
net of taxes......... 0.1 -- -- ** --
Net income (loss)...... 3.8 (1.9) 1.9 ** **
</TABLE>
- --------------------
[FN]
** Not meaningful
</FN>
(18)
<PAGE>
Net Sales
The following table sets forth certain information related to the Company's
net sales:
<TABLE>
<CAPTION>
Year Ended Year Ended
January 29, 2000 January 30, 1999
---------------- ----------------
Fiscal Fourth Fiscal Fourth
Year Quarter Year Quarter
---- ------- ---- -------
<S> <C> <C> <C> <C>
Increase (decrease) in comparable
Fashion Bug store sales (1)........ 8.7% 11.1% (0.3%) (4.1%)
Sales from new Fashion Bug stores as
a percentage of total prior-period
sales.............................. 5.2% 7.3% 4.1% 4.3%
Sales from Catherine's and Modern
Woman stores as a percentage of
total prior-period sales (2)....... 5.6% 13.8% -- --
Prior-period sales from closed
Fashion Bug stores as a percentage
of total prior-period sales........ (3.6%) (3.7%) (2.0%) (2.7%)
Increase (decrease) in total sales... 15.6% 28.0% 1.8% (2.4%)
</TABLE>
- --------------------
[FN]
(1) Sales from stores in operation during the same weeks of each period.
(2) Sales from stores acquired during the year ended January 29, 2000 from
their dates of acquisition (see "ACQUISITIONS" above).
</FN>
Net sales for the fiscal year ended January 29, 2000 ("Fiscal 2000")
totaled $1,196,529,000 as compared to net sales of $1,035,160,000 for the
year ended January 30, 1999 ("Fiscal 1999") and net sales of $1,016,537,000
for the fiscal year ended January 31, 1998 ("Fiscal 1998"). Net sales for
the fourth quarter of Fiscal 2000 totaled $348,370,000 as compared to net
sales of $272,229,000 for the fourth quarter of Fiscal 1999 and net sales
of $278,950,000 for the fourth quarter of Fiscal 1998. Net sales for
Fiscal 2000 include the results of the Modern Woman and Catherine's Stores
chains from the dates of their respective acquisitions.
During Fiscal 2000, increases in comparable Fashion Bug store sales were
achieved in sportswear, coats, intimate apparel, accessories, and girls, as
customers responded favorably to the Company's merchandise offerings
throughout the year. The Fiscal 1999 decreases in comparable store sales
were primarily attributable to the elimination of men's merchandise from
the Company's stores (see "Restructuring Charge (Credit) - STORE
RESTRUCTURING AND ELIMINATION OF MEN'S MERCHANDISE FROM THE COMPANY'S
(19)
<PAGE>
FASHION BUG STORES" below). Excluding men's merchandise, comparable store
sales increased 3.2% in Fiscal 1999 and 1.6% in the fourth quarter of
Fiscal 1999. These increases were achieved in the Company's core
merchandising departments, including sportswear, dresses, footwear,
intimate apparel, and girls clothing. The number of retail stores in
operation was 1,740 at the end of Fiscal 2000 including the acquired
Catherine's and Modern Woman stores, and 1,135 at the end of both Fiscal
1999 and Fiscal 1998.
Cost of Goods Sold, Buying, and Occupancy
Cost of goods sold, buying, and occupancy expenses expressed as a
percentage of sales decreased 3.1% in Fiscal 2000 as compared to the prior
year. Cost of goods sold as a percentage of sales decreased 1.7% in Fiscal
2000 as compared to Fiscal 1999. The improvement in merchandise margins
was primarily a result of reduced levels of markdowns and reductions in
store-wide promotions in the current year. Merchandise margins also
benefited from a reduction in inventory shrinkage costs. Buying and
occupancy expenses as a percentage of sales decreased 1.4% in Fiscal 2000
as compared to the prior year primarily as a result of cost savings from
consolidation of the Company's distribution centers and the leveraging
effect of increased sales volume on relatively fixed store occupancy and
buying expenses. Cost of goods sold, buying, and occupancy expenses for
Fiscal 2000 include the results of the Modern Woman and Catherine's Stores
chains from the dates of their respective acquisitions.
Cost of goods sold, buying, and occupancy expenses expressed as a
percentage of sales decreased 2.6% in the fourth quarter of Fiscal 2000 as
compared to the corresponding period of Fiscal 1999. Cost of goods sold as
a percentage of sales decreased 1.5% in the fourth quarter of Fiscal 2000
as compared to the fourth quarter of Fiscal 1999. This decrease was
primarily attributable to improvements in gross margins as a result of
reduced levels of markdowns as compared to the prior year and a reduction
in inventory shrinkage costs. Buying and occupancy expenses in the fourth
quarter of Fiscal 2000 expressed as a percentage of sales decreased 1.1% in
the fourth quarter of Fiscal 2000 as compared to the fourth quarter of
Fiscal 1999. The decrease was a result of the leveraging effect of
increased sales volume on relatively fixed store occupancy and buying
expenses. Cost of goods sold, buying, and occupancy expenses for the
fourth quarter of Fiscal 2000 include the results of the Modern Woman and
Catherine's Stores chains from the dates of their respective acquisitions.
Cost of goods sold, buying, and occupancy expenses expressed as a
percentage of sales decreased 1.5% in Fiscal 1999 as compared to Fiscal
1998. Cost of goods sold as a percentage of sales decreased 1.1% in Fiscal
1999 as compared to Fiscal 1998. The decrease was primarily due to
customer response to the Company's merchandise offerings, which resulted in
lower merchandise markdowns as compared to the prior year. Increased
markdowns on sales of remaining men's merchandise had a marginally negative
effect on gross margin. Buying and occupancy expenses decreased 0.4% as a
percentage of sales in Fiscal 1999 as compared to the prior year as a
result of a reduction in store occupancy expenses, primarily depreciation
and utility costs.
(20)
<PAGE>
Cost of goods sold, buying, and occupancy expenses expressed as a
percentage of sales decreased 1.2% in the fourth quarter of Fiscal 1999 as
compared to the corresponding period of Fiscal 1998. The decrease as a
percentage of sales was attributable to improvements in gross margins as a
result of the elimination of men's merchandise from the Company's stores
and a reduction in inventory shrinkage costs. Buying and occupancy
expenses in the fourth quarter of Fiscal 1999 and the fourth quarter of
Fiscal 1998 were constant as a percent of sales.
Selling, General, and Administrative
Selling, general, and administrative expenses expressed as a percentage of
sales decreased 0.2% in Fiscal 2000 as compared to Fiscal 1999. This
decrease was primarily attributable to the leveraging effect of the
increase in sales volume on relatively fixed general and administrative
expenses. Selling expenses were constant as a percentage of sales.
Increases in payroll costs, store incentive programs, and certain volume-
related expenses, and inclusion of expenses incurred by Modern Woman, were
offset by the leveraging effect of increased sales volume. Selling,
general, and administrative expenses for the fourth quarter of Fiscal 2000
increased 0.2% as a percentage of sales as compared to the fourth quarter
of Fiscal 1999, primarily as a result of the inclusion of expenses incurred
by Modern Woman and Catherine's Stores.
Selling, general, and administrative expenses expressed as a percentage of
sales increased 0.9% in Fiscal 1999 as compared to Fiscal 1998. This
increase was primarily attributable to increased advertising expenses as a
result of the Company's new television and radio campaign and the impact of
Federal minimum wage legislation on store operations. Selling expenses for
Fiscal 1998 were adversely impacted by higher levels of delinquencies
within the Company's securitized proprietary credit card receivables
portfolio. This adverse impact was partially offset by reduced expenses
related to the servicing of the credit card operations.
Restructuring Charge (Credit)
STORE RESTRUCTURING AND ELIMINATION OF MEN'S MERCHANDISE FROM THE COMPANY'S
FASHION BUG STORES
On March 5, 1998, the Company's Board of Directors approved a restructuring
plan that resulted in a pre-tax charge of $34.0 million. The plan was
approved in conjunction with the decision to eliminate men's merchandise
from the Company's Fashion Bug stores. The restructuring charge included a
$10.0 million non-cash write-down of store fixtures and improvements,
accruals of $19.7 million for terminations and amendments of store leases
and renovation of vacated store space and $4.3 million for other costs,
including severance for approximately 650 employees. As of January 29,
2000, the following payments had been charged against the accruals: $13.0
million for lease terminations and amendments and renovations, and $2.2
million for severance for approximately 590 employees and other costs.
(21)
<PAGE>
During Fiscal 2000, the Company closed 19 stores and completed the
downsizing of 42 stores in connection with the plan. To-date, 71 stores
have been closed in connection with the plan. In addition, 72 stores have
been downsized to-date and 29 stores are under contract for downsizing in
Fiscal 2001. Elimination of the men's merchandise from the stores was
completed in October 1998, the balance of the men's inventory has been
sold, and the selling space used for men's merchandise has been re-
merchandised. In the fourth quarter of Fiscal 2000, the Company revised
its estimates of costs relating to the plan that were recognized during
Fiscal 1999. As a result, the Company recognized a pre-tax restructuring
credit of $2.1 million.
DISTRIBUTION CENTER RESTRUCTURING
In December 1998, the Company consolidated its distribution center
operations in its Greencastle, Indiana distribution center and closed its
Bensalem, Pennsylvania distribution center. As a result, the Company
recognized a pre-tax restructuring charge of $20.2 million during Fiscal
1999. The restructuring charge included an $18.0 million write-down of the
cost of the Bensalem facilities to a net realizable value of $5.7 million,
based on an independent appraisal. The restructuring charge also included
accruals of $1.5 million for severance costs resulting from a workforce
reduction of approximately 100 employees and $0.7 million for other non-
recurring costs relating to the closure. The Bensalem distribution center
closed on December 10, 1998, and the facilities were held for sale. During
Fiscal 2000, the Company completed the sale of the Bensalem facility and
revised its estimate of costs relating to the distribution center
restructuring. As a result, the Company recognized a pre-tax restructuring
credit of $2.8 million in Fiscal 2000, which primarily represents sales
proceeds in excess of the estimated net realizable value of the Bensalem
facility.
CLOSING OF MODERN WOMAN STORES
In the fourth quarter of Fiscal 2000, the Company recorded a restructuring
charge of $1.4 million in connection with the consolidation of the Modern
Woman stores into the Catherine's Stores division (see "ACQUISITIONS"
above). The restructuring charge was primarily for lease termination costs
related to the closing of 11 geographically overlapping Modern Woman
stores.
Non-recurring Gain From Demutualization of Insurance Company
During Fiscal 2000, the Company received a stock distribution from one of
its mutual insurance carriers in connection with the carrier's conversion
to a publicly-held corporation (demutualization). In accordance with the
consensus reached in Emerging Issues Task Force Issue No. 99-4, "Accounting
for Stock Received from the Demutualization of A Mutual Insurance Company,"
the Company recorded the distribution at its fair value and recognized the
resulting non-recurring gain in income from continuing operations, and
subsequently sold the securities received.
(22)
<PAGE>
Non-recurring Gain From Asset Securitization
The Company securitizes all of its Fashion Bug proprietary credit card
receivables in the public and private markets. In each securitization,
credit card receivables are transferred to a trust, which issues
certificates representing ownership interest in the trust to institutional
investors. The Company retains 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
Company is subject to certain recourse provisions in connection with
securitizations entered into prior to January 1, 1997 and has established
reserves relating to these provisions.
The Company adopted the provisions of SFAS No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities," in January 1997. SFAS No. 125 establishes the accounting for
certain financial asset transfers, including securitization transactions.
For transfers that result in the recognition of a sale, SFAS No. 125
requires that assets obtained and liabilities incurred by transferors are
to be measured at fair value. In conjunction with the sale of $83.5
million of credit card receivables during Fiscal 1998, the Company
evaluated the fair value of its participation interest and related recourse
provisions in these securitizations. As a result of such evaluation, the
Company recognized a non-recurring gain of $13.0 million in Fiscal 1998.
Interest Expense
Interest expense decreased in Fiscal 2000 as compared to Fiscal 1999 and
decreased in Fiscal 1999 as compared to Fiscal 1998. The decreases were a
result of the Company's repurchases during Fiscal 2000 and Fiscal 1999 of
$23.3 million and $18.6 million aggregate principal amount, respectively,
of its 7.5% Convertible Subordinated Notes due 2006.
Other Income
Other income expressed as a percentage of sales decreased 0.7% in Fiscal
2000 as compared to Fiscal 1999. The decrease was primarily a result of a
decrease in interest income from the Company's available-for-sale
securities and realized losses from sales of available-for-sale securities
during Fiscal 2000. The Company utilized proceeds from the sale of a
portion of its available-for-sale securities for the acquisitions of Modern
Woman and Catherine's Stores in the latter part of Fiscal 2000 and to
repurchase portions of the Company's convertible notes and common stock
during Fiscal 1999 and Fiscal 2000. The decrease in other income was
partially offset by the decrease in interest expense that resulted from the
repurchases of the convertible notes. Other income increased in Fiscal
1999 as compared to Fiscal 1998 primarily as the result of increased
interest income from higher levels of investments in available-for-sale
securities.
(23)
<PAGE>
Income Tax Provision (Benefit)
The income tax provision for Fiscal 2000 was $26.9 million, resulting in a
38% effective tax rate, as compared to an income tax benefit for Fiscal
1999 of $10.9 million, resulting in a (35%) effective tax rate. The change
in the effective tax rate from Fiscal 1999 to Fiscal 2000 is primarily
attributable to a non-recurring provision of $2.0 million in Fiscal 2000
related to one of the Company's employee insurance programs.
The income tax provision for Fiscal 1998 was $10.1 million, resulting in a
34.3% effective tax rate. The change in the effective tax rate from Fiscal
1998 to Fiscal 1999 is primarily attributable to decreases in state and
foreign income taxes and an increase in non-deductible permanent
differences relating to certain Company-owned life insurance policies (see
"Item 8. Financial Statements and Supplementary Data; Notes to Consolidated
Financial Statements - Income Taxes" below).
Gain on Early Retirement of Debt
During Fiscal 2000, the Company repurchased $23.3 million aggregate
principal amount of its 7.5% Convertible Subordinated Notes due 2006 at a
total cost of $21.0 million. The notes had an aggregate carrying value of
$22.9 million as of the repurchase dates. The repurchases resulted in an
extraordinary gain of $1.2 million, net of income taxes of $0.7 million.
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>
Fiscal Fiscal Fiscal
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Including Restructuring Charge (Credit) and
Non-recurring Items:
Net return on average stockholders' equity.. 11.0% (5.0)% 4.6%
Net return on average total assets.......... 6.1% (2.9)% 2.7%
Excluding Restructuring Charge (Credit) and
Non-recurring Items:
Net return on average stockholders' equity.. 9.0% 3.7% 2.6%
Net return on average total assets.......... 5.3% 2.2% 1.5%
</TABLE>
(24)
<PAGE>
FINANCIAL CONDITION
Liquidity and Capital Resources
The Company's primary sources of working capital are cash flow from
operations, its proprietary credit card receivables securitization
agreements, its investment portfolio, and its $150 million revolving credit
facility described below. The following table highlights certain
information related to the Company's liquidity and capital resources:
<TABLE>
<CAPTION>
Fiscal Fiscal Fiscal
(dollars in thousands) 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Working capital................ $161,376 $192,274 $163,208
Cash and cash equivalents...... 34,299 43,789 12,349
Available-for-sale securities.. 115,829 246,625 292,100
Cash provided by
operating activities......... 57,894 63,371 83,484
Current ratio.................. 1.7 2.1 2.1
Debt to equity ratio........... 24.1% 31.2% 33.1%
</TABLE>
The Company's cash flow from operations decreased $5.5 million in Fiscal
2000 as compared to Fiscal 1999. The decrease resulted primarily from
payments related to restructurings (see "RESULTS OF OPERATIONS --
Restructuring Charge (Credit)" above) and an increase in inventories, net
of accounts payable, partially offset by an increase in net income.
The Company's cash flow from operations decreased $20.1 million in Fiscal
1999 as compared to Fiscal 1998. The decrease resulted primarily from the
following: (i) payments related to restructurings; (ii) a smaller decrease
in inventories, net of accounts payable, in Fiscal 1999 as compared to
Fiscal 1998; (iii) net payments for income taxes; and (iv) payments of
accrued expenses.
On August 2, 1999, the Company completed the acquisition of 100% of the
outstanding stock of Modern Woman Holdings, Inc. ("Modern Woman") for $8.7
million, net of cash acquired of $1.1 million. The acquisition has been
accounted for as a purchase, and Modern Woman's assets and liabilities are
included in the Company's balance sheet at January 29, 2000.
On January 7, 2000, the Company completed the acquisition of 100% of the
outstanding stock of Catherines Stores Corporation ("Catherine's Stores")
for $21 per share. The total cost of the acquisition was approximately
$136.6 million, net of cash acquired of $18.3 million. The Company also
assumed $11.2 million of short-term and long-term debt and capital lease
obligations. The acquisition was funded from the Company's existing cash
and available-for-sale securities. The acquisition has been accounted for
(25)
<PAGE>
as a purchase, and Catherine's Stores assets and liabilities are included
in the Company's balance sheet as of January 29, 2000. (See "Acquisitions"
above).
In July 1996, the Company completed a public offering of $138 million
aggregate principal amount of 7.5% Convertible Subordinated Notes due 2006
(the "Notes"). The Notes are convertible into shares of the Company's
Common Stock at a conversion price of $7.46 per share. The Notes are
redeemable, at the Company's option, at declining redemption prices
starting on July 15, 1999 at 103.75% of principal and decreasing to 100%
after July 15, 2005. Holders of the Notes may require the Company to
repurchase some or all of the Notes under certain circumstances involving a
change in control of the Company. During Fiscal 1999, the Company
repurchased $18.6 million aggregate principal amount of the Notes, which
had a net carrying value of $18.3 million as of the date of purchase, at a
total cost of $17.8 million. During Fiscal 2000, the Company repurchased
an additional $23.3 million aggregate principal amount of the Notes, which
had a net carrying value of $22.9 million as of the date of purchase, at a
total cost of $21.0 million. The Company will continue to evaluate market
conditions to determine if additional Notes will be repurchased during
Fiscal 2001.
As part of the acquisition of Catherine's Stores, the Company assumed a
7.5% Mortgage Note (the "Mortgage Note") and certain capital lease
obligations. The mortgage financing agreement provides for a $6.9 million
mortgage facility with a seven-year term and a 20-year amortization period.
The Mortgage Note is secured by land and buildings at the Memphis,
Tennessee office of Catherine's Stores. The capital leases are for data
processing and point-of-sale equipment. At the end of the initial lease
term, the Company has the option of purchasing the equipment at fair market
value (or at $1 in the case of the point-of-sale equipment), renewing the
leases, or returning the equipment to the lessor. The Company has debt
maturity payments of $1.9 million in Fiscal 2001, which are primarily for
amounts due under the Mortgage Note and the capital lease obligations.
The Company has an agreement with a commercial finance company to provide a
revolving credit facility with a maximum availability of $150 million,
subject to limitations based upon eligible inventory. The primary purpose
of the facility, which expires June 1, 2001, is to enable the Company to
issue letters of credit for overseas purchases of merchandise as well as to
provide for seasonal cash borrowings. The facility is secured by
merchandise inventory, furniture and fixtures within retail stores, and
certain other Company assets. As of the end of Fiscal 2000, the
availability under the facility was approximately $105.8 million, against
which the Company had outstanding letters of credit of $34.3 million.
There were no cash borrowings outstanding under the agreement as of the end
of Fiscal 2000. The agreement requires that, among other things, the
Company maintain a minimum net worth of $300 million and not pay dividends
on its Common Stock.
At the time of its acquisition by the Company, Catherine's Stores was a
party to a bank credit agreement that provided for a maximum working
capital availability of $19.5 million, including a swing line of credit of
(26)
<PAGE>
$3 million. The agreement was secured by substantially all of Catherine's
Stores assets except for inventory and assets securing the 7.5% mortgage
note discussed above. Amounts available under the agreement were based on
the amounts of Catherine's Stores inventories and receivables. The working
capital facility could also be used to fund letters of credit. As a result
of the Company's acquisition of Catherine's Stores, the bank providing the
agreement has extended the term of the agreement to April 27, 2000. At
January 29, 2000, the combined availability under the working capital and
swing line facilities was approximately $13.4 million, after considering
outstanding letters of credit of $6.1 million. The Company is currently
negotiating the extension of this agreement. Should this agreement not be
extended, Catherine's Stores will have adequate working capital available
to meet its needs from internally-generated funds.
As a result of the acquisition of Modern Woman, the Company also has access
to a working capital line of credit with a maximum availability of $10
million. As of January 29, 2000, $5 million was available under this
agreement to fund letters of credit, against which the Company had
outstanding letters of credit of $350 thousand. In exchange for the bank's
release of its security interest in all of the assets of Modern Woman, the
Company pledged $5 million of available-for-sale securities.
The Company's Board of Directors has approved the repurchase of up to
20,000,000 shares of the Company's Common Stock. Shares repurchased will
be held as treasury stock available for use under the Company's employee
benefits program or for other corporate purposes. During Fiscal 2000, the
Company repurchased 245,000 shares at an aggregate cost of $1.4 million.
During Fiscal 1999, the Company repurchased 3,130,000 shares at an
aggregate cost of $14.0 million. During Fiscal 1998, the Company
repurchased 5,580,000 shares at an aggregate cost of $25.4 million. The
Company will continue to evaluate market conditions to determine if
additional shares will be repurchased during Fiscal 2001.
The Company has formed a trust to which the Company's credit card bank has
transferred, at face value, its interest in receivables created under the
Company's Fashion Bug 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.
During Fiscal 2000, the Company, through the trust, completed an offering
of $150 million of asset-backed certificates with a five-year term to
replace its five-year facility that matured in April 1999.
The Company securitized $398.6 million and $360.7 million of credit card
receivables in Fiscal 2000 and Fiscal 1999, respectively, and had $285.8
million of credit card receivables under securitizations outstanding as of
January 29, 2000, of which the Company retained an interest equal to $41.2
million (see "Item 8. Financial Statements and Supplementary Data; Notes to
Consolidated Financial Statements - Asset Securitization" below).
(27)
<PAGE>
These securitization agreements improve the overall liquidity of the
Company and lessen the effect of interest rate volatility by providing
short-term sources of funding. The 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.
If such securitization agreements were to become unavailable to the Company
or prohibitively expensive, this could have a material adverse effect on
the Company's results of operations and financial position. The Company
receives loan servicing proceeds from the Charming Shoppes Master Trust
representing income from credit card finance charge income and fees in
excess of interest paid to certificate holders, credit losses, and other
expenses. As a result, although the Company's securitization agreements
provide for the Company to continue to service the credit card receivables
and control credit policy, a significant decrease in loan servicing
proceeds could have a material adverse effect on the Company's results of
operations. A significant decrease in loan servicing proceeds could result
from increases in interest paid to certificate holders, credit losses, or
other expenses.
Charming Shoppes Receivables Corp. and Charming Shoppes Street, Inc.,
wholly-owned indirect subsidiaries of the Company, are separate special
purpose corporations. At January 29, 2000, Charming Shoppes Receivables
Corp. had $29.5 million of Charming Shoppes Master Trust Certificates and
Charming Shoppes Street, Inc. had $610 thousand of cash. These assets will
be available first and foremost to satisfy the claims of the respective
creditors of these separate corporate entities, including certain claims of
investors in the Charming Shoppes Master Trust. The providers of the
credit enhancements and trust investors 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 counter-party
non-performance.
The Company has historically entered 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. The Company has
entered into interest-rate cap agreements with an aggregate notional amount
of $83.5 million and $243.5 million as of the end of Fiscal 2000 and Fiscal
1999, respectively. On September 15, 1999, the Company entered into an
interest rate swap with a notional amount of $50 million. Under the terms
of the swap agreement, the Company may be required to pledge certain assets
if the market value of the interest rate swap falls below an amount set
forth in the agreement. As of January 29, 2000, there were no pledged
amounts required under the terms of the agreement. The Company recognizes
interest rate payments it makes to the swap counter-party as expenses in
the period incurred. The Company paid $142 thousand to the swap counter-
party during Fiscal 2000. The interest rate swap expires on October 15,
2004. The Company had no interest-rate swap agreements in effect during
(28)
<PAGE>
Fiscal 1999 or Fiscal 1998 (see "Item 8, Financial Statements and
Supplementary Data; Notes to Consolidated Financial Statements - Derivative
Financial Instruments Held For Purposes Other Than Trading" below).
The Company has a non-recourse agreement to permit a third party to provide
an accounts receivable proprietary credit card sales funding program for
its Catherine's Stores, which expires in January 2005. Under this
agreement, the third party reimburses the Company daily with respect to the
proprietary credit card sales generated by the Catherine's Stores credit
card accounts. The agreement may require the Company to repurchase
receivables from the third party under certain conditions relating to a
change in control of the Company. Net proceeds received for the month of
January 2000 (which approximates the period subsequent to the Company's
acquisition of Catherine's Stores), were approximately $6.6 million. The
net balance of accounts receivable held by the third party was
approximately $93.6 million at January 29, 2000.
Capital expenditures amounted to $39.2 million, $32.4 million, and $22.0
million in Fiscal 2000, 1999, and 1998, respectively. In Fiscal 2000,
these expenditures were primarily for the construction, remodeling, and
fixturing of new and existing retail stores, loss-prevention equipment,
systems technology, and expansion of the Company's Greencastle, Indiana
distribution center. In Fiscal 1999, such expenditures were primarily for
leasehold improvements and fixtures for new stores, the remodeling and
fixturing of existing retail stores, systems technology, and loss
prevention equipment. In Fiscal 1998, such expenditures were for leasehold
improvements and fixtures for new stores, the remodeling and fixturing of
existing stores, the acquisition of leases for stores opened during Fiscal
1999, loss prevention equipment, and systems technology.
During Fiscal 2001, the Company anticipates capital expenditures of
approximately $65 million, which are intended principally for (i)
construction and fixturing of new stores, (ii) remodeling and fixturing of
existing retail stores, and (iii) investments in management information
systems technology and distribution centers. The Company also anticipates
entering into a lease for new point-of-sale equipment for the Fashion Bug
chain. The total commitment under the lease is expected to be
approximately $25 million, to be paid over a five-year period. The Company
plans to open approximately 115 new stores, remodel approximately 50
stores, and relocate approximately 50 stores during Fiscal 2001. It is
anticipated that the funds required for capital expenditures will be
financed principally through internally- generated funds.
During Fiscal 1999, the Company recorded total restructuring charges of
$54.2 million. During Fiscal 2000, the Company recognized credits of $4.9
million for revisions of the estimated charges recorded in 1999, and
recognized a restructuring charge of $1.4 million. As of January 29, 2000,
the Company had approximately $8.3 million of accrued, unpaid restructuring
costs. These costs, the majority of which the Company expects to pay by
the end of Fiscal 2001, are included in current liabilities. It is
anticipated that the funds required for payments of the accrued
restructuring costs will be financed principally through internally-
(29)
<PAGE>
generated funds. See "Results of Operations -- Restructuring Charge
(Credit)" above, and "Item 8. Financial Statements and Supplementary Data;
Notes to Consolidated Financial Statements -- Restructuring Charge
(Credit)" below.
The Company has not paid cash dividends since Fiscal 1996. On October 2,
1995, the Company's Board of Directors announced an indefinite suspension
of dividends on the Company's Common Stock. In addition, the Company's
$150 million revolving credit facility (discussed above) requires that the
Company not pay dividends on its Common Stock during the term of such
agreement.
The Company believes that cash flow from operations, its proprietary credit
card receivables securitization agreements, its investment portfolio, and
its revolving credit facilities are sufficient to support current
operations.
Impact of Year 2000
The Year 2000 computer problem can occur when a computer that has been
programmed to store dates as two-digit numbers rather than four-digit
numbers cannot properly recognize dates beyond 1999. Computer calculations
using such two-digit dates may inaccurately interpret a date stored as "00"
as the year 1900 rather than the year 2000, possibly resulting in incorrect
calculations, execution of faulty logic, or outright system failure.
Beginning in 1997, the Company implemented a program to remediate and test
its computer systems in order to minimize the potential for Year 2000
computer problems.
The Company has not experienced any significant adverse consequences to-
date as a result of the Year 2000 problem, and does not anticipate any
significant impact on future operations. The Company does not sell
products which use computer systems, embedded chip technology, or other
devices that may be sensitive to dates. The Company is a retailer of
women's apparel, and does not rely on a single customer for any significant
amount of sales. However, it is possible that the full impact of the Year
2000 problem has not yet been fully recognized. Issues related to the Year
2000 problem could still occur during quarterly or annual financial
closings. In addition, the Company's vendors or suppliers could still be
adversely affected by Year 2000 problems. The Company's management
believes that any such problems would most likely be minor and correctable.
The Company is not currently aware of any Year 2000 problems affecting its
vendors or suppliers.
The Company accelerated the receipt of inventories from January 2000 to
December 1999, and shipped additional merchandise to its stores in
anticipation of potential Year 2000 problems.
The total cost of implementing the Company's Year 2000 readiness program
was approximately $6.0 million, of which approximately $0.9 million was for
replacement systems and the remainder was for remediation and upgrade
costs. Of the total Year 2000 costs, $3.6 million were incurred in Fiscal
(30)
<PAGE>
year 2000. The Company funded the Year 2000 readiness program from
operating cash flows. The Company did not delay any significant
information technology projects as a result of its Year 2000 compliance
effort.
Market Risk
The Company manages its Fashion Bug proprietary credit card program through
various operating entities that are wholly owned by the Company. The
primary activity of these entities is to service the proprietary credit
card portfolio, the balances of which are sold under a credit card
securitization program. Under the securitization program, the Company may
be exposed to fluctuations in interest rates to the extent that a portion
of the investor certificates are floating-rate instruments.
The Company manages its interest rate risk through the use of derivative
instruments. The Company regularly monitors interest rate fluctuations and
business implications surrounding interest rate changes, especially related
to the management of its Fashion Bug proprietary credit card program, which
is securitized. As of January 29, 2000, the Company had rate exposure to
floating-rate instruments representing approximately $209.8 million, or
approximately 73% of all securitized assets under the program.
The Company has entered into certain interest rate cap agreements that
protect the Company's securitization master trust if interest rates were to
exceed 9% and 11%. In addition, the Company has entered into an interest
rate swap that limits the Company's exposure to rising interest rates
should interest rates increase to a rate above the agreement's specified
rate.
The interest rate swap may subject the Company to market risk associated
with changes in interest rates, as well as the risk of default by a
counter-party to the agreement. Under the terms of the swap agreement, the
Company may be required to pledge certain assets if the market value of the
interest rate swap falls below an amount set forth in the agreement. As of
January 29, 2000, there were no pledged amounts required under the terms of
the agreement.
To the extent that short-term interest rates were to increase by one
percentage point by the end of Fiscal 2001, an increase of approximately
$500 thousand in selling, general, and administrative expenses would
result.
The Company is not subject to material foreign exchange risk, as the
Company's foreign transactions are primarily U. S. Dollar-denominated and
the Company's foreign operations do not constitute a material part of its
business.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
See "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Market Risk," above.
(31)
<PAGE>
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 29, 2000 and January 30, 1999,
and the related consolidated statements of operations and comprehensive
income (loss), stockholders' equity, and cash flows for each of the three
fiscal years in the period ended January 29, 2000. 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 auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. 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 29, 2000 and January 30, 1999,
and the consolidated results of their operations and their cash flows for
each of the three fiscal years in the period ended January 29, 2000, in
conformity with accounting principles generally accepted in the United
States.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
March 9, 2000
(32)
<PAGE>
CHARMING SHOPPES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
January 29, January 30,
(dollars in thousands) 2000 1999
---- ----
<S> <C> <C>
ASSETS
Current Assets
Cash and Cash Equivalents........................... $ 34,299 $ 43,789
Available-for-Sale Securities, Including Fair
Value Adjustments of $0 as of January 29,
2000 and $19 as of January 30, 1999............... 41,339 100,743
Merchandise Inventories............................. 260,792 171,327
Deferred Taxes...................................... 10,801 15,194
Prepayments and Other............................... 47,090 30,487
-------- --------
Total Current Assets................................ 394,321 361,540
-------- --------
Property, Equipment, and Leasehold
Improvements - at Cost............................ 450,401 391,152
Less: Accumulated Depreciation and Amortization..... 259,477 236,569
-------- --------
Net Property, Equipment, and Leasehold Improvements. 190,924 154,583
-------- --------
Available-for-Sale Securities, Including Fair Value
Adjustments of ($2,222) as of January 29, 2000
and $389 as of January 30, 1999................... 74,490 145,882
Goodwill............................................ 97,405 0
Other Assets........................................ 27,656 22,644
-------- --------
Total Assets........................................ $784,796 $684,649
======== ========
</TABLE>
[FN]
See Notes to Consolidated Financial Statements.
</FN>
(33)
<PAGE>
CHARMING SHOPPES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
<TABLE>
<CAPTION>
January 29, January 30,
(dollars in thousands except per share amounts) 2000 1999
---- ----
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable.................................... $ 88,721 $ 61,806
Accrued Expenses.................................... 134,033 84,444
Income Taxes Payable................................ 0 4,552
Accrued Restructuring Expenses...................... 8,271 18,448
Current Portion -- Long-Term Debt................... 1,920 16
-------- --------
Total Current Liabilities........................... 232,945 169,266
-------- --------
Deferred Taxes...................................... 10,375 12,336
Long-Term Debt...................................... 105,213 119,475
Stockholders' Equity
Common Stock $.10 Par Value
Authorized - 300,000,000 Shares
Issued - 109,639,425 Shares and 106,830,596 Shares 10,964 10,683
Additional Paid-In Capital.......................... 76,125 64,924
Treasury Stock at Cost - 8,955,000 Shares and
8,710,000 Shares................................. (40,824) (39,405)
Deferred Employee Compensation...................... (1,792) (1,051)
Accumulated Other Comprehensive Income (Loss)....... (1,423) 267
Retained Earnings................................... 393,213 348,154
-------- --------
Total Stockholders' Equity.......................... 436,263 383,572
-------- --------
Total Liabilities and Stockholders' Equity.......... $784,796 $684,649
======== ========
</TABLE>
[FN]
See Notes to Consolidated Financial Statements.
</FN>
34
<PAGE>
CHARMING SHOPPES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
Year Ended
(in thousands except January 29, January 30, January 31,
per share amounts) 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Net Sales........................................... $1,196,529 $1,035,160 $1,016,537
Other Income........................................ 8,993 16,003 15,986
---------- ---------- ----------
Total Revenue....................................... 1,205,522 1,051,163 1,032,523
---------- ---------- ----------
Cost of Goods Sold, Buying, and Occupancy Expenses.. 854,774 771,107 772,709
Selling, General, and Administrative Expenses....... 282,932 246,747 233,020
Restructuring Charge (Credit)....................... (3,471) 54,246 0
Non-recurring Gain from Demutualization of
Insurance Company................................. (6,700) 0 0
Non-recurring Gain from Asset Securitization........ 0 0 (13,018)
Interest Expense.................................... 7,308 10,052 10,390
---------- ---------- ----------
Total Expenses...................................... 1,134,843 1,082,152 1,003,101
---------- ---------- ----------
Income (Loss) Before Income Taxes
and Extraordinary Item............................ 70,679 (30,989) 29,422
Income Tax Provision (Benefit)...................... 26,852 (10,854) 10,088
---------- ---------- ----------
Income (loss) Before Extraordinary Item............. 43,827 (20,135) 19,334
Extraordinary Item - Gain on Early Retirement of
Debt, Net of Income Taxes of $664................. 1,232 0 0
---------- ---------- ----------
Net Income (Loss)................................... 45,059 (20,135) 19,334
---------- ---------- ----------
Other Comprehensive Income (Loss), Net of Tax:
Unrealized (Losses) Gains on Available-for-Sale
Securities, Net of Income Tax Benefit (Expense) of
$214 in 2000, ($86) in 1999, and ($158) in 1998... (343) 164 244
Reclassification of Realized Gains on Available-for-
Sale Securities Included in Net Income, Net of
Income Tax Expense of $726 in 2000, $124 in 1999
and $38 in 1998................................... (1,347) (229) (71)
---------- ---------- ----------
Total Other Comprehensive Income (Loss)............. (1,690) (65) 173
---------- ---------- ----------
Comprehensive Income (Loss)......................... $ 43,369 $ (20,200) $ 19,507
========== ========== ==========
Basic Net Income (Loss) per Share:
Before Extraordinary Item......................... $ .45 $(.20) $ .18
Extraordinary Item................................ .01 .00 .00
----- ----- -----
Net Income (Loss)................................. $ .46 $(.20) $ .18
===== ===== =====
Diluted Net Income (Loss) per Share:
Before Extraordinary Item......................... $ .42 $(.20) $ .18
Extraordinary Item................................ .01 .00 .00
----- ----- -----
Net Income (Loss)................................. $ .43 $(.20) $ .18
===== ===== =====
</TABLE>
[FN]
See Notes to Consolidated Financial Statements.
</FN>
(35)
<PAGE>
CHARMING SHOPPES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Treasury Stock
(dollars in thousands) Shares Amount Capital Shares Amount
------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C>
Balance, February 1, 1997... 105,470,251 $10,547 $62,818 0 $ 0
Issued to Employees, Net.... 286,627 29 (23)
Exercise of Stock Options... 492,507 49 1,302
Purchases of Treasury Stock. (5,580,000) (25,382)
Tax Expense - Employee Stock
Programs.................. (78)
----------- ------- ------- --------- --------
Balance, January 31, 1998... 106,249,385 10,625 64,019 (5,580,000) (25,382)
Issued to Employees, Net.... 106,150 11 860
Exercise of Stock Options... 475,061 47 434
Purchases of Treasury Stock. (3,130,000) (14,023)
Tax Expense - Employee Stock
Programs.................. (389)
----------- ------- ------- --------- --------
Balance, January 30, 1999... 106,830,596 10,683 64,924 (8,710,000) (39,405)
Issued to Employees, Net.... 354,620 36 1,575
Exercise of Stock Options... 2,454,209 245 7,578
Purchases of Treasury Stock. (245,000) (1,419)
Tax Benefit - Employee Stock
Programs.................. 2,048
----------- ------- ------- --------- --------
Balance, January 29, 2000... 109,639,425 $10,964 $76,125 (8,955,000) $(40,824)
=========== ======= ======= ========= ========
</TABLE>
<TABLE>
<CAPTION>
Accumulated
Deferred Other
Employee Comprehensive Retained
(in thousands) Compensation Income (Loss) Earnings
------------ ------------- --------
<S> <C> <C> <C>
Balance, February 1, 1997... $(1,444) $ 159 $348,955
Issued to Employees, net.... (347)
Amortization................ 718
Unrealized Gains, Net of
Income Taxes of $120...... 173
Net Income.................. 19,334
------- ------- --------
Balance, January 31, 1998... (1,073) 332 368,289
Issued to Employees, net.... (688)
Amortization................ 710
Unrealized Losses, Net of
Tax Benefit of $38........ (65)
Net Loss.................... (20,135)
------- ------- --------
Balance, January 30, 1999... (1,051) 267 348,154
Issued to Employees, net.... (1,488)
Amortization................ 747
Unrealized Losses, Net of
Tax Benefit of $940....... (1,690)
Net Income.................. 45,059
------- ------- --------
Balance, January 29, 2000... $(1,792) $(1,423) $393,213
======= ======= ========
</TABLE>
[FN]
See Notes to Consolidated Financial Statements.
</FN>
(36)
<PAGE>
CHARMING SHOPPES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended
January 29, January 30, January 31,
(in thousands) 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Operating Activities
Net Income (Loss)................................... $ 45,059 $ (20,135) $ 19,334
Adjustments to Reconcile Net Income (Loss) to Net
Cash Provided By Operating Activities:
Depreciation and Amortization..................... 32,650 35,091 40,810
Amortization of Goodwill.......................... 302 0 0
Deferred Income Taxes, Net of Acquisitions........ 18,250 (14,099) 5,401
Non-recurring Gain from Demutualization of
Insurance Company............................... (6,700) 0 0
Non-recurring Gain from Asset Securitization...... 0 0 (13,018)
Write-down of Capital Assets due to Restructuring. 0 27,969 0
Net (Gain) Loss from Disposition of Capital Assets (1,469) 3,139 (2,107)
Tax Benefit (Expense) Related to Stock Plans...... 2,048 (389) (78)
Net (Gain) Loss on Sale of Available-for-Sale
Securities...................................... 4,627 (353) (109)
Net Gain on Repurchase of Notes................... (1,896) (466) 0
Changes in Operating Assets and Liabilities, Net
of Acquisitions:
Income Tax Refund Receivable.................... 0 0 3,836
Merchandise Inventories......................... (29,703) 4,458 18,192
Accounts Payable................................ (1,797) 8,183 (1,878)
Prepayments and Other........................... (5,097) 1,563 (2,266)
Accrued Expenses................................ 16,349 1,533 9,364
Income Taxes Payable............................ (4,552) (1,571) 6,003
Accrued Restructuring Expenses.................. (10,177) 18,448 0
--------- --------- ---------
Net Cash Provided By Operating Activities........... 57,894 63,371 83,484
--------- --------- ---------
Investing Activities
Gross Purchases of Available-for-Sale Securities.... (393,393) (406,651) (419,983)
Proceeds from Sales of Available-for-Sale Securities 523,545 452,263 304,189
Acquisition of Catherine's Stores and Modern Woman,
Net of Cash Acquired.............................. (145,309) 0 0
Investment in Capital Assets........................ (39,211) (32,369) (22,001)
Proceeds from Sales of Capital Assets............... 10,556 368 3,565
(Increase) Decrease in Other Assets................. (4,927) (14,302) 7,908
--------- --------- ---------
Net Cash Used In Investing Activities............... (48,739) (691) (126,322)
--------- --------- ---------
Financing Activities
Reduction of Long-Term Borrowings................... (21,237) (17,806) (12)
Proceeds from Short-Term Borrowings................. 30,600 0 0
Reduction of Short-Term Borrowings.................. (34,393) 0 0
Purchases of Treasury Stock......................... (1,419) (14,023) (25,382)
Proceeds from Exercise of Stock Options............. 7,804 589 1,602
--------- --------- ---------
Net Cash Used In Financing Activities............... (18,645) (31,240) (23,792)
--------- --------- ---------
Increase (Decrease) in Cash and Cash Equivalents.... (9,490) 31,440 (66,630)
Cash and Cash Equivalents, Beginning of Year........ 43,789 12,349 78,979
--------- --------- ---------
Cash and Cash Equivalents, End of Year.............. $ 34,299 $ 43,789 $ 12,349
========= ========= =========
</TABLE>
[FN]
See Notes to Consolidated Financial Statements.
</FN>
(37)
<PAGE>
CHARMING SHOPPES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED JANUARY 29, 2000
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
The Company operates a chain of retail specialty stores located throughout
the continental United States which merchandises low- to moderate- and
better-priced junior, misses, large-size, and girls-size sportswear,
dresses, coats, lingerie, accessories, and casual footwear.
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 on the Saturday nearest
to January 31.
Foreign Operations
The Company uses a December 31 fiscal year for all foreign subsidiaries in
order to expedite the year-end closing.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
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
The Company's investments are classified as available-for-sale. These
securities are carried at fair value and unrealized gains and losses are
reported in a separate component of stockholders' equity. The 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. Long-term investments have an original maturity of
greater than one year, but are available on an as-needed basis to support
working capital needs.
Inventories
Merchandise inventories are valued at the lower of cost or market as
determined by the retail method (average cost basis).
(38)
<PAGE>
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 $30,483,000,
$32,323,000, and $35,307,000 in Fiscal 2000, 1999, and 1998, respectively.
Amortization of Goodwill
Goodwill is amortized on a straight-line basis over 20 years. The Company
periodically evaluates goodwill to determine if a revision to the remaining
estimated useful life is required, or if a reduction in the carrying value
is required due to an impairment of the asset.
Store Opening Costs
Costs other than capital expenditures incurred in opening new stores are
expensed as incurred.
Asset Securitizations
The Company accounts for the securitization of its proprietary credit card
receivables in accordance with the provisions of SFAS No. 125, "Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities." Transaction expenses related to securitizations are deferred
and amortized over the reinvestment period of the transaction. Net
securitization income is included as a reduction of selling, general, and
administrative expenses in the accompanying consolidated statements of
operations.
Interest-Rate Cap and Swap Agreements
The Company's interest-rate cap and swap agreements are designated as
hedges of its asset-backed certificates issued in connection with its
Fashion Bug proprietary credit card programs.
Payments to be received from cap agreements that have become favorable are
accrued in other assets and are recognized as a reduction of selling,
general, and administrative expenses. The cost of cap agreements is
included in other assets and amortized to selling, general, and
administrative expenses ratably during the life of the agreement. Interest
rate payments that the Company makes to, or receives from, swap counter-
parties are recognized as increases or reductions in selling, general, and
administrative expenses when paid or received.
Upon termination of a favorable interest-rate cap agreement, gains
attributable to the agreement are deferred to the extent it is probable
that asset-backed certificates of at least as much as the notional amount
of the terminated cap will remain outstanding. The deferred gain is
included in other liabilities and amortized as a reduction of selling,
general, and administrative expenses over the remaining original
contractual life of the agreement. Additional gains or losses are
recognized in earnings. Notional amounts of agreements exceeding the
balance of asset-backed certificates to be outstanding during their terms
are marked to market, with changes in market value recorded in selling,
general, and administrative expenses.
(39)
<PAGE>
Common Stock Plans
The Company accounts for stock-based compensation in accordance with
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock
Issued to Employees," and its related interpretations. Deferred
compensation expense attributable to Employee Stock Option and Stock
Incentive Plans is amortized over the required employment period. No
compensation expense is recognized for option plans having an exercise
price equal to the market price on the date of grant or for the Company's
Employee Stock Purchase Plan. The Company has adopted the disclosure
requirements of SFAS No. 123, "Accounting for Stock-Based Compensation."
Revenue Recognition
Revenues from merchandise sales are net of returns and allowances, and
exclude sales tax.
Advertising Costs
The Company expenses advertising costs as incurred. Advertising costs
charged to expense were $28,876,000, $29,442,000, and $22,677,000 in Fiscal
2000, 1999, and 1998, respectively.
Income Taxes
The Company uses the liability method of accounting for income taxes as
prescribed by SFAS No. 109, "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.
U.S. income taxes have not been provided on undistributed earnings of
foreign subsidiaries accumulated prior to January 29, 2000 because the
Company intends to reinvest such undistributed earnings in foreign
operations. Presently, income taxes would not be significantly increased
if such earnings were remitted because of available foreign tax credits.
Net Income (Loss) Per Share
Net income (loss) per share is based on the weighted-average number of
common shares outstanding during each fiscal year. Net income per share
assuming dilution is based on the weighted-average number of common shares
and share equivalents outstanding. Common share equivalents include the
effect of dilutive stock options, using the treasury stock method. Common
share equivalents also include the effect of assumed conversion of the
Company's 7.5% Convertible Subordinated Notes Due 2006, using the "if-
converted" method, when the effect of such assumed conversion is dilutive.
Share equivalents are not included in the weighted-average shares
outstanding for determining net loss per share, as the result would be
antidilutive.
Comprehensive Income (Loss)
The consolidated statements of operations and comprehensive income (loss)
include transactions from non-owner sources that affect stockholders'
equity. Unrealized gains and losses recognized in comprehensive income are
reclassified to net income (loss) upon their realization.
(40)
<PAGE>
Business Segments and Related Disclosures
The Company adopted the provisions of SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information," as of the end of Fiscal
1999. The Company's Fashion Bug, Catherine's, and Modern Woman stores
operate within a single segment -- retail sales of women's apparel, and
within a single geographic area -- the continental United States. The
Company's foreign sourcing operations do not constitute a material
geographic segment.
Costs of Computer Software Developed or Obtained for Internal Use
The Company adopted the provisions of American Institute of Certified
Public Accountants ("AICPA") Statement of Position 98-1 ("SOP 98-1"),
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use," effective as of January 31, 1999. Costs related to the
development of internal-use software, other than those incurred during the
application development stage, are expensed as incurred. Costs incurred
during the application development stage are capitalized and amortized over
the estimated useful life of the software. The adoption of SOP 98-1 did
not have a material effect on the Company's consolidated financial
statements.
Impact of Recent Accounting Pronouncements
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The Company is required to adopt this
statement as of the beginning of the fiscal year ending February 2, 2002.
SFAS No. 133 requires the recognition of all derivative instruments as
either assets or liabilities in the statement of financial position, and
the measurement of those instruments at fair value. The statement also
specifies the conditions under which derivative instruments qualify as
hedging activities, and the accounting for changes in the fair value of
derivatives designated as hedges. The Company currently manages a portion
of its interest-rate risk through the use of derivative instruments that
cap a portion of the Company's interest-rate risk. Management has not
completed its determination of the effect that SFAS 133 will have on the
Company's consolidated financial statements or financial statement
disclosures.
ACQUISITIONS
On August 2, 1999, the Company completed the acquisition of 100% of the
outstanding stock of Modern Woman Holdings, Inc. ("Modern Woman") for
$9,773,000 ($8,709,000 net of cash acquired). Modern Woman operated 136
retail apparel stores in 24 states, specializing in large-size women's
apparel. The acquisition has been accounted for as a purchase, and Modern
Woman's results of operations are included in the Company's financial
statements as of the acquisition date. Prior-period results have not been
restated. The fair value of the net assets acquired exceeded the purchase
price, and the excess has been applied to reduce the fair value of non-
current assets. The recorded values of assets acquired and liabilities
assumed are subject to adjustment, pending final determination of their
acquisition values. The final allocation of the purchase price is not
(41)
<PAGE>
expected to differ materially from the allocations used to prepare these
financial statements. The acquisition was financed through the use of
internally-generated funds.
On January 7, 2000, the Company completed the acquisition of 100% of the
outstanding stock of Catherines Stores Corporation ("Catherine's Stores")
for $154,884,000 ($136,600,000 net of cash acquired). Catherine's Stores
operated 436 retail apparel stores in 40 states and the District of
Columbia, specializing in large-size women's apparel. The Company plans to
consolidate the Modern Woman stores into the Catherine's Stores division.
The acquisition has been accounted for as a purchase, and Catherine's
Stores results of operations are included in the Company's financial
statements as of the acquisition date. Prior-period results have not been
restated. Assets acquired and liabilities assumed have been recorded at
their estimated fair values, and are subject to adjustment pending final
determination of their acquisition values. The final allocation of the
purchase price is not expected to differ materially from the allocations
used to prepare these financial statements. The purchase price exceeded
the fair value of identifiable net assets acquired, and the excess,
approximately $97,707,000, has been accounted for as goodwill, and will be
amortized over a 20-year period. The acquisition was financed through the
use of the Company's existing cash and available-for-sale securities.
The following unaudited pro forma information is based on historical data,
and gives effect to the Company's acquisition of Catherine's Stores as if
the acquisition had occurred on February 1, 1998. Pro forma adjustments
primarily represent a reduction in interest income from the use of
investments and amortization of goodwill resulting from the acquisition.
The pro forma information does not include the acquisition of Modern Woman,
as the effect would have been immaterial.
<TABLE>
<CAPTION>
(in thousands except per share amounts) 2000 1999
---- ----
<S> <C> <C>
Net Sales......................................... $1,487,053 $1,330,438
Income (Loss) Before Extraordinary Items.......... 45,693 (22,156)
Net Income (Loss)................................. 46,925 (22,156)
Net Income (Loss) per Share:
Basic........................................... $0.48 $(0.22)
Diluted......................................... 0.45 (0.22)
</TABLE>
The unaudited pro forma information is not necessarily indicative of the
actual results of operations that would have occurred if the acquisition
had occurred as of February 1, 1998, and is not necessarily indicative of
results that may be achieved in the future. The unaudited pro forma
information does not reflect adjustments for operating synergies that the
Company may realize as the result of the acquisition. No assurances can be
made as to the amount and timing of any financial benefits that the Company
may realize as the result of the acquisition.
(42)
<PAGE>
PROPERTY, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS
<TABLE>
<CAPTION>
Lives
(in thousands) (Years) 2000 1999
----- ---- ----
<S> <C> <C> <C>
Land.......................... $ 1,757 $ 2,010
Buildings and Improvements.... 10 to 40 52,543 46,970
Store Fixtures................ 5 to 10 141,331 101,862
Equipment..................... 3 to 10 134,099 116,029
Leasehold Improvements........ 10 to 20 120,671 124,281
-------- --------
Total at Cost................. 450,401 391,152
Less Accumulated Depreciation
and Amortization............ 259,477 236,569
-------- --------
$190,924 $154,583
======== ========
</TABLE>
AVAILABLE-FOR-SALE SECURITIES
<TABLE>
<CAPTION>
Unrealized Estimated
(in thousands) Cost Gains Losses Fair Value
---- ----- ------ ----------
<S> <C> <C> <C> <C>
January 29, 2000
U. S. Treasury and Government
Agency Bonds........................ $ 68,520 $ 4 $(2,226) $ 66,298
Charming Shoppes Master Trust
Certificates........................ 41,245 0 0 41,245
Low Income Housing Partnerships....... 7,952 0 0 7,952
Other................................. 334 0 0 334
-------- ---- ------- --------
$118,051 $ 4 $(2,226) $115,829
======== ==== ======= ========
January 30, 1999
U. S. Treasury and Government
Agency Bonds........................ $168,693 $424 $ (16) $169,101
Charming Shoppes Master Trust
Certificates........................ 56,559 0 0 56,559
Charming Shoppes Master Trust Note.... 13,769 0 0 13,769
Low Income Housing Partnerships....... 6,849 0 0 6,849
Other................................. 347 0 0 347
-------- ---- ------- --------
$246,217 $424 $ (16) $246,625
======== ==== ======= ========
</TABLE>
(43)
<PAGE>
Gross realized gains and (losses) on available-for-sale securities were
$6,910,000 and $(4,837,000), respectively, during Fiscal 2000. Gross
realized gains and (losses) were $629,000 and $(276,000), respectively,
during Fiscal 1999.
Contractual maturities of available-for-sale securities at January 29, 2000
were:
<TABLE>
<CAPTION>
Estimated
(in thousands) Cost Fair Value
---- ----------
<S> <C> <C>
Due in One Year or Less................ $ 41,339 $ 41,339
Due After One Year Through Five Years.. 68,760 66,538
-------- --------
110,099 107,877
Equity Securities...................... 7,952 7,952
-------- --------
$118,051 $115,829
======== ========
</TABLE>
INCOME TAXES
Income (loss) before income taxes and extraordinary item:
<TABLE>
<CAPTION>
(in thousands) 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Domestic........ $65,615 $(34,479) $27,853
Foreign......... 5,064 3,490 1,569
------- -------- -------
$70,679 $(30,989) $29,422
======= ======== =======
</TABLE>
Income tax provision (benefit):
<TABLE>
<CAPTION>
(in thousands) 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Current:
Federal....... $ 5,431 $ 4,321 $ 6,376
State......... 1,158 692 2,061
Foreign....... 514 192 4
-------- -------- -------
7,103 5,205 8,441
-------- -------- -------
Deferred(1)..... 19,749 (16,059) 1,647
-------- -------- -------
$ 26,852 $(10,854) $10,088
======== ======== =======
</TABLE>
[FN]
(1) Primarily Federal
</FN>
(44)
<PAGE>
The Company made income tax payments of $9,692,000, $5,982,000, and
$2,000,000 during Fiscal 2000, 1999, and 1998, respectively. Included in
"Prepayments and Other" in the accompanying consolidated balance sheet as
of January 29, 2000 is an income tax receivable of $6,808,000.
Reconciliation of the effective tax rate with the statutory Federal income
tax rate:
<TABLE>
<CAPTION>
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Statutory Federal Income Tax
(Benefit) Rate................ 35.0% (35.0)% 35.0%
State Income Tax, Net
of Federal Income Tax......... 1.0 1.5 2.8
Foreign Income.................. (1.7) (3.4) (3.0)
Employee Benefits............... 3.1 1.4 (0.2)
Other, Net...................... 0.6 0.5 (0.3)
---- ---- ----
38.0% (35.0)% 34.3%
==== ==== ====
</TABLE>
Components of deferred tax assets and liabilities:
<TABLE>
<CAPTION>
Net Current Net Long-Term
Assets Assets
(in thousands) (Liabilities) (Liabilities)
----------- -----------
<S> <C> <C>
January 29, 2000
Property, Equipment, and Leasehold
Improvements........................... $ (8,112)
Tax Net Operating Losses
and Credit Carryforwards............... 8,467
Accrued Expenses......................... $ 5,206
Inventory................................ (3,317)
Deferred Employee Compensation........... 1,585
Prepaid Employee Benefits................ 2,233
Investments.............................. (6,184)
Deferred Rent............................ 2,059
Other.................................... 4,620 (6,131)
------- --------
$10,801 $(10,375)
======= ========
</TABLE>
(45)
<PAGE>
<TABLE>
<CAPTION>
Net Current Net Long-Term
Assets Assets
(in thousands) (Liabilities) (Liabilities)
----------- -----------
<S> <C> <C>
January 30, 1999
Property, Equipment, and Leasehold
Improvements........................... $(15,646)
Tax Credit Carryforwards................. 10,268
Accrued Expenses......................... $16,510
Inventory................................ (4,960)
Deferred Employee Compensation........... 2,333
Prepaid Employee Benefits................ (972)
Investments.............................. (4,059)
Deferred Rent............................ 2,579
Other.................................... 2,037 (5,232)
------- --------
$15,194 $(12,336)
======= ========
</TABLE>
Based on the Company's evaluation of its operating plans and history of
earnings, a net deferred tax asset of $426,000 is included in the
accompanying consolidated balance sheet as of January 29, 2000.
At January 29, 2000, the Company had Alternative Minimum Tax and General
Business Credit carryforwards of $6,128,000. The tax credit carryforwards
do not expire. In addition, the Company had net operating loss
carryforwards of $2,339,000, which begin to expire in 2019.
NET INCOME (LOSS) PER SHARE
<TABLE>
<CAPTION>
(in thousands) 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Basic Weighted Average Common Shares
Outstanding......................... 98,609 99,441 105,678
Dilutive Effect of Assumed Conversion
of Convertible Notes................ 16,001 0 0
Dilutive Effect of Stock Options...... 1,278 0 1,403
------- ------ -------
Diluted Weighted Average Common
Shares and Equivalents Outstanding.. 115,888 99,441 107,081
======= ====== =======
</TABLE>
(46)
<PAGE>
Options to purchase 4.1 million, 6.1 million, and 4.0 million shares of
Common Stock at a weighted average exercise price of $6.95, $6.61, and
$8.49 per share were outstanding at January 29, 2000, January 30, 1999, and
January 31, 1998, respectively, but were not included in the computation of
diluted net income (loss) per share because the option exercise prices were
greater than the average market price of the Company's Common Stock. The
effect of an assumed conversion of the Company's Convertible Notes was
excluded from the computation of diluted net income (loss) per share for
the years ended January 30, 1999 and January 31, 1998 because the effect
would have been antidilutive.
Options to purchase 0.7 million shares of Common Stock at January 30, 1999,
with exercise prices below the average market price of the Company's Common
Stock, were excluded from the calculation of diluted net loss per share
because the effect would have been antidilutive.
For the fiscal year ended January 29, 2000, $4,708,000 of after-tax
interest expense on the convertible notes was excluded from income before
extraordinary item and net income for purposes of calculating diluted
income per share as a result of the assumed conversion of the notes.
DEBT
Long-term debt at year end:
<TABLE>
<CAPTION>
(in thousands) 2000 1999
---- ----
<S> <C> <C>
7.5% Convertible Subordinated Notes
Due 2006............................. $ 96,047 $119,363
7.5% Mortgage Note..................... 6,652 0
Capital Lease Obligations.............. 4,332 0
Other.................................. 102 128
-------- --------
Total Long-Term Debt................... 107,133 119,491
Less Current Portion................... 1,920 16
-------- --------
$105,213 $119,475
======== ========
</TABLE>
The 7.5% Convertible Subordinated Notes (the "Notes") are convertible at
any time prior to maturity into shares of Common Stock of the Company at a
conversion price of $7.46 per share. The Notes are redeemable at the
Company's option, in whole or in part, at declining redemption prices
starting on July 15, 1999 at 103.75% of principal and decreasing to 100% on
or after July 15, 2005. Under certain circumstances involving a change in
(47)
<PAGE>
control of the Company, holders of the Notes may require the Company to
repurchase all or a portion of the Notes at 100% of the principal amount
plus accrued and unpaid interest, if any. There is no sinking fund for the
Notes.
During the fiscal year ended January 29, 2000, the Company repurchased
$23,316,000 aggregate principal amount of the Notes, which had a net
carrying value of $22,927,000 as of the dates of purchase, at a total cost
of $21,031,000. The repurchases resulted in an extraordinary gain of
$1,232,000, net of income taxes of $664,000, for the year ended January 29,
2000. During the fiscal year ended January 30, 1999, the Company
repurchased $18,637,000 aggregate principal amount of the Notes, which had
a net carrying value of $18,268,000 as of the dates of purchase, at a total
cost of $17,802,000. The net gain on the repurchases of the Notes was not
material.
The 7.5% Mortgage Note (the "Mortgage Note") and the capital lease
obligations were assumed in connection with the acquisition of Catherine's
Stores. On February 27, 1998, Catherine's Stores entered into a mortgage
financing agreement providing for a $6,919,000 mortgage facility with a
seven-year term and a 20-year amortization period. The Mortgage Note is
secured by land and buildings at the Catherine's Stores Memphis, Tennessee
office. The capital leases are for data processing and point-of-sale
equipment. At the end of the initial lease term, the Company has the
option of purchasing the equipment at fair market value (or at $1 in the
case of the point-of-sale equipment), renewing the leases, or returning the
equipment to the lessor.
The Company has an agreement with a commercial finance company to provide a
revolving credit facility with a maximum availability of $150,000,000,
subject to limitations based upon eligible inventory. The primary purpose
of the facility, which expires June 1, 2001, is to enable the Company to
issue letters of credit for overseas purchases of merchandise as well as to
provide for seasonal cash borrowings. The facility is secured by
merchandise inventory, furniture and fixtures within retail stores, and
certain other Company assets. The interest rate on borrowings is 0.5%
above the Prime rate. There is a fee of .25% on the unused portion of the
first $105,000,000 of the facility, and an annual servicing fee of
$100,000. As of January 29, 2000, the availability under the facility was
approximately $105,776,000, against which the Company had outstanding
letters of credit of $34,269,000. There were no cash borrowings
outstanding under the agreement as of January 29, 2000. The agreement
requires that, among other things, the Company maintain a minimum net worth
of $300,000,000 and not pay dividends on its Common Stock.
At the time of its acquisition by the Company, Catherine's Stores was a
party to a bank credit agreement that provided for a maximum working
capital availability of $19,500,000, including a swing line of credit of
$3,000,000. The agreement was secured by substantially all of Catherine's
Stores assets except for inventory and assets securing the 7.5% mortgage
note discussed above. Amounts available under the agreement were based on
the amounts of Catherine's Stores inventories and receivables. The working
capital facility could also be used to fund letters of credit. The
(48)
<PAGE>
interest rate on borrowings fluctuated based on Catherine's Stores debt
coverage ratio, and ranged from LIBOR plus 1-1/4% to LIBOR plus 2-1/4% or
the agent bank's prime rate, at Catherine's Stores option. As a result of
the Company's acquisition of Catherine's Stores, the bank providing the
agreement has extended the term of the agreement to April 27, 2000. At
January 29, 2000, the combined availability under the working capital and
swing line facilities was approximately $13,400,000, after considering
outstanding letters of credit of $6,122,000. The Company is currently
negotiating the extension of this agreement.
As a result of the acquisition of Modern Woman, the Company also has access
to a working capital line of credit with a maximum availability of
$10,000,000. As of January 29, 2000, $5,000,000 was available under this
agreement to fund letters of credit, against which the Company had
outstanding letters of credit of $350,000. In exchange for the bank's
release of its security interest in all of the assets of Modern Woman, the
Company pledged $5,000,000 of available-for-sale securities.
During Fiscal 2000, 1999, and 1998, the Company made interest payments of
$7,519,000, $9,756,000, and $10,361,000, respectively.
Aggregate maturities of long-term debt during the next five fiscal years
are:
<TABLE>
<CAPTION>
7.5% Capital Capital
Mortgage Lease Lease
(in thousands) Note Principal Interest Other Total
---- --------- -------- ----- -----
<S> <C> <C> <C> <C> <C>
2001 $182 $1,720 $268 $18 $2,188
2002 196 1,605 137 84 2,022
2003 211 889 34 0 1,134
2004 221 90 6 0 317
2005 235 28 0 0 263
</TABLE>
STOCKHOLDERS' EQUITY
The Company's capital consists of 1,000,000 shares of Series Participating
Preferred Stock, $1.00 par value, of which 500,000 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.
In November 1997, the Company's Board of Directors ("the Board") authorized
the repurchase of up to 10,000,000 shares of the Company's Common Stock.
In March 1999, the Board authorized the repurchase of an additional
10,000,000 shares of Common Stock. Shares repurchased will be held as
treasury stock available for use under the Company's employee benefits
program or for other corporate purposes. During Fiscal 2000, the Company
(49)
<PAGE>
purchased 245,000 shares at an aggregate cost of $1,419,000. During Fiscal
1999, the Company purchased 3,130,000 shares at an aggregate cost of
$14,023,000. During Fiscal 1998, the Company purchased 5,580,000 shares at
an aggregate cost of $25,382,000.
STOCK OPTION AND STOCK INCENTIVE PLANS
At January 29, 2000, the Company had various stock-based compensation
plans, which are described below. The Company applies APB Opinion No. 25,
"Accounting for Stock Issued to Employees," and related Interpretations in
accounting for its stock plans. Accordingly, no compensation has been
recognized in the financial statements for options issued under such plans
with an exercise price equal to the market price of the Company's Common
Stock at the date of grant. In addition, no compensation expense has been
recognized for shares of stock issued under the Company's Employee Stock
Purchase Plan. Compensation cost recognized in the financial statements
for discounted stock options, restricted stock awards and performance share
awards granted was $747,000, $710,000, and $718,000 in Fiscal 2000, 1999,
and 1998, respectively.
SFAS No. 123, "Accounting for Stock-Based Compensation," requires pro forma
disclosures of the effect of using fair values at the dates of grant to
determine compensation cost for awards under stock-based compensation
plans. Using the method prescribed under SFAS No. 123 to determine compen-
sation cost for the Company's plans, the Company's net income (loss) and
net income (loss) per share would have changed to the pro forma amounts
shown below:
<TABLE>
<CAPTION>
(in thousands except per-share data) 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Pro forma net income (loss).......... $43,102 $(21,629) $17,690
Pro forma diluted net income
(loss) per share................... $.41 $(.22) $.17
</TABLE>
For purposes of determining the pro forma disclosures, the fair value of
each option grant is estimated on the date of grant using the Black-Scholes
option-pricing model. In applying the Black-Scholes model, the following
assumptions were used: dividend yield of 0%; expected stock price
volatility of 37.6%; expected lives of 3 months for the Employee Stock
Purchase Plan, 1 to 3 years for stock award plans, and 6 years for stock
option and stock incentive plans; and the following risk-free interest
rates:
<TABLE>
<CAPTION>
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Employee stock purchase plan..... 5.4% 4.7% 5.3%
Stock award plans................ 6.5% 5.1% 5.5%
Stock option and incentive plans. 6.6% 5.2% 5.6%
</TABLE>
(50)
<PAGE>
In accordance with the transition provisions of SFAS No. 123, the pro forma
disclosures presented above reflect the statement's application only to
option grants and stock awards dated on or after January 29, 1995. Option
grants and awards generally vest over several years and the Company expects
to grant additional awards in the future. Therefore, the pro forma results
should not be considered to be representative of the effects on reported
results for future years.
The Company's Board of Directors adopted the 1999 Associates' Stock
Incentive Plan in February 1999. The plan provides for the grant of
options to purchase up to 1,000,000 shares of the Company's Common Stock.
The exercise price of such options may not be less than the fair market
value at the date of grant. The maximum term of options issued under the
plan is ten years. As of January 29, 2000, no options were exercisable
under this plan.
The Company's 1993 Employees' 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 Board of Directors and the Stock Option Committee of the
Board of Directors. The maximum term of options issued under the plan is
ten years. As of January 29, 2000 and January 30, 1999, 3,415,250 options
and 2,465,230 options, respectively, were exercisable under this plan.
During Fiscal 2000, 306,307 shares of Restricted Stock were awarded at no
cost under this plan. These shares had grant date fair values ranging from
$3.63 to $5.94 per share.
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 grant. As a result of adoption of the 1993 Employees' Stock
Incentive Plan, the Company no longer intends to issue options under this
Plan. As of January 29, 2000 and January 30, 1999, 483,800 options and
3,522,142 options, respectively, were exercisable under this plan.
The Company's Amended and Restated Non-Employee Directors Program was
adopted by the Board of Directors on July 1, 1999. This program provides
for the automatic annual grant of options to purchase 20,000 shares of
Common Stock to each non-employee director. The options vest in equal
installments over five years. The exercise price of such options shall be
equal to the fair market value of the stock on the date of grant. As of
January 29, 2000, no options were exercisable under this plan. The program
also provides for a one-time grant of 10,000 shares of Restricted Common
Stock to each newly elected non-employee director. The grants vest in
equal amounts over three years. During Fiscal 2000, 20,000 shares were
granted and issued under this program. The weighted average fair value at
date of grant for shares granted in Fiscal 2000 was $6.21.
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 is not an employee of the Company.
(51)
<PAGE>
The exercise price of such options shall be equal to the fair market value
of the stock on the date of grant. As of January 29, 2000 and January 30,
1999, 78,000 options and 90,000 options, respectively, were exercisable
under this plan. As a result of the adoption of the Amended and Restated
Non-Employee Directors Program on July 1, 1999, the Company no longer
intends to issue options under this plan.
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 29, 2000 and January 30, 1999, 205,330
options and 412,245 options, respectively, were exercisable under this
plan.
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, 1997...... 10,871,374 $5.450 $ .222-17.000
Granted-Option Price Equal to Market. 1,177,000 5.948 5.063- 6.188
Granted-Option Price Less Than Market 35,600 1.000 1.000- 1.000
Canceled/Forfeited................... (812,295) 6.733 .500-15.750
Expired.............................. (165,900) 5.813 5.813- 5.813
Exercised............................ (493,668) 2.751 .333- 6.000
---------- ------ -------------
Outstanding at January 31, 1998...... 10,612,111 5.512 .222-17.000
Granted-Option Price Equal to Market. 1,551,722 4.306 3.594- 5.250
Granted-Option Price Less Than Market 18,500 1.000 1.000- 1.000
Canceled/Forfeited................... (1,279,938) 7.797 .500-17.000
Exercised............................ (475,061) 1.013 .222- 5.375
---------- ------ -------------
Outstanding at January 30, 1999...... 10,427,334 5.249 .500-16.875
Granted-Option Price Equal to Market. 1,794,970 4.077 3.625- 6.625
Granted-Option Price Less Than Market 16,000 1.000 1.000- 1.000
Canceled/Forfeited................... (417,387) 5.068 .500-15.750
Exercised............................ (3,364,058) 4.247 .500- 6.188
---------- ------ -------------
Outstanding at January 29, 2000...... 8,456,859 $5.400 $ .500-16.875
========== ====== =============
</TABLE>
Weighted average grant date fair value for options granted, using Black-
Scholes model and assumptions described above:
<TABLE>
<CAPTION>
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Option Price = Market Price.........$1.92 $1.94 $2.32
Option Price < Market Price......... 2.96 3.59 4.45
</TABLE>
(52)
<PAGE>
The table below summarizes information regarding weighted average exercise
price and weighted average remaining contractual life in years for options
outstanding and options exercisable as of January 29, 2000 for the ranges
of exercise prices shown:
<TABLE>
<CAPTION>
Weighted Weighted
Average Average
Option Option Remaining
Ranges of Option Prices Shares Price Life
- ----------------------- ------ ----- ----
<S> <C> <C> <C>
$0.50-$1.00:
Options Outstanding........ 268,659 $.688 3.4
Options Exercisable........ 205,330 .591 2.2
$1.01-$5.00:
Options Outstanding........ 5,047,800 $4.006 7.1
Options Exercisable........ 2,140,500 4.105 5.7
$5.01-$10.00:
Options Outstanding........ 2,241,950 $6.027 6.1
Options Exercisable........ 1,055,500 6.047 4.9
$10.01-$16.88:
Options Outstanding........ 898,450 $13.072 3.3
Options Exercisable........ 781,050 13.159 3.3
</TABLE>
At January 29, 2000, 2,981,524 shares were available for future grant under
the 1993 Employees' Stock Incentive plan, 428,672 shares were available for
grant under the Amended and Restated Non-employee Directors Program,
216,214 shares were available for grant under the 1988 Key Employee Stock
Option Plan, and 89,500 shares were available for grant under the 1999
Associates' Stock Incentive Plan.
The Company's Board of Directors adopted the Restricted Stock Award Plan
for Associates on January 26, 1995. The plan provides for discretionary
awards of rights to receive up to 200,000 shares of restricted Common Stock
to associates who are not directors or executive officers of the Company.
Associates will pay no cash consideration for restricted stock received
under an award. During Fiscal 2000, 5,500 rights were granted under this
plan, and 5,500 shares were issued. During Fiscal 1999, 5,500 rights were
granted under this plan, and 12,783 shares were issued. The weighted
average fair value at date of grant for shares granted in Fiscal 2000 was
$3.63 per share.
The Company's Non-Employee Director Compensation Program and the
Compensation Program for the Non-Employee Chairman of the Board of
Directors were adopted on August 21, 1996 and approved by shareholders on
June 19, 1997. These programs stipulate that, effective June 27, 1996, 60%
of Non-Employee Director and 50% of Non-Employee Chairman compensation
shall be paid in Common Stock of the Company. During Fiscal 2000 and
Fiscal 1999, rights to receive 1,500 shares and 41,904 shares,
respectively, have been granted under these plans. During Fiscal 2000 and
(53)
<PAGE>
Fiscal 1999, 1,500 shares and 41,904 shares, respectively, were issued
under these plans. The weighted average fair value at date of grant for
shares granted in Fiscal 2000 was $4.00 per share. Awards under this
program were discontinued as of July 1, 1999 as a result of adoption of the
Amended and Restated Non-Employee Directors Program.
The Company's 1998 Restricted Stock Award Program provides for the grant of
rights to receive shares of the Company's Common Stock subject to
attainment of specified performance goals for Fiscal 2000. During Fiscal
2000, 4,591 rights to receive shares were granted and 7,768 rights to
receive shares were cancelled under this plan. During Fiscal 1999, a total
of 114,232 rights to receive shares were granted under the Plan. The
weighted average fair value at date of grant for awards granted in Fiscal
2000 was $4.03 per share. Associates pay no cash consideration for shares
received under the plan.
The shares issued and options granted under the above plans are subject to
forfeiture if the employees do not remain employed by the Company for a
specified period of time. Under the 1989 Non-Employee Director Stock
Option Plan, the Non-Employee Director Compensation Program, the
Compensation Program for the Non-Employee Chairman of the Board of
Directors, and the Amended and Restated Non-Employee Directors Program,
shares issued and options granted are subject to forfeiture if the
individual ceases to remain a Director of the Company except, under certain
circumstances, in the case of retirement.
EMPLOYEE STOCK PURCHASE PLAN
The Company's 1994 Employee Stock Purchase Plan permits employees to
purchase shares during each quarterly 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 of up to 10% of each participating
employee's compensation during such offering period. Under this plan,
2,000,000 shares have been reserved for grant. During Fiscal 2000 and
Fiscal 1999, 31,343 shares and 56,119 shares, respectively, were purchased
under the plan. The weighted average grant date fair value for shares
purchased during Fiscal 2000 was $4.84 per share. At January 29, 2000,
1,731,491 shares were available for future purchase under this plan.
SHAREHOLDER RIGHTS PLAN
In February 1999, the Company's Board of Directors adopted a Shareholder
Rights Plan to replace the existing Shareholder Rights Plan with effect
from April 26, 1999, when the existing Shareholder Rights Plan expired.
The Board of Directors also increased the authorized shares of
Participating Series A Junior Preferred Stock, $1.00 par value, from
300,000 shares to 500,000 shares, and declared a dividend of one Right for
each outstanding share of Common Stock, payable as of the close of business
on April 26, 1999 to shareholders of record as of the close of business on
(54)
<PAGE>
April 12, 1999. Such Rights only become exercisable or transferable apart
from the Common Stock ten days after a person or group (Acquiring Person)
acquires, or obtains the right to acquire, beneficial ownership of 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 purchase
price of $20, 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 exercise price of the Rights. 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), the rights entitle holders other than
the Acquiring Person 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 25, 2009.
EMPLOYEE RETIREMENT BENEFIT PLAN
The Company provides a comprehensive retirement benefit program for its
employees. This 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.
The program also includes a 401(k) employee savings plan, whereby eligible
participating employees may elect to contribute up to 15% of their
compensation to an investment trust. The 401(k) plan includes a matching
Company contribution of 50% of the participant's elective contribution on
up to 6% of the participant's compensation. Participating employees are
immediately vested in their own contributions. Full vesting in the
matching Company contribution occurs on the earlier of the participant's
attainment of 6 years of service, retirement, death, or disability, as
defined in the plan.
The total expense for the above plans amounted to $1,312,000, $1,556,000,
and $709,000 for Fiscal 2000, 1999, and 1998, respectively.
As of the dates of their respective acquisitions, Catherine's Stores and
Modern Woman provided retirement plans for its employees with benefits
substantially the same as the Company's plan. The Catherine's Stores and
Modern Woman plans will be merged into the Company's plan. Participants in
the Catherine's Stores and Modern Woman plans as of the dates of their
respective acquisitions will retain credited years of service earned under
those plans.
(55)
<PAGE>
Also available to officers and certain key executives is a non-qualified
deferred compensation plan. Under this plan, which was adopted January 1,
1998, participants may contribute up to 77% of their base compensation and
100% of bonus compensation.
ASSET SECURITIZATION
Asset securitization involves the transfer by the Company's credit card
bank of Fashion Bug proprietary credit card receivables to a special
purpose corporation, which in turn transfers the receivables to a single
purpose trust (the "Trust") created for the securitization. Asset-backed
certificates issued by the Trust represent undivided interests in those
credit card receivables transferred into the Trust. Certificates issued by
the Trust are sold to investors, with any seller's interest retained by the
Company. These asset-backed certificates issued to investors are generally
credit-enhanced by a third party to provide various levels of an
investment-grade credit rating at the time of issuance. The Company
includes the seller's interest and any other retained interest in
investment securities available for sale in the accompanying consolidated
balance sheet. The carrying value of these retained interests approximates
their fair value.
The Company has adopted the requirements of Statement of Financial
Accounting Standards ("SFAS") No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities,"
effective as of January 1, 1997, for the securitization of its Fashion Bug
proprietary credit card receivables. In connection with the execution of
the Series 1997-1 securitization, the Company evaluated the fair market
value of its retained interests and related recourse provisions and, as a
result, recognized a non-recurring gain of $13,018,000 in Fiscal 1998.
Additionally, the effect of applying SFAS No. 125 as related to sales of
credit card receivables during Fiscal 1998 was to increase income before
income taxes by $3,941,000. The effect of applying SFAS No. 125 during
Fiscal 1999 and Fiscal 2000 was immaterial.
The Company records gains or losses on the securitization of Fashion Bug
credit card receivables based on the estimated fair value of the assets
retained and liabilities incurred in the sale. Gains represent the present
value of the estimated cash flows that the Company has retained over the
estimated outstanding period of the receivables. This excess cash flow
essentially represents an "interest-only" ("I/O") strip, consisting of the
excess finance charges and past due fees over the sum of the return paid to
certificate holders and credit losses. During Fiscal Years 2000 and 1999,
the Company recognized additions to the I/O strip of $9,876,000 and
$9,765,000, respectively, and of those balances, $9,814,000 and $10,254,000
were amortized during each respective Fiscal Year. In addition, the
Company recognized a servicing liability of $2,744,000 and $2,370,000 in
Fiscal Years 2000 and 1999, respectively, and of those balances, $2,797,000
and $2,579,000 were amortized in each Fiscal Year, respectively. Prior to
January 1, 1997, no gains were recorded due to the relatively short average
life of the credit card loans securitized. Excess servicing fee income was
recorded over the life of each sale transaction.
(56)
<PAGE>
During Fiscal 2000, the Company, through the trust, completed an offering
of $150 million of asset-backed certificates with a five-year term to
replace its five-year facility that matured in April 1999. Proceeds from
securitization transactions were approximately $398,646,000, $360,686,000,
and $376,885,000 for Fiscal 2000, Fiscal 1999, and Fiscal 1998,
respectively. At January 29, 2000 and January 30, 1999, approximately
$285,782,000 and $427,209,000 of investor certificates remained
outstanding, respectively. The investor certificates mature as follows:
$85,204,000 in the fiscal year ending February 1, 2003 ("Fiscal 2003") and
$150,000,000 in the fiscal year ending January 31, 2005 ("Fiscal 2005").
The Company's retained interests in its securitizations, which aggregated
$41,245,000 and $56,559,000 at January 29, 2000 and January 30, 1999,
respectively, are generally subordinated in right of payment to
certificates issued by the Trust to third party investors.
Charming Shoppes Receivables Corp. and Charming Shoppes Street, Inc.,
wholly-owned indirect subsidiaries of the Company, are separate special
purpose corporations. At January 29, 2000, Charming Shoppes Receivables
Corp. had $29,481,000 of Charming Shoppes Master Trust Certificates and
Charming Shoppes Street, Inc. had $610,000 of cash. These assets will be
available first and foremost to satisfy the claims of the respective
creditors of these separate corporate entities, including certain claims of
investors in the Charming Shoppes Master Trust. The providers of the
credit enhancements and trust investors 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 non-
performance.
The Company is active in originating proprietary credit card lines to the
customers of the Company's retail stores. Holders of credit cards issued
by a subsidiary of the Company are located throughout the United States and
have various available lines of credit which are granted on an unsecured
basis after reviewing each potential cardholder's credit application and
evaluating his or her financial history and ability to repay.
The Company has a non-recourse agreement to permit a third party to provide
an accounts receivable proprietary credit card sales funding program for
its Catherine's Stores, which expires in January 2005. Under this
agreement, the third party reimburses the Company daily with respect to the
proprietary credit card sales generated by the Catherine's Stores credit
card accounts. The agreement may require the Company to repurchase
receivables from the third party under certain conditions relating to a
change in control of the Company. Net proceeds received for the month of
January 2000 (which approximates the period subsequent to the Company's
acquisition of Catherine's Stores), were approximately $6,611,000. The net
balance of accounts receivable held by the third party was approximately
$93,648,000 at January 29, 2000.
DERIVATIVE FINANCIAL INSTRUMENTS HELD FOR PURPOSES OTHER THAN TRADING
Although the Company securitizes credit card receivables from its Fashion
Bug proprietary credit card program in a non-consolidated master trust, the
Company is exposed to fluctuations in interest rates. The Company actively
(57)
<PAGE>
manages its exposure to fluctuations in interest rates with respect to the
securitized credit card receivables through the use of interest rate cap
and swap agreements.
The Company purchases interest-rate cap agreements that are designed to
limit its exposure to increasing interest rates and are designated as
hedges of its asset-backed certificates issued in connection with its
credit card securitizations. An interest-rate cap entitles the Company to
receive a payment from the counterparty equal to the excess, if any, of the
hypothetical interest expense (strike price) on a specified notional amount
at a current market interest rate over an amount specified in the
agreement. The only amount the Company is obligated to pay to the
counterparty is an initial premium. The strike price of these agreements
exceeds the current market levels at the time they are entered into. The
interest-rate indices specified by the agreements have been, and are
expected to be, highly correlated with the interest rates the Company
incurs on its asset-backed certificates.
The Company has entered into interest-rate cap agreements with an aggregate
notional amount of $83,500,000 as of January 29, 2000, which mature as
follows: $56,000,000 in Fiscal 2003 and $27,500,000 in the fiscal year
ended January 31, 2004 ("Fiscal 2004"). The aggregate notional amount of
interest-rate cap agreements as of January 30, 1999 was $243,500,000. 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 $27,500,000 notional amount and
11% for $56,000,000 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 expenses over the respective lives of
the 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 expenses.
The Company's credit exposure on interest-rate caps is limited to the value
of interest-rate caps that have become favorable to the Company, but the
Company does not anticipate non-performance by any of these counter-
parties. The amount of such exposure is generally the unrealized gains in
the contracts.
On September 15, 1999, the Company entered into an interest rate swap
transaction with a notional amount of $50,000,000 that limits the Company's
exposure to rising interest rates should the one-month LIBOR rate increase
to a rate above the agreement's specified rate. Interest rate swap
agreements are agreements between counter-parties to exchange cash flows
based on the difference between two interest rates, applied to a notional
principal amount for a specified period. Interest rate swap agreements may
subject the Company to market risk associated with changes in interest
rates as a result of the change to floating-rate funding sources, as well
as the risk of default by a counter-party to the agreement. Under the
terms of the swap agreement, the Company may be required to pledge certain
assets if the market value of the interest rate swap falls below an amount
set forth in the agreement. As of January 29, 2000, there were no pledged
amounts required under the terms of the agreement.
(58)
<PAGE>
The Company recognizes interest rate payments it makes to the swap counter-
party as expenses in the period incurred. The Company paid $142,000 to the
swap counter-party during Fiscal 2000. This interest rate swap expires on
October 15, 2004.
LEASES
The Company leases substantially all of its stores under non-cancelable
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. The Company also leases certain other buildings and equipment.
Rental expense was:
<TABLE>
<CAPTION>
(in thousands) 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Minimum Rental...... $ 86,438 $80,058 $80,050
Contingent Rental... 15,399 13,399 13,216
-------- ------- -------
$101,837 $93,457 $93,266
======== ======= =======
</TABLE>
Minimum annual rental commitments for all non-cancelable leases for the
next five fiscal years and thereafter are: 2001 - $118,608,000; 2002 -
$104,955,000; 2003 - $88,648,000; 2004 - $69,805,000; 2005 - $47,020,000;
Thereafter - $83,687,000.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The following is a summary of the carrying amounts and estimated fair
values of the Company's financial instruments:
<TABLE>
<CAPTION>
January 29, 2000 January 30, 1999
Carrying Fair Carrying Fair
(in thousands) Amount Value Amount Value
------ ----- ------ -----
<S> <C> <C> <C> <C>
Assets:
Cash and Cash Equivalents.... $ 34,299 $ 34,299 $ 43,789 $ 43,789
Available-for-Sale Securities 115,829 115,829 246,625 246,625
Liabilities:
7.5% Convertible Subordinated
Notes due 2006............. 96,047 98,448 119,363 106,403
7.5% Mortgage Note........... 6,652 6,652 0 0
Other Long-Term Debt......... 102 102 128 128
Off-Balance-Sheet Financial
Instruments:
Interest Rate Caps 0 116 0 0
Interest Rate Swaps 0 1,096 0 0
</TABLE>
(59)
<PAGE>
The fair value of cash and cash equivalents approximates their carrying
amount because of the short maturities of such instruments. The fair value
of available-for-sale securities is based on quoted market prices of the
securities, except for certain equity securities that are not traded in the
open market. The carrying amount of these equity securities ($7,952,000 at
January 29, 2000 and $6,849,000 at January 30, 1999) was used to
approximate fair value. The fair value of the Company's 7.5% Convertible
Subordinated Notes is based on quoted market prices for the securities.
The fair values of the 7.5% Mortgage Note and other long-term debt
approximate their carrying amounts based on estimated current interest
rates that the Company could obtain on similar borrowings. The fair values
of interest-rate caps and swaps were 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 and yield
curve or volatility factors underlying the positions.
RESTRUCTURING CHARGE (CREDIT)
On March 5, 1998, the Company's Board of Directors approved a restructuring
plan that resulted in a pre-tax charge of $34,000,000. The plan was
approved in conjunction with the decision to eliminate men's merchandise
from the Company's Fashion Bug stores. To-date, 71 stores have been closed
in connection with the plan. In addition, 72 stores have been downsized,
with an additional 29 stores under contract for downsizing in Fiscal 2001.
Elimination of the men's merchandise from the stores was completed in
October 1998, the balance of the men's inventory has been sold, and the
selling space used for men's merchandise has been re-merchandised. In the
fourth quarter of Fiscal 2000, the Company revised its estimates of costs
relating to the plan that were recognized during Fiscal 1999. As a result,
the Company recognized a pre-tax restructuring credit of $2,096,000.
The restructuring charge included a $10,000,000 write-down of store
fixtures and improvements. The following is a summary of other restructure
charges accrued and payments charged against the accrual to-date:
<TABLE>
<CAPTION>
Revision Accrued At
Beginning of Cost January 29,
(in thousands) Accrual Payments Estimate 2000
------- -------- -------- ----
<S> <C> <C> <C> <C>
Lease terminations/amendments
and renovations of vacated
store space.................. $19,700 $(13,026) $(1,784) $4,890
Severance..................... 320 (290) (30) 0
Other costs................... 3,980 (1,891) (282) 1,807
------- -------- ------- ------
$24,000 $(15,207) $(2,096) $6,697
======= ======== ======= ======
</TABLE>
(60)
<PAGE>
On December 10, 1998, the Company's Board of Directors approved a plan to
close the Company's Bensalem, Pennsylvania distribution center. The plan
was approved in conjunction with the decision to consolidate the Company's
distribution center operations in the Company's Greencastle, Indiana
distribution center. The plan resulted in a pre-tax restructuring charge
of $20,246,000 during Fiscal 1999.
The restructuring charge included a $17,969,000 write-down of the cost of
the Bensalem facilities to a net realizable value of $5,662,000, based on
an independent appraisal. The restructuring charge also included accruals
of $1,556,000 for severance costs resulting from a workforce reduction, and
$721,000 for other non-recurring costs relating to the closure. The
Bensalem distribution center closed on December 10, 1998, and the
facilities were held for sale. During Fiscal 2000, the Company completed
the sale of the Bensalem facility and revised its estimate of costs
relating to the distribution center restructuring. As a result, the
Company recognized a pre-tax restructuring credit of $2,834,000 in Fiscal
2000, which primarily represents sales proceeds in excess of the estimated
net realizable value of the Bensalem facility.
During the fourth quarter of Fiscal 2000, the Company recorded a
restructuring charge of $1,459,000 in connection with the Company's
acquisitions of Modern Woman and Catherine's Stores. The Company plans to
consolidate Modern Woman stores into the Catherine's Stores division. The
restructuring charge was primarily for lease termination costs related to
the closing of 11 Modern Woman stores that geographically overlap
Catherine's Stores. There were no payments charged against this accrual as
of January 29, 2000.
NON-RECURRING GAIN FROM DEMUTUALIZATION OF INSURANCE COMPANY
During Fiscal 2000, the Company received a stock distribution from one of
its mutual insurance carriers in connection with the carrier's conversion
to a publicly-held corporation (demutualization). In accordance with the
consensus reached in Emerging Issues Task Force Issue No. 99-4, "Accounting
for Stock Received from the Demutualization of A Mutual Insurance Company,"
the Company recorded the distribution at its fair value and recognized the
resulting non-recurring gain in income from continuing operations, and
subsequently sold the securities received.
(61)
<PAGE>
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
First Second Third Fourth
(in thousands) Quarter Quarter Quarter Quarter
------- ------- ------- -------
<S> <C> <C> <C> <C>
Fiscal 2000
Net Sales........... $258,975 $311,743 $277,441 $348,370
Gross Profit........ 68,913 96,971 78,264 97,607
Net Income.......... 6,002(1) 22,225(2) 8,276(3) 8,556(4)
Diluted Net Income
per Share......... .06(1) .21 .08 .08
Fiscal 1999
Net Sales........... $244,031 $279,158 $239,742 $272,229
Gross Profit........ 61,579 73,713 59,594 69,167
Net Income (Loss)... (19,902)(5) 9,328 (424) (9,137)(6)
Diluted Net Income
(Loss) per Share.. (.20) .09 (.00) (.09)
</TABLE>
- --------------------
[FN]
(1) Net income includes an after-tax extraordinary gain from early
retirement of debt of $1,232 ($.01 per share).
(2) Net income includes an after-tax restructuring credit of $1,842.
(3) Net income includes an after-tax non-recurring gain from
demutualization of insurance company of $4,355.
(4) Net income includes an after-tax restructuring credit of $1,362 and an
after-tax restructuring charge of $948.
(5) Net income (loss) includes an after-tax restructuring charge of
$22,100.
(6) Net income (loss) includes an after-tax restructuring charge of
$13,147.
</FN>
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.
(62)
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Information regarding Directors of the Company is included under the
caption "Election of Directors" of the Company's definitive proxy
statement, which is incorporated herein by reference. Information
regarding Executive Officers is included under "Item 4A. Executive
Officers of the Registrant," in Part I of this Report.
Item 11. Executive Compensation
Information regarding executive compensation is included 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.
(63)
<PAGE>
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:
Report of Independent Auditors.........................................32
Consolidated Balance Sheets - January 29, 2000 and January 30, 1999....33
Consolidated Statements of Operations and Comprehensive Income (Loss) -
years ended January 29, 2000, January 30, 1999, and January 31, 1998.35
Consolidated Statements of Stockholders' Equity - years ended
January 29, 2000, January 30, 1999, and January 31, 1998.............36
Consolidated Statements of Cash Flows - years ended
January 29, 2000, January 30, 1999 and January 31, 1998..............37
Notes to Consolidated Financial Statements.............................38
(a)(2) Financial Statement Schedules
No schedules required to be filed.
(b) Reports on Form 8-K
No reports were filed during the quarter ended January 29, 2000.
(c) 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 that 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.
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-Q of the Registrant for the quarter ended July 31, 1999. (Exhibit 3.2).
(64)
<PAGE>
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 April 28, 1999.
4.2 Rights Agreement, dated as of April 26, 1999, between Charming
Shoppes, Inc. and American Stock Transfer & Trust Company, as Rights Agent,
incorporated by reference to Form 8-K of the Registrant, filed April 28,
1999. (Exhibit 4).
Material Contracts
10.1.1 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).
10.1.2 Amendment No. 1, dated as of December 22, 1995, to Amended and
Restated Pooling and Service Agreement, dated as of December 24, 1992, as
Amended and Restated as of May 4, 1994, between Spirit of America National
Bank as Seller and Servicer, and First Fidelity Bank, National Association,
as Trustee for Charming Shoppes Master Trust, incorporated by reference to
Form 10-K of the Registrant for the fiscal year ended February 3, 1996.
(Exhibit 10.1.11).
10.1.3 Amendment No. 2, dated as of March 22, 1996, to Amended and
Restated Pooling and Service Agreement, dated as of December 24, 1992, as
Amended and Restated as of May 4, 1994, as Amended by Amendment No. 1 as of
December 22, 1995, between Spirit of America National Bank as Seller and
Servicer, and First Union National Bank as Trustee for Charming Shoppes
Master Trust, incorporated by reference to Form 10-K of the Registrant for
the fiscal year ended February 3, 1996. (Exhibit 10.1.12).
10.1.4 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).
10.1.5 First Amendment and Assignment dated as of November 25, 1997 to
the Series 1994-1 Supplement, dated as of May 4, 1994 by and between Spirit
of America National Bank, as Seller and Servicer, and First Union National
Bank, as Trustee for Charming Shoppes Master Trust, incorporated by
reference to Form 10-K of the Registrant for the fiscal year ended January
31, 1998. (Exhibit 10.1.5).
(65)
<PAGE>
10.1.6 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 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), incorporated by reference
to Form 10-K of the Registrant for the fiscal year ended January 28, 1995.
(Exhibit 10.1.14).
10.1.7 Amendment No. 1, dated as of March 29, 1996, to Series 1994-2
Supplement, between Spirit of America National Bank as Seller and Servicer,
and First Union National Bank as Trustee for Charming Shoppes Master Trust,
incorporated by reference to Form 10-K of the Registrant for the fiscal
year ended February 3, 1996. (Exhibit 10.1.13).
10.1.8 Second Amendment dated as of November 25, 1997 to the Series
1994-2 Supplement, dated as of August 15, 1994, as amended on March 29,
1996, by and between Spirit of America National Bank, as Seller and
Servicer, and First Union National Bank, as Trustee for Charming Shoppes
Master Trust, incorporated by reference to Form 10-K of the Registrant for
the fiscal year ended January 31, 1998. (Exhibit 10.1.8).
10.1.9 Series 1997-1 Supplement dated as of November 25, 1997 to the
Second Amended and Restated Pooling and Servicing Agreement dated as of
November 25, 1997 by and among Charming Shoppes Receivables Corp., as
Seller, Spirit of America National Bank, as Servicer and First Union
National Bank, as Trustee on behalf of the Series 1997-1 Certificate
Holders ($83,500,000 Charming Shoppes Master Trust Series 1997-1),
incorporated by reference to Form 10-K of the Registrant for the fiscal
year ended January 31, 1998. (Exhibit 10.1.9).
10.1.10 Release Agreement, dated as of February 28, 1997, among (a)
Congress Financial Corporation (Lender) and (b) Charming Shoppes, Inc.,
Charming Shoppes of Delaware, Inc., CSI Industries, Inc. and FB Apparel,
Inc. (collectively, the Borrowers), incorporated by reference to Form 10-K
of the Registrant for the fiscal year ended February 1, 1997. (Exhibit
10.1.15).
10.1.11 Second Amended and Restated Loan and Security Agreement, Dated
February 28, 1997, by and between (a) Congress Financial Corporation, as
Lender, (b) Charming Shoppes, Inc., Charming Shoppes of Delaware, Inc., CSI
Industries, Inc. and FB Apparel, Inc., as borrowers and (c) Charming
Shoppes of Delaware, Inc., as Borrower's Agent, incorporated by reference
to Form 10-K of the Registrant for the fiscal year ended February 1, 1997.
(Exhibit 10.1.16).
10.1.12 Amendment of Second Amended and Restated Loan and Security Agree-
ment, dated February 28, 1997 among Charming Shoppes, Inc. (the "Company"),
certain subsidiaries of the Company which are parties thereto, Borrowers'
Agent and Congress Financial Corporation, dated as of May 1, 1998,
incorporated by reference to Form 10-Q for the quarter ended May 2, 1998.
(Exhibit 10.1).
(66)
<PAGE>
10.1.13 Amendment No. 2 to Second Amended and Restated Loan and Security
Agreement, dated February 28, 1997 (as amended and supplemented) among
Charming Shoppes, Inc. (the "Company"), certain subsidiaries of the Company
which are parties thereto, Borrowers' Agent and Congress Financial
Corporation, dated as of December 21, 1998, incorporated by reference to
Form 10-K of the Registrant for the fiscal year ended January 30, 1999.
(Exhibit 10.1.14)
10.1.14 Consent of Congress Financial Corporation, dated July 30, 1999,
to the Modern Woman Acquisition, Re: Second Amended and Restated Loan and
Security Agreement, dated February 28, 1997, as amended and supplemented,
among Charming Shoppes, Inc. (the "Company"), certain subsidiaries of the
Company which are parties thereto (collectively, with the Company,
"Borrowers"), Borrower's Agent, and Congress Financial Corporation.
10.1.15 Amendment, dated as of October 19, 1999, to Second Amended and
Restated Loan and Security Agreement, by and among Congress Financial
Corporation, as Lender, Charming Shoppes, Inc., Charming Shoppes of
Delaware, Inc., CSI Industries, Inc., and FB Apparel, Inc., as Borrowers,
and Charming Shoppes of Delaware, Inc., as Borrower's Agent, dated February
28, 1997.
10.1.16 Consent of Congress Financial Corporation, dated November 1999,
to Catherine Stores Merger Transaction, Re: Second Amended and Restated
Loan and Security Agreement, dated February 28, 1997, as amended and
supplemented, among Charming Shoppes, Inc. (the "Company"), certain
subsidiaries of the Company which are parties thereto (collectively, with
the Company, "Borrowers"), Borrower's Agent, and Congress Financial
Corporation.
10.1.17 Amendment No. 3, dated as of December 27, 1999, to Second Amended
and Restated Loan and Security Agreement, dated February 28, 1997, as
amended and supplemented, among Charming Shoppes, Inc. (the "Company"),
certain subsidiaries of the Company which are parties thereto
(collectively, with the Company, "Borrowers"), Borrower's Agent, and
Congress Financial Corporation.
10.1.18 Amended and Restated Receivables Purchase Agreement dated as of
November 25, 1997 by and among First Union National Bank, in its capacity
as Trustee for the Charming Shoppes Master Trust, as the Seller, Charming
Shoppes Receivables Corp., as the Owner and the Subordinated Purchaser,
Spirit of America National Bank, as the Servicer and the Originator,
Corporate Receivables Corporation, as the Purchaser, Citibank, N.A., as a
Bank, and Citicorp North America, Inc., as the Agent, incorporated by
reference to Form 10-K of the Registrant for the fiscal year ended January
31, 1998. (Exhibit 10.1.18).
10.1.19 Amendment No. 1 to Amended and Restated Receivables Purchase
Agreement, dated as of October 29, 1998, among First Union National Bank, a
national banking association, solely in its capacity as the trustee for
Charming Shoppes Master Trust, a trust formed pursuant to the Pooling and
(67)
<PAGE>
Servicing Agreement, Charming Shoppes Receivables Corp., a Delaware
corporation, in its capacity as the owner of the Receivables and in its
capacity as Subordinated Purchaser, Spirit of America National Bank, a
national banking association, in its capacity as the originator of the
Receivables and in its capacity as the Servicer, Corporate Receivables
Corporation, a California corporation, as a purchaser, Citicorp North
America, Inc., a Delaware corporation, as agent for the Purchasers and the
Banks and Citibank NA, a national banking association, as a Bank,
incorporated by reference to Form 10-K of the Registrant for the fiscal
year ended January 30, 1999. (Exhibit 10.1.21).
10.1.20 Second Amended and Restated Pooling and Servicing Agreement,
dated as of November 25, 1997, as amended on July 22, 1999, among Charming
Shoppes Receivables Corp., as Seller, Spirit of America, Inc., as Servicer,
and First Union National Bank as Trustee, incorporated by reference to Form
8-K of Charming Shoppes Receivables Corp., (No. 333-71757) dated July 22,
1999. (Exhibit No. 4.1).
10.1.21 Series 1999-1 Supplement, dated as of July 22, 1999, to Second
Amended and Restated Pooling and Service Agreement, dated as of November
25, 1997, as amended on July 22, 1999, among Charming Shoppes Receivables
Corp., as Seller, Spirit of America, Inc., as Servicer, and First Union
National Bank, as Trustee, for $150,000,000 Charming Shoppes Master Trust
Asset-Backed Certificates Series 1999-1, incorporated by reference to Form
8-K of Charming Shoppes Receivables Corp., (No. 333-71757) dated July 22,
1999. (Exhibit No. 4.2).
10.1.22 Receivables Purchase Agreement, dated as of May 28, 1999, among
Charming Shoppes Street, Inc. as Seller, Spirit of America, Inc., as
Servicer, Clipper Receivables Corporation, as Purchaser, State Street
Capital Corporation, as Administrator, and State Street Bank & Trust
Company, as Relationship Bank.
10.1.23 Series 1999-2 Supplement, dated as of May 28, 1999, to Second
Amended and Restated Pooling and Service Agreement, dated as of November
25, 1997, as amended on July 22, 1999, among Charming Shoppes Receivables
Corp., as Seller, Spirit of America, Inc., as Servicer, and First Union
National Bank, as Trustee, for $55,750,000 Charming Shoppes Master Trust
Asset-Backed Certificates Series 1999-2.
10.1.24 Agreement and Plan of Merger, dated as of November 15, 1999, by
and among Catherines Stores Corporation, Charming Shoppes, Inc., and Rose
Merger Sub, Inc., incorporated by reference to Schedule 14(D)-1 of the
Registrant filed November 19, 1999. (Item 11(c)(1)).
10.1.25 Merchant Services Agreement, between Hurley State Bank and
Catherines, Inc., incorporated by reference to Form 10-Q of Catherines
Stores Corp. (Commission File No. 000-19372) for the quarter ended May 1,
1999. (Item 6. (A)(1).)
(68)
<PAGE>
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).
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 The Charming Shoppes, Inc. Non-Employee Directors Compensation
Program, As Amended and Restated, incorporated by reference to Form 10-Q of
the Registrant for the quarter ended July 31, 1999. (Exhibit 10.1).
10.2.7 The Charming Shoppes, Inc. Non-Employee Directors Compensation
Program Stock Option Agreement, incorporated by reference to Form 10-Q of
the Registrant for the quarter ended July 31, 1999. (Exhibit 10.2).
10.2.8 The Charming Shoppes, Inc. Non-Employee Directors Compensation
Program Restricted Stock Agreement, incorporated by reference to Form 10-Q
of the Registrant for the quarter ended July 31, 1999. (Exhibit 10.3).
10.2.9 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).
10.2.10 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).
10.2.11 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).
(69)
<PAGE>
10.2.12 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).
10.2.13 The Charming Shoppes, Inc. 1993 Employees' Stock Incentive Plan
Restricted Stock Agreement, incorporated by reference to Form 10-K of the
Registrant for the fiscal year ended January 30, 1999. (Exhibit 10.2.10).
10.2.14 The Charming Shoppes, Inc. Employee Stock Purchase Plan, as
amended, incorporated by reference to Form 10-K of the Registrant for the
fiscal year ended February 3, 1996. (Exhibit 10.2.10).
10.2.15 The Charming Shoppes, Inc. Restricted Stock Award Plan for
Associates, incorporated by reference to Form 10-K of the Registrant for
the fiscal year ended February 3, 1996. (Exhibit 10.2.11).
10.2.16 The Charming Shoppes, Inc. 1996 Restricted Stock Award Program,
incorporated by reference to Form 10-K of the Registrant for the fiscal
year ended February 3, 1996. (Exhibit 10.2.12).
10.2.17 The Charming Shoppes, Inc. 1996 Restricted Stock Award Program
Restricted Stock Agreement, incorporated by reference to Form 10-K of the
Registrant for the fiscal year ended February 3, 1996. (Exhibit 10.2.13).
10.2.18 Employment Agreement, dated as of May 17, 1995, by and between
Charming Shoppes, Inc., and David V. Wachs, incorporated by reference to
Form 10-K of the Registrant for the fiscal year ended February 3, 1996.
(Exhibit 10.2.14).
10.2.19 Employment Agreement, dated as of August 22, 1995 by and between
Charming Shoppes, Inc., and Dorrit J. Bern, incorporated by reference to
Form 10-K of the Registrant for the fiscal year ended February 3, 1996.
(Exhibit 10.2.15).
10.2.20 Employment Agreement, dated as of October 12, 1999, by and
between Charming Shoppes, Inc. and Dorrit J. Bern, incorporated by
reference to Form 10-Q of the Registrant for the quarter ended October 30,
1999. (Exhibit 10.1).
10.2.21 1993 Employees' Stock Incentive Plan Stock Option Agreement,
dated as of August 23, 1995, by and between Charming Shoppes, Inc., and
Dorrit J. Bern, incorporated by reference to Form 10-K of the Registrant
for the fiscal year ended February 3, 1996. (Exhibit 10.2.16).
10.2.22 1993 Employees' Stock Incentive Plan Restricted Stock and Stock
Bonus Agreement, dated as of March 20, 1996, by and between Charming
Shoppes, Inc., and Dorrit J. Bern, incorporated by reference to Form 10-K
of the Registrant for the fiscal year ended February 3, 1996. (Exhibit
10.2.17).
(70)
<PAGE>
10.2.23 1993 Employees' Stock Incentive Plan Restricted Stock Agreement,
dated as of October 12, 1999, by and between Charming Shoppes, Inc. and
Dorrit J. Bern, incorporated by reference to Form 10-Q of the Registrant
for the quarter ended October 30, 1999. (Exhibit 10.2).
10.2.24 Settlement Agreement and Release, dated as of February 9, 1996,
by and between Charming Shoppes, Inc., and Philip Wachs, incorporated by
reference to Form 10-K of the Registrant for the fiscal year ended February
3, 1996. (Exhibit 10.2.20).
10.2.25 Settlement Agreement and Release, dated as of April 25, 1996, by
and between Charming Shoppes, Inc., and Samuel Sidewater, incorporated by
reference to Form 10-K of the Registrant for the fiscal year ended February
3, 1996. (Exhibit 10.2.21).
10.2.26 The Charming Shoppes, Inc. Non-Employee Directors Compensation
Program, incorporated by reference to Registration Statement on Form S-8
(Registration No. 333-22323), of the Registrant, dated February 25, 1997.
(Exhibit 4.1).
10.2.27 The Charming Shoppes, Inc. Compensation Program for the Non-
Employee Chairman of the Board of Directors, incorporated by reference to
Registration Statement on Form S-8 (Registration No. 333-22323), of the
Registrant, dated February 25, 1997. (Exhibit 4.2).
10.2.28 Charming Shoppes, Inc. 1998 Restricted Award Program,
incorporated by reference to Form 10-K of the Registrant for the fiscal
year ended January 31, 1998. (Exhibit 10.2.22).
10.2.29 Charming Shoppes Inc. 1999 Associates' Stock Incentive Plan,
incorporated by reference to Form 10-K of the Registrant for the fiscal
year ended January 30, 1999. (Exhibit 10.2.24).
10.2.30 Charming Shoppes, Inc. 1999 Associates' Stock Incentive Plan
Stock Option Agreement, incorporated by reference to Form 10-K of the
Registrant for the fiscal year ended January 30, 1999. (Exhibit 10.2.25).
10.2.31 Charming Shoppes, Inc. 2000 Associates' Stock Incentive Plan.
10.2.32 Charming Shoppes, Inc. 2000 Associates' Stock Incentive Plan
Stock Option Agreement.
10.2.33 Forms of Executive Severance Agreements by and between the
Company, the named executive officers in the Company's Proxy Statement for
the Annual Meeting to be held on June 15, 2000, and certain other Executive
Officers of the Company.
(71)
<PAGE>
Other Exhibits
Exhibit 21 - Subsidiaries of Registrant
Exhibit 23 - Consent of independent auditors
Exhibit 27 - Financial data schedule
All other schedules are omitted because they are not applicable or not
required, or because the required information is included in the consoli-
dated financial statements or notes thereto.
(72)
<PAGE>
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.
- -------------------------------------
By: Dorrit J. Bern
Chairman of the Board
President and Chief Executive Officer
Date: April 27, 2000
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:
- ------------------------------------- ------------------------------------
Dorrit J. Bern, April 27, 2000 Eric M. Specter, April 27, 2000
Chairman of the Board Executive Vice President
President and Chief Executive Officer Chief Financial Officer And Treasurer
- ------------------------------------- ------------------------------------
John J. Sullivan, April 27, 2000 Joseph L. Castle II, April 27, 2000
Vice President, Corporate Controller Director
Chief Accounting Officer
- ------------------------------------- ------------------------------------
Alan Rosskamm Marvin L. Slomowitz, April 27, 2000
Director Director
- ------------------------------------- ------------------------------------
Marjorie Margolies-Mezvinsky Pamela S. Lewis, April 27, 2000
April 27, 2000 Director
Director
- ------------------------------------- ------------------------------------
Kenneth S. Olshan Charles T. Hopkins
April 27, 2000 April 27, 2000
Director Director
(73)
EXHIBIT 10.1.14
July 30, 1999
Charming Shoppes, Inc.
450 Winks Lane
Bensalem, Pennsylvania 19020
Re: Second Amended and Restated Loan and Security Agreement,
dated February 28, 1997 (as amended and supplemented, the "Loan
Agreement") among Charming Shoppes, Inc. (the "Company"), certain
subsidiaries of the Company which are parties thereto
(collectively, with the Company, "Borrowers"), Borrowers' Agent
and Congress Financial Corporation ("Congress")
Ladies and Gentlemen:
The Company has advised Congress that (a) the Company has organized
CSD Acquisition Corp., a Delaware corporation, ("CSD") and all of the
issued and outstanding stock of CSD is owned by the Company, (b) CSD has
entered into an agreement to acquire (the "Modern Woman Acquisition") 100%
of the stock of Modern Woman Holdings, Inc., a Delaware corporation,
("Holdings") which owns 100% of the stock of Modern Woman, Specialty, Inc.,
a California corporation, ("Specialty") which in turn owns 100% of the
stock of Modern Woman, Inc., a Delaware corporation, ("MW Delaware"),
which in turn owns 100% of the stock of Modern Woman, Inc., a Michigan
corporation ("MW Michigan"). Holdings also owns 100% of the stock of
Modern Woman Name Holdings, Inc., a Delaware corporation ("MW Name").
Capitalized terms used herein which are defined in the Loan Agreement
shall have the respective meanings ascribed to such terms in the Loan
Agreement.
This will confirm that Congress consents to (a) the organization of
CSD and (b) the Modern Woman Acquisition, provided that:
(i) no Event of Default exists at the time of the
consummation (or after giving effect thereto) of the
Modern Woman Acquisition;
(ii) Borrowers have not less than $50,000,000 of
Excess Availability immediately after consummation of
the Modern Woman Acquisition; and
(iii) the Modern Woman Acquisition is consummated
on or before September 30, 1999.
This will also confirm that Congress agrees that (a) CSD, shall be
deemed to be an Excluded Subsidiary, (b) upon consummation of the Modern
Woman Acquisition, each of Holdings, Specialty, MW Delaware, MW Michigan,
MW Name (collectively with CSD, the "MW Companies") and any other
Subsidiary of any of the MW Companies (except for any presently existing
Subsidiary of Borrowers, excluding the MW Companies, which is not now an
Excluded Subsidiary), shall be deemed to be Excluded Subsidiaries.
This will also confirm that Congress agrees that the Company and
Charming Shoppes of Delaware, Inc. may execute guaranties of the
obligations of any of the MW Companies or any Subsidiary thereof, provided
that the aggregate amount guaranteed thereunder does not exceed $20,000,000
in the aggregate at any time.
Except as expressly set forth herein, no existing defaults or Events
of Default and no rights or remedies of Congress have been or are being
waived hereby and no changes in the Financing Agreements have been or are
being made or intended hereby, and in all other respects, the Financing
Agreements are hereby specifically ratified, restated and confirmed by all
parties hereto as of the date hereof.
The foregoing shall be effective, as of the date hereof, upon
execution of this letter by Borrowers and the other entities listed below.
Very truly yours,
CONGRESS FINANCIAL CORPORATION
By:___________________________
Title:________________________
[SIGNATURES CONTINUE ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PRECEDING PAGE]
AGREED AND ACCEPTED:
CHARMING SHOPPES, INC.
By:_________________________
Title:______________________
CHARMING SHOPPES OF DELAWARE, INC.
By:_________________________
Title:______________________
CSI INDUSTRIES, INC.
By:_________________________
Title:______________________
FB APPAREL, INC,
By:_________________________
Title:______________________
BORROWERS' AGENT
CHARMING SHOPPES OF DELAWARE, INC.,
BORROWERS' AGENT
By:_________________________
Title:______________________
[SIGNATURES CONTINUE ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PRECEDING PAGE]
CONSENTED TO:
By Each of the Obligors
on Exhibit A Annexed Hereto
____________________________
Its:________________________
By Each of the Obligors
on Exhibit B Annexed Hereto
____________________________
Its:________________________
EXHIBIT 10.1.15
October 19, 1999
Charming Shoppes, Inc.
Charming Shoppes of Delaware, Inc.
CSI Industries, Inc.
FB Apparel, Inc.
450 Winks Lane
Bensalem, Pennsylvania 19020
Re: Modern Woman, Inc.
Gentlemen:
Reference is made to the Second Amended and Restated Loan and Security
Agreement by and among (a) Congress Financial Corporation ("Lender"), (b)
Charming Shoppes, Inc. ("Parent"), Charming Shoppes of Delaware, Inc., CSI
Industries, Inc. and FB Apparel, Inc. (individually and collectively,
"Borrowers"), and (c) Charming Shoppes of Delaware, Inc., as Borrowers'
Agent ("Agent"), dated February 28, 1997 (as it now exists or may from time
to time be amended, the "Loan Agreement").
Capitalized terms used herein, which are not otherwise defined herein,
shall have the respective meanings (as amended herein) ascribed thereto in
the Loan Agreement.
Parent and the other Borrowers have requested that Congress issue or
cause to be issued letters of credit for the account of Modern Woman, Inc.,
a Delaware corporation ("MW Delaware"), which is a Subsidiary of Parent,
(the "MW Letters of Credit").
This will confirm the agreement among Lender, Parent, the other
Borrowers and Agent that, subject to the other terms and conditions of the
Loan Agreement and the other Financing Agreements, the Loan Agreement shall
be and is hereby amended as follows:
1. Amendments to Definitions in Section 1 of Loan Agreement.
2.
a. The definition of "Additional L/C Debtors" shall be and is
hereby amended to include, without limitation, MW Delaware.
b.
c. The definition of "Additional L/C Accommodations" shall be
and is hereby amended to include, without limitation, all existing and
future MW Letters of Credit (whether or not issued pursuant to the Trade
Financing Agreement).
d.
e. The definition of "Additional L/C Debt" shall be and is
hereby amended to include, without limitation, the reimbursement
obligations with respect to the MW Letters of credit of MW Delaware and
Borrowers as provided herein (whether or not pursuant to the Trade
Financing Agreement).
f.
g. The definition of "Letter of Credit Accommodations" shall
include, without limitation, the MW Letters of Credit as part of the
Additional L/C Accommodations and MW Delaware as an Additional L/C Debtor.
h.
3. Amendments to Section 2.2 of Loan Agreement.
4.
a. The provisions of Section 2.2 shall be applicable, without
limitation, to the MW Letters of Credit as part of the Letter of Credit
Accommodations and to MW Delaware as an Additional L/C Debtor.
b.
c. The provisions of Section 2.2(c)(ii) of the Loan Agreement
shall be applicable to all existing and future MW Letters of Credit
notwithstanding the purpose thereof. The provisions of Section 2.2(c)(i)
of the Loan Agreement shall not be applicable to any MW Letters of Credit
notwithstanding the purpose thereof.
d.
5. Inventory Acquired Under MW Letters of Credit. Parent and the
other Borrowers have represented (and do hereby represent and warrant) to
Lender that the MW Letters of Credit are intended solely for the purchase
of merchandise by MW Delaware for sale in retail stores owned by MW
Delaware, Modern Woman, Inc., a Michigan corporation, and certain
subsidiaries of MW Delaware. Accordingly, in reliance thereon, Lender
agrees that (notwithstanding anything to the contrary contained in the Loan
Agreement, Trade Financing Agreement or other Financing Agreements), (1)
Lender has no security interest of any nature in the merchandise purchased
pursuant to the MW Letters of Credit or any receivables from the sale
thereof, (2) such merchandise is not "Inventory" as such term is defined in
the Loan Agreement, (3) the merchandise is not being acquired by Borrowers
nor being sold in "Retail Stores", as such terms are defined in the Loan
Agreement, and (4) the provisions of Sections 3.1, 3.2, 3.13, 3.16 and 3.17
of the Trade Financing Agreement shall not apply to the MW Letters of
Credit.
6.
Except as hereinabove specifically provided, nothing contained herein
shall be construed as an amendment, waiver, release or other modification
to the Loan Agreement or any of the other Financing Agreements.
Very truly yours,
CONGRESS FINANCIAL CORPORATION
By:___________________________________
Title:__________________________________
CONFIRMED AND AGREED TO:
BORROWERS
CHARMING SHOPPES, INC.
By:______________________________
Title:_____________________________
CHARMING SHOPPES OF DELAWARE, INC.
By:______________________________
Title:_____________________________
CSI INDUSTRIES, INC.
By:______________________________
Title:_____________________________
FB APPAREL, INC.
By:______________________________
Title:_____________________________
BORROWERS' AGENT
CHARMING SHOPPES OF DELAWARE, INC.
AS BORROWERS' AGENT
By:______________________________
Title:_____________________________
CONSENTED TO:
MODERN WOMAN, INC.
By:______________________________
Title:_____________________________
EXHIBIT 10.1.16
November __, 1999
Charming Shoppes, Inc.
450 Winks Lane
Bensalem, Pennsylvania 19020
Re: Second Amended and Restated Loan and Security Agreement,
dated February 28, 1997 (as amended and supplemented, the "Loan
Agreement") among Charming Shoppes, Inc. (the "Company"), certain
subsidiaries of the Company which are parties thereto
(collectively, with the Company, "Borrowers"), Borrowers' Agent
and Congress Financial Corporation ("Congress")
Ladies and Gentlemen:
The Company has advised Congress that (a) the Company has organized
Rose Merger Sub, Inc., a Tennessee corporation, ("Rose") and all of the
issued and outstanding stock of Rose is owned by the Company, and (b) Rose
has entered into an Agreement and Plan of Merger dated as of November 15,
1999 among Rose, Catherine Stores Corporation, a Tennessee corporation
("Catherine Stores"), and the Company, pursuant to which (i) Rose shall
purchase one hundred (100%) percent of the outstanding stock of Catherine
Stores, and (ii) as soon as practicable, after the purchase by Rose of all
of the outstanding stock of Catherine Stores, Rose shall be merged with and
into Catherine Stores, with Catherine Stores being the survivor of the
merger (collectively, the "Catherine Stores Merger Transaction").
Capitalized terms used herein which are defined in the Loan Agreement
shall have the respective meanings ascribed to such terms in the Loan
Agreement.
This will confirm that Congress consents to (a) the organization of
Rose and (b) the Catherine Stores Merger Transaction, provided that:
(i) no Event of Default exists at the time of the
consummation (or after giving effect thereto) of the
Catherine Stores Merger Transaction;
(ii) Borrowers have not less than $50,000,000 of
Excess Availability immediately after consummation of
the Catherine Stores Merger Transaction; and
(iii) the Catherine Stores Merger Transaction is
consummated on or before January 31, 2000.
This will also confirm that Congress agrees that(a) Rose shall be
deemed to be an Excluded Subsidiary, (b) upon consummation of the Catherine
Stores Merger Transaction, Catherine Stores and any Subsidiary of Catherine
Stores (except for any presently existing Subsidiary of Borrowers,
excluding Catherine Stores, which is not now an Excluded Subsidiary), shall
be deemed to be Excluded Subsidiaries.
Except as expressly set forth herein, no existing defaults or Events
of Default and no rights or remedies of Congress have been or are being
waived hereby and no changes in the Financing Agreements have been or are
being made or intended hereby, and in all other respects, the Financing
Agreements are hereby specifically ratified, restated and confirmed by all
parties hereto as of the date hereof.
The foregoing shall be effective, as of the date hereof, upon
execution of this letter by Borrowers and the other entities listed below.
Very truly yours,
CONGRESS FINANCIAL CORPORATION
By:___________________________
Title:________________________
[SIGNATURES CONTINUE ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PRECEDING PAGE]
AGREED AND ACCEPTED:
CHARMING SHOPPES, INC.
By:_________________________
Title:______________________
CHARMING SHOPPES OF DELAWARE, INC.
By:_________________________
Title:______________________
CSI INDUSTRIES, INC.
By:_________________________
Title:______________________
FB APPAREL, INC,
By:_________________________
Title:______________________
BORROWERS' AGENT
CHARMING SHOPPES OF DELAWARE, INC.,
BORROWERS' AGENT
By:_________________________
Title:______________________
[SIGNATURES CONTINUE ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PRECEDING PAGE]
CONSENTED TO:
By Each of the Obligors
on Exhibit A Annexed Hereto
____________________________
Its:________________________
By Each of the Obligors
on Exhibit B Annexed Hereto
____________________________
Its:________________________
EXHIBIT 10.1.17
Dated as of December 27, 1999
Charming Shoppes, Inc.
450 Winks Lane
Bensalem, Pennsylvania 19020
Re: Amendment No. 3 to Second Amended and Restated
Loan and Security Agreement, dated February 28, 1997 (as
amended and supplemented, the "Loan Agreement") among
Charming Shoppes, Inc. (the "Company"), certain subsidiaries
of the Company which are parties thereto (collectively, with
the Company, "Borrowers"), Borrowers' Agent and
Congress Financial Corporation ("Congress")
Gentlemen:
In consideration of the mutual agreements contained herein and other
good and valuable consideration, each of Borrowers, Borrowers' Agent and
Congress agree as follows:
1. Capitalized terms used herein shall have the meanings ascribed
thereto in the Loan Agreement, unless otherwise defined herein.
2.
3. The Loan Agreement shall be and is amended, effective as of the
date hereof, as follows:
4.
a. The following definition shall be added to Section 1 of the
Agreement:
b.
"Net Recovery Percentage" shall mean, at any applicable
time, a fraction expressed as a percentage (a) the
numerator of which is the amount equal to the appraised
recovery value of the aggregate quantity of the types
of categories of the Inventory at such time on a "going
out of business sale" basis as set forth in the most
recent appraisal of Inventory received by Lender in
accordance with Section 7.3(d) hereof, net of operating
expenses, liquidation expenses and commissions, and (b)
the denominator of which is the cost at such time of
the aggregate quantity of such types and categories of
the Inventory.
a. Section 2.1(a) of the Loan Agreement is amended by deleting
the words:
b.
"(i) the lesser of (A) fifty (50%) percent multiplied
by the value of Eligible Inventory, or (B) twenty-five
(25%) percent of the Retail Sales Price of the Eligible
Inventory, less"
and by inserting in its stead:
"(i) the lesser of (A) sixty (60%) percent of the Value
of the Eligible Inventory, (B) eighty (80%) percent of
the Net Recovery Percentage multiplied by the cost of
the Eligible Inventory, or (C) twenty-five (25%)
percent of the Retail Sales Price of the Eligible
Inventory, less"
a. Section 1.47 of the Loan Agreement is amended by providing
that the term "Interest Rate" shall mean (but only as to Prime Rate Loans)
a rate equal to the Prime Rate, provided, that, the Interest Rate as set
forth in the proviso to Section 1.47 (but only as to Prime Rate Loans)
shall mean, the rate of two (2%) percent per annum in excess of the Prime
Rate;
a. Section 12.1(a) of the Loan Agreement is amended by deleting
the date of "June 1, 2000" set forth therein and inserting "June 30, 2001"
in its stead;
b.
c. Section 12.1(c) of the Loan Agreement is amended by deleting
the date "June 1, 2000" set forth therein and inserting the date "June 30,
2001" in its stead.
d.
e. Section 12.1(c) is also amended by, immediately before the
proviso therein, (i) deleting the date "December 1, 1999" set forth therein
and inserting the date "December 1, 2000" in its stead, and (ii) deleting
the date "November 30, 1999", set forth therein and inserting the date
"November 30, 2000" in its stead.
f.
2. Congress agrees that the Company and Charming Shoppes of
Delaware, Inc. may execute guaranties of the obligations of any of the MW
Companies (as defined in that certain Letter Agreement dated July 30, 1999)
or any Subsidiary thereof, and guaranties of the obligations of Catherine
Stores (as defined in that certain Letter Agreement dated November __,
1999) or any Subsidiary thereof, provided, that, the aggregate amount
guaranteed thereunder does not exceed $40,000,000 at any time. The
following language contained in the Letter Agreement dated July 30, 1999 is
hereby deleted: "This will also confirm that Congress agrees that the
Company and Charming Shoppes of Delaware, Inc. may execute guaranties of
the obligations of any of the MW Companies or any Subsidiary thereof,
provided, that, the aggregate amount guaranteed thereunder does not exceed
$20,000,000 in the aggregate at any time."
3.
4. In addition to the representations, warranties and covenants
heretofore or hereafter made by the Company and the other Borrowers to
Congress pursuant to the Loan Agreement and the other Financing Agreements,
each of the Borrowers hereby represents, warrants and covenants to and with
Congress as follows (which representations, warranties and covenants are
continuing and shall survive the execution and delivery of this letter and
shall be incorporated into and made a part of the Financing Agreements);
5.
a. No Event of Default exists or has occurred and is continuing
on the date of this Amendment; and
b.
c. this Amendment has been duly executed and delivered by the
Company and each of the other Borrowers, has been consented to by each of
the other Obligors and is in full force and effect on the date hereof.
d.
6. This Amendment (a) shall be effective, as of the date hereof,
upon execution of this letter by the Borrowers and Congress, and (b)
contains the entire agreement of the parties with respect to the subject
matter hereof and supersedes all correspondence, memoranda, communications,
discussions and negotiations with respect thereto. Except as expressly set
forth above, no existing defaults or Events of Default and no rights or
remedies of Congress have been or are being waived hereby and no changes or
modifications to the Financing Agreements have been or are being made or
are intended hereby and in all other respects the Financing Agreements
shall continue in full force and effect.
7.
8. This Amendment may be executed and delivered in counterparts, all
of which together shall constitute a complete agreement.
9.
10. Very truly yours,
11.
12. CONGRESS FINANCIAL CORPORATION
13.
14. By:___________________________
15.
16. Title:________________________
17.
18. AGREED AND ACCEPTED:
19.
20. CHARMING SHOPPES, INC.
21.
22. By:_________________________
23.
24. Title:______________________
25.
[SIGNATURES CONTINUE ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PRECEDING PAGE]
CHARMING SHOPPES OF DELAWARE, INC.
By:_________________________
Title:______________________
CSI INDUSTRIES, INC.
By:_________________________
Title:______________________
FB APPAREL, INC,
By:_________________________
Title:______________________
BORROWERS' AGENT
CHARMING SHOPPES OF DELAWARE, INC.,
BORROWERS' AGENT
By:_________________________
Title:______________________
CONSENTED TO:
By Each of the Obligors
on the List Annexed Hereto
By: ____________________________
Its: ____________________________
EXHIBIT 10.1.22
EXECUTION COPY
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 28, 1999
Among
CHARMING SHOPPES STREET, INC.
as Seller
and
SPIRIT OF AMERICA, INC.
as Servicer
and
CLIPPER RECEIVABLES CORPORATION
as Purchaser
and
STATE STREET CAPITAL CORPORATION
as Administrator
and
STATE STREET BANK & TRUST COMPANY
as Relationship Bank
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I
PURCHASES AND REINVESTMENTS
<S> <C>
SECTION 1.01. Commitments to Purchase; Limits on Purchaser's Obligations 2
SECTION 1.02. Purchase Procedures; Assignment of Purchaser's Interests 2
SECTION 1.03.Reinvestments of Certain Collections; Payment of Remaining Collections 2
SECTION 1.04. Asset Interest 4
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01. Computation of Purchaser's Total Investment. 4
SECTION 2.02. Computation of Earned Discount 5
SECTION 2.03. Estimates of Earned Discount Rate, Fees, etc 5
ARTICLE III
SETTLEMENTS
SECTION 3.01. Settlement Procedures 5
SECTION 3.02. Deemed Collections; Reduction of Purchaser's Total Investment, Etc 8
SECTION 3.03. Payments and Computations, Etc. 10
SECTION 3.04. Treatment of Collections and Deemed Collections 10
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees 12
SECTION 4.02. Yield Protection 12
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01. Conditions Precedent to Initial Purchase 14
SECTION 5.02. Conditions Precedent to All Purchases and Reinvestments 16
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Seller 17
SECTION 6.02. Representations and Warranties of Servicer 20
ARTICLE VII
GENERAL COVENANTS OF SELLER AND SERVICER
SECTION 7.01. Affirmative Covenants of Seller and Servicer 22
SECTION 7.02. Reporting Requirements of Seller 23
SECTION 7.03. Negative Covenants of Seller 24
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer 28
SECTION 8.02. Duties of Servicer 29
SECTION 8.03. Rights of the Administrator 30
SECTION 8.04. Responsibilities of Seller 31
SECTION 8.05. Further Action Evidencing Purchases and Reinvestments 31
SECTION 8.06. Application of Collections 32
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest 32
SECTION 9.02. Further Assurances 33
SECTION 9.03. Remedies 33
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.01. Liquidation Events 33
SECTION 10.02. Remedies 35
ARTICLE XI
THE ADMINISTRATOR; RELATIONSHIP BANK
SECTION 11.01. Authorization and Action 36
SECTION 11.02. Administrator's and Relationship Bank's Reliance, Etc 36
SECTION 11.03. State Street Capital and State Street Bank and Affiliates 36
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. Restrictions on Assignments 37
SECTION 12.02. Rights of Assignee 38
SECTION 12.03. Evidence of Assignment 38
SECTION 12.04. Rights of the Banks and Collateral Agent 38
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities by Seller 38
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc 40
SECTION 14.02. Notices, Etc. 41
SECTION 14.03. No Waiver; Remedies 41
SECTION 14.04. Binding Effect; Survival 41
SECTION 14.05. Costs, Expenses and Taxes 42
SECTION 14.06. No Proceedings 42
SECTION 14.07. Confidentiality of Program Information 42
SECTION 14.08. Confidentiality of Seller Information 44
SECTION 14.09. Captions and Cross References 45
SECTION 14.10. Integration 45
SECTION 14.11. Governing Law 45
SECTION 14.12. Waiver Of Jury Trial 46
SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities 46
SECTION 14.14. Execution in Counterparts 46
SECTION 14.15. No Recourse Against Other Parties 46
SECTION 14.16. State Street Business Combination 47
</TABLE>
APPENDICES
APPENDIX A Definitions
SCHEDULES
SCHEDULE 5.01(h) Description of Opinions
SCHEDULE 6.01(j) Description of Litigation
SCHEDULE 6.01(n) List of Offices of Seller where Records Are
Kept
SCHEDULE 7.01(g) Description of Credit and Collection Policy
EXHIBITS
EXHIBIT 3.01(a) Information Package to be Provided as of Cut-Off
Date
EXHIBIT 14.02 Addresses
||
RECEIVABLES PURCHASE AGREEMENT
Dated as of May 28, 1999
THIS IS A RECEIVABLES PURCHASE AGREEMENT, among CHARMING SHOPPES
STREET, INC., a Delaware corporation ("Seller"), SPIRIT OF AMERICA, INC., a
Delaware corporation as Servicer ("Servicer") CLIPPER RECEIVABLES
CORPORATION, a Delaware corporation ("Purchaser"), STATE STREET CAPITAL
CORPORATION, a Massachusetts corporation ("State Street Capital"), as
administrator for Purchaser under the Program Administration Agreement (in
such capacity, the "Administrator") and STATE STREET BANK & TRUST COMPANY,
a national banking association, as a referral agent for Purchaser under the
Relationship Bank Agreement (in such capacity, together with any successors
thereto in such capacity, the "Relationship Bank" and in its individual
capacity, "State Street Bank"). Unless otherwise indicated, capitalized
terms used in this Agreement are defined in Appendix A.
Background
1. Seller is engaged in the business of purchasing receivables
originated by Spirit of America National Bank under Mastercard(R) and
VISA(R) cards.
2. Seller has, and expects to have, Pool Receivables in which Seller
intends to sell an undivided interest. Seller has requested Purchaser, and
Purchaser has agreed, subject to the terms and conditions contained in this
Agreement, to purchase such undivided interest, referred to herein as the
Asset Interest, from Seller from time to time during the term of this
Agreement.
3. Seller and Purchaser desire that, subject to the terms and
conditions of this Agreement, certain of the daily Collections in respect
of the Asset Interest be reinvested in Pool Receivables, which reinvestment
shall constitute part of the Asset Interest.
4. State Street Capital has been requested, and is willing, to act
as the Administrator.
5. State Street Bank has been requested, and is willing, to act as
the Relationship Bank.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto, intending to be legally
bound hereby, agree as follows:
ARTICLE I
PURCHASES AND REINVESTMENTS
SECTION 1.01. Commitments to Purchase; Limits on Purchaser's
Obligations. Upon the terms and subject to the conditions of this
Agreement, from time to time prior to the Termination Date, Seller may
request that Purchaser purchase from Seller ownership interests in the Pool
Assets (each being a "Purchase") and Purchaser shall make such Purchase;
provided that no Purchase shall be made by Purchaser to the extent that,
after giving effect thereto, either (a) the then Purchaser's Total
Investment would exceed the lesser of (i) the Utilization Cap Amount, or
(ii) $20,000,000 or such larger amount as may be mutually agreed to in
writing by the parties hereto (the "Purchase Limit"), or (b) the Asset
Interest would exceed the Allocation Limit; and provided further that each
Purchase made pursuant to this Section 1.01 shall have a Purchase Price of
at least $100,000 and shall be in integral multiples of $100,000.
SECTION 1.02. Purchase Procedures; Assignment of Purchaser's
Interests.
(a) Notice of Purchase. Each Purchase from Seller by Purchaser
shall be made on notice from Seller to the Administrator received by the
Administrator not later than 11:00 a.m. (New York City time) on the
Business Day before the date of such proposed Purchase. Each such notice
of a proposed Purchase shall specify the desired amount and date of such
Purchase. The "Purchase Price" for each Purchase shall be the lesser of
(i) the amount requested by Seller pursuant to this Section 1.02(a) and
(ii) the amount permitted pursuant to Section 1.01.
(b) Funding of Purchase. On the date of each Purchase,
Purchaser shall, upon satisfaction of the applicable conditions set forth
in Article V, make available to the Administrator at the Administrator's
Office (or to such account as designated by the Administrator) the amount
of its Purchase in same day funds, and after receipt by the Administrator
of such funds, the Administrator will make such funds immediately available
to Seller at such office or to such account as Seller shall designate in
writing to the Administrator on or prior to the date hereof (or such other
office or account as Seller shall designate from time to time).
(c) Assignment of Asset Interests. Seller hereby sells, assigns
and transfers to Purchaser, effective on and as of the date of each
Purchase by the Purchaser hereunder, the Asset Interest in the Pool Assets.
SECTION 1.03. Reinvestments of Certain Collections; Payment of
Remaining Collections. (a) On the close of business on each Business Day
during the period from the date hereof to the Final Payout Date, Servicer
shall, out of all Collections received on such day from Pool Receivables:
(i) determine the portion of such Collections attributable
on such day to the Asset Interest by multiplying (x) the
amount of such Collections times (y) the Asset Interest
(expressed as a percentage of Net Pool Balance);
(ii) out of the portion of such Collections allocated to
the Asset Interest pursuant to clause (i), set aside and hold
in trust for Purchaser an amount at least equal to the sum of
the estimated amount of Earned Discount accrued in respect of
the Purchaser's Total Investment (based on rate information
provided by the Administrator pursuant to Section 2.03), all
other amounts due to Purchaser, the Administrator or the
Relationship Bank hereunder and the Servicer's Fee (in each
case, accrued through such day) and an amount equal to any
Cash Collateral Shortfall and any Spread Account Shortfall not
so previously set aside; provided that unless the
Administrator or the Relationship Bank shall request it to do
so in writing (which writing shall set forth the reason for
such request), Servicer shall not be required to hold
Collections that have been set aside in a separate deposit
account containing only such Collections but shall, to the
extent any amount is set aside for any Cash Collateral
Shortfall or any Spread Account Shortfall deposit such amount
in the RPA Cash Collateral Account or Spread Account, as
applicable;
(iii) apply the Collections allocated to the Asset Interest
pursuant to clause (i) and not required to be set aside
pursuant to clause (ii) to the purchase from Seller of
ownership interests in Pool Assets (each such purchase being a
"Reinvestment"); provided that (A) if the then Asset Interest,
expressed as a percentage of Net Pool Balance, would exceed
the Allocation Limit, then, Servicer shall not reinvest, but
shall set aside and hold for the benefit of Purchaser, a
portion of such Collections which, together with other
Collections previously set aside and then so held, shall equal
the amount necessary to reduce the Asset Interest to the
Allocation Limit; (B) if the conditions precedent to
Reinvestment in Section 5.02 are not satisfied then Servicer
shall not reinvest, but shall set aside and hold for the
benefit of Purchaser, any of such remaining Collections; and
(C) if the Seller shall have requested a reduction in the
Purchaser's Total Investment, then, during the times specified
in Section 3.02(b)(ii), Servicer shall not reinvest, but shall
set aside and hold for the benefit of Purchaser, a portion of
such Collections until the amount thereof not so reinvested
shall equal the amount of such reduction; and
(iv) pay to Seller (A) the portion of such Collections not
allocated to the Asset Interest pursuant to clause (i) and (B)
the Collections applied to Reinvestment pursuant to clause
(iii).
(b) Unreinvested Collections. Servicer shall set aside and hold in
trust for the benefit of Purchaser all Collections which pursuant to clause
(iii) of Section 1.03(a), may not be reinvested in Pool Assets; provided
that unless the Administrator or the Relationship Bank shall request it to
do so in writing (which writing shall set forth the reason for such
request), Servicer shall not be required to hold Collections that have been
set aside in a separate deposit account containing only such Collections.
If, prior to the date when such Collections are required to be paid to the
Administrator for the benefit of Purchaser pursuant to Section 3.01, the
amount of Collections so set aside exceeds the amount, if any, necessary to
reduce the Asset Interest to the Allocation Limit, and the conditions
precedent to Reinvestment set forth in Section 5.02 are satisfied, then the
Servicer shall apply such Collections (or, if less, a portion of such
Collections equal to the amount of such excess) to the making of a
Reinvestment.
(c) Reduction of Purchaser's Total Investment. The Purchaser's Total
Investment shall not be reduced by the amount of Collections set aside
pursuant to this Section unless and until such Collections are actually
delivered to the Administrator pursuant hereto.
SECTION 1.04. Asset Interest. (a) Components of Asset Interest. On
any date the Asset Interest will represent Purchaser's combined undivided
percentage ownership interest in (i) all then outstanding Pool Receivables,
(ii) related Contracts, (iii) all Related Security with respect to such
Pool Receivables, (iv) the Accounts, (v) all Collections with respect to,
and other proceeds of, such Pool Receivables, Contracts and Related
Security as at such date, (vi) all rights of Seller (directly or as
assignee of Parent) under the First Tier Agreement, the Second Tier
Agreement, the ES Agreement and the Cap Agreements, (vii) all books and
records evidencing or related to the foregoing, and (viii) all proceeds of
the foregoing (collectively, the "Pool Assets").
(b) Computation of Asset Interest. On any date, the Asset Interest
shall be equal to a fraction (expressed as a percentage), the numerator of
which is the Purchaser's Total Investment and the denominator of which is
the Net Pool Balance, each as of such day; provided, however, that during
the Liquidation Period, the Asset Interest shall be the Asset Interest
computed as of the day immediately preceding the commencement of the
Liquidation Period; provided, further, that the Asset Interest shall not
exceed 100%.
(c) Frequency of Computation. The Asset Interest shall be computed
as of the Cut-Off Date for each Settlement Period. In addition, the
Administrator may require Servicer to provide an Information Package for
purposes of computing the Asset Interest as of any other date, utilizing
the then most recently available information, and the Servicer agrees to do
so within three Business Days of its receipt of the Administrator's written
request.
ARTICLE II
COMPUTATIONAL RULES
SECTION 2.01. Computation of Purchaser's Total Investment. In making
any determination of Purchaser's Total Investment, the following rules
shall apply:
(a) Purchaser's Total Investment shall not be considered
reduced by any allocation, setting aside or distribution of
any portion of Collections unless such Collections shall have
been actually delivered to the Administrator pursuant hereto;
and
(b) Purchaser's Total Investment shall not be considered
reduced by any distribution of any portion of Collections if
at any time such distribution is rescinded or otherwise
returned for any reason.
SECTION 2.02. Computation of Earned Discount. In making any
determination of Earned Discount, the following rules shall apply:
(a) the Administrator shall determine the Earned Discount
accruing with respect to the Purchaser's Total Investment, in
accordance with the definition of Earned Discount;
(b) no provision of this Agreement shall require the
payment or permit the collection of Earned Discount in excess
of the maximum permitted by applicable law; and
(c) Earned Discount shall not be considered paid by any
distribution if at any time such distribution is rescinded or
otherwise returned for any reason.
SECTION 2.03. Estimates of Earned Discount Rate, Fees, etc. For
purposes of determining the amounts required to be set aside by Servicer
pursuant to Section 1.03, the Administrator shall notify Servicer from time
to time of the Earned Discount Rate applicable to the Purchaser's Total
Investment and the rates at which fees and other amounts are accruing
hereunder. It is understood and agreed that (i) the Earned Discount Rate
may change from time to time, (ii) certain rate information provided by the
Administrator to Servicer shall be based upon the Administrator's good
faith estimate, (iii) the amount of Earned Discount actually accrued with
respect to any Settlement Period may exceed, or be less than, the amount
set aside with respect thereto by Servicer, and (iv) the amount of fees or
other payables accrued hereunder with respect to any Settlement Period may
exceed, or be less than, the amount set aside with respect thereto by
Servicer. Failure to set aside any amount so accrued shall not relieve
Servicer of its obligation to remit Collections to the Administrator with
respect to such accrued amount, as and to the extent provided in Section
3.01.
ARTICLE III
SETTLEMENTS
SECTION 3.01. Settlement Procedures.
The parties hereto will take the following actions with respect to
each Settlement Period:
(a) Information Package. On the seventh Business Day
following the Cut-Off Date for such Settlement Period or as
otherwise may be requested pursuant to Section 1.04(c),
Servicer shall deliver to the Relationship Bank and the
Administrator a diskette containing the information described
in Exhibit 3.01(a) (each, an "Information Package").
(b) Earned Discount; Other Amounts Due. On the first
Business Day following such Cut-Off Date, the Administrator
shall notify Servicer of (i) the amount of Earned Discount
that will have accrued in respect of the Purchaser's Total
Investment during such Settlement Period, and (ii) all fees
and other amounts accrued and payable by Seller under this
Agreement (other than Purchaser's Total Investment).
(c) Settlement Date Procedure - Reinvestment Period. On
the fifteenth day of each month, or if such day is not a
Business Day, the next succeeding Business Day (each, a
"Settlement Date") prior to the Termination Date, the Servicer
shall distribute, from Available Funds for such Settlement
Date, the following amounts in the following order:
(1) to the Administrator, an amount equal to the
Earned Discount accrued during such Settlement Period,
plus any previously accrued Earned Discount not paid on a
prior Settlement Date, which amount shall be distributed
by the Administrator to the Purchaser for application to
such Earned Discount;
(2) to the Administrator, an amount equal to the
Program Fee and the Commitment Fee accrued during such
Settlement Period, plus any previously accrued Program
Fee and Commitment Fee not paid on a prior Settlement
Date;
(3) to the Servicer, if the Servicer is not Seller or
one of its Affiliates, an amount equal to the Servicer's
Fee accrued during such Settlement Period, to the extent
that such Servicer's Fee does not exceed the Servicer's
Fee that would have accrued if such Servicer's Fee had
been calculated using a Servicer's Fee Rate of 2%;
(4) to the Administrator, an amount equal to the
amount, if any, necessary to reduce the Asset Interest to
the Allocation Limit and to reduce the Purchaser's Total
Investment in accordance with Section 3.02(b), which
amount shall be distributed by the Administrator to the
Purchaser for application to the Purchaser's Total
Investment;
(5) to the Administrator, all other amounts then due
under this Agreement to the Administrator, the
Relationship Bank, the Purchaser, the Affected Parties or
the Indemnified Parties;
(6) to the Servicer, an amount equal to the Servicer's
Fee accrued during such Settlement Period to the extent
not paid pursuant to subparagraph (3) above, plus any
previously accrued Servicer's Fee not paid on a prior
Settlement Date;
(7) to the RPA Cash Collateral Account, to the extent
necessary to cause funds on deposit therein to equal the
RPA Required Cash Collateral Amount;
(8) to the Spread Account, to the extent required
under the terms of the Spread Account Agreement; and
(9) to the Seller, any remaining amounts; provided,
however, that if the Seller shall so instruct the
Administrator, funds that would otherwise be paid to the
Seller under this clause shall be deposited in the RPA
Cash Collateral Account.
(d) Settlement Date Procedure - Liquidation Period. On
each Settlement Date during the Liquidation Period, the
Servicer shall distribute, from Available Funds for such
Settlement Date, the following amounts in the following order:
(1) to the Administrator, an amount equal to the
Earned Discount accrued during such Settlement Period,
plus any previously accrued Earned Discount not paid on a
prior Settlement Date, which amount shall be distributed
by the Administrator to the Purchaser for application to
such Earned Discount;
(2) to the Administrator, an amount equal to the
Program Fee and Commitment Fee accrued during such
Settlement Period, plus any previously accrued Program
Fee and Commitment Fee not paid on a prior Settlement
Date;
(3) to the Servicer, if the Servicer is not Seller or
one of its Affiliates, an amount equal to the Servicer's
Fee accrued during such preceding Settlement Period, to
the extent that such Servicer's Fee does not exceed the
Servicer's Fee that would have accrued if such Servicer's
Fee had been calculated using a Servicer's Fee Rate of
2%;
(4) to the Administrator, an amount equal to any
remaining Purchaser's Share of Collections until the
Purchaser's Total Investment is reduced to zero, which
amount shall be distributed by the Administrator to the
Purchaser for application to the Purchaser's Total
Investment;
(5) to the Administrator, all other amounts then due
under this Agreement to the Administrator, the
Relationship Bank, the Purchaser, the Affected Parties or
the Indemnified Parties;
(6) to the Servicer, an amount equal to the Servicer's
Fee accrued during such Settlement Period, to the extent
not paid pursuant to subparagraph (3) above, plus any
previously accrued Servicer's Fee not paid on a prior
Settlement Date; and
(7) to the Seller, any remaining amounts.
(e) Order of Application of Purchaser's Total Investment.
Upon receipt by the Administrator of funds distributed
pursuant to this Section 3.01 with respect to any Settlement
Period on account of Purchaser's Total Investment, the
Administrator shall apply them to the items specified in the
subclauses below, in the order of priority of such subclauses:
(i) to that portion of the Purchaser's Total
Investment funded by Liquidity Fundings until such
portion has been reduced to zero;
(ii) to that portion of the Purchaser's Total
Investment funded by Commercial Paper Notes until such
portion has been reduced to zero; and
(iii) to the remaining portion of the Purchaser's Total
Investment until the Purchaser's Total Investment has
been reduced to zero.
(f) Non-Distribution of Servicer's Fee. Unless the
Administrator gives written notice to the contrary to Servicer
(which notice may be given at any time), from and after the
date on which the amounts (if any) set aside pursuant to
Section 1.03 for any Settlement Period in respect of payments
required to be made prior to the payment of the Servicer's Fee
on the related Settlement Date are sufficient to make such
payments, the amounts (if any) set aside pursuant to Section
1.03 in respect of the Servicer's Fee may be paid to Servicer,
in which case no distribution shall be made in respect of
Servicer's Fee pursuant to clause (c) or (d) above.
(g) Delayed Payment. If on any day described in this
Section 3.01 because Collections during the relevant
Settlement Period were less than the aggregate amounts
payable, Servicer shall not make any payment otherwise
required, the next available Collections in respect of the
Asset Interest shall be applied to such payment, and no
Reinvestment shall be permitted hereunder until such amount
payable has been paid in full.
SECTION 3.02. Deemed Collections; Reduction of Purchaser's Total
Investment, Etc.
(a) Deemed Collections. If on any day
(i) the Unpaid Balance of any Pool Receivable is
(A) reduced as a result of any defective, rejected or
returned merchandise or services, any cash discount, or
any incorrect billing or other adjustment by Seller or
any Affiliate of Seller,
(B) reduced or canceled as a result of a setoff in
respect of any claim by the Obligor thereof against
Seller or any Affiliate of Seller or any other Person
(whether such claim arises out of the same or a related
or an unrelated transaction), or
(C) reduced on account of the obligation of Seller to
pay to the related Obligor any rebate or refund, or
(D) less than the amount included in calculating the
Net Pool Balance for purposes of any Information Package,
or
(ii) any of the representations or warranties of Seller set
forth in Section 6.01(l) or (p) were not true when made with
respect to any Pool Receivable, or any of the representations
or warranties of Seller set forth in Section 6.01(l) are no
longer true with respect to any Pool Receivable,
then, on such day, Seller shall be deemed to have received a Collection of
such Pool Receivable
(I) in the case of clause (i) above, in the amount of
such reduction or cancellation or the difference between
the actual Unpaid Balance and the amount included in
calculating such Net Pool Balance, as applicable; and
(II) in the case of clause (ii) above, in the amount
of the Unpaid Balance of such Pool Receivable.
(b) Seller's Optional Reduction of Purchaser's Total Investment.
Seller may at any time elect to reduce the Purchaser's Total Investment as
follows:
(i) Seller shall give the Administrator at least three
Business Days' prior written notice of such reduction
(including the amount of such proposed reduction and the
proposed date on which such reduction will commence),
(ii) on the proposed date of commencement of such reduction
and on each day thereafter, Servicer shall refrain from
reinvesting Collections pursuant to Section 1.03 until the
amount thereof not so reinvested shall equal the amount of
such reduction, and
(iii) Servicer shall hold such Collections in trust for
Purchaser, pending payment to the Administrator, as provided
in Section 3.01;
provided that,
(A) the amount of any such reduction shall be not less
than $100,000 and the Purchaser's Total Investment after
giving effect to such reduction shall be not less than
$100,000 (unless such reduction reduces Purchaser's Total
Investment to zero), and
(B) Seller shall use reasonable efforts to attempt to
choose a reduction amount, and the date of commencement
thereof, so that such reduction shall commence and
conclude in the same Settlement Period to the extent
possible.
SECTION 3.03. Payments and Computations, Etc.
(a) Payments. All amounts to be paid or deposited by Seller or
Servicer to the Administrator or any other Person hereunder (other than
amounts payable under Section 4.02) shall be paid or deposited in
accordance with the terms hereof no later than 11:00 a.m. (New York City
time) on the day when due in lawful money of the United States of America
in same day funds (i) in the case of amounts to be paid or deposited in
respect of accrued and unpaid Earned Discount or in reduction of
Purchaser's Total Investment, to the Collateral Agent at First National
Bank of Chicago, Chicago, Illinois, for credit to such account as the
Administrator shall specify and (ii) in the case of all fees, expenses and
other amounts (other than amounts payable under Section 4.02), to the
Administrator at State Street Bank, Boston, Massachusetts, for credit to
such account as the Administrator shall specify.
(b) Late Payments. Seller or Servicer, as applicable, shall, to the
extent permitted by law, pay to Purchaser interest on all amounts not paid
or deposited when due hereunder at 1% per annum above the Alternate Base
Rate, payable on demand, provided, however, that such interest rate shall
not at any time exceed the maximum rate permitted by applicable law.
(c) Method of Computation. All computations of interest, Earned
Discount, any fees payable under Sections 4.01(a) and (b) and any other
fees payable by Seller to Purchaser, the Administrator or the Relationship
Bank in connection with Purchases or the Asset Interest hereunder shall be
made on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) elapsed.
SECTION 3.04. Treatment of Collections and Deemed Collections.
Seller shall forthwith deliver to Servicer all Collections deemed received
by Seller pursuant to Section 3.02(a), and Servicer shall hold or
distribute such Collections as Earned Discount, accrued Servicer's Fee,
repayment of Purchaser's Total Investment, etc. to the same extent as if
such Collections had actually been received on the date of such delivery to
Servicer. If Collections are then being paid to the Collateral Agent, or
lock boxes or accounts directly or indirectly owned or controlled by the
Collateral Agent, Servicer shall forthwith cause such deemed Collections to
be paid to the Collateral Agent or to such lock boxes or accounts, as
applicable, or as the Collateral Agent shall request in writing. So long
as Seller shall hold any Collections or deemed Collections required to be
paid to Servicer, the Administrator or Collateral Agent, it shall hold such
Collections in trust and shall clearly mark its records to reflect such
trust; provided that unless the Administrator or the Relationship Bank
shall request it to do so in writing, Seller shall not be required to hold
such Collections in a separate deposit account containing only such
Collections.
SECTION 3.05. Establishment of RPA Cash Collateral Account.
(a) The Administrator, for the benefit of the Purchaser and the
Liquidity Banks, shall establish and maintain an account (the "RPA Cash
Collateral Account"). The RPA Cash Collateral Account shall be under the
sole dominion and control of the Administrator. The Servicer shall from
time to time deposit in the RPA Cash Collateral Account (i) a portion of
the proceeds of fundings under this Agreement, and (ii) funds otherwise
payable to the Seller under Section 3.01(c) (7) and (9).
(b) Funds on deposit in the RPA Cash Collateral Account shall be
invested by the Administrator in Permitted Investments at the direction of
Seller. Such investments made at any time will mature so that funds will
be available for withdrawal no later than the following Settlement Date.
All earnings on such investment during any such Settlement Period shall be
deemed to be Collections for such Settlement Period.
(c) The Administrator shall maintain investments in the RPA Cash
Collateral Account in such manner as will maintain the perfection and
priority of the Administrator's lien thereon.
(d) If on any Settlement Date, a Shortfall shall exist, the
Administrator shall withdraw from the RPA Cash Collateral Account (in an
amount equal to the lesser of such Shortfall or the amount on deposit in
the RPA Cash Collateral Account) and apply such withdrawing funds in the
same manner as Collections pursuant to Section 3.01.
(e) If on any Settlement Date the funds on deposit in the RPA Cash
Collateral Account (exclusive of earnings on the investment of such funds)
shall exceed the RPA Required Cash Collateral Amount, the Administrator
shall withdraw such excess and pay such excess to Seller.
SECTION 3.06. Spread Account. If, on any Settlement Date, a
Shortfall shall remain after giving effect to any applications from the RPA
Cash Collateral Account pursuant to Section 3.05(d), the Servicer shall
cause funds to be withdrawn from the Spread Account (to the extent
available under the terms of the Spread Account Agreement) in the amount of
such remaining Shortfall and applied in the same manner as Collections
pursuant to Section 3.01.
ARTICLE IV
FEES AND YIELD PROTECTION
SECTION 4.01. Fees.
(a) Arrangement Fee. Seller shall pay to the Relationship Bank, an
arrangement fee ("Arrangement Fee") payable on such dates and in such
amounts as are set forth in the letter dated the date hereof from the
Relationship Bank to Seller.
(b) Other Fees. Seller shall pay to Purchaser certain fees, payable
on such dates and in such amounts as are set forth in the letter dated the
date hereof from the Relationship Bank to Seller (as amended from time to
time, the "Fee Letter").
SECTION 4.02. Yield Protection.
(a) If (i) Regulation D or (ii) any Regulatory Change occurring after
the date hereof:
(A) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the
Federal Reserve Board, but excluding any reserve included in
the determination of Earned Discount), special deposit or
similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any
Affected Party or with or for the account of any affiliate (or
entity deemed by the Federal Reserve Board to be an affiliate)
of any Affected Party, or credit extended by any Affected
Party; or
(B) shall change the amount of capital maintained or
required or requested or directed to be maintained by any
Affected Party;
(C) shall impose any other condition affecting any Asset
Interest owned or funded in whole or in part by any Affected
Party, or its obligations or rights, if any, to make Purchases
or Reinvestments or to provide funding therefor; or
(D) shall change the rate for, or the manner in which the
Federal Deposit Insurance Corporation (or a successor thereto)
assesses, deposit insurance premiums or similar charges;
and the result of any of the foregoing is or would be:
(x) to increase the cost to (or in the case of Regulation D
referred to above, to impose a cost on) an Affected Party
funding or making or maintaining any Purchases or
Reinvestments, any purchases, reinvestments, or loans or other
extensions of credit under the Liquidity Agreement, or any
Credit Draw, or any commitment of such Affected Party with
respect to any of the foregoing,
(y) to reduce the amount of any sum received or receivable
by an Affected Party under this Agreement, or under the
Liquidity Agreement or the Credit Agreement with respect
thereto, or
(z) in the reasonable determination of such Affected Party,
to reduce the rate of return on the capital of an Affected
Party as a consequence of its obligations hereunder or arising
in connection herewith to a level below that which such
Affected Party could otherwise have achieved but for
Regulation D or such Regulatory Change,
then within thirty days after demand by such Affected Party (which demand
shall be accompanied by a statement setting forth the basis of such
demand), Seller shall pay directly to such Affected Party such additional
amount or amounts as will compensate such Affected Party for such
additional or increased cost or such reduction. This Section 4.02(a) shall
not apply to taxes.
(b) Each Affected Party will promptly notify Seller and the
Administrator of any event of which it has knowledge which will entitle
such Affected Party to compensation pursuant to this Section 4.02;
provided, however, no failure to give or delay in giving such notification
shall adversely affect the rights of any Affected Party to such
compensation.
(c) In determining any amount provided for or referred to in this
Section 4.02, an Affected Party may use any reasonable averaging and
attribution methods that it (in its sole discretion) shall deem applicable.
Any Affected Party when making a claim under this Section 4.02 shall submit
to Seller a statement as to such increased cost or reduced return
(including calculation thereof in reasonable detail), which statement
shall, in the absence of demonstrable error, be conclusive and binding upon
Seller.
(d) Purchaser agrees that it shall use its reasonable best efforts
to take any action that will avoid the need to pay, or reduce the amount
of, any increased amounts referred to in paragraph (a); provided that
Purchaser shall not be obligated to take any actions that would, in the
reasonable opinion of Purchaser, be disadvantageous to Purchaser.
(e) Subject to Section 4.02(g), any and all payments made under this
Agreement shall be made free and clear of, and without deduction for, any
and all present or future Taxes. If any amount of Taxes shall be required
by law to be deducted from or in respect of any sum payable hereunder to
any Foreign assignee or participant of Purchaser, (i) the sum payable shall
be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section 4.02(e)), such Foreign assignee or participant of
Purchaser, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) Seller shall make such
deductions and (iii) Seller shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with
applicable law.
(f) Each Foreign assignee or participant of Purchaser, on or prior to
the date pursuant to which it becomes an assignee or participant of
Purchaser, and from time to time thereafter if requested in writing by
Seller (unless such Foreign assignee or participant of Purchaser can no
longer lawfully do so due to a change in law subsequent to the date it
became an assignee or participant of Purchaser hereunder), shall provide
Seller with Internal Revenue Service Form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service, certifying
that such Foreign assignee or participant of Purchaser is entitled to
benefits under an income tax treaty to which the United States is a party
which reduces the rate of withholding tax on payments of interest to zero
or certifying that the income receivable pursuant to this Agreement is
effectively connected with the conduct of a trade or business in the United
States.
(g) For any period with respect to which a Foreign assignee or
participant of Purchaser has failed to provide the Seller with the
appropriate form described in Section 4.02(f) (other than if such failure
is due to a change in law occurring subsequent to the date on which a form
originally was required to be provided), such Foreign assignee or
participant of Purchaser shall not be entitled to payments of additional
amounts under Section 4.02(e).
SECTION 4.03. Funding Losses. In the event that the Purchaser or any
Liquidity Bank shall incur any loss or expense (including any loss or
expense incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by the Purchaser or such Liquidity Bank to make any
Purchase or Liquidity Funding or maintain any Purchase or Liquidity
Funding) as a result of (i) any settlement with respect to any portion of
Purchaser's Total Investment being made on any day other than a Settlement
Date, or (ii) any Purchase not being made in accordance with a request
therefore under Section 1.02 (other than by reason of (a) a default by the
Purchaser or such Liquidity Bank, (b) Purchaser's failure to make available
to the Administrator the required funds as set forth in Section 1.02(b) or
(c) the Administrator's failure to make available the required funds to
Seller as set forth in Section 1.02(b)), then, upon written notice from the
Administrator to Seller and Servicer, Seller shall pay to Servicer, and
Servicer shall pay to the Administrator for the account of the Purchaser or
such Liquidity Bank, the amount of such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in
the absence of manifest error, be conclusive and binding upon the Seller
and Servicer.
ARTICLE V
CONDITIONS OF PURCHASES
SECTION 5.01. Conditions Precedent to Initial Purchase. The initial
Purchase hereunder is subject to the condition precedent that the
Administrator shall have received, on or before the Initial Funding Date,
the following, each (unless otherwise indicated) dated such date and in
form and substance satisfactory to the Administrator:
(a) A copy of the resolutions of the Board of Directors of
each Transferor approving the Transaction Documents to be
delivered by it and the transactions contemplated thereby,
certified by its Secretary or Assistant Secretary;
(b) A good standing certificate for each Transferor issued
by the jurisdiction of its formation.
(c) A certificate of the Secretary or Assistant Secretary
of each Transferor certifying the names and true signatures of
the officers authorized on its behalf to sign the Transaction
Documents to be delivered by it (on which certificate the
Administrator and Purchaser may conclusively rely until such
time as the Administrator shall receive from Seller a revised
certificate meeting the requirements of this subsection (c));
(d) The organizational documents of each Transferor, duly
certified by its Secretary or Assistant Secretary;
(e) Such proper financing statements (Form UCC-1), to be
filed against the Transferors, as may be necessary or, in the
opinion of the Administrator, desirable under the UCC or any
comparable law of all appropriate jurisdictions to perfect
Purchaser's interests in the Pool Assets;
(f) A search report provided in writing to the
Administrator, listing all effective financing statements that
name a Transferor as debtor and that are filed in the
jurisdictions in which filings were made pursuant to
subsection (e) above and in such other jurisdictions that
Administrator shall reasonably request, together with copies
of such financing statements (none of which shall cover any
Pool Assets);
(g) A list of the Lock-Box Banks, and duly executed copies
of Lock-Box Agreements with each of the Lock-Box Banks;
(h) Favorable opinions of counsel to the Transferors, in
form and substance reasonably satisfactory to the
Administrator and with respect to such matters as are set
forth in Schedule 5.01(h);
(i) Such powers of attorney as the Administrator shall
reasonably request to enable the Administrator to collect all
amounts due under any and all Pool Receivables;
(j) A pro forma Information Package, prepared in respect of
the proposed initial Purchase, assuming a Cut-Off Date of no
more than 3 Business Days prior to the Initial Funding Date;
(k) Fully executed copies of the First Tier Agreement, the
Second Tier Agreement, the Spread Account Agreement, the ES
Agreement, the SA Bank Security Agreement and the Specified
Supplement, each of which agreements shall be in form and
substance reasonably satisfactory to the Administrator;
(l) The Liquidity Agreements, each duly executed by
Purchaser, the Liquidity Agent and each Liquidity Bank;
(m) Written approval by the Credit Bank of this Agreement
and the transactions contemplated hereby;
(n) Letters from the rating agencies then rating the
Commercial Paper Notes, confirming in effect that the existing
ratings of the Commercial Paper Notes will remain in effect
after giving effect to the transactions contemplated hereby;
and
(o) The Fee Letter, duly executed by Seller.
SECTION 5.02. Conditions Precedent to All Purchases and
Reinvestments. Each Purchase (including the initial Purchase) and each
Reinvestment hereunder shall be subject to the further conditions precedent
that on the date of such Purchase or Reinvestment the following statements
shall be true (and Seller by accepting the amount of such Purchase or by
receiving the proceeds of such Reinvestment shall be deemed to have
certified that):
(a) the representations and warranties contained in Section
6.01 are correct in all material respects on and as of such
day as though made on and as of such day and shall be deemed
to have been made on such day,
(b) no event has occurred and is continuing, or would
result from such Purchase or Reinvestment, that constitutes a
Liquidation Event or Unmatured Liquidation Event,
(c) after giving effect to each proposed Purchase or
Reinvestment, (i) Purchaser's Total Investment will not exceed
the Purchase Limit, and (ii) the Asset Interest, expressed as
a percentage of Net Pool Balance, will not exceed the
Allocation Limit,
(d) the Termination Date shall not have occurred,
(e) the aggregate amount on deposit in the RPA Cash
Collateral Account (after giving effect to such Purchase or
Reinvestment and any deposit to the RPA Cash Collateral
Account but excluding any earnings on the investment of such
amount), shall not be less than the RPA Required Cash
Collateral Amount; and
(f) the Spread Account Amount (after giving effect to such
Purchase or Reinvestment and any deposit to the Spread Account
Amount) shall not be less than the Required Spread Account
Amount,
provided, however, the absence of the occurrence and continuance of an
Unmatured Liquidation Event shall not be a condition precedent to any
Reinvestment or any Purchase which does not cause the Purchaser's Total
Investment, after giving effect to such Reinvestment or Purchase, to exceed
the Purchaser's Total Investment as of the opening of business of the day
of such Reinvestment or Purchase.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. Representations and Warranties of Seller. Seller
represents and warrants as follows:
(a) Organization and Good Standing. Seller has been duly
organized and is validly existing as a corporation in good
standing under the laws of Delaware, with power and authority
to own its properties and to conduct its business as such
properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, all
necessary power, authority, and legal right to acquire and own
the Pool Receivables.
(b) Due Qualification. Seller is duly qualified to do
business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the failure to so qualify or obtain
such licenses or approvals would have a Material Adverse
Effect.
(c) Power and Authority; Due Authorization. Seller (i) has
all necessary power, authority and legal right to (A) execute
and deliver the Transaction Documents to which it is a party,
(B) carry out the terms of the Transaction Documents to which
it is a party, and (C) sell and assign the Asset Interest on
the terms and conditions herein provided and (ii) has duly
authorized by all necessary corporate action the execution,
delivery and performance of the Transaction Documents to which
it is a party and the sale and assignment of the Asset
Interest on the terms and conditions herein provided.
(d) Valid Sale; Binding Obligations. This Agreement
constitutes a valid sale, transfer, and assignment of the
Asset Interest to Purchaser, enforceable against creditors of,
and purchasers from, Seller; and this Agreement constitutes,
and each other Transaction Document to be executed by Seller
when duly executed and delivered will constitute, a legal,
valid and binding obligation of Seller enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in
equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by the Transaction Documents and the fulfillment
of the terms thereof will not (i) conflict with, result in any
breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default
under, (A) the articles of incorporation or by-laws of Seller,
or (B) in any material respect, any indenture, loan agreement,
receivables purchase agreement, mortgage, deed of trust, or
other agreement or instrument to which Seller is a party or by
which it or any of its properties is bound, (ii) result in the
creation or imposition of any Lien upon any of Seller's
properties pursuant to the terms of any such indenture, loan
agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument, other than the
Transaction Documents, or (iii) violate any law or any order,
rule, or regulation applicable to Seller of any court or of
any federal or state regulatory body, administrative agency,
or other governmental instrumentality having jurisdiction over
Seller or any of its properties.
(f) No Proceedings. There are no proceedings or
investigations pending, or, to Seller's knowledge, threatened,
before any court, regulatory body, administrative agency, or
other tribunal or governmental instrumentality (i) asserting
the invalidity of any Transaction Document to which Seller is
a party, (ii) seeking to prevent the sale and assignment of
any Asset Interest or the consummation of any of the other
transactions contemplated by any Transaction Document to which
Seller is a party, or (iii) seeking any determination or
ruling that might have a Material Adverse Effect.
(g) Bulk Sales Act. No transaction contemplated hereby
requires compliance with any bulk sales act or similar law.
(h) Government Approvals. No authorization or approval or
other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the
due execution, delivery and performance by Seller of this
Agreement or any other Transaction Document, except for the
filing of the UCC financing statements referred to in Article
V, all of which, at the time required in Article V, shall have
been duly made and shall be in full force and effect.
(i) Financial Condition. (x) The pro forma balance sheets
of Seller prepared as of the month end prior to the Closing
Date, a copy of which has been furnished to the Administrator,
fairly present the consolidated financial condition of Seller
as at such date in accordance with generally accepted
accounting principles.
(j) Litigation. No injunction, decree or other decision
has been issued or made by any court, governmental agency or
instrumentality thereof that prevents, and no threat by any
person has been made to attempt to obtain any such decision
that would prevent, Seller from conducting a material part of
its business operations, except as described in Schedule
6.01(j).
(k) Margin Regulations. The use of all funds obtained by
Seller under this Agreement will not conflict with or
contravene any of Regulations G, T, U and X promulgated by the
Board of Governors of the Federal Reserve System from time to
time.
(l) Quality of Title. Each Pool Receivable, together with
each other Pool Asset, is owned by Seller free and clear of
any Lien (other than any Lien arising solely as the result of
any action taken by Purchaser (or any assignee thereof) or by
the Administrator); when Purchaser makes a Purchase or
Reinvestment, it shall have acquired and shall at all times
thereafter continuously maintain a valid and perfected first
priority undivided percentage ownership interest to the extent
of the Asset Interest in each Pool Receivable, and each other
Pool Asset, free and clear of any Lien (other than any Lien
arising solely as the result of any action taken by Purchaser
(or any assignee thereof) or by the Administrator); and no
financing statement or other instrument similar in effect
covering any Pool Receivable, or any other Pool Asset is on
file in any recording office except such as may be filed (i)
in favor of Purchaser or the Administrator in accordance with
this Agreement or in connection with any Lien arising solely
as the result of any action taken by Purchaser (or any
assignee thereof) or by the Administrator, or (ii) in favor of
the Collateral Agent.
(m) Accurate Reports. No Information Package (if prepared
by Seller or its Affiliate, or to the extent information
therein was supplied by Seller or its Affiliate) or other
information, exhibit, financial statement, document, book,
record or report furnished or to be furnished by or on behalf
of Seller or its Affiliates to the Administrator, Purchaser or
the Relationship Bank in connection with this Agreement was or
will be inaccurate in any material respect as of the date it
was or will be dated or (except as otherwise disclosed to the
Administrator, Purchaser, and the Relationship Bank at such
time) as of the date so furnished, or contained or will
contain any material misstatement of fact or omitted or will
omit to state a material fact or any fact necessary to make
the statements contained therein not materially misleading.
(n) Offices. The chief place of business and chief
executive office of Seller are located at the address of
Seller referred to in Section 14.02, and the offices where
Seller keeps all its books, records and documents evidencing
Pool Receivables, the related Accounts and Contracts and all
other agreements related to such Pool Receivables are located
at the addresses specified in Schedule 6.01(n) (or at such
other locations, notified to the Administrator in accordance
with Section 7.01(f), in jurisdictions where all action
required by Section 8.05 has been taken and completed).
(o) Lock-Box Accounts. The names and addresses of all the
Lock-Box Banks, together with the account numbers of the lock-
box accounts of Seller at such Lock-Box Banks, have been
notified to the Administrator and the Relationship Bank on the
Initial Funding Date, or later, in accordance with Section
7.03(d)).
(p) Eligible Receivables. Each Receivable included in the
Net Pool Balance as an Eligible Receivable on the date of any
Purchase, Reinvestment or other calculation of the Net Pool
Balance shall be an Eligible Receivable on such date.
(q) Servicing Programs. No license or approval is required
for the Administrator's use of any Software program used by
Servicer in the servicing of the Receivables, other than those
which have been obtained and are in full force and effect.
SECTION 6.02. Representations and Warranties of Servicer. Servicer
represents and warrants as follows:
(a) Organization and Good Standing. Servicer has been duly
organized and is validly existing as a corporation in good
standing under the laws of Delaware, with power and authority
to own its properties and to conduct its business as such
properties are presently owned and such business is presently
conducted, and had at all relevant times, and now has, all
necessary power, authority, and legal right to service the
Pool Receivables.
(b) Due Qualification. Servicer is duly qualified to do
business as a foreign corporation in good standing, and has
obtained all necessary licenses and approvals, in all
jurisdictions in which the failure to so qualify or obtain
such licenses or approvals would have a Material Adverse
Effect.
(c) Power and Authority; Due Authorization. Servicer (i)
has all necessary power, authority and legal right to (A)
execute and deliver the Transaction Documents to which it is a
party, and (B) carry out the terms of the Transaction
Documents to which it is a party and (ii) has duly authorized
by all necessary corporate action the execution, delivery and
performance of the Transaction Documents to which it is a
party.
(d) Valid Sale; Binding Obligations. This Agreement and
each other Transaction Document to be executed by Servicer
when duly executed and delivered will constitute, a legal,
valid and binding obligation of Servicer enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity, regardless of
whether such enforceability is considered in a proceeding in
equity or at law.
(e) No Violation. The consummation of the transactions
contemplated by the Transaction Documents and the fulfillment
of the terms thereof will not (i) conflict with, result in any
breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default
under, (A) the articles of incorporation or by-laws of
Servicer, or (B) in any material respect, any indenture, loan
agreement, receivables purchase agreement, mortgage, deed of
trust, or other agreement or instrument to which Servicer is a
party or by which it or any of its properties is bound, (ii)
result in the creation or imposition of any Lien upon any of
Servicer's properties pursuant to the terms of any such
indenture, loan agreement, receivables purchase agreement,
mortgage, deed of trust, or other agreement or instrument,
other than the Transaction Documents, or (iii) violate any law
or any order, rule, or regulation applicable to Servicer of
any court or of any federal or state regulatory body,
administrative agency, or other governmental instrumentality
having jurisdiction over Servicer or any of its properties.
(f) No Proceedings. There are no proceedings or
investigations pending, or, to Servicer's knowledge,
threatened, before any court, regulatory body, administrative
agency, or other tribunal or governmental instrumentality (i)
asserting the invalidity of any Transaction Document to which
Servicer is a party or (ii) seeking any determination or
ruling that might have a Material Adverse Effect.
(g) Government Approvals. No authorization or approval or
other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the
due execution, delivery and performance by Servicer of this
Agreement or any other Transaction Document;
(h) Litigation. No injunction, decree or other decision
has been issued or made by any court, governmental agency or
instrumentality thereof that prevents, and no threat by any
person has been made to attempt to obtain any such decision
that would prevent, Servicer from conducting a material part
of its business operations, except as described in Schedule
6.01(j).
(i) Accurate Reports. No Information Package (if prepared
by Servicer or its Affiliate, or to the extent information
therein was supplied by Servicer or its Affiliate) or other
information, exhibit, financial statement, document, book,
record or report furnished or to be furnished by or on behalf
of Servicer or its Affiliates to the Administrator, Purchaser
or the Relationship Bank in connection with this Agreement was
or will be inaccurate in any material respect as of the date
it was or will be dated or (except as otherwise disclosed to
the Administrator, Purchaser, and the Relationship Bank at
such time) as of the date so furnished, or contained or will
contain any material misstatement of fact or omitted or will
omit to state a material fact or any fact necessary to make
the statements contained therein not materially misleading.
(j) Servicing Programs. No license or approval is required
for Administrator's use of any software program used by
Servicer in the servicing of the Receivables, other than those
which have been obtained and are in full force and effect.
ARTICLE VII
GENERAL COVENANTS OF SELLER AND SERVICER
SECTION 7.01. Affirmative Covenants of Seller and Servicer. From the
date hereof until the Final Payout Date, Seller and Servicer will, unless
the Administrator shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material
respects with all applicable laws, rules, regulations and
orders, including those with respect to the Pool Receivables
and related Accounts and Contracts.
(b) Preservation of Corporate Existence. Preserve and
maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and
qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to preserve
and maintain such existence, rights, franchises, privileges
and qualification would have a Material Adverse Effect.
(c) Audits. (i) At any time and from time to time during
regular business hours, permit the Administrator, the
Relationship Bank or any of their agents or representatives,
upon at least two Business Days' prior notice (A) to examine
and make copies of and abstracts from all books, records and
documents (including, without limitation, computer tapes and
disks) in the possession or under the control of Seller or of
Servicer relating to Pool Receivables, including, without
limitation, the related Accounts and Contracts and other
agreements, and (B) to visit the offices and properties of
Seller or of Servicer for the purpose of examining such
materials described in clause (i)(A) next above, and to
discuss matters relating to Pool Receivables or Seller's or
Servicer's performance hereunder with any of the officers or
employees of Seller or of Servicer having knowledge of such
matters; and (ii) without limiting the provisions of clause
(i) next above, from time to time on request of Administrator
or the Relationship Bank, permit internal auditors or other
employees of the Relationship Bank to conduct a review of
Seller's or of Servicer's books and records; provided,
however, that, unless a Liquidation Event is continuing, no
more than one such review shall be conducted during each
fiscal year of Seller and the cost thereof payable by Seller
and Servicer in connection therewith shall not exceed $20,000.
(d) Keeping of Records and Books of Account. Maintain and
implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing
Pool Receivables in the event of the destruction of the
originals thereof), and keep and maintain all documents,
books, records and other information reasonably necessary or
advisable for the collection of all Pool Receivables
(including, without limitation, records adequate to permit the
daily identification of each new Pool Receivable and all
Collections of and adjustments to each existing Pool
Receivable).
(e) Performance and Compliance with Receivables and
Contracts. At its expense timely and fully perform and comply
with all provisions, covenants and other promises required to
be observed by it under the Contracts related to the Pool
Receivables and all other agreements related to such Pool
Receivables, except insofar as the failure to perform and
comply would not materially and adversely affect the rights of
Purchaser hereunder or the collectibility of such Pool
Receivables.
(f) Location of Records. Keep its chief place of business
and chief executive office, and the offices where it keeps its
records concerning the Pool Receivables, all related Accounts
and Contracts and all other agreements related to such Pool
Receivables (and all original documents relating thereto), at
the address(es) of Seller referred to in Section 6.01(n) or,
upon 30 days' prior written notice to the Administrator, at
such other locations in jurisdictions where all action
required by Section 8.05 shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all material
respects with its Credit and Collection Policy in regard to
each Pool Receivable and the related Contract.
(h) Collections. Instruct all Obligors to cause all
payments with respect to Pool Receivables to be deposited
directly with a Lock-Box Bank. From and after the occurrence
of a Liquidation Event, deposit all collections received in
stores of an Affiliate of the Seller or otherwise received by
Seller into an account at a Lock-Box Bank within two Business
Days of receipt.
SECTION 7.02. Reporting Requirements of Seller. From the date hereof
until the Final Payout Date, Seller shall, unless the Administrator and the
Relationship Bank shall otherwise consent in writing, furnish to the
Administrator and the Relationship Bank:
(a) Quarterly Financial Statements. As soon as available
and in any event within 75 days after the end of each of the
first three quarters of each fiscal year of Charming Shoppes,
copies of the financial statements of Charming Shoppes and its
Subsidiaries, and of Seller, prepared on a consolidated basis
in conformity with generally accepted accounting principles,
duly certified by the chief financial officer of Charming
Shoppes;
(b) Annual Financial Statements. As soon as available and
in any event within 120 days after the end of each fiscal year
of Charming Shoppes, copies of the financial statements (i) of
Charming Shoppes and its Subsidiaries, prepared on a
consolidated basis in conformity with generally accepted
accounting principles and duly certified by independent
certified public accountants of recognized standing selected
by Charming Shoppes and (ii) of Seller, prepared in conformity
with generally accepted accounting principles and duly
certified by an officer of the Seller;
(c) Liquidation Events. As soon as possible and in any
event within three Business Days after the occurrence of each
Liquidation Event and each Unmatured Liquidation Event, a
written statement of the Chairman, President, Treasurer or any
Vice President of Seller setting forth details of such event
and the action that Seller proposes to take with respect
thereto;
(d) Litigation. As soon as possible and in any event
within three Business Days of Seller's knowledge thereof,
notice of (i) any litigation, investigation or proceeding
which could have a Material Adverse Effect and (ii) any
material adverse development in previously disclosed
litigation;
(e) Change in Credit and Collection Policy. Prior to its
effective date, notice of (i) any material change in the
character of Seller's business or (ii) any material change in
the Credit and Collection Policy; and
(f) Other. Promptly, from time to time, such other
information, documents, records or reports respecting the
Receivables or the condition or operations, financial or
otherwise, of the Transferors as the Administrator or the
Relationship Bank may from time to time reasonably request in
order to protect the interests of the Administrator or
Purchaser under this Agreement.
SECTION 7.03. Negative Covenants of Seller. From the date hereof
until the Final Payout Date, Seller shall not, without the prior written
consent of the Administrator:
(a) Sales, Liens, Etc. Except as otherwise provided
herein, sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Lien
upon or with respect to, any Pool Receivable or related
Account or Contract or Related Security, or any interest
therein, or any lock-box account to which any Collections of
any Pool Receivable are sent, or any right to receive income
or proceeds from or in respect of any of the foregoing.
(b) Extension or Amendment of Pool Receivables. Except as
otherwise permitted in Section 8.02 or as ordered by a court
of competent jurisdiction, extend, amend or otherwise modify
the terms of any Pool Receivable, or amend, modify or waive
any term or condition of any Contract related thereto.
(c) Change in Business or Credit and Collection Policy.
Make any change in the character of its business or in the
Credit and Collection Policy, which change would, in either
case, materially impair the collectibility of any Pool
Receivable or otherwise materially and adversely affect the
interests or remedies of Purchaser under this Agreement or any
other Transaction Document.
(d) Change in Payment Instructions to Obligors. Add or
terminate any bank as a Lock-Box Bank from the list provided
to the Administrator and the Relationship Bank on the Initial
Funding Date or make any change in its instructions to
Obligors regarding payments to be made to Seller or Servicer
or payments to be made to any Lock-Box Bank, unless the
Administrator and the Relationship Bank shall have received
notice of such addition, termination or change and duly
executed copies of Lock-Box Agreements with each new Lock-Box
Bank and shall have consented the identity of such Lock-Box
Bank (which consent shall not be unreasonably withheld).
(e) Mergers, Sales, Etc. Be a party to any merger or
consolidation, or, except in the ordinary course of its
business, sell, transfer, convey or lease all or substantially
all of its assets, or sell or assign with or without recourse
any Pool Receivables or any interest therein (other than
pursuant hereto).
(f) Deposits to Special Accounts. Deposit or otherwise
credit, or cause or permit to be so deposited or credited, to
any Lock-Box Account cash or cash proceeds other than
Collections.
SECTION 7.04. Negative Covenants of the Servicer. From the date
hereof until the Final Payout Date, Servicer shall not, without the prior
written consent of the Administrator:
(a) Extension or Amendment of Pool Receivables. Except as
otherwise permitted in Section 8.02 or as ordered by a court
of competent jurisdiction, extend, amend or otherwise modify
the terms of any Pool Receivable, or amend, modify or waive
any term or condition of any Contract related thereto.
(b) Change in Business or Credit and Collection Policy.
Make any change in the character of its business or in the
Credit and Collection Policy, which change would, in either
case, materially impair the collectibility of any Pool
Receivable or otherwise materially and adversely affect the
interests or remedies of Purchaser under this Agreement or any
other Transaction Document.
(c) Change in Payment Instructions to Obligors. Add or
terminate any bank as a Lock-Box Bank from the list provided
to the Administrator and the Relationship Bank on the Initial
Funding Date or make any change in its instructions to
Obligors regarding payments to be made to Seller or Servicer
or payments to be made to any Lock-Box Bank, unless the
Administrator and the Relationship Bank shall have received
notice of such addition, termination or change and duly
executed copies of Lock-Box Agreements with each new Lock-Box
Bank and shall have consented the identity of such Lock-Box
Bank (which consent shall not be unreasonably withheld).
(d) Mergers, Sales, Etc. Be a party to any merger or
consolidation, or, except in the ordinary course of its
business, sell, transfer, convey or lease all or substantially
all of its assets, or sell or assign with or without recourse
any Pool Receivables or any interest therein (other than
pursuant hereto).
(e) Deposits to Special Accounts. Deposit or otherwise
credit, or cause or permit to be so deposited or credited, to
any Lock-Box Account cash or cash proceeds other than
Collections.
SECTION 7.05. Separate Corporate Existence. Seller hereby
acknowledges that Purchaser, the Liquidity Banks and the Administrator, are
entering into the transactions contemplated by the Transaction Documents in
reliance upon Seller's identity as a legal entity separate from Parent.
Therefore, from and after the date hereof, Seller shall take all steps
specifically required by this Agreement or by the Purchaser or
Administrator to continue Seller's identity as a separate legal entity and
to make it apparent to third Persons that Seller is an entity with assets
and liabilities distinct from those of Parent and any other Person, and is
not a division of Parent or any other Person. Without limiting the
generality of the foregoing and in addition to and consistent with the
other covenants set forth herein, Seller shall take such actions as shall
be required in order that:
(a) Seller will be a limited purpose corporation whose
primary activities are restricted in its certificate of
incorporation to purchasing or otherwise acquiring from
Parent, and owning, holding, granting security interests, or
selling interests, in Pool Assets, entering into agreements
for the servicing and financing of Pool Assets, entering into
interest rate agreements, spread account agreements and
similar documents and conducting such other activities as it
deems necessary or appropriate to carry out its primary
activities.
(b) Not less than one member of Seller's Board of Directors
(the "Independent Director") shall be an individual who is not
a direct, indirect or beneficial stockholder, officer,
director, employee, affiliate, associate, or supplier of
Seller or any of its Affiliates, except that the Independent
Director may be an independent director on the Board of
Directors of a direct or indirect "bankruptcy remote"
subsidiary of Charming Shoppes. The certificate of
incorporation of Seller shall provide that (i) Seller's Board
of Directors shall not approve, or take any other action to
cause the filing of, a voluntary bankruptcy petition with
respect to Seller unless the Independent Director shall
approve the taking of such action in writing prior to the
taking of such action and (ii) such provision cannot be
amended without the prior written consent of the Independent
Director.
(c) The Independent Director shall not at any time serve as
a trustee in bankruptcy for Seller, Parent or any Affiliate
thereof.
(d) Any employee, consultant or agent of Seller will be
compensated from Seller's funds for services provided to
Seller. Seller will engage no agents other than its
attorneys, auditors and other professionals, and a servicer
for Pool Assets, which servicer will be fully compensated for
its services by payment of the Servicer's Fee.
(e) Seller will contract with Servicer to perform for
Seller all operations required on a daily basis to service the
Pool Assets. Seller will pay Servicer the Servicer's Fee
pursuant hereto. Seller will not incur any material indirect
or overhead expenses for items shared between Seller and
Parent (or any other Affiliate thereof) which are not
reflected in the Servicer's Fee. To the extent, if any, that
Seller and Parent (or any other Affiliate thereof) share items
of expenses not reflected in the Servicer's Fee, such as
legal, auditing and other professional services, such expenses
will be allocated to the extent practical on the basis of
actual use or the value of services rendered, and otherwise on
a basis reasonably related to the actual use or the value of
services rendered, it being understood that Parent shall pay
all expenses relating to the preparation, negotiation,
execution and delivery of the Transaction Documents,
including, without limitation, legal, agency and other fees.
(f) Seller will pay its own operating expenses.
(g) Seller will have its own separate post office box and
stationery.
(h) Seller's books and records will be maintained
separately from those of Parent and any other Affiliate
thereof.
(i) All financial statements of Parent or any Affiliate
thereof that are consolidated to include Seller will contain
detailed notes clearly stating that (A) all of Seller's assets
are owned by Seller, and (B) Seller is a separate corporate
entity with creditors who have received security interests in
Seller's assets.
(j) Seller's assets will be maintained in a manner that
facilitates their identification and segregation from those of
Parent or any Affiliate thereof.
(k) Seller will strictly observe corporate formalities in
its dealings with Parent or any Affiliate thereof, and funds
or other assets of Seller will not be commingled with those of
Parent or any Affiliate thereof. Seller shall not maintain
joint bank accounts or other depository accounts to which
Parent or any Affiliate thereof (other than Parent in its
capacity as Servicer) has independent access.
(l) Seller will maintain arm's-length relationships with
Parent (and any Affiliate thereof). Any Person that renders
or otherwise furnishes services to Seller will be compensated
by Seller at market rates for such services it renders or
otherwise furnishes to Seller. Except as contemplated in the
Transaction Documents neither Seller nor Parent will be or
will hold itself out to be responsible for the debts of the
other or the decisions or actions respecting the daily
business and affairs of the other.
SECTION 7.06. Transaction Documents. Neither Seller nor Servicer
shall amend, modify, waive or provide consent under the provisions of any
agreement expressly referenced in the definition of "Transaction Document"
to which it is a party unless (x) the Administrator shall have given its
prior written consent, and (y) for any amendment which may reasonably be
expected to adversely affect the interests of the Commercial Paper Holders,
the Rating Agency Condition is satisfied.
ARTICLE VIII
ADMINISTRATION AND COLLECTION
SECTION 8.01. Designation of Servicer.
(a) Appointment of Servicer. The servicing, administering and
collection of the Pool Receivables shall be conducted by the Person
designated as Servicer hereunder ("Servicer") from time to time in
accordance with this Section 8.01. Until the Administrator or the
Relationship Bank gives to Seller and to Servicer a Successor Notice (as
defined in Section 8.01(b)), Spirit of America, Inc. is hereby designated
as, and hereby agrees to perform the duties and obligations of, Servicer
pursuant to the terms hereof.
(b) Successor Notice; Liquidation Events. Upon Servicer's receipt of
a notice from the Administrator or Relationship Bank of the Administrator's
or Relationship Bank's designation of a new Servicer (a "Successor
Notice"), Servicer agrees that it will terminate its activities as Servicer
hereunder in a manner that the Administrator reasonably believes will
facilitate the transition of the performance of such activities to the new
Servicer, and the Administrator (or its designee) shall assume each and all
of Seller's obligations to service and administer such Receivables, on the
terms and subject to the conditions herein set forth, and Servicer shall
use its best efforts to assist the Administrator (or its designee) in
assuming such obligations. The Administrator and Relationship Bank agree
not to give Servicer a Successor Notice until after the occurrence of a
Replacement Event, in which case such Successor Notice may be given at any
time in the Administrator's or the Relationship Bank's discretion. If
Servicer disputes the occurrence of a Liquidation Event, Servicer may take
appropriate action to resolve such dispute; provided that Servicer must
terminate its activities hereunder as Servicer and allow the newly
designated Servicer to perform such activities on the date provided by the
Administrator or Relationship Bank as described above, notwithstanding the
commencement or continuation of any proceeding to resolve the
aforementioned dispute; provided, further that in the event that such
dispute is resolved in favor of Servicer and no other Liquidation Event has
occurred and is continuing, at Seller's written request, Servicer shall be
reinstated as Servicer.
(c) Subcontracts. Servicer may, with the prior consent of the
Administrator, subcontract with any other person for servicing,
administering or collecting the Pool Receivables, provided that (i)
Servicer shall remain liable for the performance of the duties and
obligations of Servicer pursuant to the terms hereof and (ii) such
subcontract provides for termination upon the occurrence of a Liquidation
Event. The Administrator hereby acknowledges and consents to the
continuation of Total Systems Services, Inc. as the Administrative
Servicer.
(d) Servicer's Fee. Seller shall be responsible for the payment of
(and, if paid by Purchaser or Administrator, shall on demand reimburse
Purchaser or the Administrator for) Seller's Portion of the Servicing Fee.
"Seller's Portion of the Servicing Fee" for any Settlement Period means an
amount equal to (i) the Servicer's Fee Rate times (ii) (x) the aggregate
Unpaid Balance of the Pool Receivables as of the first day of such
Settlement Period minus (y) the Purchaser's Total Investment on that
Settlement Date times (iii) 1/360 times (iv) the number of days in such
Settlement Period.
SECTION 8.02. Duties of Servicer.
(a) Appointment; Duties in General. Each of Seller, Purchaser and
the Administrator hereby appoints as its agent Servicer, as from time to
time designated pursuant to Section 8.01, to enforce its rights and
interests in and under the Pool Receivables, the Related Security and the
related Contracts. Servicer shall take or cause to be taken all such
actions as may be necessary or advisable to collect each Pool Receivable
from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.
(b) Allocation of Collections; Segregation. Servicer shall set aside
for the account of Seller and Purchaser their respective allocable shares
of the Collections of Pool Receivables in accordance with Section 1.03 but
shall not be required (unless otherwise requested by the Administrator or
the Relationship Bank) to segregate the funds constituting such portions of
such Collections prior to the remittance thereof in accordance with said
Section. If instructed by the Administrator or the Relationship Bank,
Servicer shall segregate and deposit with a bank designated by the
Relationship Bank, with the approval of the Administrator, Purchaser's
Share of Collections of Pool Receivables, set aside for Purchaser on the
first Business Day following receipt by Servicer of such Collections in
immediately available funds.
(c) Modification of Receivables. So long as no Liquidation Event or
Unmatured Liquidation Event shall have occurred and be continuing,
Servicer, may, in accordance with the Credit and Collection Policy, (i)
extend the maturity or adjust the Unpaid Balance of, or defer payment of,
or otherwise modify the terms of any Receivable as Seller may determine to
be appropriate to maximize Collections thereof; provided that, after giving
effect to such extension of maturity or such adjustment, the Asset
Interest, expressed as a percentage of Net Pool Balance, will not exceed
the Allocation Limit, and (ii) adjust the Unpaid Balance of any Receivable
to reflect the reductions or cancellations described in the first sentence
of Section 3.02(a).
(d) Documents and Records. Seller shall deliver to Servicer, and
Servicer shall hold in trust for Seller and Purchaser in accordance with
their respective interests, all documents, instruments and records
(including, without limitation, computer tapes or disks) that evidence or
relate to Pool Receivables.
(e) Certain Duties to Seller. Servicer shall, as soon as practicable
following receipt, turn over to Seller (i) that portion of Collections of
Pool Receivables representing Seller's undivided interest therein, and (ii)
the Collections of any Receivable which is not a Pool Receivable.
Servicer, if other than Seller, shall, as soon as practicable upon demand,
deliver to Seller all documents, instruments and records in its possession
that evidence or relate to Receivables of Seller other than Pool
Receivables, and copies of documents, instruments and records in its
possession that evidence or relate to Pool Receivables.
(f) Termination. Servicer's authorization under this Agreement shall
terminate upon the Final Payout Date.
(g) Power of Attorney. Seller hereby grants to Servicer an
irrevocable power of attorney, with full power of substitution, coupled
with an interest, to take in the name of Seller all steps which are
necessary or advisable to endorse, negotiate or otherwise realize on any
writing or other right of any kind held or transmitted by Seller or
transmitted or received by Purchaser (whether or not from Seller) in
connection with any Receivable.
SECTION 8.03. Rights of the Administrator.
(a) Notice to Obligors. At any time during the continuance of a
Liquidation Event, the Administrator may notify the Obligors of Pool
Receivables, or any of them, of the ownership of Asset Interests by
Purchaser.
(b) Notice to Lock-Box Banks. At any time following the earliest to
occur of (i) the occurrence of a Liquidation Event, (ii) the commencement
of the Liquidation Period, and (iii) the warranty in Section 6.01(i) shall
no longer be true, the Administrator is hereby authorized to give notice to
the Lock-Box Banks, as provided in the Lock-Box Agreements, of the transfer
to the Administrator of dominion and control over the lock-boxes and
related accounts to which the Obligors of Pool Receivables make payments.
Seller hereby transfers to the Administrator, effective when the
Administrator shall give notice to the Lock-Box Banks as provided in the
Lock-Box Agreements, the exclusive dominion and control over such lock-
boxes and accounts, and shall take any further action that the
Administrator may reasonably request to assist with such transfer.
(c) Rights on Liquidation Event. At any time following the
designation of a Servicer other than Seller pursuant to Section 8.01:
(i) The Administrator may direct the Obligors of Pool
Receivables, or any of them, to pay all amounts payable under
any Pool Receivable directly to the Collateral Agent.
(ii) Seller shall, at the Administrator's or Relationship
Bank's request and at Seller's expense, give notice of the
ownership of the Pool Receivables by Purchaser to each said
Obligor and direct that payments be made directly to the
Collateral Agent.
(iii) Seller shall, at the Administrator's or Relationship
Bank's request, (A) assemble all of the documents, instruments
and other records (including, without limitation, computer
programs, tapes and disks) which evidence the Pool
Receivables, and the related Accounts and Contracts and
Related Security, or which are otherwise reasonably necessary
or desirable to service such Pool Receivables, and make the
same available to the Administrator at a place selected by the
Administrator or the Relationship Bank, and (B) segregate all
cash, checks and other instruments received by it from time to
time constituting Collections of Pool Receivables in a manner
reasonably acceptable to the Administrator and promptly upon
receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the
Collateral Agent.
(iv) Each of Seller and Purchaser hereby authorizes the
Administrator, and grants to the Administrator an irrevocable
power of attorney, to take any and all steps in Seller's name
and on behalf of Seller and Purchaser which are reasonably
necessary or desirable, in the determination of the
Administrator, to collect all amounts due under any and all
Pool Receivables, including, without limitation, endorsing
Seller's name on checks and other instruments representing
Collections and enforcing such Pool Receivables and the
related Contracts; provided that the Administrator shall not
exercise its rights under such Power of Attorney unless a
Liquidation Event shall have occurred and be continuing.
SECTION 8.04. Responsibilities of Seller. Anything herein to the
contrary notwithstanding:
(a) Contracts. Seller shall perform all of its obligations under the
Contracts related to the Pool Receivables and under other agreements
related thereto to the same extent as if the Asset Interest had not been
sold hereunder, and the exercise by the Administrator or its designee of
its rights hereunder shall not relieve Seller from such obligations.
(b) Limitation of Liability. The Administrator, the Relationship
Bank and Purchaser shall not have any obligation or liability with respect
to any Pool Receivables, Contracts or Accounts related thereto or any other
related agreements, nor shall any of them be obligated to perform any of
the obligations of Seller thereunder.
SECTION 8.05. Further Action Evidencing Purchases and Reinvestments.
(a) Further Assurances. Seller agrees to mark its master data
processing records evidencing such Pool Receivables and the related
Contracts with a legend, acceptable to the Administrator, evidencing that
the Asset Interest has been sold in accordance with this Agreement. Seller
agrees that from time to time, at its expense, it will promptly execute and
deliver all further instruments and documents, and take all further action
that the Administrator or its designee may reasonably request in order to
perfect, protect or more fully evidence the Purchases hereunder and the
resulting Asset Interest, or to enable Purchaser or the Administrator or
its designee to exercise or enforce any of their respective rights
hereunder or under any Transaction Document. Without limiting the
generality of the foregoing, Seller will upon the request of the
Administrator or its designee execute and file such financing or
continuation statements, or amendments thereto or assignments thereof, and
such other instruments or notices, as may be necessary or appropriate.
(b) Additional Financing Statements; Performance by Administrator.
Seller hereby authorizes the Administrator or its designee to file one or
more financing or continuation statements, and amendments thereto and
assignments thereof, relative to all or any of the Pool Assets now existing
or hereafter arising in the name of Seller. If Seller fails to perform any
of its agreements or obligations under this Agreement, the Administrator or
its designee may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the reasonable expenses
of the Administrator or its designee incurred in connection therewith shall
be payable by Seller as provided in Section 14.05.
(c) Continuation Statements; Opinion. Without limiting the
generality of subsection (a), Seller shall, not earlier than six (6) months
and not later than three (3) months prior to the fifth anniversary of the
date of filing of the financing statement referred to in Section 5.01(e) or
any other financing statement filed pursuant to this Agreement or in
connection with any Purchase hereunder, unless the Final Payout Date shall
have occurred:
(i) execute and deliver and file or cause to be filed an
appropriate continuation statement with respect to such
financing statement; and
(ii) deliver or cause to be delivered to the Administrator
an opinion of the counsel for Seller referred to in Section
5.01(h) (or other counsel for Seller reasonably satisfactory
to the Administrator), in form and substance reasonably
satisfactory to the Administrator, confirming and updating the
opinion delivered pursuant to Section 5.01(h) to the effect
that Purchaser's Total Interest hereunder continues to be a
valid and perfected ownership or security interest, subject to
no other Liens of record except as provided herein or
otherwise permitted hereunder.
SECTION 8.06. Application of Collections. Any payment by an Obligor
in respect of any indebtedness owed by it to Seller shall, except as
otherwise specified by such Obligor, as required by the underlying Contract
or law or unless the Administrator instructs otherwise, be applied, first,
as a Collection of any Pool Receivable or Receivables then outstanding of
such Obligor in the order of the age of such Pool Receivables, starting
with the oldest of such Pool Receivable and, second, to any other
indebtedness of such Obligor.
ARTICLE IX
SECURITY INTEREST
SECTION 9.01. Grant of Security Interest. To secure all obligations
of Seller and Servicer arising in connection with this Agreement and each
other Transaction Document to which either of them is a party, whether now
or hereafter existing, due or to become due, direct or indirect, or
absolute or contingent, including, without limitation, all Indemnified
Amounts, payments on account of Collections and fees, in each case pro rata
according to the respective amounts thereof, Seller hereby assigns and
grants to Purchaser, for the benefit of the Secured Parties, a security
interest in all of Seller's right, title and interest (including
specifically any undivided interest retained by Seller hereunder) now or
hereafter existing in, to and under all the Pool Assets and proceeds
thereof.
SECTION 9.02. Further Assurances. The provisions of Section 8.05
shall apply to the security interest granted under Section 9.01 as well as
to the Purchases, Reinvestments and all the Asset Interests hereunder.
SECTION 9.03. Remedies. Upon the occurrence of a Liquidation Event,
Purchaser shall have, with respect to the collateral granted pursuant to
Section 9.01, and in addition to all other rights and remedies available to
Purchaser or the Administrator under this Agreement or other applicable
law, all the rights and remedies of a secured party upon default under the
UCC.
ARTICLE X
LIQUIDATION EVENTS
SECTION 10.01. Liquidation Events. The following events shall be
"Liquidation Events" hereunder:
(a) (i) Servicer (if Seller or its Affiliate is Servicer)
shall fail to deliver to Administrator an Information Package
for any Settlement Period on or before 12:00, noon (New York
City time) of the related Settlement Date or (ii) Servicer (if
Seller or its Affiliate is Servicer) shall fail to perform or
observe in any material respect any other term, covenant or
agreement that is an obligation of Servicer hereunder (other
than as referred to in clause (iii) next following) and such
failure shall remain unremedied for five Business Days after
(1) written notice thereof shall have been given by the
Administrator to Seller or (2) Seller has actual knowledge
thereof or (iii) Servicer (if Seller or its Affiliate is
Servicer) shall fail to make any payment or deposit to be made
by it hereunder when due and such failure shall remain
unremedied for more than three Business Days; or
(b) Any representation or warranty made or deemed to be
made by a Transferor or the Servicer, if Seller or its
Affiliate is Servicer, (or any of their officers) under a
Transaction Document or Information Package or other
information or report delivered pursuant hereto shall prove to
have been incorrect in any material respect when made and
shall continue to be incorrect for a period of thirty-five
days (or, with respect to Section 6.01(l), fifteen Business
Days) after (i) written notice thereof shall have been given
by the Administrator to the Seller or the Servicer (if Seller
or its Affiliate is Servicer) or (ii) Seller or the Servicer
(if Seller or its Affiliate is Servicer) has actual knowledge
thereof; provided, that with respect to the breach of the
representations or warranties set forth in Section 6.01(l) or
(p), compliance by Seller with the provisions of Section 3.02
in respect thereof shall be deemed to cure such breach; or
(c) A Transferor shall fail to perform or observe in any
material respect any other term, covenant or agreement
contained in any of the Transaction Documents to which it is a
party on its part to be performed or observed and any such
failure shall remain unremedied for thirty days after (i)
written notice thereof shall have been given by the
Administrator to Seller or (ii) Seller has actual knowledge
thereof; or
(d) (i) A default shall have occurred and be continuing
under any Credit Facility of Charming Shoppes or any of its
Affiliates with respect to a payment of principal of or
premium or interest in excess of $1,000,000 (or $5,000,000, in
the case of Charming Shoppes), which default if unremedied,
uncured, or unwaived (with or without the passage of time or
the giving of notice or both) would permit acceleration of the
maturity of such indebtedness and such default shall have
continued unremedied, uncured or unwaived for a period long
enough to permit such acceleration, and (x) any notice of
default required to permit acceleration shall have been given
and ten days shall have passed without such default having
been cured or waived or (y) an acceleration shall have
occurred; or (ii) any default under any agreement or
instrument relating to the purchase of receivables of Seller
or any other Transferor shall occur and shall continue after
the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such default is to
permit the termination of the commitment of any party to such
agreement or instrument to purchase receivables or the right
of Seller to reinvest in receivables the principal amount paid
by any party to such agreement or instrument for interest in
receivables (provided that such default is not related to
failure of the obligors on such purchased receivables to pay
due to credit problems of such obligors or other portfolio
tests with respect to such receivables), and (x) any notice of
such event required to permit such termination shall have been
delivered and ten days shall have passed without such default
having been cured or waived or (y) termination shall have
occurred; or
(e) An Event of Bankruptcy shall have occurred and remain
continuing with respect to a Transferor, Servicer, Charming
Shoppes or CSRC; or
(f) (i) Any litigation (including, without limitation,
derivative actions), arbitration proceedings or governmental
proceedings not disclosed in writing by Seller to the
Administrator and Purchaser prior to the date of execution and
delivery of this Agreement is pending against a Transferor,
Servicer, Charming Shoppes or CSRC, or (ii) any material
development not so disclosed has occurred in any litigation
(including, without limitation, derivative actions),
arbitration proceedings or governmental proceedings so
disclosed, which, in the case of clause (i) or (ii), in the
reasonable opinion of the Administrator, has a reasonable
likelihood of having a Material Adverse Effect; or
(g) The funds on deposit in the RPA Cash Collateral
Account shall be less than the RPA Required Cash Collateral
Amount, and such condition shall continue for ten days; or any
amount required to be deposited in the Spread Account under
the terms of the Spread Account Agreement shall not have been
so deposited and such condition shall continue for ten days;
(h) On any Settlement Date, after giving effect to the
payments made under Section 3.01(c), the Asset Interest
exceeds the Allocation Limit or the Purchaser's Total
Investment exceeds the Purchase Limit; or
(i) An "Early Amortization Event" has occurred under the
Specified Supplement and is continuing; or
(j) A Transferor, Servicer (if Servicer is Seller or its
Affiliate) or Charming Shoppes is subject to a Change in
Control; or
(k) The Internal Revenue Service shall file notice of a
lien pursuant to Section 6323 of the Internal Revenue Code
with regard to any of the assets of Seller and such lien shall
not have been released within 5 Business Days, or the Pension
Benefit Guaranty Corporation shall, or shall indicate its
intention to, file notice of a lien pursuant to Section 4068
of ERISA with regard to any of the assets of Seller or any of
its Affiliates; or
(l) Fashion Service Corp. shall fail to perform its
obligations under the Cap Agreements, and such failure shall
continue for three Business Days; or a Termination Event (as
defined in the Cap Agreements) shall occur with respect to
Fashion Service Corp.; or
(m) The CB Excess Yield Percentage is less than 0% for
three consecutive Settlement Periods.
SECTION 10.02. Remedies.
(a) Optional Liquidation. Upon the occurrence of a Liquidation Event
(other than a Liquidation Event described in subsection (e), (g), (h), (l)
or (m) of Section 10.01), the Administrator shall, at the request, or may
with the consent, of Purchaser, by notice to Seller declare the Purchase
Termination Date to have occurred and the Liquidation Period to have
commenced.
(b) Automatic Liquidation. Upon the occurrence of a Liquidation
Event described in subsection (e), (g), (h), (l) or (m) of Section 10.01,
the Purchase Termination Date shall occur and the Liquidation Period shall
commence automatically.
(c) Additional Remedies. Upon any Purchase Termination Date pursuant
to this Section 10.02, no Purchases or Reinvestments thereafter will be
made, and the Administrator, Purchaser and the Relationship Bank shall
have, in addition to all other rights and remedies under this Agreement or
otherwise, all other rights and remedies provided under the UCC of each
applicable jurisdiction and other applicable laws, which rights shall be
cumulative.
ARTICLE XI
THE ADMINISTRATOR; RELATIONSHIP BANK
SECTION 11.01. Authorization and Action. Pursuant to the Program
Administration Agreement and the Relationship Bank Agreement, Purchaser has
appointed and authorized the Administrator and the Relationship Bank (or
their respective designees) to take such action as agent on its behalf and
to exercise such powers under this Agreement as are delegated to the
Administrator or the Relationship Bank by the terms hereof, together with
such powers as are reasonably incidental thereto.
SECTION 11.02. Administrator's and Relationship Bank's Reliance, Etc.
The Administrator, the Relationship Bank and their directors, officers,
agents or employees shall not be liable for any action taken or omitted to
be taken by it or them under or in connection with the Transaction
Documents (including, without limitation, the servicing, administering or
collecting of Pool Receivables as Servicer pursuant to Section 8.01),
except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, each of the Administrator
and the Relationship Bank: (a) may consult with legal counsel (including
counsel for Seller), independent certified public accountants and other
experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of
such counsel, accountants or experts; (b) makes no warranty or
representation to Purchaser or any other holder of any interest in Pool
Receivables and shall not be responsible to Purchaser or any such other
holder for any statements, warranties or representations made in or in
connection with any Transaction Document; (c) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of any Transaction Document on the part of
Seller or to inspect the property (including the books and records) of
Seller; (d) shall not be responsible to Purchaser or any other holder of
any interest in Pool Receivables for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of any Transaction
Document; and (e) shall incur no liability under or in respect of this
Agreement by acting upon any notice (including notice by telephone),
consent, certificate or other instrument or writing (which may be by
facsimile or telex) reasonably believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 11.03. State Street Capital and State Street Bank and
Affiliates. State Street Capital and State Street Bank and any of their
respective Affiliates may generally engage in any kind of business with
Seller or any Obligor, any of their respective Affiliates and any Person
who may do business with or own securities of Seller or any Obligor or any
of their respective Affiliates, all as if State Street Capital and State
Street Bank were not the Administrator and the Relationship Bank,
respectively, and without any duty to account therefor to Purchaser or any
other holder of an interest in Pool Receivables.
ARTICLE XII
ASSIGNMENT OF PURCHASER'S INTEREST
SECTION 12.01. Restrictions on Assignments.
(a) Except as provided in the next sentence, none of Seller, Servicer
or State Street Bank, individually or as the Relationship Bank (except as
otherwise provided in the Relationship Bank Agreement), may assign its
rights, or delegate its duties hereunder or any interest herein without the
prior written consent of the Administrator. Servicer may assign its rights
as Servicer under this Agreement to any of its Affiliates without prior
written consent of the Administrator, provided that Servicer shall have
given the Administrator ten days' prior written notice thereof. Purchaser
may not assign its rights hereunder (although it may delegate its duties
hereunder as expressly indicated herein) or the Asset Interest (or any
portion thereof) to any Person without the prior written consent of Seller,
which shall not be unreasonably withheld (it being recognized and
understood by all parties hereto that all parties hereto shall deem it
reasonable for Seller to withhold such consent if any such proposed
assignment would, in the reasonable determination of Seller, cause Seller
to be required to pay to any Affected Party any of the amounts referred to
in Section 4.02); provided, however, that
(i) Purchaser may assign all of its rights and interests in
the Transaction Documents, together with all its interest in
the Asset Interest, to State Street Capital or State Street
Bank, or both, or any Affiliate of either of them, or to any
"bankruptcy remote" special purpose entity, the business of
which is administered by State Street Capital or any Affiliate
of State Street Capital provided, that such assignment shall
not cause a material increase in the Earned Discount Rate; and
(ii) Purchaser may assign and grant a security interest in
all of its rights in the Transaction Documents, together with
all of its rights and interest in the Asset Interest, to the
Collateral Agent, to secure Purchaser's obligations under or
in connection with the Commercial Paper Notes, the Liquidity
Agreement, the Credit Agreement and any letter of credit
issued thereunder, and certain other obligations of Purchaser
incurred in connection with the funding of the Purchases and
Reinvestments hereunder, which assignment and grant of a
security interest (and any subsequent assignment by the
Collateral Agent) shall not be considered an "assignment" for
purposes of this Section 12.01 or, prior to the enforcement of
such security interest, for purposes of any other provision of
this Agreement.
(b) Seller agrees to advise the Administrator within five Business
Days after notice to Seller of any proposed assignment by Purchaser of the
Asset Interest (or any portion thereof), not otherwise permitted under
subsection (a), of Seller's consent or non-consent to such assignment and,
if it does not consent, the reasons therefor. If Seller does not consent
to such assignment, Purchaser may immediately assign such Asset Interest
(or portion thereof) to State Street Capital, State Street Bank or any
Affiliate of State Street Capital or State Street Bank. All of the
aforementioned assignments shall be upon such terms and conditions as
Purchaser and the assignee may mutually agree.
SECTION 12.02. Rights of Assignee. Upon the assignment by Purchaser
in accordance with this Article XII, the assignee receiving such assignment
shall have all of the rights of Purchaser with respect to the Transaction
Documents and the Asset Interest (or such portion thereof as has been
assigned).
SECTION 12.03. Evidence of Assignment. Any assignment of the Asset
Interest (or any portion thereof) to any Person may be evidenced by such
instrument(s) or document(s) as may be reasonably satisfactory to
Purchaser, the Administrator and the assignee.
SECTION 12.04. Rights of the Banks and Collateral Agent. Seller
hereby agrees that, upon notice to Seller, the Collateral Agent may
exercise all the rights of the Administrator hereunder, with respect to the
Asset Interest (or any portions thereof), and Collections with respect
thereto, which are owned by Purchaser, and all other rights and interests
of Purchaser in, to or under this Agreement or any other Transaction
Document. Without limiting the foregoing, upon such notice Collateral
Agent may request Servicer to segregate Purchaser's allocable shares of
Collections from Seller's allocable share, may give a Successor Notice
pursuant to Section 8.01(a), may give or require the Administrator or
Relationship Bank to give notice to the Lock-Box Banks as referred to in
Section 8.03(b) and may direct the Obligors of Pool Receivables to make
payments in respect thereof directly to an account designated by them, in
each case, to the same extent as the Administrator might have done.
ARTICLE XIII
INDEMNIFICATION
SECTION 13.01. Indemnities by Seller.
(a) General Indemnity. Without limiting any other rights which any
such Person may have hereunder or under applicable law, Seller hereby
agrees to indemnify each of the Administrator, Purchaser, the Liquidity
Banks, the Credit Bank, the Relationship Bank, the Liquidity Agent, each of
their respective Affiliates, and all successors, transferees, participants
and assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each an "Indemnified Party"),
forthwith on demand, from and against any and all damages, losses, claims,
liabilities and related costs and expenses, including reasonable attorneys'
fees and disbursements (all of the foregoing being collectively referred to
as "Indemnified Amounts") awarded against or incurred by any of them
arising out of or relating to the Transaction Documents or the ownership or
funding of the Asset Interest or in respect of any Receivable or Account or
any Contract, excluding, however, (a) Indemnified Amounts to the extent
resulting from gross negligence or willful misconduct on the part of any
such Indemnified Party, (b) recourse (except as otherwise specifically
provided in this Agreement) for any Receivable that is not paid as a result
of credit related issues and (c) any tax based upon or measured by net
income. Without limiting the foregoing, Seller shall indemnify each
Indemnified Party for Indemnified Amounts arising out of or relating to:
(i) the transfer by Seller of any interest in any
Receivable other than the transfer of an Asset Interest to
Purchaser pursuant to this Agreement and the grant of a
security interest to Purchaser pursuant to Section 9.01;
(ii) any representation or warranty made by Seller or
Servicer (or any of its officers) under or in connection with
any Transaction Document, any Information Package or any other
information or report delivered by or on behalf of Seller
pursuant hereto, which shall have been false, incorrect or
misleading in any material respect when made or deemed made;
(iii) the failure by Seller or Servicer to comply with any
applicable law, rule or regulation with respect to any Pool
Receivable or the related Account or Contract, or the
nonconformity of any Pool Receivable or the related Contract
with any such applicable law, rule or regulation;
(iv) the failure to vest and maintain vested in Purchaser
an undivided percentage ownership interest, to the extent of
the Asset Interest, in the Receivables in, or purporting to be
in, the Receivables Pool, free and clear of any Lien, other
than a Lien arising solely as a result of an act of Purchaser,
the Administrator or the Relationship Bank, whether existing
at the time of any Purchase or Reinvestment of such Asset
Interest or at any time thereafter, unless such failure is the
result of the failure of Purchaser to execute any necessary
financing statements;
(v) the failure to file, or any delay in filing, financing
statements or other similar instruments or documents under the
UCC of any applicable jurisdiction or other applicable laws
with respect to any Receivables in, or purporting to be in,
the Receivables Pool, whether at the time of any Purchase or
Reinvestment or at any time thereafter;
(vi) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense
based on such Receivable's or the related Contract's not being
a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise or
services related to such Receivable or the furnishing or
failure to furnish such merchandise or services;
(vii) any failure of Seller or Servicer to perform its
duties or obligations in accordance with the provisions of
Article VIII;
(viii) any products liability claim arising out of or in
connection with merchandise or services that are the subject
of any Pool Receivable; or
(ix) any tax or governmental fee or charge (but not
including taxes upon or measured by net income), all interest
and penalties thereon or with respect thereto, and all out-of-
pocket costs and expenses, including the reasonable fees and
expenses of counsel in defending against the same, which may
arise by reason of the purchase or ownership of any Asset
Interest, or any other interest in the Pool Receivables or in
any goods which secure any such Pool Receivables.
(b) Contest of Tax Claim; After-Tax Basis. If any Indemnified Party
shall have notice of any attempt to impose or collect any tax or
governmental fee or charge for which indemnification will be sought from
Seller under Section 13.01(a)(ix), such Indemnified Party shall give prompt
and timely notice of such attempt to Seller and Seller shall have the
right, at its expense, to participate in any proceedings resisting or
objecting to the imposition or collection of any such tax, governmental fee
or charge. Indemnification hereunder shall be in an amount necessary to
make the Indemnified Party whole after taking into account any tax
consequences to the Indemnified Party of the payment of any of the
aforesaid taxes and the receipt of the indemnity provided hereunder or of
any refund of any such tax previously indemnified hereunder, including the
effect of such tax or refund on the amount of tax measured by net income or
profits which is or was payable by the Indemnified Party.
(c) Contribution. If for any reason the indemnification provided
above in this Section 13.01 is unavailable to an Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then Seller shall
contribute to the amount paid or payable by such Indemnified Party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by such
Indemnified Party on the one hand and Seller on the other hand but also the
relative fault of such Indemnified Party as well as any other relevant
equitable considerations.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement nor consent to any departure by Seller
therefrom shall in any event be effective unless the same shall be in
writing and signed by (a) Seller, the Administrator and Purchaser (with
respect to an amendment), provided that no amendment shall become effective
without the signature of the Relationship Bank, if such amendment
materially increases the obligations or liabilities of the Relationship
Bank, in either its individual or agent capacity hereunder, or materially
reduces any amount payable to it hereunder or (b) the Administrator and
Purchaser (with respect to a waiver or consent by them) or Seller (with
respect to a waiver or consent by it), as the case may be, and then such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. The parties acknowledge that, before
entering into such an amendment or granting such a waiver or consent,
Purchaser may also be required to obtain the approval of some or all of the
Liquidity Banks or the Credit Bank or to satisfy the Rating Agency
Condition with respect to such amendment, waiver or consent. The parties
acknowledge that the effect of any waiver of a Liquidation Event hereunder
shall be to negate any effect of the continuation of such Liquidation Event
under the Spread Account Agreement.
SECTION 14.02. Notices, Etc. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including facsimile communication) and shall be personally delivered or
sent by express mail or courier or by certified mail, postage prepaid, or
by facsimile, to the intended party at the address or facsimile number of
such party set forth in Exhibit 14.02 or at such other address or facsimile
number as shall be designated by such party in a written notice to the
other parties hereto. All such notices and communications shall be
effective, (a) if personally delivered or sent by express mail or courier
or if sent by certified mail, when received, and (b) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means.
SECTION 14.03. No Waiver; Remedies. No failure on the part of the
Administrator, the Relationship Bank, any Affected Party, any Indemnified
Party, Purchaser or any other holder of the Asset Interest (or any portion
thereof) to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law. Without limiting the
foregoing, each of State Street Capital, individually and as Administrator,
State Street Bank, individually and as Relationship Bank, the Collateral
Agent, the Credit Bank and each Liquidity Bank is hereby authorized by
Seller at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other indebtedness at
any time owing by State Street Capital, the Collateral Agent and such
Liquidity Bank to or for the credit or the account of Seller, now or
hereafter existing under this Agreement, to the Administrator, any Affected
Party, any Indemnified Party or Purchaser, or their respective successors
and assigns.
SECTION 14.04. Binding Effect; Survival. This Agreement shall be
binding upon and inure to the benefit of Seller, the Administrator, the
Relationship Bank, Purchaser and their respective successors and assigns,
and the provisions of Section 4.02 and Article XIII shall inure to the
benefit of the Affected Parties and the Indemnified Parties, respectively,
and their respective successors and assigns; provided, however, nothing in
the foregoing shall be deemed to authorize any assignment not permitted by
Section 12.01. This Agreement shall create and constitute the continuing
obligations of the parties hereto in accordance with its terms, and shall
remain in full force and effect until the Final Payout Date. The rights
and remedies with respect to any breach of any representation and warranty
made by Seller pursuant to Article VI and the indemnification and payment
provisions of Article XIII and Sections 4.02, 14.05, 14.06, 14.07, 14.08
and 14.15 shall be continuing and shall survive any termination of this
Agreement.
SECTION 14.05. Costs, Expenses and Taxes. In addition to its
obligations under Article XIII, Seller agrees to pay on demand:
(a) all reasonable costs and expenses incurred by the
Administrator, the Relationship Bank, the Credit Bank, the
Collateral Agent and the Purchaser and their respective
Affiliates in connection with the negotiation, preparation,
execution and delivery, the administration (including periodic
auditing) or the enforcement of, or any actual or claimed
breach of, this Agreement and the other Transaction Documents,
including, without limitation (i) the reasonable fees and
expenses of counsel to any of such Persons incurred in
connection with any of the foregoing or in advising such
Persons as to their respective rights and remedies under any
of the Transaction Documents, and (ii) all reasonable out-of-
pocket expenses (including reasonable fees and expenses of
independent accountants), incurred in connection with any
review of Seller's books and records either prior to the
execution and delivery hereof or pursuant to Section 7.01(c);
and
(b) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement or the other
Transaction Documents, and agrees to indemnify each
Indemnified Party against any liabilities with respect to or
resulting from any delay in paying or omission to pay such
taxes and fees.
SECTION 14.06. No Proceedings. Seller, Servicer, State Street
Capital (individually and as Administrator) and State Street Bank
(individually and as Relationship Bank) each hereby agrees that it will not
institute against Purchaser, or join any other Person in instituting
against Purchaser, any insolvency proceeding (namely, any proceeding of the
type referred to in the definition of Event of Bankruptcy) so long as any
Commercial Paper Notes issued by Purchaser shall be outstanding or there
shall not have elapsed one year plus one day since the last day on which
any such Commercial Paper Notes shall have been outstanding. The foregoing
shall not limit Seller's right to file any claim in or otherwise take any
action with respect to any insolvency proceeding that was instituted by any
Person other than Seller.
SECTION 14.07. Confidentiality of Program Information.
(a) Confidential Information. Each party hereto acknowledges that
State Street Capital regards the structure of the transactions contemplated
by this Agreement to be proprietary, and each such party severally agrees
that:
(i) it will not disclose without the prior written consent
of State Street Capital (other than to the directors,
employees, auditors, counsel or affiliates (collectively,
"representatives" of such party, each of whom shall be
informed by such party of the confidential nature of the
Program Information (as defined below) and of the terms of
this Section 14.07), (A) any information regarding the pricing
in, or copies of, this Agreement or any transaction
contemplated hereby, (B) any information regarding the
organization, business or operations of Purchaser generally or
the services performed by the Administrator or the
Relationship Bank for Purchaser, or (C) any information which
is furnished by State Street Capital to such party and which
is designated by State Street Capital to such party as
confidential or not otherwise available to the general public
(the information referred to in clauses (A), (B) and (C) is
collectively referred to as the "Program Information");
provided, however, that such party may disclose any such
Program Information (I) to any other party to this Agreement
for the purposes contemplated hereby, (II) as may be required
by any municipal, state, federal or other regulatory body
having or claiming to have jurisdiction over such party, (III)
in order to comply with any law, order, regulation, regulatory
request or ruling applicable to such party, (IV) subject to
subsection (c), in the event such party is legally compelled
(by interrogatories, requests for information or copies,
subpoena, civil investigative demand or similar process) to
disclose any such Program Information; or (V) specifically,
Seller or one of its affiliates may file this executed
agreement as an exhibit to any annual or quarterly report it
files with the United States Securities and Exchange
Commission; and
(ii) it will use the Program Information solely for the
purposes of evaluating, administering and enforcing the
transactions contemplated by this Agreement and making any
necessary business judgments with respect thereto;
(b) Availability of Confidential Information. This Section 14.07
shall be inoperative as to such portions of the Program Information which
are or become generally available to the public or such party on a
nonconfidential basis from a source other than State Street Capital or were
known to such party on a nonconfidential basis prior to its disclosure by
State Street Capital.
(c) Legal Compulsion to Disclose. In the event that any party or
anyone to whom such party or its representatives transmits the Program
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand
or similar process) to disclose any of the Program Information, such party
will:
(i) provide State Street Capital with prompt written notice
so that State Street Capital may seek a protective order or
other appropriate remedy and/or waive compliance with the
provisions of this Section 14.07; and
(ii) unless State Street Capital waives compliance by such
party with the provisions of this Section 14.07, make a timely
objection to the request or confirmation to provide such
Program Information on the basis that such Program Information
is confidential and subject to the agreements contained in
this Section 14.07.
In the event that such protective order or other remedy is not obtained, or
State Street Capital waives compliance with the provisions of this Section
14.07, such party will furnish only that portion of the Program Information
which (in such party's good faith judgment) is legally required to be
furnished and will exercise reasonable efforts to obtain reliable assurance
that confidential treatment will be accorded the Program Information.
(d) Survival. This Section 14.07 shall survive termination of this
Agreement.
SECTION 14.08. Confidentiality of Seller Information.
(a) Confidential Information. Each party hereto acknowledges that
Seller regards certain financial and portfolio information to be
confidential, and each such party severally agrees that:
(i) it will not disclose without the prior written consent
of Seller (other than to the directors, employees, auditors,
counsel or affiliates (collectively, "representatives" of such
party, each of whom shall be informed by such party of the
confidential nature of the Seller Information (as defined
below) and of the terms of this Section 14.08), (A) any
financial information regarding Seller, (B) any pricing
information of Seller, or (C) any information which is
furnished by Seller to such party and which is designated by
Seller to such party as confidential or not otherwise
available to the general public (the information referred to
in clauses (A), (B) and (C) is collectively referred to as the
"Seller Information"); provided, however, that such party may
disclose any such Seller Information (I) to any other party to
this Agreement for the purposes contemplated hereby, (II) as
may be required by any municipal, state, federal or other
regulatory body having or claiming to have jurisdiction over
such party, (III) in order to comply with any law, order,
regulation, regulatory request or ruling applicable to such
party, (IV) subject to subsection (c), in the event such party
is legally compelled (by interrogatories, requests for
information or copies, subpoena, civil investigative demand or
similar process) to disclose any such Seller Information, and
(V) to the Credit Bank, the Liquidity Banks, any assignee or
participant or potential assignee or participant of the Credit
Bank or any Liquidity Bank, the rating agencies rating the
Commercial Paper Notes, and the investors in and dealers of
the Commercial Paper Notes; and
(ii) it will use the Seller Information solely for the
purposes of evaluating, administering and enforcing the
transactions contemplated by this Agreement and making any
necessary business judgments with respect thereto.
(b) Availability of Confidential Information. This Section 14.08
shall be inoperative as to such portions of the Seller Information which
are or become generally available to the public or such party on a
nonconfidential basis from a source other than Seller or were known to such
party on a nonconfidential basis prior to its disclosure by Seller.
(c) Legal Compulsion to Disclose. In the event that any party or
anyone to whom such party or its representatives transmits the Seller
Information is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand
or similar process) to disclose any of the Seller Information, such party
will
(i) provide Seller with prompt written notice so that
Seller may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Section
14.08; and
(ii) unless Seller waives compliance by such party with the
provisions of this Section 14.08, make a timely objection to
the request or confirmation to provide such Seller Information
on the basis that such Seller Information is confidential and
subject to the agreements contained in this Section 14.08.
In the event that such protective order or other remedy is not obtained, or
Seller waives compliance with the provisions of this Section 14.08, such
party will furnish only that portion of the Seller Information which (in
such party's good faith judgment) is legally required to be furnished and
will exercise reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded the Seller Information.
(d) Survival. This Section 14.08 shall survive termination of this
Agreement.
SECTION 14.09. Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement
are provided solely for convenience of reference and shall not affect the
meaning or interpretation of any provision of this Agreement. Unless
otherwise indicated, references in this Agreement to any Section, Appendix,
Schedule or Exhibit are to such Section of or Appendix, Schedule or Exhibit
to this Agreement, as the case may be, and references in any Section,
subsection, or clause to any subsection, clause or subclause are to such
subsection, clause or subclause of such Section, subsection or clause.
SECTION 14.10. Integration. This Agreement, together with the letter
referenced in Section 4.01(a), contains a final and complete integration of
all prior expressions by the parties hereto with respect to the subject
matter hereof and shall constitute the entire understanding among the
parties hereto with respect to the subject matter hereof, superseding all
prior oral or written understandings.
SECTION 14.11. Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS
AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE
EXTENT THAT THE PERFECTION OF THE INTERESTS OF PURCHASER IN THE RECEIVABLES
IS GOVERNED BY THE LAWS OF THE JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
SECTION 14.12. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO
EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENT OR ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT AND AGREES THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT A JURY TRIAL.
SECTION 14.13. Consent To Jurisdiction; Waiver Of Immunities. EACH
OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IT IRREVOCABLY (i)
SUBMITS TO THE JURISDICTION, FIRST, OF ANY UNITED STATES FEDERAL COURT, AND
SECOND, IF FEDERAL JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE
COURT, IN EITHER CASE SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, (ii) AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED ONLY IN SUCH NEW YORK STATE OR FEDERAL COURT AND NOT IN ANY
OTHER COURT, AND (iii) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION
OR PROCEEDING.
SECTION 14.14. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by the different parties hereto
in separate counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one
and the same Agreement.
SECTION 14.15. No Recourse Against Other Parties. No recourse under
any obligation, covenant or agreement of any of the Securitization Entities
contained in this Agreement shall be had against any incorporator,
stockholder, officer, director or employee of such Securitization Entity,
by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that this Agreement is solely a corporate obligation
of Purchaser, and that no personal liability whatever shall attach to or be
incurred by the incorporators, stockholders, officers, directors or
employees of such Securitization Entity, or any of them under or by reason
of any of the obligations, covenants or agreements of such Securitization
Entity contained in this Agreement, or implied therefrom, and that any and
all personal liability for breaches by such Securitization Entity of any of
such obligations, covenants or agreements either at common law or at
equity, or by statute or constitution, of every such incorporator,
stockholder, officer, director or employee is hereby expressly waived as a
condition of and in consideration for the execution of this Agreement;
provided, however, that nothing in this Section 14.15 shall relieve any of
the foregoing persons or entities from any liability arising from his, her
or its willful misconduct or intentional misrepresentations.
SECTION 14.16. State Street Business Combination. The parties hereto
recognize that State Street Capital is contemplating a business combination
whereby State Street Capital is to be combined with State Street Capital
Markets, L.L.C. ("SSCM"). Upon consummation of the transaction, SSCM shall
automatically become a party hereto, effective immediately upon such
combination. References herein to State Street Capital shall be deemed to
include references to SSCM.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the
date first above written.
CHARMING SHOPPES STREET, INC.
as Seller
By:
Name:
Title:
SPIRIT OF AMERICA, INC., as Servicer
By:
Name:
Title:
CLIPPER RECEIVABLES CORPORATION,
as Purchaser
By:
Name:
Title:
STATE STREET
CAPITAL CORPORATION,
as Administrator
By:
Name:
Title:
STATE STREET
BANK & TRUST COMPANY,
as Relationship Bank
By:
Name:
Title:
Schedule 5.01(h)
to Receivables Purchase Agreement
Opinions to be Delivered Prior to Initial Funding
1. Opinions of Mayer, Brown & Platt ("MBP"), as special counsel to
the Transferors, substantially in the form attached to this Schedule.
2. Opinion of Colin Stern, Executive Vice President and General
Counsel of Charming Shoppes, with respect to (i) the organization of the
Transferors, (ii) the authorization by the Transferors of the Transaction
Documents, (iii) the absence of conflict with each Transferor's
organizational documents, material agreements and orders of courts and
regulatory bodies having jurisdiction over the Transferors, and (iv)
litigation matters. Such opinion shall be subject to such exceptions and
qualifications as are set forth in the opinion delivered by Mr. Stern on
November 25, 1997 in connection with the issuance of Series 1997-1.
Schedule 6.01(j)
to Receivables Purchase Agreement
Description of Litigation
NONE
Schedule 6.01(n)
to Receivables Purchase Agreement
List of Offices Where Seller Records are Kept
3411 Silverside Road
Wilmington, Delaware 19810
450 Winks Lane
Bensalem, Pennsylvania 19020
Schedule 7.01(g)
to Receivables Purchase Agreement
Description of Credit and Collection Policy
To be delivered by Servicer prior to the initial funding.
EXHIBIT 3.01(a)
Information Package
Exhibit 14.02
Addresses for Notices
Clipper Receivables Corporation
c/o State Street Capital Corporation,
as Administrator
225 Franklin Street, 18th Floor
Boston, Massachusetts 02110
State Street Capital Corporation,
as Administrator
225 Franklin Street, 18th Floor
Boston, Massachusetts 02110
State Street Bank & Trust Company,
as Relationship Bank
225 Franklin Street, 18th Floor
Boston, Massachusetts 02110
Spirit of America, Inc.
c/o Spirit of American National Bank
1103 Allen Drive
Milford, Ohio 45150
Charming Shoppes Street, Inc.
c/o Fashion Service Corp.
450 Winks Lane
Bensalem, Pennsylvania 19020
EXHIBIT 10.1.23
EXECUTION COPY
CHARMING SHOPPES RECEIVABLES CORP.
Seller
SPIRIT OF AMERICA, INC.
Servicer
and
FIRST UNION NATIONAL BANK
Trustee
on behalf of the Series 1999-2 Certificateholders
__________________________________
SERIES 1999-2 SUPPLEMENT
Dated as of May 28, 1999
to
SECOND AMENDED AND RESTATED POOLING AND
SERVICING AGREEMENT
Dated as of November 25, 1997
__________________________________
up to $55,750,000
CHARMING SHOPPES MASTER TRUST
SERIES 1999-2
TABLE OF CONTENTS
PAGE
SECTION 1. Designation 1
SECTION 2. Definitions 1
SECTION 3. Servicing Compensation 16
SECTION 4. Variable Funding Mechanics 16
SECTION 5. Optional Repurchase; Reassignment and
Termination Provisions 18
SECTION 6. Maximum Funded Amounts 19
SECTION 7. Delivery and Payment for the Series 1999-2
Certificates 19
SECTION 8. Article IV of Agreement 19
SECTION 9. Article V of the Agreement. 31
SECTION 10. Series 1999-2 Early Amortization Events 33
SECTION 11. Series 1999-2 Termination 35
SECTION 12. Limitations on Addition of Accounts 35
SECTION 13. Ratification of Agreement 35
SECTION 14. Counterparts 35
SECTION 15. Governing Law 35
SECTION 16. No Petition 35
SECTION 17. Tax Representation and Covenant 36
SECTION 18. Amendments 36
SECTION 19. State Street Capital Business Combination 36
EXHIBITS
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT B Form of Optional Amortization Payment
Instructions and Notification to the Trustee
EXHIBIT C Form of Monthly Payment Instructions and
Notification to the Trustee
EXHIBIT D Form of Monthly Certificateholders' Statement
SERIES 1999-2 SUPPLEMENT, dated as of
May 28, 1999 (this "Supplement"), by and among CHARMING
SHOPPES RECEIVABLES CORP., a Delaware corporation, as Seller
(the "Seller"), SPIRIT OF AMERICA, INC., as Servicer (the
"Servicer"), and FIRST UNION NATIONAL BANK, as Trustee (the
"Trustee") under the Second Amended and Restated Pooling and
Servicing Agreement dated as of November 25, 1997 among the
Seller, the Servicer and the Trustee (as amended from time
to time, the "Agreement").
Section 6.9 of the Agreement provides, among other
things, that the Seller, the Servicer 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
Trustee shall create a new Series of Investor Certificates
and shall specify the Principal Terms thereof.
1. SECTION Designation.
a) There is hereby created a Series of
Investor Certificates to be issued in two classes pursuant
to the Agreement and this Series Supplement and to be known
together as the "Series 1999-2 Certificates." The two
classes shall be designated the Class A Floating Rate Asset
Backed Certificates, Series 1999-2 (the "Class A
Certificates") and the Class B Floating Rate Asset Backed
Certificates, Series 1999-2 (the "Class B Certificates").
The Class A Certificates and the Class B Certificate shall
be substantially in the form of Exhibits A-1 and A-2,
hereto, respectively.
a) Series 1999-2 shall be included in Group
One. Series 1999-2 shall not be subordinated to any other
Series.
1. SECTION 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
subsection references herein shall mean Article, Section or
subsections 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 1999-2 Certificates
and no other Series of Certificates or Receivables Purchase
Series issued by the Trust.
"Administrator" shall mean State Street Capital
Corporation, as administrator for the initial Class A
Purchaser.
"Amortization Period" shall mean, unless an Early
Amortization Event shall have occurred prior thereto, the
period commencing at the close of business on the Purchase
Expiration Date (or such later date as shall have been
agreed to by the Seller and each Series 1999-2
Certificateholder) and ending on the earlier to occur of (a)
the commencement of the Early Amortization Period, and (b)
the Series 1999-2 Termination Date, provided that the Seller
may, by written notice to the Trustee and each Series 1999-2
Certificateholder (and so long as the Early Amortization
Period has not begun), cause the Amortization Period to
begin on any date earlier than the one otherwise specified
above.
"Available Funds" shall mean, with respect to any
Distribution Date, the sum of Class A Available Funds and
Class B Available Funds, in each case for such Distribution
Date.
"Available Principal Collections" shall mean, (i) with
respect to any Optional Amortization Date that is not also a
Distribution Date, the Principal Allocation Percentage of
all Collections of Principal Receivables previously
allocated to the Series 1999-2 Certificateholders pursuant
to Section 4.5(a)(ii), (a)(iii), (b)(ii) and (b)(iii) then
on deposit in the Collection Account and (ii) with respect
to any Distribution Date, the sum of (a) the Principal
Allocation Percentage of all Collections of Principal
Receivables for the related Due Period minus any such
Collections of Principal Receivables used to make an
Optional Amortization, minus the amount of Reallocated Class
B Principal Collections with respect to such Due Period
which pursuant to Section 4.12 are required to fund the
Class A Required Amount, (b) any Shared Principal
Collections with respect to other Series in Group One that
are allocated to Series 1999-2 in accordance with
Section 4.15 for such Distribution Date, and (c) any other
amounts which pursuant to Section 4.9 and 4.11(a) (to the
extent allocable to the Class A Investor Loss Amount), (b),
(e), and (f) for such Due Period (other than such amounts
paid from Reallocated Class B Principal Collections) are to
be treated as Available Principal Collections for such
Distribution Date.
"Available Series Cash Collateral Amount" shall mean
with respect to any date, the amount on deposit in the
Series Cash Collateral Account on such date (such amount
calculated before giving effect to any deposit to, or
withdrawal from, the Series Cash Collateral Account to be
made with respect to such date).
"Available Shared Principal Collections" shall mean,
with respect to any date, the amount of Shared Principal
Collections available for distribution in connection with an
Optional Amortization.
"Average Class A Funded Amount" shall mean, with
respect to any Interest Period, the quotient of (a) the sum
of the Class A Funded Amount as of each day in such Interest
Period, divided by (b) the number of days in such Interest
Period.
"Average Class B Funded Amount" shall mean, with
respect to any Interest Period, the quotient of (a) the sum
of the Class B Funded Amount as of each day in such Interest
Period, divided by (b) the number of days in such Interest
Period.
"Average Maximum Class A Funded Amount" shall mean,
with respect to any Interest Period, the quotient of (a) the
sum of the Maximum Class A Funded Amount as of each day in
such Interest Period, divided by (b) the number of days in
such Interest Period.
"Average Maximum Class B Funded Amount" shall mean,
with respect to any Interest Period, the quotient of (a) the
sum of the Maximum Class B Funded Amount as of each day in
such Interest Period, divided by (b) the number of days in
such Interest Period.
"Base Expenses" shall mean, for any Due Period, the sum
of the following amounts: (i) Monthly Interest for the
related Distribution Date, (ii) Class Additional Amounts for
the related Distribution Date, (iii) Class B Additional
Amounts for the related Distribution Date, plus (iv) the
Investor Monthly Servicing Fee for such Due Period.
"Base Rate" shall mean, for any Due Period, (a) the sum
of the Base Expenses for such Due Period, divided by (b) the
Weighted Average Investor Interest for such Due Period,
times (c) 12.
"Breakage Payment" is defined in Section 4.6(c).
"Business Day" shall mean any "Business Day" (as
defined in the Agreement) other than a day on which national
banking associations or state banking institutions are
authorized or obligated by law to be closed in Boston,
Massachusetts.
"Capped Amount" shall mean, with respect to any fiscal
year of the Seller, an amount equal to the product of (a)
0.5% and (b) the Class A Benchmark.
"Cap Agreements" means (i) the ISDA Master Agreement,
Schedule and Confirmation, dated as of the date hereof,
between Fashion Service Corp. and State Street Bank,
pursuant to which Fashion Service Corp. provides an interest
rate cap for the benefit of State Street Bank, and (ii) the
ISDA Master Agreement, Schedule and Confirmation, dated as
the date hereof, pursuant to which State Street Bank
provides an interest rate cap for the benefit of the Class A
Certificateholder, in each case as amended or modified from
time to time.
"Certificate Purchase Agreement" shall mean the
Certificate Purchase Agreement among Seller, Servicer, the
Class A Certificateholder and the Class B Certificateholder,
as supplemented by the Fee Letter referred to (and defined)
therein and as the same may be amended or otherwise modified
from time to time. The Certificate Purchase Agreement is
hereby designated a "Transaction Document" for all purposes
of the Agreement and this Supplement.
"Certificateholder Servicing Fee" is defined in Section
3.
"Change in Control" means
(a) as to Seller, Servicer or Originator, any person
or group of related persons (excluding Charming Shoppes and
its Affiliates) gains beneficial ownership of a majority in
voting interest of the outstanding voting stock of Seller or
Originator or has caused to be elected a majority of the
Board of Directors of Seller or Originator; and
(b) as to Charming Shoppes, any Person, or two or more
Persons acting in concert, shall acquire beneficial
ownership (within the meaning of Rule 13D-3 of the
Securities and Exchange Commission) of 25% or more of the
outstanding voting shares of Charming Shoppes.
"Class A Additional Amounts" is defined in Section
4.6(b).
"Class A Available Funds" shall mean, as to any Due
Period, an amount equal to the sum of (a) the Weighted
Average Class A Floating Allocation Percentage of the sum of
Collections of Finance Charge Receivables allocated to the
Series 1999-2 Certificates and deposited in the Collection
Account for such Due Period, (b) amounts paid to the Trust
pursuant to the Cap Agreements, and (c) the interest and
earnings on funds on deposit in the Series Cash Collateral
Account for such Due Period deposited into the Collection
Account pursuant to Section 4.16 on the related Distribution
Date.
"Class A Benchmark" shall mean, for any date of
determination, the highest Class A Invested Amount during
the twelve immediately preceding Due Periods.
"Class A Certificate Rate" shall mean, for any Interest
Period, the sum of (i) a per annum interest rate which if
multiplied by the Class A Investor Interest as of the last
day of such Interest Period would produce, on the basis of a
360 day year (based on actual days elapsed), as the case may
be, an amount equal to the sum of the Cost of Funds (as
defined in the Certificate Purchase Agreement) for such
Interest Period plus (ii) the Applicable Margin (as defined
in the Certificate Purchase Agreement).
"Class A Certificateholder" shall mean each Person in
whose name a Class A Certificate is registered in the
Certificate Register.
"Class A Certificates" shall mean any of the certifi
cates executed by the Seller and authenticated by or on
behalf of the Trustee, substantially in the form of Exhibit
A-1 hereto.
"Class A Expected Final Payment Date" shall mean the
twelfth Distribution Date following the Purchase Expiration
Date (as defined in the Certificate Purchase Agreement).
"Class A Fixed Allocation Percentage" shall mean, for
any Due Period during the Fixed Allocation Period, the
percentage equivalent (which percentage shall never exceed
100%) of a fraction, (a) the numerator of which is the Class
A Investor Interest as of the close of business on the last
day of the Revolving Period and (b) the denominator of which
is equal to the Investor Interest as of the close of
business on the last day of the Revolving Period.
"Class A Floating Allocation Percentage" shall mean,
for any Due Period, the percentage equivalent (which
percentage shall never exceed 100%) of a fraction:
(a) the numerator of which is the Class A Investor
Interest as of the close of business on the last day of
the preceding Due Period; and
(b) the denominator of which is equal to the
Investor Interest as of the close of business on the
last day of the preceding Due Period;
provided that with respect to any Due Period in which an
Incremental Funding occurs:
(x) the numerator determined pursuant to clause
(a) shall be (1) the Class A Investor Interest as of
the close of business on the later of the last day of
the prior Due Period or the preceding Reset Date, for
the period from and including the first day of the
current Due Period or the preceding Reset Date, as
applicable, to but excluding the related Reset Date and
(2) the Class A Investor Interest as of the close of
business on such Reset Date, for the period from and
including such Reset Date to the earlier of the last
day of such Due Period (in which case such period shall
include such day) or the next succeeding Reset Date (in
which case such period shall not include such
succeeding Reset Date); and
(y) the denominator determined pursuant to clause
(b) shall be (1) the Investor Interest as of the close
of business on the later of the last day of the prior
Due Period or the preceding Reset Date, for the period
from and including the first day of the current Due
Period or preceding Reset Date, as applicable, to but
excluding the related Reset Date and (2) the Investor
Interest as of the close of business on such Reset
Date, for the period from and including such Reset Date
to the earlier of the last day of such Due Period (in
which case such period shall include such day) or the
next succeeding Reset Date (in which case such period
shall not include such succeeding Reset Date);
provided further that, with respect to the first Due Period,
the Closing Date shall be treated as the last day of the
preceding Due Period.
"Class A Funded Amount" shall mean, with respect to any
date of determination, an amount equal to the result of (a)
the Class A Initial Investor Interest, plus (b) the
aggregate amount of all Class A Incremental Funded Amounts
for all Class A Incremental Fundings occurring on or prior
to such date, minus (c) the aggregate amount of principal
payments made to the Class A Certificateholders prior to
such date. As applied to any particular Class A Certificate,
the "Class A Funded Amount" means the portion of the overall
Class A Funded Amount represented by that Certificate.
"Class A Incremental Funded Amount" shall mean the
amount of the increase in the Class A Funded Amount
occurring as a result of any Class A Incremental Funding,
which amount shall equal the aggregate amount of the
purchase price paid by the Class A Certificateholders with
respect to that Class A Incremental Funding pursuant to the
Certificate Purchase Agreement and Section 4 hereof.
"Class A Incremental Funding" shall mean any increase
in the Class A Funded Amount during the Revolving Period
made pursuant to the Certificate Purchase Agreement.
"Class A Initial Investor Interest" shall mean the
aggregate initial principal amount of the Class A
Certificates, which is $0.
"Class A Investor Allocation" shall mean, with respect
to any Due Period, (a) with respect to Loss Amounts and
Collections of Finance Charge Receivables at any time and
Collections of Principal Receivables during the Revolving
Period, the Class A Floating Allocation Percentage and
(b) with respect to Collections of Principal Receivables
during the Fixed Allocation Period, the Class A Fixed
Allocation Percentage.
"Class A Investor Charge-Offs" is defined in
subsection 4.10(a).
"Class A Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class A Funded
Amount on that date, minus (b) the excess, if any, of the
aggregate amount of Class A Investor Charge-Offs pursuant to
Section 4.10(a) over Class A Investor Charge-Offs reimbursed
pursuant to Section 4.11(b) prior to such date of
determination; provided that the Class A Investor Interest
may not be reduced below zero.
"Class A Investor Loss Amount" shall mean, with respect
to each Distribution Date, an amount equal to the product of
(a) the Investor Loss Amount for the related Due Period and
(b) the Weighted Average Class A Floating Allocation
Percentage applicable for the related Due Period.
"Class A Monthly Interest" shall mean the monthly
interest distributable in respect of the Class A
Certificates as calculated in accordance with subsection
4.6(a).
"Class A Monthly Principal" shall mean the monthly
principal distributable in respect of the Class A
Certificates as calculated in accordance with subsection
4.7(a).
"Class A Optional Amortization" is defined in Section
4(b).
"Class A Optional Amortization Amount" is defined in
Section 4(b).
"Class A Required Amount" is defined in
subsection 4.8(a).
"Class A Scheduled Final Payment Date" shall mean the
Distribution Date falling in the twelfth month following the
month in which the Amortization Period begins.
"Class A Servicing Fee" is defined in Section 3.
"Class B Additional Amounts" is defined in Section
4.6(e).
"Class B Available Funds" shall mean, as to any Due
Period, an amount equal to the Weighted Average Class B
Floating Allocation Percentage of the sum of Collections of
Finance Charge Receivables allocated to the Series 1999-2
Certificates and deposited in the Collection Account for
such Due Period.
"Class B Certificate Rate" shall mean, for any Interest
Period, the rate specified in the Certificate Purchase
Agreement as the Class B Certificate Rate for such Interest
Period.
"Class B Certificateholder" shall mean each Person in
whose name a Class B Certificate is registered in the
Certificate Register.
"Class B Certificates" shall mean any of the certifi
cates executed by the Seller and authenticated by or on
behalf of the Trustee, substantially in the form of Exhibit
A-2 hereto.
"Class B Fixed Allocation Percentage" shall mean, with
respect to any Due Period during a Fixed Allocation Period,
the excess (if any) of 100% over the Class A Fixed
Allocation Percentage for such Due Period.
"Class B Floating Allocation Percentage" shall mean,
with respect to any Due Period, the excess (if any) of 100%
over the Class A Floating Allocation Percentage for such Due
Period.
"Class B Funded Amount" shall mean, with respect to any
date of determination, an amount equal to the result of (a)
the Class B Initial Investor Interest, plus (b) the
aggregate amount of all Class B Incremental Funded Amounts
for all Class B Incremental Fundings occurring on or prior
to such date, minus (c) the aggregate amount of principal
payments made to the Class B Certificateholders prior to
such date. As applied to any particular Class B Certificate,
the "Class B Funded Amount" means the portion of the overall
Class B Funded Amount represented by that Certificate.
"Class B Incremental Funded Amount" shall mean the
amount of each increase in the Class B Funded Amount
occurring as a result of any Class B Incremental Funding,
which amount shall equal the aggregate amount of the
purchase price paid by the Class B Certificateholders with
respect to that Class B Incremental Funding pursuant to the
Certificate Purchase Agreement.
"Class B Incremental Funding" shall mean any increase
in the Class B Funded Amount Interest during the Revolving
Period made pursuant to the Certificate Purchase Agreement
and Section 4 hereof.
"Class B Initial Investor Interest" shall mean the
aggregate initial principal amount of the Class B
Certificates, which is $0.
"Class B Investor Allocation" shall mean, with respect
to any Due Period (a) with respect to Loss Amounts and
Collections of Finance Charge Receivables at any time and
Collections of Principal Receivables during the Revolving
Period, the Class B Floating Allocation Percentage and
(b) with respect to Collections of Principal Receivables
during the Fixed Allocation Period, the Class B Fixed
Allocation Percentage.
"Class B Investor Charge-Offs" is defined in
subsection 4.10(b).
"Class B Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class B Funded
Amount on such date, minus (b) the aggregate amount of Class
B Investor Charge-Offs for all prior Distribution Dates
pursuant to subsection 4.10(b), minus (c) the aggregate
amount of Reallocated Class B Principal Collections
allocated pursuant to subsection 4.12 on all prior
Distribution Dates, minus (d) an amount equal to the amount
by which the Class B Investor Interest has been reduced on
all prior Distribution Dates pursuant to subsection 4.10(a)
and plus (e) the aggregate amount of Excess Spread and
Shared Excess Finance Charge Collections allocated and
available on all prior Distribution Dates pursuant to subsec
tion 4.11(f) for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (b), (c) and (d);
provided, however, that the Class B Investor Interest may
not be reduced below zero.
"Class B Investor Loss Amount" shall mean, with respect
to each Distribution Date, an amount equal to the product of
(a) the Investor Loss Amount for the related Due Period and
(b) the Weighted Average Class B Floating Allocation
Percentage applicable for the related Due Period.
"Class B Monthly Interest" shall mean the monthly
interest distributable in respect of the Class B
Certificates as calculated in accordance with subsection
4.6(d).
"Class B Monthly Principal" shall mean the monthly
principal distributable in respect of the Class B
Certificates as calculated in accordance with subsection
4.7(b).
"Class B Optional Amortization" is defined in Section
in Section 4(e).
"Class B Optional Amortization Amount" is defined in
Section 4(e).
"Class B Servicing Fee" is defined in Section 3.
"Closing Date" shall mean May 28, 1999.
"Co-Brand Purchase Agreement" shall mean the
Receivables Purchase Agreement, dated as of the date hereof,
among Charming Shoppes Street, Inc., Spirit of America,
Inc., Clipper Receivables Corporation, State Street Capital
Corporation and State Street Bank & Trust Company, as the
same may be amended or otherwise modified from time to time.
"Controlled Amortization Amount" shall mean for any
Distribution Date with respect to the Amortization Period
prior to the payment in full of the Class A Investor
Interest, the Class A Investor Interest as of the close of
business on the last day of the Revolving Period divided by
twelve (or such other number of months in such Amortization
Period selected by the Seller in accordance with the terms
of this Supplement).
"Controlled Amortization Shortfall" initially shall
mean zero and thereafter shall mean, with respect to any Due
Period during the Amortization Period, the excess, if any,
of the Controlled Payment Amount for the previous Due Period
over the amounts distributed pursuant to Section 4.9(d)(i)
with respect to the Class A Certificates for the previous
Due Period.
"Controlled Payment Amount" shall mean, with respect to
any Distribution Date, the sum of (a) the Controlled
Amortization Amount for such Distribution Date and (b) any
existing Controlled Amortization Shortfall; provided that
(a) Seller may designate any amount greater than the
foregoing as the Controlled Payment Amount upon five
Business Days' notice to the Series 1999-2
Certificateholders prior to the related Distribution Date
and (b) in no event will the Controlled Payment Amount
exceed the Class A Investor Interest.
"Controlling Certificateholders" shall mean (a) on any
date of determination on which the Class A Investor Interest
is greater than zero, Class A Certificateholders owning
Class A Certificates evidencing more than 50% of the sum of
the Class A Investor Interest, and (b) thereafter, Class B
Certificateholders owning Class B Certificates evidencing
more than 50% of the Class B Investor Interest.
"Cumulative Principal Shortfall" shall mean the sum of
the Principal Shortfalls (as such term is defined in each of
the related Supplements or Receivables Purchase Agreement)
for each Series in Group One that are Principal Sharing
Series.
"Early Amortization Period" shall mean the 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 1999-2 is deemed to have
occurred, and ending on the Series 1999-2 Termination Date.
"Enhancement" shall mean with respect to the Class A
Certificates, the subordination of the Class B Certificates,
the Series Cash Collateral Account and the Spread Account.
"Enhancement Provider" shall mean the Class B
Certificateholders.
"Enhancement Surplus" shall mean, with respect to any
Distribution Date, the excess, if any, of (a) the Class B
Investor Interest (after giving effect to any reductions
made with respect to such date other than as the result of
the existence of an Enhancement Surplus) over (b) the
Required Class B Amount.
"Excess Spread" shall mean, with respect to any
Distribution Date, the sum of the amounts with respect to
such Distribution Date, if any, specified pursuant to
subsections 4.9(a)(vii) and 4.9(b)(ii).
"Finance Charge Shortfall" is defined in sub
section 4.14(b).
"Fixed Allocation Percentage" shall mean, with respect
to any Due Period, the percentage equivalent of a fraction
(a) the numerator of which is the Investor Interest as of
the close of business on the last day of the Revolving
Period and (b) the denominator of which is the greater of
(i) the aggregate amount of Principal Receivables in the
Trust determined as of the close of business on (A) if only
one Series is outstanding the last day of the Revolving
Period and (B) if more than one Series is outstanding, the
last day of the prior Due Period and (ii) the sum of the
numerators used to calculate the Investor Percentages for
allocations with respect to Principal Receivables for all
outstanding Series on such date of determination; provided
that with respect to any Due Period in which a Reset Date
occurs, (x) the denominator determined pursuant to subclause
(b)(i) shall be (1) the aggregate amount of Principal
Receivables in the Trust as of the close of business on the
later of the last day of the prior Due Period or the
preceding Reset Date, for the period from and including the
first day of the current Due Period or the preceding Reset
Date, as applicable, to but excluding such Reset Date and
(2) the aggregate amount of Principal Receivables in the
Trust as of the close of business on such Reset Date, for
the period from and including such Reset Date to the later
of the last day of such Due Period (in which case such
period shall include such day) or the next succeeding Reset
Date (in which case such period shall not include such
succeeding Reset Date) and (y) the denominator determined
pursuant to subclause (b)(ii) shall be (1) the sum of the
numerators used to calculate the Investor Percentages for
allocations with respect to Principal Receivables for all
outstanding Series as of the close of business on the later
of the last day of the prior Due Period or the preceding
Reset Date, for the period from and including the first day
of the current Due Period or the preceding Reset Date, as
applicable, to but excluding such Reset Date and (2) the sum
of the numerators used to calculate the Investor Percentages
for allocations with respect to Principal Receivables for
all outstanding Series as of the close of business on such
Reset Date, for the period from and including such Reset
Date to the earlier of the last day of such Due Period (in
which case such period shall include such day) or the next
succeeding Reset Date (in which case such period shall not
include such succeeding Reset Date).
"Fixed Allocation Period" shall mean the Amortization
Period or the Early Amortization Period.
"Fixed Period" is defined in Section 4.6(a).
"Fixed Principal Allocation Date" shall mean the
earlier of (a) the date on which an Early Amortization Event
with respect to Series 1999-2 is deemed to have occurred;
and (b) the date on which the Amortization Period with
respect to Series 1999-2 commences.
"Floating Allocation Percentage" shall mean, with
respect to any Due Period, the percentage equivalent of a
fraction:
(a) the numerator of which is the Investor
Interest as of the close of business on the last day of
the preceding Due Period; and
(b) the denominator of which is the greater of (i)
the aggregate amount of Principal Receivables in the
Trust as of the close of business on the last day of
the preceding Due Period and (ii) the sum of the
numerators used to calculate the Investor/Purchaser
Percentages for such Due Period allocations with
respect to Finance Charge Receivables, Principal
Receivables or Loss Amounts, as applicable, for all
outstanding Series on such date of determination in
subclause (b)(i);
provided that with respect to any Due Period in which a
Reset Date occurs:
(x) if such Reset Date is the result of an
Incremental Funding, the numerator determined pursuant
to clause (a) shall be (1) the Investor Interest as of
the close of business on the later of the last day of
the preceding Due Period or the preceding Reset Date,
for the period from and including the first day of the
current Due Period or the preceding Reset Date, as
applicable, to but excluding such Reset Date and (2)
the Investor Interest as of the close of business on
such Reset Date, for the period from and including such
Reset Date to the earlier of the last day of such Due
Period (in which case such period shall include such
day) or the next succeeding Reset Date (in which case
such period shall not include such succeeding Reset
Date);
(y) the denominator determined pursuant to
subclause (b)(i) shall be (1) the aggregate amount of
Principal Receivables in the Trust as of the close of
business on the later of the last day of the preceding
Due Period or the preceding Reset Date, for the period
from and including the first day of the current Due
Period or preceding Reset Date, as applicable, to but
excluding such Reset Date and (2) the aggregate amount
of Principal Receivables in the Trust as of the close
of business on such Reset Date, for the period from and
including such Reset Date to the earlier of the last
day of such Due Period (in which case such period shall
include such day) or the next succeeding Reset Date (in
which case such period shall not include such
succeeding Reset Date); and
(z) the denominator determined pursuant to
subclause (b)(ii) shall be (1) the sum of the
numerators used to calculate the Investor/Purchaser
Percentages for all outstanding Series for allocations
with respect to Finance Charge Receivables, Loss
Amounts or Principal Receivables, as applicable, for
all such Series as of the close of business on the
later of the last day of the preceding Due Period or
the preceding Reset Date, for the period from and
including the first day of the current Due Period or
preceding Reset Date, as applicable, to but excluding
such Reset Date and (2) the sum of the numerators used
to calculate the Investor/Purchaser Percentages for all
outstanding Series for allocations with respect to
Finance Charge Receivables, Loss Amounts or Principal
Receivables, as applicable, for all such Series as the
close of business on such Reset Date, for the period
from and including such Reset Date to the earlier of
the last day of such Due Period (in which case such
period shall include such day) or the next succeeding
Reset Date (in which case such period shall not include
such succeeding Reset Date).
provided further that with respect to the first Due Period,
the Closing Date shall be treated as the last day of the
preceding Due Period.
"Funding Tranche" is defined in Section 4.6(a).
"Group One" shall mean Series 1999-2 and each other
Series specified in the related Supplement or Receivables
Purchase Agreement to be included in Group One.
"Incremental Funding" shall mean a Class A Incremental
Funding or a Class B Incremental Funding.
"Initial Investor Interest" shall mean the sum of the
Class A Initial Investor Interest and the Class B Initial
Investor Interest.
"Interest Period" shall mean, with respect to any
Distribution Date, the period from and including the
previous Distribution Date through the day preceding such
Distribution Date, except that the initial Interest Period
shall be the period from and including the Closing Date
through the day preceding the initial Distribution Date.
"Investor Interest" shall mean, with respect to any
date of determination, an amount equal to the sum of (a) the
Class A Investor Interest, and (b) the Class B Investor
Interest for such date.
"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 Monthly Servicing Fee" is defined in Section
3 of this Supplement.
"Investor/Purchaser Percentage" shall mean, with
respect to Collections of Principal Receivables, the
Principal Allocation Percentage, and with respect to
Collections of Finance Charge Receivables or Loss Amounts,
the Floating Allocation Percentage.
"London Business Day" shall mean any Business Day on
which dealings in deposits in United States dollars are
transacted in the London interbank market.
"Maximum Class A Funded Amount" shall mean, as of any
day, (x) $50,000,000, as such amount may be increased or
decreased from time to time pursuant to Section 6 of this
Supplement, minus (y) the then outstanding Purchaser's Total
Investment (as defined in the Co-Brand Purchase Agreement).
As applied to any particular Class A Certificate, the
"Maximum Class A Funded Amount" means the portion of the
overall Maximum Class A Funded Amount represented by that
Certificate.
"Maximum Class B Funded Amount" shall mean, as of any
day, (x) $5,750,000, as such amount may be increased or
decreased from time to time pursuant to the Certificate
Purchase Agreement. As applied to any particular Class B
Certificate, the "Maximum Class B Funded Amount" means the
portion of the overall Maximum Class B Funded Amount
represented by that Certificate.
"Minimum Seller Interest" shall mean, as of any date of
determination, the product of 5% and the Investor Interest
on such date of determination; provided, however, that the
Seller may reduce the percentage used to calculate the
Minimum Seller Interest upon (i) ten Business Days' prior
notice to the Trustee and the Class A Certificateholders,
(ii) satisfaction of the Rating Agency Condition,
(iii) delivery to the Trustee, each Purchaser Representative
and the Class A Certificateholder of an Officer's
Certificate to the effect that such reduction will not then
or thereafter cause an Early Amortization Event to occur
with respect to any Series, (iv) receipt by the Seller of
the consent of the Class A Certificateholders to such
reduction, and (v) delivery of a Tax Opinion to the Trustee
with respect to such reduction.
"Monthly Interest" shall mean, with respect to any
Distribution Date, the sum of (a) the Class A Monthly
Interest and (b) the Class B Monthly Interest, each with
respect to such Distribution Date.
"Non-Use Fee" is defined in Section 4.6(b).
"Optional Amortization" shall mean a Class A Optional
Amortization or Class B Optional Amortization.
"Optional Amortization Date" is defined in Section 4(b)
of this Supplement.
"Optional Amortization Notice" is defined in Section
4(b) of this Supplement.
"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
(without duplication) of (a) the Floating Allocation
Percentage of Collections of Finance Charge Receivables
allocated to the Series 1999-2 Certificates for such Due
Period (including certain other amounts that are to be
treated as Collections of Finance Charge Receivables in
accordance with the Agreement), and the amount of any
interest and earnings on the Series Cash Collateral Account
deposited in the Collection Account pursuant to Section 14.6
on 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
Weighted Average Investor Interest for such Due Period.
"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 Fixed Allocation
Percentage for such Due Period.
"Principal Shortfall" shall mean, as the context
requires, any of the following: (a) on any Distribution
Date with respect to the Amortization Period, the amount by
which the Controlled Payment Amount for the prior Due Period
exceeds the amount of Available Principal Collections for
such Distribution Date (excluding any portion thereof
attributable to Shared Principal Collections); and (b) on
any Distribution Date with respect to the Early Amortization
Period, the amount by which the sum of the Investor Interest
exceeds the Available Principal Collections for such
Distribution Date (excluding any portion thereof
attributable to Shared Principal Collections).
"Purchase Expiration Date" is defined in the
Certificate Purchase Agreement.
"Reallocated Class B Principal Collections" shall mean,
with respect to any Distribution Date, Collections of
Principal Receivables allocated to the Class B Investor
Interest applied in accordance with subsection 4.12 in an
amount not to exceed the amount described in subsection
4.5(a)(ii) during the Revolving Period and subsection
4.5(b)(ii) during the Accumulation Period; provided,
however, that such amount shall not exceed the Class B
Investor Interest after giving effect to any Class B
Investor Charge-Offs for such Distribution Date.
"Record Date" shall mean, for purposes of Series 1999-2
with respect to any Distribution Date or Optional
Amortization Date, the date falling five Business Days prior
to such date.
"Refinancing Date" is defined in Section 4(c).
"Required Class B Amount" shall mean, as of any date of
determination, the result of the following calculation:
(a) divide the Available Series Cash Collateral
Amount by 0.115;
(b) subtract the amount determined pursuant to
clause (a) from the Class A Investor Interest;
(c) multiply the amount determined pursuant to
clause (b) by 0.1299, the product of which
multiplication shall be the Required Class B Amount.
"Required Draw Amount" is defined in Section 4.16 of
this Supplement.
"Required Enhancement Amount" shall mean, with respect
to any date of determination, the sum of (x) the Available
Series Cash Collateral Amount, plus (y) the Required Class B
Amount.
"Reset Date" shall mean the occurrence of (a) any
Addition Date, (b) any Removal Date, (c) a date on which an
Incremental Funding occurs and (d) any date on which a new
Series is issued.
"Revolving Period" shall mean the period from and
including the Closing Date to, but not including, the
earlier of (a) the day the Amortization Period commences or
(b) the day the Early Amortization Period commences.
"Series Account" means the Series Cash Collateral
Account.
"Series Cash Collateral Account" is defined in Section
4.16(a).
"Series Investor Interest" shall mean, on any date of
determination, an amount equal to the sum of (i) the Class A
Investor Interest and (ii) the Class B Investor Interest.
"Series 1999-2" shall mean the Series of the Charming
Shoppes Master Trust represented by the Series 1999-2
Certificates.
"Series 1999-2 Certificateholder" shall mean the Holder
of record of any Series 1999-2 Certificates.
"Series 1999-2 Certificates" shall mean the Class A
Certificates and the Class B Certificates.
"Series 1999-2 Early Amortization Event" is defined in
Section 9 of this Supplement.
"Series 1999-2 Termination Date" shall mean the
earliest to occur of (a) the Distribution Date on which the
Series 1999-2 Certificates are paid in full, (b) the forty-
second Distribution Date following the Class A Scheduled
Payment Date, or (c) the date of termination of the Trust
pursuant to Section 12.1.
"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 (a) the aggregate amount of Collections of
Finance Charge Receivables allocated to the Series 1999-2
Certificates but available to cover Finance Charge
Shortfalls for other Series in Group One, if any, or (b) the
aggregate amount of Collections of Finance Charge
Receivables 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 1999-2 Certificates as described in Section
4.14.
"Shared Principal Collections" shall mean, as the
context requires, either (a) the amount allocated to the
Series 1999-2 Certificates which may be applied to cover
Principal Shortfalls with respect to other outstanding
Series in Group One, or (b) 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 1999-2 Certificates pursuant to Section 4.15.
"Specified Enhancement Amount" shall mean, at any time,
the sum of the Available Series Cash Collateral Amount plus
the Class B Investor Interest.
"Spread Account Agreement" shall mean the Spread
Account Agreement dated as of the date hereof, among the
Seller, the Servicer and the Administrator, as amended or
otherwise modified from time to time.
"State Street Bank" means State Street Bank & Trust
Company.
"State Street Capital" means State Street Capital
Corporation in its individual capacity.
"Weighted Average Class A Floating Allocation
Percentage" shall mean, for any Due Period, the quotient of
(a) the sum of the Class A Floating Allocation Percentage
determined as of each day in that Due Period, divided by (b)
the number of days in that Due Period.
"Weighted Average Class A Investor Interest" shall
mean, for any Due Period, the quotient of (a) the sum of the
Class A Investor Interest determined as of each day in that
Due Period, divided by (b) the number of days in that Due
Period.
"Weighted Average Class B Floating Allocation
Percentage" shall mean, for any Due Period, the quotient of
(a) the sum of the Class B Floating Allocation Percentage
determined as of each day in that Due Period, divided by (b)
the number of days in that Due Period.
"Weighted Average Class B Investor Interest" shall
mean, for any Due Period or Interest Period, as applicable,
the quotient of (a) the sum of the Class B Investor Interest
determined as of each day in that Due Period or Interest
Period, as applicable, divided by (b) the number of days in
that Due Period, or Interest Period, as applicable.
"Weighted Average Investor Interest" shall mean, for
any Due Period, the quotient of (a) the sum of the Investor
Interest determined as of each day in that Due Period,
divided by (b) the number of days in that Due Period.
1. SECTION Servicing Compensation. The share
of the Monthly Servicing Fee allocable to Series 1999-2 with
respect to any Due Period (the "Investor Monthly Servicing
Fee") shall be equal to one-twelfth of the product of
(i) the Series Servicing Fee Percentage and (ii) the
Weighted Average Investor Interest for such Due Period. The
share of the Investor Monthly Servicing Fee allocable to the
Class A Investor Interest with respect to any Due Period
(the "Class A Servicing Fee") shall be equal to the product
of (i) the Investor Monthly Servicing Fee and (ii) the
Weighted Average Class A Floating Allocation Percentage for
such Due Period. The share of the Investor Monthly
Servicing Fee allocable to the Class B Investor Interest
with respect to any Due Period (the "Class B Servicing Fee")
shall be equal to the product of (i) the Investor Monthly
Servicing Fee and (ii) the Weighted Average Class B Floating
Allocation Percentage for such Due Period. The share of the
Monthly Servicing Fee allocable to the Seller or the
Certificateholders of other Series shall be paid from the
cash flows of the Trust allocated to the Seller or
Certificateholder of other Series (as provided in the
related Supplements or Receivables Purchase Agreements) and
in no other event shall the Trust, the Trustee or the
Investor Certificateholders be liable therefor. The Class A
Servicing Fee shall be payable to the Servicer solely to the
extent amounts are available for distribution in respect
thereof pursuant to subsections 4.9(a)(iv) and 4.11(a). The
Class B Servicing Fee shall be payable solely to the extent
amounts are available for distribution in respect thereof
pursuant to subsections 4.9(b)(i) and 4.11(d).
a) SECTION Variable Funding Mechanics. Class
A Incremental Fundings. From time to time during the
Revolving Period, the Seller and the Servicer may notify a
Class A Certificateholder that a Class A Incremental Funding
will occur, subject to the conditions of the Certificate
Purchase Agreement, on the next or any subsequent Business
Day by delivering a Notice of Incremental Funding (as
defined in the Certificate Purchase Agreement) executed by
the Seller and the Servicer to the Administrator, specifying
the amount of such Class A Incremental Funding (which shall
be a minimum of $100,000 or a higher integral multiple
thereof, except that a Class A Incremental Funding may be
requested in the entire remaining Maximum Class A Funded
Amount) and the Business Day upon which such Class A
Incremental Funding is to occur. Upon the occurrence of any
Class A Incremental Funding, the Class A Floating Allocation
Percentage, the Class A Investor Interest, the Floating
Allocation Percentage, the Investor Interest and the Class A
Funded Amount shall increase as provided herein.
a) Class A Optional Amortization. On any
Business Day in the Revolving Period or the Amortization
Period, the Seller may cause the Servicer to provide notice
to the Trustee and the affected Holders (an "Optional
Amortization Notice") at least three Business Days prior to
any Business Day (the "Optional Amortization Date") stating
its intention to cause a full or partial amortization of the
Class A Certificates (a "Class A Optional Amortization")
with Available Principal Collections and/or Available Shared
Principal Collections on the Optional Amortization Date, in
an amount (the "Class A Optional Amortization Amount") of
not less than $100,000 or a higher integral multiple
thereof, except that the Class A Optional Amortization
Amount may equal the entire Class A Funded Amount. The
Optional Amortization Notice shall state the Optional
Amortization Date, the Class A Optional Amortization Amount
and the allocation of such Class A Optional Amortization
Amount among the various outstanding Funding Tranches. The
Class A Optional Amortization Amount shall be paid from
Available Principal Collections and/or Available Shared
Principal Collections. Allocation of the Class A Optional
Amortization Amount among the various outstanding Funding
Tranches shall be at the discretion of the Seller, and
accrued interest and any Class A Additional Amounts on the
affected Funding Tranches shall be payable on the first
Distribution Date on or after the related Optional
Amortization Date. On the Business Day prior to each
Optional Amortization Date, the Servicer shall instruct the
Trustee in writing (which writing shall be substantially in
the form of Exhibit B) to withdraw Available Principal
Collections and/or Available Shared Principal Collections
from the Collection Account in an aggregate amount
sufficient to pay the Class A Optional Amortization Amount
on that Optional Amortization Date and the Trustee, acting
in accordance with such instructions, shall on such Optional
Amortization Date distribute such Class A Optional
Amortization Amount to the Class A Certificateholders
pursuant to Section 5.1. Notwithstanding the foregoing, no
Class A Optional Amortization shall be made during any Due
Period if the effect of such Class A Optional Amortization
would be to cause any portion of the Class A Required Amount
to remain unfunded on the related Distribution Date after
giving effect to all applications of funds on such
Distribution Date.
a) Refinanced Optional Amortization. On any
Business Day in the Revolving Period or the Amortization
Period, the Seller may, with the consent of each affected
Series 1999-2 Certificateholder, cause the Servicer to
provide notice to the Trustee and all Series 1999-2
Certificateholders at least three Business Days prior to any
Business Day (the "Refinancing Date") stating its intention
to cause the Class A Investor Interest and/or the Class B
Investor Interest to be prepaid in full or in part on the
Refinancing Date by causing the Investor Interest, as
applicable, to be conveyed to one or more Persons (who may
be the Holders of a new Series issued substantially
contemporaneously with such prepayment) for a cash purchase
price in an amount equal to the sum of (i) the Investor
Interest (or the portion thereof that is being conveyed),
plus (ii) accrued and unpaid interest on the Investor
Interest (or the portion thereof that is being conveyed)
through the Refinancing Date, plus (iii) any accrued and
unpaid Non-Use Fees and Class A Additional Amounts in
respect of the Class A Investor Interest (or portion thereof
that is being conveyed) through the Refinancing Date, plus
(iv) if any part of the Investor Interest attributable to
the Class B Investor Interest is being conveyed, any accrued
and unpaid Non-Use Fees and Class B Additional Amounts in
respect of the Class B Investor Interest (or portion thereof
that is being conveyed) through the Refinancing Date. In the
case of any such conveyance, the purchase price shall be
deposited in the Collection Account and shall be distributed
to the applicable Series 1999-2 Holders on the Refinancing
Date in accordance with the terms of this Supplement and the
Agreement, except that any portion of such purchase price
may be applied to reduce the Class B Investor Interest if
and only to the extent that the Class B Investor Interest,
after giving effect to such conveyance, other applications
of the purchase price, and any concurrent reduction in the
Class A Funded Amount, shall not be less than the Required
Class B Amount).
a) Class B Incremental Fundings. From time
to time during the Revolving Period, the Seller and the
Servicer may notify the Class B Certificateholders that a
Class B Incremental Funding will occur, subject to the
conditions of the Certificate Purchase Agreement, on the
next Distribution Date or on the date of any Class A
Incremental Funding pursuant to paragraph (a) above by
delivering a Notice of Incremental Funding (as defined in
the Certificate Purchase Agreement) executed by the Seller
and the Servicer to the Class B Certificateholders,
specifying the amount of such Class B Incremental Funding
and the Business Date upon which such Class B Incremental
Funding is to occur. Upon the occurrence of any Class B
Incremental Funding, the Class B Floating Allocation
Percentage, the Class B Investor Interest, the Floating
Allocation Percentage, the Class B Funded Amount and the
Investor Interest shall increase as provided herein.
a) Class B Optional Amortization. If on
any Optional Amortization Date, the Class B Investor
Interest (after giving effect to any Class A Optional
Amortization to occur on such date) will be greater than
the Required Class B Amount, if so specified in any Optional
Amortization Notice delivered to the Trustee pursuant to
paragraph (b) above, the Seller may cause a full or partial
amortization of the Class B Certificates (a "Class B
Optional Amortization") up to (but not in excess of) the
amount of such Enhancement Surplus with Available Principal
Collections and/or Available Shared Principal Collections on
the Optional Amortization Date, in an amount (the "Class B
Optional Amortization Amount"), except that the Class B
Optional Amortization Amount may equal the entire Class B
Funded Amount if otherwise permitted pursuant to this
sentence. The Optional Amortization Notice shall state the
Optional Amortization Date and the Class B Optional
Amortization Amount. The Class B Optional Amortization
Amount shall be paid from Available Principal Collections
and/or Available Shared Principal Collections. Accrued
interest and any Class B Additional Amounts shall be payable
on the first Distribution Date on or after the related
Optional Amortization Date. On the Business Day prior to
each Optional Amortization Date, the Servicer shall instruct
the Trustee in writing (which writing shall be substantially
in the form of Exhibit B) to withdraw Available Principal
Collections and/or Available Shared Principal Collections
from the Collection Account in an aggregate amount
sufficient to pay the Class B Optional Amortization Amount
on that Optional Amortization Date and the Trustee, acting
in accordance with such instructions, shall on such Optional
Amortization Date distribute such Class B Optional
Amortization Amount to the applicable Investor
Certificateholders pursuant to Section 5.1. Notwithstanding
the foregoing, no Class B Optional Amortization shall be
made during any Due Period if the effect of such Class B
Optional Amortization would be to cause any portion of the
Class A Required Amount to remain unfunded on the related
Distribution Date after giving effect to all applications of
funds on such Distribution Date.
a) Enhancement Election. Upon execution of
this Agreement, credit enhancement for the Class A Investor
Interest shall be provided through the Series Cash
Collateral Account. From time to time by written agreement
of the Administrator and the Seller, such credit enhancement
may be provided through the maintenance of the Class B
Investor Interest in lieu of the Series Cash Collateral
Account.
1. SECTION Optional Repurchase; Reassignment
and Termination Provisions. The Series 1999-2 Certificates
shall be subject to retransfer to the Seller at its option
on any Distribution Date, on or after the Distribution Date
on which the Investor Interest is permanently reduced to an
amount less than or equal to 10% of the sum of the Maximum
Class A Funded Amount plus the Maximum Class B Funded Amount
by deposit into the Collection Account of a final
distribution for application in accordance with Section 12.3
in an amount which shall be equal to the sum of (i) the
Investor Interest, plus (ii) accrued and unpaid interest on
the Series 1999-2 Certificates through the day preceding the
Distribution Date on which the repurchase occurs, plus (iii)
any accrued and unpaid Non-Use Fees and Class A Additional
Amounts in respect of the Class A Certificates through the
day preceding the Distribution Date on which the repurchase
occurs plus (iv) any accrued and unpaid Non-Use Fees and
Class B Additional Amounts in respect of the Class B
Certificates through the day preceding the Distribution Date
on which the repurchase occurs. Upon the tender of the
outstanding Series 1999-2 Certificates by the Holders, the
Trustee shall distribute the amounts, to the Series 1999-2
Holders on the next Distribution Date in repayment of the
principal amount and accrued and unpaid interest and other
amounts owing to the Series 1999-2 Holders. Following
payment of the aggregate purchase price as provided above,
the Series 1999-2 Holders shall have no further rights with
respect to the Receivables. In the event that the Seller
fails for any reason to deposit in the Collection Account
the aggregate purchase price for the Investor Certificates,
payments shall continue to be made to the Series 1999-2
Holders in accordance with the terms of the Agreement and
this Supplement.
1. SECTION Maximum Funded Amounts. The initial
Maximum Class A Funded Amount of each Class A Certificate is
as set forth on the related Class A Certificate. The Maximum
Class A Funded Amount of each Class A Certificate may be
reduced or increased from time to time as provided in the
Certificate Purchase Agreement. Increases and decreases in
the overall Maximum Class A Funded Amount shall be made
ratably among the various Class A Certificates. The Maximum
Class B Funded Amount may be reduced or increased from time
to time (with notice to the Administrator) as provided in
the Certificate Purchase Agreement.
1. SECTION Delivery and Payment for the Series
1999-2 Certificates. The Seller shall execute and deliver
the Series 1999-2 Certificates (in definitive, fully
registered form) to the Trustee for authentication in
accordance with Section 6.1 of the Agreement. The Trustee
shall deliver the Series 1999-2 Certificates when
authenticated in accordance with Section 6.2 of the
Agreement. The Certificates shall be delivered as
Definitive Certificates as provided in Sections 6.2 and
6.12.
1. SECTION 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 1999-2 Certificates.
I. ARTICLE
RIGHTS OF CERTIFICATEHOLDERS AND RECEIVABLES
PURCHASERS AND ALLOCATION AND APPLICATION OF COLLECTIONS
A. SECTION Rights of Series 1999-2
Certificateholders. The Series 1999-2 Certificates shall
represent undivided interests in the Trust, consisting of
the right to receive, to the extent necessary to make the
required payments with respect to such Series 1999-2
Certificates at the times and in the amounts specified in
this Agreement, (a) the Floating Allocation Percentage and
Principal Allocation Percentage (as applicable from time to
time) of Collections received with respect to the
Receivables and (b) funds on deposit in the Collection
Account and the Series Cash Collateral Account. The Class
B Certificates shall be subordinated to the Class A
Certificates to the extent described herein. The
Exchangeable Seller Certificate shall not represent any
interest in the Collection Account or the Series Cash
Collateral Account, except as specifically provided in this
Article IV.
A. SECTION Allocations.
a) Allocations During the Revolving Period.
During the Revolving Period, the Servicer shall, prior to
the close of business on any day on which any Collections
are deposited in the Collection Account, allocate the
following amounts as set forth below:
(1) allocate to the Series 1999-2 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, to be applied in accordance with
Section 4.9(a) or (b);
(1) allocate to the Series 1999-2 Certificateholders
an amount equal to the product of (A) the Class B Investor
Allocation on such date, (B) the Investor/Purchaser
Percentage on such date and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on
such date, to be applied first on the related Distribution
Date (to the extent not previously used to make an Optional
Amortization Payment pursuant to Section 4.3 of the
Supplement) in accordance with Section 4.12 and then in
accordance with Section 4.9(c) or (d); and
(1) allocate to the Series 1999-2 Certificateholders
an amount equal to the product of (A) the Class A Investor
Allocation on such date, (B) the Investor/Purchaser
Percentage on such date and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on
such date, to be applied on the related Distribution Date
(to the extent not previously used to make an Optional
Amortization Payment pursuant to Section 4.3 of the
Supplement) in accordance with Section 4.9(c) or (d).
a) Allocations During the Amortization
Period. During the Amortization Period, the Servicer
shall, prior to the close of business on any day on which
any Collections are deposited in the Collection Account,
allocate the following amounts as set forth below:
(1) allocate to the Series 1999-2 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, to be applied in accordance with
Section 4.9(a) or (b);
(1) allocate to the Series 1999-2 Certificateholders
an amount equal to the product of (A) the Class B Investor
Allocation on such date, (B) the Investor/Purchaser
Percentage on such date and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on
such date, to be applied first on the related Distribution
Date (to the extent not previously used to make an Optional
Amortization Payment pursuant to Section 4.3 of the
Supplement) in accordance with Section 4.12 and then in
accordance with Section 4.9(c) or (d); and
(1) allocate to the Series 1999-2 Certificateholders
an amount equal to the product of (A) the Class A Investor
Allocation on such date, (B) the Investor/Purchaser
Percentage on such date and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on
such date, to be applied on the related Distribution Date
(to the extent not previously used to make an Optional
Amortization Payment pursuant to Section 4.3 of the
Supplement) in accordance with Section 4.9(c) or (d).
a) Allocations During the Early
Amortization Period. During the Early Amortization Period,
Servicer shall, prior to the close of business on any day on
which any Collections are deposited in the Collection
Account, allocate the following amounts as set forth below:
(1) allocate to the Series 1999-2 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, to be applied in accordance with
Section 4.9(a) or (b);
(1) allocate to the Series 1999-2 Certificateholders
an amount equal to the product of (A) the Class B Investor
Allocation on such date, (B) the Investor/Purchaser
Percentage on such date and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on
such date, to be applied first in accordance with Section
4.12 and then in accordance with Section 4.9(c) or (d); and
(1) allocate to the Series 1999-2 Certificateholders
an amount equal to the product of (A) the Class A Investor
Allocation on such date, (B) the Investor/Purchaser
Percentage on such date and (C) the aggregate amount of
Collections processed in respect of Principal Receivables on
such date, to be applied in accordance with Section 4.9(c)
or (d).
a) SECTION Determination of Monthly Interest,
Non-Use Fee and Breakage. Pursuant to the Certificate
Purchase Agreement, the Class A Certificates may from time
to time be divided into one or more subdivisions (each, as
further specified in the Certificate Purchase Agreement, a
"Funding Tranche") which will accrue interest on different
bases. For Funding Tranches that accrue interest by
reference to a commercial paper rate or the London interbank
offered rate, a specified period (each, a "Fixed Period")
will be designated in the Certificate Purchase Agreement
during which that Funding Tranche may accrue interest at a
fixed rate. The "Class A Monthly Interest" for any Interest
Period shall equal the sum of (i) the product of (A) the
Class A Certificate Rate in effect for such Interest Period
times (B) the Class A Investor Interest as of the last day
of such Interest Period times (C) a fraction, the numerator
of which is the actual number of days in such Interest
Period and the denominator of which is 360 plus (ii) the
amount of any accrued and unpaid Class A Monthly Interest
for any prior Interest Period plus additional interest (to
the extent permitted by law) on such unpaid interest amount
at the Class A Certificate for the current Interest Period
plus 1%, as such "Class A Monthly Interest" is adjusted for
such Interest Period in accordance with Section 2.6 of the
Certificate Purchase Agreement, all as determined by
Servicer on the related Determination Date. For purposes of
such determination, Servicer shall rely upon information
provided by the Administrator pursuant to the Certificate
Purchase Agreement including estimates of the interest to
accrue on any Funding Tranche through the related
Distribution Date.
a) In addition to Class A Monthly Interest,
the Class A Certificateholders (i) shall receive a monthly
commitment fee (a "Non-Use Fee") with respect to each
Interest Period (or portion thereof) falling in the
Revolving Period at a rate specified in the Fee Letter
referred to in the Certificate Purchase Agreement based on
its portion of the excess of the Average Maximum Class A
Funded Amount over the Average Class A Funded Amount for
such period and (ii) shall be entitled to receive certain
other amounts identified as Class A Additional Amounts (such
amounts, including Breakage Payments, being "Class A
Additional Amounts") in the Certificate Purchase Agreement.
The Non-Use Fee shall accrue based upon the number of days
in the related Interest Period (or the portion thereof
falling in the Revolving Period) and a year of 365 or 366
days, as applicable.
a) If any distribution of principal is made
with respect to any Funding Tranche with a Fixed Period and
a fixed interest rate other than on a Distribution Date or
on the last day of that Fixed Period, or if the Class A
Funded Amount or Class B Funded Amount is reduced by an
Optional Amortization in an amount greater than the amount
(if any) specified in the Certificate Purchase Agreement
without the applicable number (as specified in the
Certificate Purchase Agreement) of Business Days' prior
notice to a Class A Certificateholder or Class B
Certificateholder, as applicable, and in either case (i)
the interest paid by such Certificateholder to providers of
funds to it to fund that Funding Tranche exceeds (ii)
returns earned by such Certificateholder through the last
day of that Fixed Period by redeployment of such funds in
highly rated short-term money market instruments, then, upon
written notice (which notice shall be signed by an officer
of such Certificateholder with knowledge of and
responsibility for such matters and shall set forth in
reasonable detail the basis for requesting the amounts) from
such Certificateholder to the Servicer, such
Certificateholder shall be entitled to receive additional
amounts in the amount of such excess (each, a "Breakage
Payment") on the Distribution Date on or after the date such
distribution of principal is made with respect to that
Funding Tranche, so long as such written notice is received
not later than noon, New York City time, on the
Determination Date related to such Distribution Date. For
purposes of calculations under this paragraph, any payment
received by a Certificateholder later than noon, New York
City time, on any day shall be deemed to have been received
on the next day.
a) The amount of monthly interest
distributable to the Class B Certificateholders on each
Distribution Date (the "Class B Monthly Interest") shall
equal the sum of (i) product of (A) a fraction, the
numerator of which is the actual number of days in the
related Interest Period and the denominator of which is 360,
times (B) the Class B Certificate Rate in effect with
respect to the related Interest Period, times (C) the
Weighted Average Class B Investor Interest for the related
Interest Period plus (ii) the amount of any accrued and
unpaid Class B Monthly Interest for any prior Interest
Period plus additional interest (to the extent permitted by
law) on such unpaid interest amount at the Class A
Certificate for the current Interest Period plus 1%.
a) In addition to Class B Monthly Interest,
the Class B Certificateholders (i) shall receive a Non-Use
Fee with respect to each Interest Period (or portion
thereof) falling in the Revolving Period at a rate specified
in the Fee Letter referred to in the Certificate Purchase
Agreement based on its portion of the excess of the Average
Maximum Class B Funded Amount over the Average Class B
Funded Amount for such period and (ii) shall be entitled to
receive certain other amounts identified as Class A
Additional Amounts (such amounts, including Breakage
Payments, being "Class B Additional Amounts") in the
Certificate Purchase Agreement. The Non-Use Fee shall accrue
based upon the number of days in the related Interest Period
(or the portion thereof falling in the Revolving Period) and
a year of 365 or 366 days, as applicable.
A. SECTION Determination of Monthly Principal.
a) The amount of monthly principal
distributable from the Collection Account with respect to
the Class A Certificates on each Distribution Date (the
"Class A Monthly Principal"), beginning with the
Distribution Date in the month following the month in which
the Amortization Period or, if earlier, the Early
Amortization Period, begins, shall be equal to the lesser of
(i) the Available Principal Collections with respect to such
Distribution Date and (ii) (a) for each Distribution Date
with respect to the Amortization Period, the Controlled
Payment Amount for such Distribution Date and (b) for each
Distribution Date during the Early Amortization Period, the
Class A Investor Interest on such Distribution Date (after
taking into account any adjustments to be made on such
Distribution Date pursuant to Section 4.10).
a) The amount of monthly principal
distributable with respect to the Class B Certificates on
each Distribution Date (the "Class B Monthly Principal")
shall be (i) during the Revolving Period, an amount equal to
the lesser of (1) the amount of any Enhancement Surplus or
such lesser amount as designated by the Servicer on the
related Determination Date and (2) the Available Principal
Collections not required for any Class A Optional
Amortization on such Distribution Date, (ii) during the
Amortization Period, an amount equal to the lesser of
(1) the amount of any Enhancement Surplus on such
Distribution Date, (2) the Available Principal Collections
not required for Class A Monthly Principal or any Class A
Optional Amortization on such Distribution Date and (iii)
during the Early Amortization Period on and after the date
on which the Class A Investor Interest is paid in full, the
Class B Investor Interest on such Distribution Date (after
taking into account any adjustments to be made on such
Distribution Date pursuant to Section 4.10 and Section
4.12).
A. SECTION Coverage of Class A Required
Amount.
a) On or before each Distribution Date,
Servicer shall determine the amount (the "Class A Required
Amount"), if any, by which the sum of (i) the Class A
Monthly Interest for such Distribution Date, plus (ii) the
Non-Use Fee, if any, for such Distribution Date, plus (iii)
the Class A Additional Amounts, if any, for such
Distribution Date, plus (iv) the Class A Servicing Fee for
the prior Due Period, plus (v) any Class A Monthly Interest,
Non-Use Fee, Class A Additional Amounts and Class A
Servicing Fee included in the Class A Required Amount for
any prior Distribution Date but not yet paid, plus (vi) the
Class A Investor Loss Amount, if any, for the prior Due
Period, exceeds the Class A Available Funds for the related
Due Period.
a) If the Class A Required Amount for any
Distribution Date is greater than zero, (i) the Servicer
shall give written notice to the Trustee of such positive
Class A Required Amount on or before such Distribution Date
and (ii) all or a portion of the Excess Spread, any Shared
Excess Finance Change Collections and any Required Draw
Amount with respect to such Distribution Date in an amount
equal to the Class A Required Amount, to the extent
available, for such Distribution Date shall be distributed
from the Collection Account or the Series Cash Collateral
Account, as applicable, on such Distribution Date pursuant
to Sections 4.11(a) and 4.16. If the Class A Required Amount
for such Distribution Date exceeds the amount so allocated
pursuant to the preceding sentence, the Collections of
Principal Receivables allocable to the Class B Certificates
with respect to the prior Due Period shall be applied as
specified in Section 4.12.
A. SECTION Monthly Payments. On or before
each Distribution Date, the Servicer shall instruct the
Trustee in writing (which writing shall be substantially in
the form of Exhibit C hereto) to withdraw and the Trustee,
acting in accordance with such instructions, shall withdraw
on such Distribution Date, to the extent of available funds,
the amounts required to be withdrawn from the Collection
Account as follows:
a) An amount equal to the Class A Available
Funds for the related Due Period will be distributed on each
Distribution Date, to the extent available, in the following
priority:
(1) an amount equal to the unpaid Class A Monthly
Interest shall be distributed to the Class A
Certificateholders in accordance with Section 5.1;
(1) an amount equal to the unpaid Non-Use Fee, if
any, for the related Interest Period plus any Non-Use Fee
due but not paid to the Class A Certificateholders on any
prior Distribution Date shall be distributed to the Class A
Certificateholders in accordance with Section 5.1;
(1) an amount equal to the Class A Additional
Amounts, if any, for the related Interest Period plus any
Class A Additional Amounts due but not paid to the Class A
Certificateholders on any prior Distribution Date shall be
distributed to the Class A Certificateholders in accordance
with Section 5.1; provided, however, that the total of all
Class A Additional Amounts paid in any fiscal year of the
Seller pursuant to this clause (iii) shall not exceed the
Capped Amount for such fiscal year;
(1) an amount equal to the Class A Servicing Fee for
such Distribution Date plus any Class A Servicing Fee due
but not paid to the Servicer on any prior Distribution Date
shall be distributed to Servicer;
(1) an amount equal to the Class A Investor Loss
Amount, if any, for the related Due Period shall be treated
as a portion of Available Principal Collections on such
Distribution Date;
(1) an amount equal to any remaining unpaid Class A
Additional Amounts shall be distributed to the Class A
Certificateholder in accordance with Section 5.1; and
(1) the balance, if any, shall constitute Excess
Spread and shall be allocated and distributed as set forth
in Section 4.11.
a) An amount equal to the Class B Available
Funds for the related Due Period will be distributed on each
Distribution Date, to the extent available, in the following
priority:
(1) if the Seller or one of its Affiliates is not
the Servicer, an amount equal to the Class B Servicing Fee
for such Distribution Date, plus any Class B Servicing Fee
due but not paid to Servicer on any prior Distribution Date
(if such amounts relate to amounts owing to a Servicer that
is not the Seller or one of its Affiliates) shall be
distributed to the Servicer; and
(1) the balance, if any, shall constitute Excess
Spread and shall be allocated and distributed as set forth
in Section 4.11.
a) During the Revolving Period, an amount
equal to the Available Principal Collections for the related
Due Period will be distributed on each Distribution Date, to
the extent available, in the following priority:
(1) an amount equal to the Class B Monthly Principal
for such Distribution Date shall be distributed to the Class
B Certificateholders;
(1) an amount equal to the lesser of (A) Available
Principal Collections for such Distribution Date after
giving effect to the application specified in subsection
4.9(c)(i) above, and (B) the product of (1) a fraction, the
numerator of which is equal to such Available Principal
Collections and the denominator of which is equal to the sum
of the Available Principal Collections available for sharing
as specified in the related Supplement or Receivables
Purchase Agreement for each Series (including this Series
1999-2) in Group One that are Principal Sharing Series and
(2) the Cumulative Principal Shortfall, shall be treated as
Shared Principal Collections and applied to Series in Group
One that are Principal Sharing Series other than this Series
1999-2; and
(1) an amount equal to the excess, if any, of
(A) the Available Principal Collections for such
Distribution Date over (B) the applications specified in
subsections 4.9(c)(i) and (ii) above shall be paid to the
Holder of the Exchangeable Seller Certificate; provided,
however, that in no event shall the amount payable to the
Holder of the Exchangeable Seller Certificate pursuant to
this subsection 4.9(c)(iii) be greater than the Seller
Interest on such Distribution Date.
a) During a Fixed Allocation Period, an
amount equal to the Available Principal Collections for the
related Due Period plus any amounts in the Excess Funding
Account allocable to Series 1999-2 in accordance with
Section 4.3(e) will be distributed on each Distribution
Date, to the extent available, in the following priority:
(1) an amount equal to the Class A Monthly Principal
for such Distribution Date shall be distributed to the
Class A Certificateholders in accordance with Section
5.1(a);
(1) an amount equal to Class B Monthly Principal
shall be distributed to the Class B Certificateholders in
accordance with Section 5.1(b);
(1) an amount equal to the lesser of (A) Available
Principal Collections for such Distribution Date after
giving effect to the application specified in clauses (i)
and (ii) above and (B) the product of (1) a fraction, the
numerator of which is equal to such Available Principal
Collections and the denominator of which is equal to the sum
of the Available Principal Collections available for sharing
as specified in the related Supplement or Receivables
Purchase Agreement for each Series (including this Series
1999-2) in Group One which is a Principal Sharing Series and
(2) the Cumulative Principal Shortfall, shall be treated as
Shared Principal Collections and applied to Series in Group
One which are Principal Sharing Series other than this
Series 1999-2; and
(1) an amount equal to the excess, if any, of (A)
the Available Principal Collections over (B) the
applications specified in clauses (i) through (iii) above
shall be paid to the Holder of the Exchangeable Seller
Certificate; provided, however, that in no event shall the
amount payable to the Holder of the Exchangeable Seller
Certificate pursuant to this subsection 4.9(d)(iv) be
greater than the Seller Interest on such Distribution Date.
A. SECTION Investor Charge-Offs.
a) On or before each Distribution Date, the
Servicer shall calculate the Class A Investor Loss Amount.
If on any Distribution Date, the Class A Investor Loss
Amount for the prior Due Period exceeds the sum of the
amounts allocated with respect thereto pursuant to
subsection 4.9(a)(v), subsection 4.11(a) and Section 4.12
with respect to such Due Period, the Class B Investor
Interest (after giving effect to reductions for any Class B
Investor Charge-Offs and any Reallocated Class B Principal
Collections on such Distribution Date) will be reduced by
the amount of such excess. In the event that such reduction
would cause the Class B Investor Interest to be a negative
number, the Class B Investor Interest will be reduced to
zero, and the Class A Investor Interest (after giving effect
to reductions for any Class A Investor Charge-Offs on such
Distribution Date) will be reduced by the amount by which
the Class B Investor Interest would have been reduced below
zero, but not by more than the Class A Investor Loss Amount
for such Distribution Date (a "Class A Investor Charge-
Off"). If the Class A Investor Interest has been reduced by
the amount of any Class A Investor Charge-Offs, it will be
reimbursed on any Distribution Date (but not by an amount in
excess of the aggregate Class A Investor Charge-Offs) by the
amount of Excess Spread allocated and available for such
purpose pursuant to subsection 4.11(b).
a) On or before each Distribution Date, the
Servicer shall calculate the Class B Investor Loss Amount.
If on any Distribution Date, the Class B Investor Loss
Amount for the prior Due Period exceeds the amounts
allocated with respect thereto pursuant to
subsection 4.11(e) with respect to such Due Period, the
Class B Investor Interest (after giving effect to any
Reallocated Class B Principal Collections on such
Distribution Date) will be reduced by the amount of such
excess (a "Class B Investor Charge-Off"). The Class B
Investor Interest will also be reduced by the amount of
Reallocated Class B Principal Collections pursuant to
Section 4.12 and the amount of any portion of the Class B
Investor Interest allocated to the Class A Certificates to
avoid a reduction in the Class A Investor Interest pursuant
to subsection 4.10(a) above. The Class B Investor Interest
will thereafter be reimbursed (but not in excess of the
aggregate amount of such reductions which have not been
previously reimbursed) on any Distribution Date by the
amount of Excess Spread allocated and available for that
purpose as described under subsection 4.11(f).
A. SECTION Excess Spread; Shared Excess
Finance Charge Collections. On or before each Distribution
Date, the Servicer shall instruct the Trustee in writing
(which writing shall be substantially in the form of Exhibit
B hereto) to apply Excess Spread and Shared Excess Finance
Charge Collections allocated to Series 1999-2 with respect
to the related Due Period to make the following
distributions on each Distribution Date in the following
priority:
a) an amount equal to the Class A Required
Amount, if any, with respect to such Distribution Date will
be used to fund the Class A Required Amount and be applied
in accordance with, and in the priority set forth in,
Section 4.9(a);
a) an amount equal to the aggregate amount
of Class A Investor Charge-Offs which have not been
previously reimbursed will be treated as a portion of
Available Principal Collections on such Distribution Date;
a) an amount equal to (i) the Class B
Monthly Interest plus (ii) any Non-Use Fee payable to the
Class B Certificateholders under the Certificate Purchase
Agreement for such Distribution Date, plus (iii) any Class B
Additional Amounts payable to the Class B Certificateholders
under the Certificate Purchase Agreement for such
Distribution Date, plus (iv) the amount of any past due Non-
Use Fee and Class B Additional Amounts payable will be paid
to the Class B Certificateholders in accordance with the
Certificate Purchase Agreement;
b) an amount equal to the aggregate amount
of accrued but unpaid Class B Servicing Fee will be paid to
Servicer;
a) an amount equal to the Class B Loss
Amount, if any, for the prior Due Period will be treated as
a portion of Class B Principal Collections on such
Distribution Date;
a) an amount equal to the aggregate amount
by which the Class B Investor Interest has been reduced for
reasons other than the payment of principal to the Class B
Certificateholders (but not in excess of the aggregate
amount of such reductions which have not been previously
reimbursed) will be treated as a portion of Available
Principal Collections on such Distribution Date;
a) an amount up to the excess, if any, of
the Required Enhancement Amount (determined after all
deposits, withdrawals, reductions, payments and adjustments
to be made with respect to such Distribution Date) over the
Specified Enhancement Amount (determined after all deposits,
withdrawals, reductions, payments and adjustments to be made
with respect to such Distribution Date) shall be deposited
in the Series Cash Collateral Account;
a) an amount equal to the aggregate amount
required to be applied under the Spread Account Agreement
shall be distributed for application in accordance with the
Spread Account Agreement; and
a) the balance, if any, after giving effect
to the payments made pursuant to clauses (a) through (h)
shall constitute "Excess Finance Charge Collections" to be
applied with respect to other Series in accordance with
Section 4.3 of the Agreement.
A. SECTION Reallocated Class B Principal
Collections. On or before each Distribution Date, the
Servicer shall instruct the Trustee in writing (which
writing shall be substantially in the form of Exhibit B
hereto) to apply Reallocated Class B Principal Collections
in an amount equal to the excess, if any, of (i) the Class A
Required Amount, if any, with respect to such Distribution
Date over (ii) the sum of (A) the amount of Excess Spread
and Shared Excess Finance Charge Collections allocated to
Series 1999-2 with respect to the related Due Period plus
(B) the Available Series Cash Collateral Amount for such
Distribution Date, plus (C) amounts deposited in the
Collection Account pursuant to the Spread Account Agreement
for application in accordance with Section 4.17 on such
Distribution Date, in accordance with, and in the priority
set forth in, subsections 4.9(a)(i), (ii), (iii), (iv) and
(v).
On each Distribution Date, the Class B Investor
Interest shall be reduced by the amount of Reallocated Class
B Principal Collections for such Distribution Date.
A. SECTION Seller's or Servicer's Failure to
Make a Deposit or Payment. 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. 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.
The Trustee shall be required to make any such payment,
deposit or withdrawal hereunder only to the extent that the
Trustee has sufficient information to allow it to determine
the amount thereof and only to the extent amounts on deposit
in any applicable account are sufficient to make such
payment, deposit or withdrawal. 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.
A. SECTION Shared Excess Finance Charge
Collections.
a) The balance of any Available Funds on
deposit in the Collection Account after giving effect to
subsections 4.11(a) through (h) 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).
a) Series 1999-2 shall be included in Group
One. Subject to subsection 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 1999-2 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 1999-2 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 1999-2 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
subsections 4.11(a) through (h) on such Distribution Date
over (b) the Available Funds for such Distribution Date.
A. SECTION Shared Principal Collections.
Subject to subsection 4.3(f) of the Agreement, Shared
Principal Collections for any Distribution Date will be
allocated to Series 1999-2 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 1999-2 for such Distribution Date and the
denominator of which is the Cumulative Principal Shortfall
for such Distribution Date.
A. SECTION Series Cash Collateral Account.
a) The Servicer, for the benefit of the
Class A Certificateholders, shall establish and maintain in
the name of the Trustee, on behalf of the Trust, a
segregated trust account with a Qualified Depository
Institution bearing a designation clearly indicating that
the funds deposited therein are held in the name of the
Trustee for the benefit of the Class A Certificateholders
(the "Series Cash Collateral Account"). The Trustee shall
possess all right, title and interest in all funds on
deposit from time to time in the Series Cash Collateral
Account and in all proceeds thereof. The Series Cash
Collateral Account shall be under the sole dominion and
control of the Trustee for the benefit of the Class A
Certificateholders. Except as expressly provided in this
Agreement, the Servicer agrees that it shall have no right
of setoff or banker's lien against, and no right to
otherwise deduct from, any funds held in the Series Cash
Collateral Account for any amount owed to it by the Trustee,
the Trust, or any Class A Certificateholder. If, at any
time, the Trustee is advised in writing by the Servicer that
the institution holding the Series Cash Collateral Account
ceases to be a Qualified Depository Institution, the Trustee
upon receiving such notice by the Servicer (or the Servicer
on its behalf) shall promptly (but in any event within 20
Business Days) establish a new Series Cash Collateral
Account with a Qualified Depository Institution meeting the
conditions specified above, transfer any cash or any
investments to such new Series Cash Collateral Account and
from the date such new Series Cash Collateral Account is
established, it shall be the "Series Cash Collateral
Account."
a) On the Closing Date, the Servicer shall
deposit into the Series Cash Collateral Account an amount
equal to the Required Enhancement Amount. Funds on deposit
in the Series Cash Collateral Account shall at the direction
of the Servicer be invested by the Trustee in Permitted
Investments selected by the Servicer. All such Permitted
Investments shall be held by the Trustee for the benefit of
the Class A Certificateholders. The Trustee shall maintain
for the benefit of the Class A Certificateholders possession
of the negotiable instruments or securities, if any,
evidencing such Permitted Investments. Funds on deposit in
the Series Cash Collateral Account on any date (after giving
effect to any withdrawals from the Series Cash Collateral
Account on such date) will be invested in Permitted
Investments that will mature so that funds will be available
for withdrawal on the Distribution Date following such date.
On each Determination Date, the Servicer shall instruct the
Trustee to withdraw on the related Distribution Date from
the Series Cash Collateral Account and deposit in the
Collection Account all interest and earnings on funds on
deposit in the Series Cash Collateral Account, for
application as Class A Available Funds on such Distribution
Date.
a) On each Determination Date, the Servicer
shall calculate the amount (the "Required Draw Amount") by
which the sum of the amounts specified in clauses (a) and
(b) of Section 4.11 with respect to the Distribution Date
exceeds the amount of Excess Spread and Shared Excess
Finance Charge Collections allocated with respect to the
related Distribution Date. In the event that any
Distribution Date the Required Draw Amount is greater than
zero, the Servicer shall give written notice to the Trustee
of such positive Required Draw Amount on the related
Determination Date. On the related Distribution Date, the
Required Draw Amount, if any, up to the Available Series
Cash Collateral Amount, shall be withdrawn from the Series
Cash Collateral Account and distributed to fund any
deficiency pursuant to subsections 4.11(a) and (b) (in the
order or priority set forth in Section 4.11).
a) If, after giving effect to all deposits
to and withdrawals from the Series Cash Collateral Account
with respect to any Distribution Date, the Specified
Enhancement Amount shall exceed the Required Enhancement
Amount, the Trustee, acting in accordance with the
instructions of the Servicer, shall withdraw an amount equal
to such excess from the Series Cash Collateral Account, and
apply it in accordance with the Spread Account Agreement.
(e) The Trustee, acting in accordance with the
instructions of the Servicer, shall from time to time
deposit in the Series Cash Collateral Account (i) a portion
of the proceeds of any Incremental Funding under this
Supplement, if necessary to cause the Specified Enhancement
Amount to at least equal the Required Enhancement Amount on
such date and (ii) funds otherwise required to be deposited
in the Series Cash Collateral Account pursuant to Section
4.11(g).
SECTION 4.17. Spread Account Agreement. If on any
Distribution Date, any Class A Required Amount remains
unfunded after all amounts distributed with respect thereto
pursuant to Sections 4.11(a) and 4.16, the Servicer shall
instruct the Trustee in writing to withdraw and the Trustee,
acting in accordance with such instructions, shall withdraw,
amounts deposited in the Spread Account on such date
pursuant to the Spread Account Agreement to fund any such
deficiency in accordance with and in the order of priority
set forth in subsections 4.9(a)(i), (ii), (iii), (iv) and
(v).
1. SECTION 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 1999-2
Certificates:
I. ARTICLE
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
A. SECTION Distributions.
a) On each Distribution Date, the Trustee
shall distribute (in accordance with the certificate
delivered by the Servicer to the Trustee pursuant to
subsection 3.4(b)) to each Class A Certificateholder of
record on the immediately preceding Record Date (other than
as provided in Section 12.3 respecting a final distribution)
such Certificateholder's pro rata share (based on the
aggregate Undivided Trust Interests represented by Class A
Certificates held by such Certificateholder) of amounts on
deposit in the Collection Account as are payable to the
Class A Certificateholders pursuant to Section 4.9 in
immediately available funds to each Class A
Certificateholder (at such Certificateholder's address as it
appears in the Certificate Register).
a) On each Distribution Date, the Trustee
shall distribute (in accordance with the certificate
delivered by the Servicer to the Trustee pursuant to
subsection 3.4(b)) to each Class B Certificateholder of
record on the immediately preceding Record Date (other than
as provided in Section 12.3 respecting a final distribution)
such Certificateholder's pro rata share (based on the
aggregate Undivided Trust Interests represented by Class B
Certificates held by such Certificateholder) of amounts on
deposit in the Collection Account as are payable to the
Class B Certificateholders pursuant to Section 4.9 in
immediately available funds to each Class B
Certificateholder (at such Certificateholder's address as it
appears in the Certificate Register).
A. SECTION Monthly Certificateholders'
Statement.
a) On or before each Distribution Date, the
Paying Agent shall forward to each Series 1999-2
Certificateholder a statement substantially in the form of
Exhibit D to this Supplement prepared by the Servicer
setting forth, among other things, the following information
(which, in the case of subclauses (i) and (ii) below, shall
be stated on the basis of an original principal amount of
$1,000 per Series 1999-2 Certificate and, in the case of
subclauses (viii) and (ix) shall be stated on an aggregate
basis and on the basis of an original principal amount of
$1,000 per Series 1999-2 Certificate):
(1) the amount of the current distribution
allocable to Class A Monthly Principal and Class B Monthly
Principal, respectively;
(1) the amount of the current distribution
allocable to Class A Monthly Interest, the Non-Use Fee,
Class A Additional Amounts, Class B Monthly Interest, and
other amounts then owing to the Class B Certificateholders
under the Certificate Purchase Agreement, respectively;
(1) the amount of Collections of Principal
Receivables processed during the related Due Period and
allocated in respect of the Class A Certificates and the
Class B Certificates, respectively;
(1) the amount of Collections of Finance Charge
Receivables processed during the related Due Period and
allocated in respect of the Class A Certificates and the
Class B Certificates, respectively;
(1) the aggregate amount of Principal
Receivables, the Series Investor Interest, the Class A
Investor Interest, the Weighted Average Class A Investor
Interest, the Class B Investor Interest, the Weighted
Average Class B Investor Interest, the Floating Allocation
Percentage, the Class A Floating Allocation Percentage, the
Class B Floating Allocation Percentage, and the Principal
Allocation Percentage, the Class A Fixed Allocation
Percentage and the Class B Fixed Allocation Percentage, with
respect to the Principal Receivables in the Trust as of the
end of the day on the Record Date;
(1) 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 Record Date;
(1) the Investor Loss Amount, the Class A
Investor Loss Amount and the Class B Investor Loss Amount
for the related Due Period;
(1) the aggregate amount of Class A Investor
Charge-Offs and Class B Investor Charge-Offs for the related
Due Period;
(1) the amount of the Class A Servicing Fee and
the Class B Servicing Fee for the related Due Period;
(1) the Portfolio Yield for the preceding Due
Period;
(1) the amount of Reallocated Class B Principal
Collections with respect to such Distribution Date;
(1) the Class A Investor Interest and the Class B
Investor Interest as of the close of business on such
Distribution Date;
(1) the Class A Certificate Rate (and information
with respect to each Fundings Tranche on which such rate is
based) and Class B Certificate Rate, each with respect to
the preceding Due Period;
(1) the amount of Class A Available Funds and
Class B Available Funds on deposit in the Collection Account
on the related Distribution Date;
(1) the Series Cash Collateral Account Amount on
the related Distribution Date;
(1) the Series Cash Collateral Account Investment
Proceeds transferred to the Collection Account on the
related Distribution Date;
(1) such other items as are set forth in Exhibit
D to this Supplement.
a) Annual Certificateholders' Tax
Statement. On or before January 31 of each calendar year,
beginning with calendar year 2000, the Trustee shall
distribute to each Person who at any time during the
preceding calendar year was a Series 1999-2
Certificateholder, a statement prepared by the Servicer
containing the information required to be contained in the
regular monthly report to Series 1999-2 Certificateholders,
as set forth in subclauses (i) and (ii) above, aggregated
for such calendar year or the applicable portion thereof
during which such Person was a Series 1999-2
Certificateholder, together with such other customary
information (consistent with the treatment of the Class A
Certificates and the Class B Certificates as debt) as the
Servicer deems necessary or desirable to enable the Series
1999-2 Certificateholders to prepare their tax returns. The
Servicer will provide such information to the Trustee as
soon as possible after January 1 of each calendar year.
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.
1. SECTION Series 1999-2 Early Amortization
Events. If any one of the following events shall occur with
respect to the Investor Certificates:
a) failure on the part of the Seller or the
Originator (i) to make any payment or deposit required by
the terms of (A) the Agreement, (B) this Supplement or the
Certificate Purchase Agreement or (C) the Purchase
Agreement, 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 or
Originator, as applicable, set forth in the Agreement, this
Supplement (including, without limitation, the covenant of
the Seller contained in Section 11 of this Supplement), the
Certificate Purchase Agreement or the Purchase Agreement,
which failure has a material adverse effect on the Series
1999-2 Certificateholders (which determination shall be made
without reference to the amount of the Class B Investor
Interest for such period) and which continues unremedied for
a period of 35 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 Controlling
Certificateholders, and continues to affect materially and
adversely the interests of the Series 1999-2
Certificateholders for such period (which determination
shall be made without reference to the amount of the Class B
Investor Interest for such period);
a) any representation or warranty made by
the Seller or the Originator in the Agreement, this
Supplement, the Certificate Purchase Agreement or the
Purchase Agreement, 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 or by
the Originator pursuant to Section 1.1 or 2.4(e) of the
Purchase 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 35 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 Controlling Certificateholders, and
(ii) as a result of which the interests of the Series 1999-2
Certificateholders are materially and adversely affected
(which determination shall be made without reference to the
amount of the Class B Investor Interest) and continue to be
materially and adversely affected for such period; provided,
however, that a Series 1999-2 Early Amortization Event
pursuant to this subsection 9(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;
a) the average Portfolio Yield for any
three consecutive Due Periods is reduced to a rate which is
less than the average Base Rate for such period;
a) the Seller shall fail to convey
Receivables arising under Additional Accounts to the Trust,
as required by subsection 2.6(a);
a) any Servicer Default shall occur which
would have a material adverse effect on the Class A
Certificateholders;
b) the Class A Investor Interest shall not
be paid in full on the Class A Scheduled Final Payment Date;
(g) the Specified Enhancement Amount shall be
less than the Required Enhancement Amount on any
Distribution Date after giving effect to any deposits and
payments on such date and such condition shall continue for
ten days;
(h) the Seller, Servicer (if Servicer is the
Originator or its Affiliate) or Charming Shoppes is subject
to a Change in Control;
(i) any amount required to be deposited into the
Spread Account under the terms of the Spread Account
Agreement shall not have been so deposited and such
condition shall continue for ten days;
(j) Fashion Service Corp. shall fail to may any
payment required to be made by it pursuant to the Cap
Agreements and such failure shall continue for three
Business Days; or a Termination Event (as defined in the Cap
Agreements) shall occur with respect to Fashion Service
Corp. shall occur;
then, in the case of any event described above (other than
any event described in subparagraph (c), (d), (f), (g) or
(j)) after any applicable grace period set forth in such
subparagraphs, either the Trustee or the Controlling
Certificateholders 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 1999-2 Early Amortization Event") has
occurred as of the date of such notice. Upon the occurrence
of any event described in subparagraph (c), (d), (g) or (j)
above, a Series 1999-2 Early Amortization Event will occur
automatically.
1. SECTION Series 1999-2 Termination. The
right of the Series 1999-2 Certificateholders to receive
payments from the Trust will terminate on the first Business
Day following the Series 1999-2 Termination Date.
1. SECTION Limitations on Addition of
Accounts. The Seller agrees that it shall not designate any
Additional Accounts pursuant to subsection 2.6(b) unless on
or prior to the related Addition Date, the Seller shall have
provided the Class B Certificateholders with an Officer's
Certificate certifying that such designation of such
Additional Accounts will not, as of the related Addition
Date, (x) cause a Series 1999-2 Early Amortization Event, or
(y) be reasonably expected by the Seller to materially
adversely affect in any manner the timing or amount of
payments to the Class B Certificateholders.
1. SECTION 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.
1. SECTION 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.
1. SECTION 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.
1. SECTION No Petition.
a) The Seller, the Servicer and the
Trustee, by entering into this Supplement and each Series
1999-2 Certificateholder, by accepting a Series 1999-2
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 Investor Certificates, the Agreement or this Supplement.
a) The Servicer and the Trustee, by
entering into this Supplement and each Series 1999-2
Certificateholder, by accepting a Series 1999-2 Certificate,
hereby covenant and agree that they will not at any time
institute against the Seller, or join in any institution
against the Seller of, any bankruptcy proceedings under any
United States Federal or state bankruptcy or similar law in
connection with any obligations relating to the Investor
Certificates, the Agreement or this Supplement.
1. SECTION Tax Representation and Covenant.
Notwithstanding Section 6.3 of the Pooling and Servicing
Agreement, Seller shall not execute, and the Transfer Agent
and Registrar shall not register the transfer of, any Class
B Certificate, if after giving effect to the execution or
transfer of such Class B Certificate, there would be more
than 3 Private Holders of Class B Certificates. For
purposes of this Supplement and the Pooling Agreement, each
Holder of a Class B Certificate shall be a "Private Holder."
1. SECTION Amendments. No amendment may be
made to this Supplement without the consent of 100% of the
Series 1999-2 Certificateholders.
1. SECTION State Street Capital Business
Combination. The parties hereto recognize that State
Street Capital is contemplating a business combination with
a certain affiliate whereby State Street Capital is to be
combined with State Street Capital Markets, L.L.C. ("SSCM").
Upon consummation of the transaction, SSCM shall
automatically become a party hereto, effective immediately
upon such combination. References herein to State Street
Capital shall be deemed to include references to SSCM.
IN WITNESS WHEREOF, the Seller, the Servicer and
the Trustee have caused this Series 1999-2 Supplement to be
duly executed by their respective officers as of the day and
year first above written.
CHARMING SHOPPES RECEIVABLES
CORP.,
Seller
By:
Name:
Title:
SPIRIT OF AMERICA, INC.
Servicer
By:
Name:
Title:
FIRST UNION NATIONAL BANK,
Trustee
By:
Name:
Title:
EXHIBIT A-1
FORM OF CLASS A CERTIFICATE
CLASS A CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF
MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS
OF THE SECURITIES ACT AND ANY APPLICABLE PROVISIONS OF
ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS.
THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN AND IN THE CERTIFICATE
PURCHASE AGREEMENT, EACH REFERRED TO BELOW.
No. [_______] Maximum Stated Amount
$[___________]
CHARMING SHOPPES MASTER TRUST
FLOATING RATE ASSET BACKED CERTIFICATE, SERIES 1999-2, CLASS
A
Evidencing an Undivided Interest in a trust, the corpus of
which consists of a portfolio of credit card receivables
acquired by Charming Shoppes Receivables Corp. and other
assets and interests constituting the Trust under the
Pooling and Servicing Agreement described below.
(Not an interest in or obligation of,
Charming Shoppes Receivables Corp., Spirit of America
National Bank, Spirit of America, Inc.
Charming Shoppes, Inc. or any Affiliate thereof.)
This certifies that Clipper Receivables
Corporation, a Delaware corporation (the "Class A
Certificateholder") is the registered owner of the Undivided
Interest in a trust (the "Trust"), the corpus of which
consists of a portfolio of receivables (the "Receivables")
now existing or hereafter created under credit card accounts
(the "Accounts") of Spirit of America National Bank, a
national banking association organized under the laws of the
United States, all monies due or to become due in payment of
the Receivables (including all Finance Charge Receivables)
and the other assets and interests constituting the Trust
pursuant to a Second Amended and Restated Pooling and
Servicing Agreement dated as of November 25, 1997, as
amended on _________ __, 1999 (as further amended or
otherwise modified from time to time, the "Pooling and
Servicing Agreement") and as supplemented by the Series 1999-
2 Supplement, dated as of May __, 1999 (as amended or
otherwise modified from time to time, the "Series 1999-2
Supplement"), each by and among Charming Shoppes Receivables
Corp., as Seller, Spirit of America, Inc., as Servicer, and
First Union National Bank, as Trustee (the "Trustee"). To
the extent not defined herein, capitalized terms used herein
have the meanings assigned in the Pooling and Servicing
Agreement as supplemented by the Series 1999-2 Supplement
(as so supplemented, the "Agreement").
The Class A Certificateholder is hereby authorized
to record on the grid attached to this Certificate (or at
such holder's option, in its internal books and records) the
date and amount of each Class A Incremental Funding made by
it, the amount of each repayment of the principal amount
represented by this Certificate and any reductions to the
Maximum Class A Funded Amount of this Certificate made
pursuant to the Certificate Purchase Agreement, dated as of
May __, 1999 among the Seller, the Servicer, the initial
Class A Certificateholder, the administrator for the initial
Class A Certificateholder and the initial Class B
Certificateholder (as amended or otherwise modified from
time to time, the "Certificate Purchase Agreement");
provided, however, that failure to make any such recordation
on the grid or records or any error in the grid or records
shall not adversely affect the Class A Certificateholder's
rights with respect to its interest in the assets of the
Trust and its right to receive monthly interest in respect
of the outstanding principal amount of this Certificate.
The Seller has structured the Agreement and the
Class A Certificates with the intention that the Class A
Certificates will qualify under applicable tax law as
indebtedness, and the Seller, the Holder of the Exchangeable
Seller Certificate, the Servicer and each Class A
Certificateholder (or Certificate Owner with respect to a
Class A Certificate (a "Class A Certificate Owner")) by
acceptance of its Class A Certificate (or in the case of a
Class A Certificate Owner, by virtue of such Class A
Certificate Owner's acquisition of a beneficial interest
therein), agrees to treat and to take no action inconsistent
with the treatment of the Class A Certificates (or
beneficial interest therein) for purposes of federal, state,
local and foreign income or franchise taxes and any other
tax imposed on or measured by income, as indebtedness. Each
Class A Certificateholder agrees that it will cause any
Class A Certificate Owner acquiring an interest in a Class A
Certificate through it to comply with the Agreement as to
treatment as indebtedness for certain tax purposes.
This Class A Certificate is issued under and is
subject to the terms, provisions and conditions of the
Agreement, to which Agreement, as amended from time to time,
the Class A Certificateholder by virtue of the acceptance
hereof assents and by which the Class A Certificateholder is
bound.
This Class A Certificate does not represent an
obligation of, or an interest in, the Seller, the Originator
or the Servicer, and neither the Class A Certificates nor
the Accounts or Receivables are insured or guaranteed by the
Federal Deposit Insurance Corporation or any other
governmental agency. This Class A Certificate is limited in
right of payment to certain collections respecting the
Receivables, all as more specifically set forth in the
Agreement and the Certificate Purchase Agreement.
The transfer of this Class A Certificate shall be
registered in the Certificate Register upon surrender of
this Class A Certificate for registration of transfer at any
office or agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in
a form satisfactory to the Trustee and the Transfer Agent
and Registrar duly executed by the Class A Certificateholder
or such Class A Certificateholder's attorney-in-fact duly
authorized in writing, and thereupon one or more new Class A
Certificates of authorized denominations and for the same
aggregate Undivided Interests will be issued to the
designated transferee or transferees.
As provided in the Agreement and subject to
certain limitations therein set forth, Class A Certificates
are exchangeable for new Class A Certificates evidencing
like aggregate Undivided Interests, as requested by the
Class A Certificateholder surrendering such Class A
Certificates. No service charge may be imposed for any such
exchange but the Servicer or Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection
therewith.
The Servicer, the Trustee, the Paying Agent and
the Transfer Agent and Registrar, and any agent of any of
them, may treat the person in whose name this Class A
Certificate is registered as the owner hereof for all
purposes, and neither the Servicer, the Trustee, the Paying
Agent, the Transfer Agent and Registrar, nor any agent of
any of them or of any such agent shall be affected by notice
to the contrary except in certain circumstances described in
the Agreement.
Unless the certificate of authentication hereon
has been executed by or on behalf of the Trustee, by manual
signature, this Class A Certificate shall not be entitled to
any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, Charming Shoppes Receivables
Corp. has caused this Class A Certificate to be duly
executed under its official seal.
CHARMING SHOPPES RECEIVABLES
CORP.
By:
Authorized Officer
Attested to:
By:
Assistant Secretary
Date: May __, 1999
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred
to in the within-mentioned Agreement.
FIRST UNION NATIONAL BANK,
Trustee
By:
Authorized Officer
CLASS A INCREMENTAL FUNDINGS AND REPAYMENTS
Class A
Incremental Principal Outstanding Maximum Class A
Funded Amount Amount Repaid Principal Balance Funded Amount
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
EXHIBIT A-2
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF
MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS
OF THE SECURITIES ACT AND ANY APPLICABLE PROVISIONS OF
ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS.
THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN AND IN THE CERTIFICATE
PURCHASE AGREEMENT, EACH REFERRED TO BELOW.
No. [______] Maximum Stated Amount
$[____________]
CHARMING SHOPPES MASTER TRUST
FLOATING RATE ASSET BACKED CERTIFICATE, SERIES 1999-2, CLASS
B
Evidencing an Undivided Interest in a trust, the corpus of
which consists of a portfolio of credit card receivables
acquired by Charming Shoppes Receivables Corp. and other
assets and interests constituting the Trust under the
Pooling and Servicing Agreement described below.
(Not an interest in or obligation of,
Charming Shoppes Receivables Corp., Spirit of America
National Bank, Spirit of America, Inc.
Charming Shoppes, Inc. or any Affiliate thereof.)
This certifies that Charming Shoppes Receivables
Corp., a Delaware corporation (the "Class B
Certificateholder") is the registered owner of the Undivided
Interest in a trust (the "Trust"), the corpus of which
consists of a portfolio of receivables (the "Receivables")
now existing or hereafter created under credit card accounts
(the "Accounts") of Spirit of America National Bank, a
national banking association organized under the laws of the
United States, all monies due or to become due in payment of
the Receivables (including all Finance Charge Receivables)
and the other assets and interests constituting the Trust
pursuant to a Second Amended and Restated Pooling and
Servicing Agreement dated as of November 25, 1997, as
amended on _________ __, 1999 (as further amended or
otherwise modified from time to time, the "Pooling and
Servicing Agreement") and as supplemented by the Series 1999-
2 Supplement, dated as of May __, 1999 (as amended or
otherwise modified from time to time, the "Series 1999-2
Supplement"), each by and among Charming Shoppes Receivables
Corp., as Seller, Spirit of America, Inc., as Servicer, and
First Union National Bank, as Trustee (the "Trustee"). To
the extent not defined herein, capitalized terms used herein
have the meanings assigned in the Pooling and Servicing
Agreement as supplemented by the Series 1999-2 Supplement
(as so supplemented, the "Agreement") as supplemented by the
Series 1999-2 Supplement (as so supplemented, the
"Agreement").
The Class B Certificateholder is hereby authorized
to record on the grid attached to this Certificate (or at
such holder's option, in its internal books and records) the
date and amount of each Class B Incremental Funding made by
it, the amount of each repayment of the principal amount
represented by this Certificate and any reductions to the
Maximum Class B Funded Amount of this Certificate made
pursuant to the Certificate Purchase Agreement, dated as of
May __, 1999 among the Seller, the Servicer, the initial
Class A Certificateholder, the administrator for the initial
Class A Certificateholder and the initial Class B
Certificateholder (as amended or otherwise modified from
time to time, the "Certificate Purchase Agreement");
provided, however, that failure to make any such recordation
on the grid or records or any error in the grid or records
shall not adversely affect the Class B Certificateholder's
rights with respect to its interest in the assets of the
Trust and its right to receive monthly interest in respect
of the outstanding principal amount of this Certificate.
This Class B Certificate is issued under and is
subject to the terms, provisions and conditions of the
Agreement, to which Agreement, as amended from time to time,
the Class B Certificateholder by virtue of the acceptance
hereof assents and by which the Class B Certificateholder is
bound.
This Class B Certificate does not represent an
obligation of, or an interest in, the Seller, the Originator
or the Servicer, and neither the Class B Certificates nor
the Accounts or Receivables are insured or guaranteed by the
Federal Deposit Insurance Corporation or any other
governmental agency. This Class B Certificate is limited in
right of payment to certain collections respecting the
Receivables, all as more specifically set forth in the
Agreement and the Certificate Purchase Agreement.
The transfer of this Class B Certificate shall be
registered in the Certificate Register upon surrender of
this Class B Certificate for registration of transfer at any
office or agency maintained by the Transfer Agent and
Registrar accompanied by a written instrument of transfer in
a form satisfactory to the Trustee and the Transfer Agent
and Registrar duly executed by the Class B Certificateholder
or such Class B Certificateholder's attorney-in-fact duly
authorized in writing, and thereupon one or more new Class B
Certificates of authorized denominations and for the same
aggregate Undivided Interests will be issued to the
designated transferee or transferees.
As provided in the Agreement and subject to
certain limitations therein set forth, Class B Certificates
are exchangeable for new Class B Certificates evidencing
like aggregate Undivided Interests, as requested by the
Class B Certificateholder surrendering such Class B
Certificates. No service charge may be imposed for any such
exchange but the Servicer or Transfer Agent and Registrar
may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection
therewith.
The Servicer, the Trustee, the Paying Agent and
the Transfer Agent and Registrar, and any agent of any of
them, may treat the person in whose name this Class B
Certificate is registered as the owner hereof for all
purposes, and neither the Servicer, the Trustee, the Paying
Agent, the Transfer Agent and Registrar, nor any agent of
any of them or of any such agent shall be affected by notice
to the contrary except in certain circumstances described in
the Agreement.
Unless the certificate of authentication hereon
has been executed by or on behalf of the Trustee, by manual
signature, this Class B Certificate shall not be entitled to
any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, Charming Shoppes Receivables
Corp. has caused this Class B Certificate to be duly
executed under its official seal.
CHARMING SHOPPES RECEIVABLES
CORP.
By:
Authorized Officer
Attested to:
By:
Assistant Secretary
Date: May __, 1999
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred
to in the within-mentioned Agreement.
FIRST UNION NATIONAL BANK,
Trustee
By:
Authorized Officer
CLASS B INCREMENTAL FUNDINGS AND REPAYMENTS
Class B
Incremental Principal Outstanding Maximum Class B
Funded Amount Amount Repaid Principal Balance Funded Amount
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
EXHIBIT B
FORM OF OPTIONAL PAYMENT INSTRUCTIONS
AND NOTIFICATION TO THE TRUSTEE
EXHIBIT B
Form of Optional Amortization Payment Instructions and
Notification to Trustee
Date of Notice: ____________ __, ____
The undersigned duly authorized representative of the
Servicer hereby notifies the Trustee and the affected
Holders that the Seller intends to cause a full or partial
amortization of the Class A Certificates, pursuant to
Section 4(b) of the Series 1999-2 Supplement, dated as of
May 28, 1999, among Charming Shoppes Receivables Corp. (the
"Seller"), Spirit of America, Inc., (the "Servicer"), and
First Union National Bank (the "Trustee") (the "1999-2
Supplement"). Capitalized terms used herein, but not
otherwise defined, shall have the meanings given such terms
in the 1999-2 Supplement.
1. Optional Amortization Date:
2. Optional Amortization Amount:
3. Outstanding Funding Tranches: (a)
(b)
(c)
(d)
4. Amount of the Optional Amortization Amount allocated to
each Outstanding Funding Tranche:
(a)
(b)
(c)
(d)
The Trustee is hereby instructed to withdraw Available
Principal Collections and/or Available Shared Principal
Collections from the Collection Account in an amount
sufficient to pay the Class A Optional Amortization Amount
to the Class A Certificateholders. The Trustee is hereby
instructed to pay this amount to the Certificateholders in
accordance with Section 5.1 of the Series 1999-2 Supplement.
SPIRIT OF AMERICA, INC., as
Servicer
_____________________________________
Name:
Title:
EXHIBIT C
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO THE TRUSTEE
SPIRIT OF AMERICA, INC.
CHARMING SHOPPES MASTER TRUST
SERIES 1999-2
The undersigned, a duly authorized representative of
Spirit of America, Inc. ("Spirit"), as Servicer pursuant to
the Second Amended and Restated Pooling and Servicing
Agreement dated as of November 25, 1997, as amended on
________ __, 1999 (as further amended or otherwise modified
from time to time, the "Pooling and Servicing Agreement") by
and among Charming Shoppes Receivables Corp., as Seller,
Spirit and First Union National Bank, as trustee (the
"Trustee"), does hereby certify as follows:
1. Capitalized terms used in this notice have their
respective meanings set forth in the Pooling and Servicing
Agreement; provided, that the "preceding Due Period" shall
mean the Due Period immediately preceding the calendar month
in which this notice is delivered. References herein to
certain sections and subsections are references to the
respective sections and subsections of the Pooling and
Servicing Agreement. This notice is delivered pursuant to
Section 4.9 of the Pooling and Servicing Agreement.
1. Spirit is the Servicer under the Pooling and Servicing
Agreement.
1. The undersigned is a Servicing Officer.
1. The date of this notice is a Determination Date under
the Pooling and Servicing Agreement.
A. INSTRUCTION TO MAKE A WITHDRAWAL
The Servicer does hereby instruct the Trustee (i) to
make withdrawals from the Collection Account on
______________ __, _____, which date is a Distribution Date
under the Pooling and Servicing Agreement, in aggregate
amounts set forth below in respect of the following amounts
and (ii) to apply the proceeds of such withdrawals in
accordance with Section 3 of the Series 1999-1 Supplement,
as applicable and Section 4.9 of the Pooling and Servicing
Agreement, as applicable:
1. Pursuant to subsection 4.9(a)(i):
a) Class A Monthly Interest at
the Class A Certificate Rate
as provided by the Administrator,
on the Class A Investor Interest ____________%
1. Pursuant to subsection 4.9(a)(ii):
Non-Use Fee for this Interest Period $_____________
a) Non-Use Fee from prior Interest Periods $_____________
1. Pursuant to subsection 4.9(a)(iii):
a) Class A Additional Amounts for this
Interest Period $_____________
a) Class A Additional Amounts for prior
Interest Periods
a) Class A Additional Amount paid in the _
current fiscal year after giving effect to
the applications in (1) and (2) above. $____________
1. Pursuant to subsection 4.9(a)(iv):
a) Class A Servicing Fee for this Interest
Period $_____________
a) Class A Servicing Fee for prior Interest
Periods $_____________
1. Pursuant to subsection 4.9(a)(v):
a) Class A Investor Loss Amount $_____________
1. Pursuant to subsection 4.9(a)(vi):
a) Class A Additional Amounts $_____________
1. Pursuant to subsection 4.9(a)(vii):
a) Portion of Excess Spread from
Class A Available Funds to be
allocated and distributed as
provided in Section 4.11 $_____________
1. Pursuant to subsection 4.9(b)(i):
a) Class B Servicing Fee (if Seller or
an affiliate is not the Servicer) $_____________
a) Accrued and unpaid Class B
Servicing Fee (if Seller or an
affiliate is not the Servicer) $_____________
1. Pursuant to subsection 4.9(b)(ii):
a) Portion of Excess Spread from
Class B Available Funds to be
allocated and distributed as
provided in Section 4.11 $_____________
1. Pursuant to subsection 4.9(c)(i):
a) Class B Monthly Principal $_____________
1. Pursuant to subsection 4.9(c)(ii):
a) An amount to be treated as Shared
Principal Collections $_____________
1. Pursuant to subsection 4.9(c)(iii):
a) An Amount to be paid to the Holder
of the Exchangeable Seller Certificate $_____________
a) The Seller Interest on this Distribution
Date $_____________
1. Pursuant to subsection 4.9(d)(i):
a) Class A Monthly Principal $_____________
1. Pursuant to subsection 4.9(d)(ii):
a) Class B Monthly Principal $_____________
1. Pursuant to subsection 4.9(d)(iii):
a) Amount to be treated as Shared
Principal Collections $_____________
1. Pursuant to subsection 4.9(d)(iv):
a) Amount to be paid to the Holder
of the Exchangeable Seller's Certificate $_____________
1. Pursuant to Section 4.15:
a) Amount of Shared Excess Finance
Charge Collections to be withdrawn
from the Collection Account to be
allocated to Series 1999-2 and
distributed as provided in
Section 4.11. $_____________
A. INSTRUCTION TO MAKE CERTAIN PAYMENTS
Pursuant to Section 4.9 of the Pooling and Servicing
Agreement, the Servicer does hereby instruct the Trustee to
pay in accordance with Section 5.1 from the Collection
Account on __________ __, ____, which date is a Distribution
Date under the Pooling and Servicing Agreement:
1. Amount to be distributed to
Class A Certificateholders $______________
1. Amount to be distributed to
Class B Certificateholders $______________
A. APPLICATION OF EXCESS SPREAD
Pursuant to Section 4.11, the Servicer does hereby
instruct the Trustee to apply the Excess Spread with respect
to the related Due Period and to make the following
distributions in the following priority:
1. The amount equal to the Class A
Required Amount, if any, which
will be used to fund the Class A
Required Amount and be applied in
accordance with, and in the priority
set forth in subsection 4.9(a) $_______________
1. The amount equal to the aggregate
amount of Class A Investor
Charge-Offs which have not been
previously reimbursed (after
giving effect to the allocation
on such Distribution Date of
certain other amounts applied for
that purpose) which will be treated
as a portion of Available Principal
Collections $_______________
1. An amount equal to (i) the Class B
Monthly Interest plus (ii) any Non-Use
Fee payable to the Class B Certificateholders
under the Certificate Purchase Agreement for
such Distribution Date, plus (iii) any Class B
Additional Amounts payable to the Class B
Certificateholders under the Certificate Purchase
Agreement for such Distribution Date, plus (iv)
the amount of any past due Non-Use Fee and
Class B Additional Amounts payable will be paid
to the Class B Certificateholders in accordance
with the Certificate Purchase Agreement;
$______________
1. an amount equal to the aggregate amount of
accrued but unpaid Class B Servicing Fee
will be paid to Servicer;
$______________
1. an amount equal to the Class B Loss Amount,
if any, for the prior Due Period will be treated
as a portion of Class B Principal Collections
on such Distribution Date;
$______________
1. an amount equal to the aggregate amount by
which the Class B Investor Interest has been
reduced for reasons other than the payment of
principal to the Class B Certificateholders
(but not in excess of the aggregate amount of
such reductions which have not been previously
reimbursed) will be treated as a portion of
Available Principal Collections on such
Distribution Date;
$______________
1. an amount up to the excess, if any, of the Series
Required Cash Collateral Amount (determined
after all deposits, withdrawals, reductions, payments
and adjustments to be made with respect to such
Distribution Date) over the Available Series Cash
Collateral Amount (determined after all deposits,
withdrawals, reductions, payments and adjustments
to be made with respect to such Distribution Date)
shall be deposited in the Series Cash
Collateral Account; $_____________
1. an amount equal to the aggregate amount required
to be applied under the Spread Account Agreement
shall be distributed for application in accordance
with the Spread Account Agreement; and
$______________
1. The balance, if any, after giving
effect to the payments made
pursuant to subparagraphs [(A)
through (J)] above to be applied
as Shared Excess Finance Charge
Collections for such Distribution Date
$______________
A. REALLOCATED CLASS B PRINCIPAL COLLECTIONS
Pursuant to Section 4.12, the Servicer does hereby
instruct the Trustee to withdraw from the Collection Account
and apply Reallocated Class B Principal Collections pursuant
to Section 4.12 with respect to the related Due Period in
the following amounts:
1. Reallocated Class B
Principal Collections
$______________
A. ACCRUED AND UNPAID AMOUNTS
After giving effect to the withdrawals and transfers to
be made in accordance with this notice, the following
amounts will be accrued and unpaid with respect to all Due
Periods preceding the current calendar month
1. Subsections 4.9(a)(ii):
a) The aggregate amount of all
accrued and unpaid Non-Use Fee $______________
1. Subsection 4.9(a)(iii):
a) The Aggregate amount of all accrued
and unpaid Class A Additional Amounts $______________
1. Section 4.9(b)(i) :
a) The aggregate amount of all
accrued and unpaid Class B Servicing Fee
$______________
1. Subsection 4.10
a) The aggregate amount of all
unreimbursed Class A Investor
Charge-Offs $______________
a) The aggregate amount of all
unreimbursed Class B Investor
Charge-Offs $______________
IN WITNESS WHEREOF, the undersigned has duly
executed this certificate this __ day of _______, ____.
SPIRIT OF AMERICA, INC.
Servicer
By:___________________________
Name:
Title:
EXHIBIT D
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
Series 1999-2
SPIRIT OF AMERICA, INC.
CHARMING SHOPPES MASTER TRUST
TO BE DELIVERED IN A FORM TO BE AGREED UPON BY THE
TRUSTEE, SERVICER, AND SELLER PRIOR TO THE INITIAL FUNDING
HEREUNDER.
EXHIBIT 10.2.31
CHARMING SHOPPES, INC.
2000 ASSOCIATES' STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this 2000 Associates' Stock Incentive Plan is
to assist Charming Shoppes, Inc. (the "Company") and its Subsidiaries
and Affiliates in attracting, retaining, and rewarding associates
other than executive officers, enabling such associates to acquire or
increase a proprietary interest in the Company in order to promote a
closer identity of interests between such associates and the Company's
shareholders, and providing an increased incentive to expend their
maximum efforts for the success of the Company's business.
2. DEFINITIONS
For purposes of the Plan, the following terms shall be defined
as set forth below:
(a) "Affiliate" means any affiliate of the Company and its
Subsidiaries that is designated by the Board as a participating
employer under the Plan.
(b) "Award" means any Option, SAR (including a Limited SAR),
Restricted Stock, Deferred Stock, Stock granted as a bonus or in lieu
of other awards, Dividend Equivalent, or Other Stock-Based Award, or
any other right or interest relating to Stock or cash, granted to a
Participant under the Plan.
(c) "Award Agreement" means any written agreement, contract,
or other instrument or document evidencing an Award.
(d) "Beneficiary" means any person or trust which has been
designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the
benefits specified under this Plan upon such Participant's death or,
if there is no designated Beneficiary or surviving designated
Beneficiary, then any person or trust entitled by will or the laws of
descent and distribution to receive such benefits.
(e) "Board" means the Board of Directors of the Company.
(f) "Code" means the Internal Revenue Code of 1986, as
amended from time to time. References to any provision of the Code
shall be deemed to include successor provisions thereto and
regulations thereunder.
(g) "Committee" means the Stock Option Committee of the
Board, or any committee of officers of the Company as may be
designated by the Board or the Stock Option Committee to administer
the Plan.
(h) "Company" means Charming Shoppes, Inc., a corporation
organized under the laws of the Commonwealth of Pennsylvania, or any
successor corporation.
(i) "Deferred Stock" means a right, granted to a Participant
under Section 6(e), to receive Stock at the end of a specified
deferral period.
(j) "Dividend Equivalent" means a right, granted to a
Participant under Section 6(g), to receive cash, Stock, other Awards,
or other property equal in value to dividends paid with respect to a
specified number of shares of Stock, or other periodic payments.
Dividend Equivalents may be awarded on a free-standing basis or in
connection with another Award, and may be paid currently or on a
deferred basis.
(k) "Fair Market Value" means, with respect to Stock, Awards,
or other property, the fair market value of such Stock, Awards, or
other property determined by such methods or procedures as shall be
established from time to time by the Committee. Unless otherwise
determined by the Committee, the Fair Market Value of Stock as of any
given date shall mean the closing sale price of Stock reported on the
Nasdaq National Market System (or, if Stock is then principally traded
on a national securities exchange, in the table reporting "composite
transactions" for such exchange) in the Wall Street Journal for such
date, or, if no shares of Stock were traded on that date, on the next
preceding day on which there was such a trade.
(l) "Limited SAR" means a SAR exercisable only for cash upon
a change in control or other event, as specified by the Committee.
(m) "Option" means a right, granted to a Participant under
Section 6(b), to purchase Stock, other Awards, or other property at a
specified price during specified time periods. Each Option shall be a
nonstatutory Option (i.e., an Option not intended to be an incentive
stock option under Section 422 of the Code).
(n) "Other Stock-Based Award" means a right, granted to a
Participant under Section 6(h), that relates to or is valued by
reference to Stock, other Awards relating to Stock, or other property.
(o) "Participant" means a person who, as an associate of the
Company, a Subsidiary, or an Affiliate, has been granted an Award
under the Plan.
(p) "Plan" means this 2000 Associates' Stock Incentive Plan.
(q) "Restricted Stock" means an award of shares of Stock to a
Participant under Section 6(d) that may be subject to certain
restrictions and to a risk of forfeiture.
(r) "Stock" means the Common Stock, par value $.10 per share,
of the Company and such other securities as may be substituted for
Stock or such other securities pursuant to Section 4.
(s) "SAR" or "Stock Appreciation Right" means the right,
granted to a Participant under Section 6(c), to be paid an amount
measured by the appreciation in the Fair Market Value of Stock from
the date of grant to the date of exercise of the right, with payment
to be made in cash, Stock, or other Awards as specified in the Award
or determined by the Committee.
(t) "Subsidiary" means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the
Company if each of the corporations (other than the last corporation
in the unbroken chain) owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in the chain.
3. ADMINISTRATION
(a) Authority of the Committee. The Plan shall be
administered by the Committee. The Committee shall have full and
final authority to take the following actions, in each case subject to
and consistent with the provisions of the Plan:
(i) to select Participants to whom Awards may be
granted;
(ii) to designate Affiliates;
(iii) to determine the type or types of Awards to be
granted to each Participant, and denominate such Award (for
example, Deferred Stock or Other Stock-Based Awards subject to
performance conditions may be denominated "performance shares"
or "performance units" if deemed appropriate by the
Committee);
(iv) to determine the number of Awards to be granted, the
number of shares of Stock to which an Award will relate, the
terms and conditions of any Award granted under the Plan
(including, but not limited to, any exercise price, grant
price, or purchase price, any restriction or condition, any
schedule for lapse of restrictions or conditions relating to
transferability or forfeiture, exercisability, or settlement
of an Award, and waivers or accelerations thereof, and waivers
of or modifications to performance conditions relating to an
Award, based in each case on such considerations as the
Committee shall determine), and all other matters to be
determined in connection with an Award;
(v) to determine whether, to what extent, and under what
circumstances an Award may be settled, or the exercise price
of an Award may be paid, in cash, Stock, other Awards, or
other property, or an Award may be cancelled, forfeited, or
surrendered;
(vi) to determine whether, to what extent, and under what
circumstances cash, Stock, other Awards, or other property
payable with respect to an Award will be deferred either
automatically, at the election of the Committee, or at the
election of the Participant;
(vii) to prescribe the form of each Award Agreement,
which need not be identical for each Participant;
(viii) to adopt, amend, suspend, waive, and rescind such
rules and regulations and appoint such agents as the Committee
may deem necessary or advisable to administer the Plan;
(ix) to correct any defect or supply any omission or
reconcile any inconsistency in the Plan and to construe and
interpret the Plan and any Award, rules and regulations, Award
Agreement, or other instrument hereunder; and
(x) to make all other decisions and determinations as may
be required under the terms of the Plan or as the Committee
may deem necessary or advisable for the administration of the
Plan.
(b) Manner of Exercise of Committee Authority. Any action by
the Committee with respect to the Plan shall be final, conclusive, and
binding on all persons, including the Company, Subsidiaries,
Affiliates, Participants, any person claiming any rights under the
Plan from or through any Participant, and shareholders. The express
grant of any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any power
or authority of the Committee. A memorandum signed by all members of
the Committee shall constitute the act of the Committee without the
necessity, in such event, to hold a meeting. Authority may be
delegated under the Plan to officers or managers of the Company or any
Subsidiary or Affiliate, subject to such terms as the Committee shall
determine, to perform such functions as the Committee may determine,
to the extent consistent with applicable law.
(c) Limitation of Liability. Each member of the Committee
shall be entitled to, in good faith, rely or act upon any report or
other information furnished to him by any officer or other employee of
the Company or any Subsidiary or Affiliate, the Company's independent
certified public accountants, or any executive compensation
consultant, legal counsel, or other professional retained by the
Company to assist in the administration of the Plan. No member of the
Committee, nor any officer or employee of the Company acting on behalf
of the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with
respect to the Plan, and all members of the Committee and any officer
or employee of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company
with respect to any such action, determination, or interpretation.
4. STOCK SUBJECT TO PLAN
(a) Number of Shares Reserved. Subject to adjustment as
hereinafter provided, the total number of shares of Stock reserved and
available for issuance in connection with Awards under the Plan shall
be 2,000,000. If any shares subject to an Award are forfeited or such
Award is settled in cash or otherwise terminates without a
distribution of shares to the Participant, any shares counted against
the number of shares reserved and available under the Plan with
respect to such Award shall, to the extent of any such forfeiture,
settlement, or termination, again be available for Awards under the
Plan; provided, however, that the Committee may adopt procedures for
the counting of shares relating to any Award to ensure appropriate
counting, avoid double counting (as, for example, in the case of
tandem or substitute awards), and provide for adjustments in any case
in which the number of shares actually distributed differs from the
number of shares previously counted in connection with such Award.
(b) Type of Shares. Any shares of Stock distributed pursuant
to an Award may consist, in whole or in part, of authorized and
unissued shares or treasury shares.
(c) Adjustments. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form
of cash, Stock, or other property), recapitalization, forward or
reverse split, reorganization, merger, consolidation, spin-off,
combination, repurchase, or share exchange, or other similar corporate
transaction or event, affects the Stock such that an adjustment is
appropriate in order to prevent dilution or enlargement of the rights
of Participants under the Plan, then the Committee shall, in such
manner as it may deem equitable, adjust any or all of (i) the number
and kind of shares of Stock which may thereafter be issued in
connection with Awards, (ii) the number and kind of shares of Stock
issued or issuable in respect of outstanding Awards, and (iii) the
exercise price, grant price, or purchase price relating to any Award
or, if deemed appropriate, make provision for a cash payment with
respect to any outstanding Award. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or non-
recurring events (including, without limitation, events described in
the preceding sentence) affecting the Company or any Subsidiary or
Affiliate or the financial statements of the Company or any Subsidiary
or Affiliate, or in response to changes in applicable laws,
regulations, or accounting principles.
5. ELIGIBILITY
Associates of the Company and its Subsidiaries and Affiliates,
other than an associate who is a director or officer of the Company,
are eligible to be granted Awards under the Plan. For this purpose,
the term "officer" shall have the same meaning under Nasdaq
Marketplace Rule 4460(i)(1)(A).
6. SPECIFIC TERMS OF AWARDS
(a) General. Awards may be granted on the terms and
conditions set forth in this Section 6. In addition, the Committee
may impose on any Award or the exercise thereof, at the date of grant
or thereafter (subject to Section 8(e)), such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the
Committee shall determine, including terms requiring forfeiture of
Awards in the event of termination of employment by the Participant;
provided, however, that the Committee shall retain full power to
accelerate or waive any such additional term or condition it may have
previously imposed.
(b) Options. The Committee is authorized to grant Options to
Participants (including "reload" options automatically granted to
offset specified exercises of options) on the following terms and
conditions:
(i) Exercise Price. The exercise price per share of
Stock purchasable under an Option shall be determined by the
Committee.
(ii) Time and Method of Exercise. The Committee shall
determine the time or times at which an Option may be
exercised in whole or in part, the methods by which such
exercise price may be paid or deemed to be paid, the form of
such payment, including, without limitation, cash, Stock,
other Awards or awards issued under other Company plans, or
other property (including notes or other contractual
obligations of Participants to make payment on a deferred
basis, such as through "cashless exercise" arrangements, to
the extent permitted by applicable law), and the methods by
which Stock will be delivered or deemed to be delivered to
Participants.
(c) Stock Appreciation Rights. The Committee is authorized
to grant SARs to Participants on the following terms and conditions:
(i) Right to Payment. A SAR shall confer on the
Participant to whom it is granted a right to receive, upon
exercise thereof, the excess of (A) the Fair Market Value of
one share of Stock on the date of exercise (or, if the
Committee shall so determine, the Fair Market Value of one
share at any time during a specified period before or after
the date of exercise, or the Fair Market Value determined by
reference to amounts paid or payable in connection with a
change in control of the Company, as specified by the
Committee), over (B) the grant price of the SAR as determined
by the Committee as of the date of grant of the SAR, which,
except as provided in Section 7(a), shall be not less than the
Fair Market Value of one share of Stock on the date of grant.
(ii) Other Terms. The Committee shall determine the time
or times at which a SAR may be exercised in whole or in part,
the method of exercise, method of settlement, form of
consideration payable in settlement, method by which Stock
will be delivered or deemed to be delivered to Participants,
whether or not a SAR shall be in tandem with any other Award,
and any other terms and conditions of any SAR. Limited SARs
that may only be exercised in connection with a change in
control or other event as specified by the Committee may be
granted on such terms, not inconsistent with this Section
6(c), as the Committee may determine. Limited SARs may be
either freestanding or in tandem with other Awards.
(d) Restricted Stock. The Committee is authorized to grant
Restricted Stock to Participants on the following terms and
conditions:
(i) Issuance and Restrictions. Restricted Stock shall be
subject to such restrictions on transferability and other
restrictions, if any, as the Committee may impose, which
restrictions may lapse separately or in combination at such
times, under such circumstances, in such installments, or
otherwise, as the Committee may determine. Except to the
extent restricted under the terms of the Plan and any Award
Agreement relating to the Restricted Stock, a Participant
granted Restricted Stock shall have all of the rights of a
shareholder including, without limitation, the right to vote
Restricted Stock or the right to receive dividends thereon.
(ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment during the
applicable restriction period, Restricted Stock that is at
that time subject to restrictions shall be forfeited and
reacquired by the Company; provided, however, that the
Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Restricted
Stock will be waived in whole or in part in the event of
terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the
forfeiture of Restricted Stock.
(iii) Certificates for Stock. Restricted Stock granted
under the Plan may be evidenced in such manner as the
Committee shall determine. If certificates representing
Restricted Stock are registered in the name of the
Participant, such certificates shall bear an appropriate
legend referring to the terms, conditions, and restrictions
applicable to such Restricted Stock, the Company shall retain
physical possession of the certificate, and the Participant
shall have delivered a stock power to the Company, endorsed in
blank, relating to the Restricted Stock.
(iv) Dividends. Dividends paid on Restricted Stock shall
be either paid at the dividend payment date in cash or in
shares of unrestricted Stock having a Fair Market Value equal
to the amount of such dividends, or the payment of such
dividends shall be deferred and/or the amount or value thereof
automatically reinvested in additional Restricted Stock, other
Awards, or other investment vehicles, as the Committee shall
determine or permit the Participant to elect. Unless
otherwise determined by the Committee, Stock distributed in
connection with a Stock split or Stock dividend, and other
property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as
the Restricted Stock with respect to which such Stock or other
property has been distributed.
(e) Deferred Stock. The Committee is authorized to grant
Deferred Stock to Participants, subject to the following terms and
conditions:
(i) Award and Restrictions. Delivery of Stock will occur
upon expiration of the deferral period specified for an Award
of Deferred Stock by the Committee (or, if permitted by the
Committee, as elected by the Participant). In addition,
Deferred Stock shall be subject to such restrictions as the
Committee may impose, if any, which restrictions may lapse at
the expiration of the deferral period or at earlier specified
times, separately or in combination, in installments, or
otherwise, as the Committee may determine.
(ii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of employment (as determined under
criteria established by the Committee) during the applicable
deferral period or portion thereof to which forfeiture
conditions apply (as provided in the Award Agreement
evidencing the Deferred Stock), all Deferred Stock that is at
that time subject to deferral (other than a deferral at the
election of the Participant) shall be forfeited; provided,
however, that the Committee may provide, by rule or regulation
or in any Award Agreement, or may determine in any individual
case, that restrictions or forfeiture conditions relating to
Deferred Stock will be waived in whole or in part in the event
of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the
forfeiture of Deferred Stock.
(f) Bonus Stock and Awards in Lieu of Cash Obligations. The
Committee is authorized to grant Stock as a bonus, or to grant Stock
or other Awards in lieu of Company obligations to pay cash or deliver
other property under other plans or compensatory arrangements. Stock
or Awards granted hereunder shall be subject to such other terms as
shall be determined by the Committee.
(g) Dividend Equivalents. The Committee is authorized to
grant Dividend Equivalents to Participants. The Committee may provide
that Dividend Equivalents shall be paid or distributed when accrued or
shall be deemed to have been reinvested in additional Stock, Awards,
or other investment vehicles as the Committee may specify.
(h) Other Stock-Based Awards. The Committee is authorized,
subject to limitations under applicable law, to grant to Participants
such other Awards that may be denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related
to, Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, convertible or
exchangeable debt securities, other rights convertible or exchangeable
into Stock, purchase rights for Stock, Awards with value and payment
contingent upon performance of the Company or any other factors
designated by the Committee, and Awards valued by reference to the
book value of Stock or the value of securities of or the performance
of specified Subsidiaries or Affiliates. The Committee shall
determine the terms and conditions of such Awards. Stock delivered
pursuant to an Award in the nature of a purchase right granted under
this Section 6(h) shall be purchased for such consideration, paid for
at such times, by such methods, and in such forms, including, without
limitation, cash, Stock, other Awards, or other property, as the
Committee shall determine. Cash awards, as an element of or
supplement to any other Award under the Plan, shall also be authorized
pursuant to this Section 6(h).
7. CERTAIN PROVISIONS APPLICABLE TO AWARDS
(a) Stand-Alone, Additional, Tandem, and Substitute Awards.
Awards granted under the Plan may, in the discretion of the Committee,
be granted either alone or in addition to, in tandem with, or in
substitution for, any other Award granted under the Plan or any award
granted under any other plan of the Company, any Subsidiary or
Affiliate, or any business entity to be acquired by the Company or a
Subsidiary or Affiliate, or any other right of a Participant to
receive payment from the Company or any Subsidiary or Affiliate. If
an Award is granted in substitution for another Award or award, the
Committee shall require the surrender of such other Award or award in
consideration for the grant of the new Award. Awards granted in
addition to or in tandem with other Awards or awards may be granted
either as of the same time as or a different time from the grant of
such other Awards or awards. The per share exercise price of any
Option, grant price of any SAR, or purchase price of any other Award
conferring a right to purchase Stock:
(i) Granted in substitution for an outstanding Award or
award shall be not less than the lesser of the Fair Market
Value of a share of Stock at the date such substitute Award is
granted or such Fair Market Value at that date reduced to
reflect the Fair Market Value at that date of the Award or
award required to be surrendered by the Participant as a
condition to receipt of the substitute Award; or
(ii) Retroactively granted in tandem with an outstanding
Award or award shall be not less than the lesser of the Fair
Market Value of a share of Stock at the date of grant of the
later Award or at the date of grant of the earlier Award or
award.
(b) Exchange and Buy Out Provisions. The Committee may at
any time offer to exchange or buy out any previously granted Award for
a payment in cash, Stock, other Awards (subject to Section 7(a)), or
other property based on such terms and conditions as the Committee
shall determine and communicate to the Participant at the time that
such offer is made.
(c) Term of Awards. The term of each Award shall be for such
period as may be determined by the Committee.
(d) Form of Payment Under Awards. Subject to the terms of
the Plan and any applicable Award Agreement, payments to be made by
the Company or a Subsidiary or Affiliate upon the grant or exercise of
an Award may be made in such forms as the Committee shall determine,
including, without limitation, cash, Stock, other Awards, or other
property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. Such payments may include,
without limitation, provisions for the payment or crediting of
reasonable interest on installment or deferred payments or the grant
or crediting of Dividend Equivalents in respect of installment or
deferred payments denominated in Stock.
(e) Loan Provisions. With the consent of the Committee, and
subject at all times to, and only to the extent, if any, and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company (including applicable margin
regulations), the Company may make, guarantee, or arrange for a loan
or loans to a Participant with respect to the exercise of any Option
or other payment in connection with any Award, including the payment
by a Participant of any or all federal, state, or local income or
other taxes due in connection with any Award. Subject to such
limitations, the Committee shall have full authority to decide whether
to make a loan or loans hereunder and to determine the amount, terms,
and provisions of any such loan or loans, including the interest rate
to be charged in respect of any such loan or loans, whether the loan
or loans are to be with or without recourse against the borrower, the
terms on which the loan is to be repaid and conditions, if any, under
which the loan or loans may be forgiven.
8. GENERAL PROVISIONS
(a) Compliance With Legal and Other Requirements. The Plan,
the granting and exercising of Awards thereunder, and the other
obligations of the Company under the Plan and any Award Agreement,
shall be subject to all applicable federal and state laws, rules, and
regulations, and to such approvals by any regulatory or governmental
agency as may be required. The Company may, in its discretion,
postpone the issuance or delivery of Stock under any Award until
completion of such registration or qualification of such Stock or
other required action under any federal or state law, rule, or
regulation, listing or other required action with respect to any
automated quotation system or stock exchange upon which the Stock or
other Company securities are designated or listed, or compliance with
any other contractual obligation of the Company, as the Company may
consider appropriate, and may require any Participant to make such
representations and furnish such information as it may consider
appropriate in connection with the issuance or delivery of Stock in
compliance with applicable laws, rules, and regulations, designation
or listing requirements, or other contractual obligations.
(b) Limits on Encumbering Awards; Beneficiaries. No Award or
right or interest of a Participant in any Award shall be pledged,
encumbered, or hypothecated to or in favor of any party other than the
Company or a Subsidiary or Affiliate, or shall be subject to any lien,
obligation, or liability of such Participant to any party other than
the Company or a Subsidiary or Affiliate. No Award or right or
interest of a Participant in any Award shall be assignable or
transferable otherwise than by will or the laws of descent and
distribution except to the Company under the terms of the Plan, or
shall be exercisable during the lifetime of the Participant by anyone
other than the Participant; provided, however, that the Committee may
permit an Award to be transferred, without consideration, to members
of the Participant's immediate family (i.e., Participant, spouse,
children, or grandchildren), to a trust for the benefit of such
immediate family members or to a partnership in which such immediate
family members are the only partners; provided further, that a
Participant may, in the manner established by the Committee, designate
a Beneficiary to exercise the rights of the Participant, and to
receive any distribution, with respect to any Award, upon the death of
the Participant. A Beneficiary, guardian, legal representative, or
other person claiming any rights under the Plan from or through any
Participant shall be subject to all terms and conditions of the Plan
and any Award Agreement applicable to such Participant, except to the
extent the Plan and such Award Agreement or agreement otherwise
provide with respect to such persons, and to any additional
restrictions deemed necessary or appropriate by the Committee.
(c) No Right to Continued Employment. Neither the Plan nor
any action taken hereunder shall be construed as giving any associate
the right to be retained in the employ of the Company or any of its
Subsidiaries or Affiliates, nor shall it interfere in any way with the
right of the Company or any of its Subsidiaries to terminate any
employee's employment at any time.
(d) Taxes. The Company or any Subsidiary or Affiliate is
authorized to withhold from any Award granted, any payment relating to
an Award under the Plan, including from a distribution of Stock, or
any payroll or other payment to a Participant, amounts of withholding
and other taxes due in connection with any transaction involving an
Award, and to take such other action as the Committee may deem
advisable to enable the Company and Participants to satisfy
obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make
cash payments in respect thereof in satisfaction of a Participant's
tax obligations, but any such withholding of Stock shall not exceed
the amount necessary to withhold to meet mandatory tax withholding
obligations.
(e) Changes to the Plan and Awards. The Board may amend,
alter, suspend, discontinue, or terminate the Plan or the Committee's
authority to grant Awards under the Plan without the consent of
shareholders or Participants; provided, however, that, without the
consent of an affected Participant, no amendment, alteration,
suspension, discontinuation, or termination of the Plan may materially
and adversely affect the rights of such Participant under any Award
theretofore granted to him. The Committee may waive any conditions or
rights under, or amend, alter, suspend, discontinue, or terminate, any
Award theretofore granted and any Award Agreement relating thereto;
provided, however, that, without the consent of an affected
Participant, no such amendment, alteration, suspension,
discontinuation, or termination of any Award may materially and
adversely affect the rights of such Participant under such Award. The
foregoing notwithstanding, any performance condition specified in
connection with an Award shall not be deemed a fixed contractual term,
but shall remain subject to adjustment by the Committee, in its
discretion, at any time in view of the Committee's assessment of the
Company's strategy, performance of comparable companies, and other
circumstances.
(f) No Rights to Awards; No Shareholder Rights. No
Participant or associate shall have any claim to be granted any Award
under the Plan, and there is no obligation for uniformity of treatment
of Participants and associates. No Award shall confer on any
Participant any of the rights of a shareholder of the Company unless
and until Stock is duly issued or transferred to the Participant in
accordance with the terms of the Award.
(g) Unfunded Status of Awards; Creation of Trusts. The Plan
is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
Participant or obligation to issue Stock pursuant to an Award, nothing
contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the
Company; provided, however, that the Committee may authorize the
creation of trusts or make other arrangements to meet the Company's
obligations under the Plan to deliver cash, Stock, other Awards, or
other property pursuant to any Award, which trusts or other
arrangements shall be consistent with the "unfunded" status of the
Plan unless the Committee otherwise determines with the consent of
each affected Participant. If and to the extent authorized by the
Committee, the Company may deposit into such a trust Stock for
delivery to the Participant in satisfaction of the Company's
obligations under any Award. If so provided by the Committee, upon
such a deposit of Stock or other assets for the benefit of a
Participant, there shall be substituted for the rights of the
Participant to receive delivery of Stock and other payments under this
Agreement a right to receive the assets of the trust (to the extent
that the deposited or other assets represented the full amount of the
Company's obligation under the Award at the date of deposit).
(h) Nonexclusivity of the Plan. The adoption of the Plan by
the Board shall not be construed as creating any limitations on the
power of the Board to adopt such other incentive arrangements as it
may deem desirable, including, without limitation, the granting of
stock options otherwise than under the Plan, and such arrangements may
be either applicable generally or only in specific cases.
(i) No Fractional Shares. No fractional shares of Stock
shall be issued or delivered pursuant to the Plan or any Award. The
Committee shall determine whether cash, other Awards, or other
property shall be issued or paid in lieu of such fractional shares or
whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.
(j) Governing Law. The validity, construction, and effect of
the Plan, any rules and regulations relating to the Plan, and any
Award Agreement shall be determined in accordance with the
Pennsylvania Business Corporation Law, to the extent applicable, other
laws (including those governing contracts) of the Commonwealth of
Pennsylvania, without giving effect to principles of conflicts of
laws, and applicable federal law.
(k) Certain Limitations Relating to Accounting Treatment of
Awards. Other provisions of the Plan notwithstanding, the Committee's
authority and a Participant's rights under the Plan are limited to the
extent necessary to ensure that any Option or other Award of a type
that the Committee intended to be subject to fixed accounting, with a
measurement date at the date of grant or the date performance
conditions are satisfied under APB 25, shall not become subject to
"variable" accounting solely due to the existence of such authority or
right, unless the Committee specifically determines that the Award
shall become subject to such "variable" accounting and remain
outstanding thereafter. In addition, other provisions of the Plan
notwithstanding, if any right under this Plan would cause a
transaction to be ineligible for pooling-of-interests accounting that
would, but for the right hereunder, be eligible for such accounting
treatment, such right shall be automatically adjusted so that the
pooling-in-interests accounting shall be available, including by
substituting Stock or cash having a Fair Market Value equal to any
cash or Stock otherwise payable in respect of any right which would
cause the transaction to be ineligible for pooling-of-interests
accounting.
(l) Effective Date; Plan Termination. The Plan shall become
effective as of January 1, 2000. The Plan shall terminate at such
time as no Stock remains available for issuance pursuant to Section 4
and the Company has no further obligations with respect to any Award
granted under the Plan.
Adopted by the Board of Directors: January 27, 2000
EXHIBIT 10.2.32
CHARMING SHOPPES, INC.
2000 ASSOCIATES' STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT
Agreement dated as of January 31, 2000 between CHARMING SHOPPES,
INC. (the "Company") and (name) (the "Associate").
It is agreed as follows:
1. GRANT OF OPTION; CONSIDERATION
The Company hereby confirms the grant, under and pursuant to the
Company's 2000 Associates' Stock Incentive Plan (the "Plan"), to the
Associate on (grant date) of a nonqualified stock option to purchase up
to (no. of shs.) shares of the Company's common stock, par value $.10 per
share (the "Shares"), at an exercise price of (option price) per share
(the "Option"). The Option granted hereunder is not intended to constitute
an incentive stock option within the meaning of Section 422 of the Code.
The Associate shall be required to pay no consideration for the
grant of the Option except for his or her agreement to provide services to
the Company prior to exercise and other agreements set forth herein.
2. INCORPORATION OF PLAN BY REFERENCE
The Option has been granted to the Associate under the Plan, a copy
of which is attached hereto. All of the terms, conditions and other
provisions of the Plan are hereby incorporated by reference into this
Associate Stock Option Agreement (the "Agreement"). Capitalized terms used
in this Agreement but not defined herein shall have the same meanings as in
the Plan. If there is any conflict between the provisions of this
Agreement and the provisions of the Plan, the provisions of the Plan shall
govern.
3. DATE WHEN EXERCISABLE
(a) This Option may not be exercised unless and only to the extent
that it has become exercisable as specified in this Agreement. Subject to
acceleration as provided in this Section 3, and Sections 7 and 8 below,
limitations on exercisability imposed in Section 8 below, and all other
terms and conditions of this Agreement, this Option shall become
exercisable as follows: The Associate may purchase up to one-fifth of the
total number of shares granted hereunder commencing one (1) year after the
date of grant of this Option, an additional one-fifth commencing two (2)
years after the date of grant of this Option, an additional one-fifth
commencing three (3) years after the date of grant of this Option, an
additional one-fifth commencing four (4) years after the date of grant of
this Option, and the remaining shares granted hereunder commencing five (5)
years after the date of grant of this Option. Except as otherwise
specifically provided herein, the Option to purchase any and all Shares
covered by this Agreement shall expire at 5:00 p.m. on the date ten (10)
years after the date of grant of this Option.
(b) The number of Shares with respect to which the Option may be
exercised shall be cumulative so that if, in any of the aforementioned
periods, the full number of Shares shall not have been purchased, any such
unpurchased Shares shall continue to be included in the number of Shares
with respect to which this Option shall then be exercisable along with any
other Shares as to which this Option may become exercisable in accordance
with its terms.
THE DATE OF GRANT OF THIS OPTION IS: (date)
GRANT NUMBER: (grant no.)
(c) The provisions contained in Section 3(a) above
notwithstanding, the Committee may, in its sole discretion, at any time,
upon written notice to the Associate, accelerate the vesting described in
Section 3(a) so that the Option shall become immediately exercisable to the
extent of all or any portion of the Shares covered hereunder. Acceleration
pursuant to this Section 3(c) shall be separate and independent from any
acceleration pursuant to Section 7 of this Agreement, and the provisions of
Sections 3(d) and (e) shall not apply in the case of acceleration pursuant
to Section 7 of this Agreement.
(d) In the event that the acceleration described in Section 3(c)
occurs prior to the time that all of the Options would have otherwise been
exercisable in accordance with Section 3(a), in consideration of such
acceleration, the Associate, if so requested by the Company at the time,
agrees to hold and not dispose of that number of Shares covered by this
Option for which this Option would not have been exercisable at the time of
such acceleration, if such acceleration had not occurred, and further
agrees to dispose of such Shares only at such time and to the extent of
that number of Shares for which this Option would have been exercisable in
accordance with the schedule set forth in Section 3(a) as if the
acceleration had not occurred. In addition, if the Associate's employment
with the Company or any of its subsidiaries shall be voluntarily terminated
(other than for a temporary leave of absence approved by the Company or
retirement at age 65 or older or through early retirement with the consent
of the Company pursuant to any retirement plan of the Company or any
subsidiary) prior to a Change of Control and prior to the expiration of
five (5) years after the date of grant of this Option, the Associate shall
be obligated, at the Company's option exercisable within 60 days after
termination of the Associate's employment, to sell to the Company any
Shares theretofore acquired by the Associate upon exercise of this Option
at a price which is equal to the price that the Associate paid for such
Shares, but only to the extent that the Option would not have been
exercisable at the date of termination of employment in accordance with
Section 3(a) were it not for the acceleration provided for herein.
(e) The Associate acknowledges that the certificates representing
those Shares received upon exercise of the Option at a time the Option
would not otherwise have been exercisable but for an acceleration pursuant
to Section 3(c) may bear an appropriate legend giving notice of the
foregoing restrictions, including the restriction on transfer of the
Shares.
4. METHOD OF EXERCISE
The Option may be exercised as to any part of the Shares which may
then be purchased by delivery to and receipt by the Secretary of the
Company at 450 Winks Lane, Bensalem, Pennsylvania 19020, of a written
notice, signed by the Associate, specifying the number of Shares which the
Associate wishes to purchase, accompanied by payment in full of the
exercise price therefor in accordance with Section 5. As soon as
practicable after the receipt of such notice and payment, the Company shall
deliver to the Associate a stock certificate for the Shares so purchased,
with any requisite legend affixed. Subject to the provisions of the Plan,
such exercise may include instructions to the Company to deliver Shares due
upon exercise of the Option to any registered broker or dealer designated
by the Committee (a "Designated Broker") in lieu of delivery to the
Associate. Such instructions must designate the account into which the
Shares are to be deposited. The Associate may tender this notice of
exercise, which has been properly executed by the Associate, and the
aforementioned delivery instructions to any Designated Broker together with
irrevocable instructions to the Designated Broker to promptly deliver to
the Company the cash amount of sale or loan proceeds from the Shares
sufficient to pay the exercise price, and thereupon the Company may issue
Shares and deliver them to such Designated Broker.
5. PAYMENT OF EXERCISE PRICE
The exercise price of the Option shall be payable in cash or by
certified or bank cashier's check, provided, however, that, in lieu of
payment in full in cash or by such check, the exercise price may, if and to
the extent then permitted by the Committee, upon written request of the
Associate, be paid in full or in part by delivery and transfer to the
Company of that number of shares of the Company's common stock otherwise
owned by the Associate with an aggregate fair market value (determined in
accordance with procedures for valuing shares as set forth in rules and
regulations adopted by the Committee and in effect at the time the
Associate's notice of exercise is received by the Company) equal to the
aggregate exercise price of that number of Shares for which the Option is
being exercised or such lesser portion of the aggregate purchase price as
may be specified by the Associate (in which case the balance must be paid
in cash or by certified or bank cashier's check).
6. TAX WITHHOLDING
Whenever Shares are to be delivered upon exercise of the Option,
the Company shall be entitled to require as a condition of delivery that
the Associate remit or, in appropriate cases, agree to remit when due an
amount sufficient to satisfy all federal, state and local withholding tax
requirements relating thereto. Subject to the approval of the Committee,
the Associate will be entitled to elect to have the Company withhold from
the Shares to be delivered upon the exercise of the Option, or to elect to
deliver to the Company from shares of the Company's common stock owned
separately by the Associate, a sufficient number of such shares to satisfy
the Associate's federal, state and local tax obligations relating to the
Option exercise (and the Company's withholding obligations), to the extent,
if any, permitted under rules and regulations adopted by the Committee and
in effect at the time of the exercise of the Option. In such case, the
Shares withheld or the shares surrendered will be valued at the fair market
value determined in accordance with procedures for valuing shares as set
forth in rules and regulations adopted by the Committee and otherwise in
effect at the time of the exercise of the Option.
7. CHANGE OF CONTROL PROVISIONS
(a) Acceleration of Exercisability. In the event of a Change of
Control at a time that the Associate is employed by the Company or any of
its subsidiaries and after the date of grant of this Option, this Option
shall become immediately and fully exercisable upon the occurrence of such
Change of Control, and no restriction or limitation on the rights of the
Associate set forth in Section 3 hereof shall have any further force or
effect.
(b) Definitions of Certain Terms. For purposes of this Agreement,
the following definitions shall apply:
(1) "Beneficial Owner," "Beneficially Owns," and
"Beneficial Ownership" shall have the meanings ascribed to such terms
for purposes of Section 13(d) of the Exchange Act and the rules
thereunder, except that, for purposes of this Section 7, "Beneficial
Ownership" (and the related terms) shall include Voting Securities
that a Person has the right to acquire pursuant to any agreement, or
upon exercise of conversion rights, warrants, options or otherwise,
regardless of whether any such right is exercisable within 60 days of
the date as of which Beneficial Ownership is to be determined.
(2) "Change of Control" means and shall be deemed to have
occurred if
(i) any Person, other than the Company or a
Related Party, acquires directly or indirectly the Beneficial
Ownership of any Voting Security of the Company and immediately
after such acquisition such Person has, directly or indirectly,
the Beneficial Ownership of Voting Securities representing 20
percent or more of the total voting power of all the then-
outstanding Voting Securities; or
(ii) those individuals who as of (grant
date) constitute the Board or who thereafter are elected to the
Board and whose election, or nomination for election, to the
Board was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors as of
(grant date) or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority of the members of the Board; or
(iii) the shareholders of the Company
approve a merger, consolidation, recapitalization or
reorganization of the Company, a reverse stock split of
outstanding Voting Securities, or an acquisition of securities or
assets by the Company (a "Transaction"), or consummation of such
a Transaction if shareholder approval is not obtained, other than
a Transaction which would result in the holders of Voting
Securities having at least 80 percent of the total voting power
represented by the Voting Securities outstanding immediately
prior thereto continuing to hold Voting Securities or voting
securities of the surviving entity having at least 60 percent of
the total voting power represented by the Voting Securities or
the voting securities of such surviving entity outstanding
immediately after such Transaction and in or as a result of which
the voting rights of each Voting Security relative to the voting
rights of all other Voting Securities are not altered; provided,
however, a Change of Control shall not be deemed to have occurred
if the Committee shall have determined, by action taken prior to
the approval of the Transaction by shareholders or consummation
of the Transaction if shareholder approval is not obtained, that
such Transaction shall not constitute a Change of Control for
purposes of all options then outstanding under the Plan, which
determination, if made with respect to a Transaction, shall not
be deemed to constitute a determination with respect to any
subsequent Transaction; or
(iv) the shareholders of the Company approve
a plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company of all or substantially
all of the Company's assets other than any such transaction which
would result in Related Parties owning or acquiring more than 50
percent of the assets owned by the Company immediately prior to
the transaction.
(3) "Person" shall have the meaning ascribed for purposes
of Section 13(d) of the Exchange Act and the rules thereunder.
(4) "Related Party" means (i) a majority-owned subsidiary
of the Company; or (ii) a trustee or other fiduciary holding
securities under an Associate benefit plan of the Company or any
majority-owned subsidiary of the Company; or (iii) a corporation owned
directly or indirectly by the shareholders of the Company in
substantially the same proportion as their ownership of Voting
Securities; or (iv) if, prior to any acquisition of a Voting Security
which would result in any Person Beneficially Owning more than ten
percent of any outstanding class of Voting Security and which would be
required to be reported on a Schedule 13D or an amendment thereto, the
Board approved the initial transaction giving rise to an increase in
Beneficial Ownership in excess of ten percent and any subsequent
transaction giving rise to any further increase in Beneficial
Ownership; provided, however, that such Person has not, prior to
obtaining Board approval of any such transaction, publicly announced
an intention to take actions which, if consummated or successful (at a
time such Person has not been deemed a "Related Party"), would
constitute a Change of Control.
(5) "Voting Securities" means any securities of the
Company which carry the right to vote generally in the election of
directors.
8. TERMINATION OF EMPLOYMENT
(a) This Option shall terminate and no longer be exercisable at
the earlier of the scheduled expiration time of the Option, as set forth in
Section 3(a) above, or the earliest time specified below at or following a
termination of employment of the Associate; provided, however, that in the
event of termination of the employment of the Associate, this Option shall
be exercisable during the period, if any, between the occurrence of such
termination and the time designated for the termination of this Option only
to the extent indicated below:
(1) at the time of involuntary termination of the
Associate's employment with the Company or any of its subsidiaries for
reasons of moral turpitude, at which time this Option shall
immediately terminate; provided, however, that, the provisions of
Section 3(a) notwithstanding, this Option may not be exercised during
any period prior to a Change of Control during which the Company,
having given notice to the Associate, is investigating a claim that
the Associate has engaged in one or more acts of moral turpitude; or
(2) at the time of voluntary or involuntary termination
of the Associate's employment with the Company or any of its
subsidiaries for any reason at any time prior to the expiration of one
year after the date of grant of this Option and prior to any Change of
Control, other than by reason of the Associate's death or disability,
at which time this Option shall immediately terminate; or
(3) at the expiration of three months after the voluntary
or, if for cause (other than for reasons of moral turpitude), the
involuntary termination of the Associate's employment with the Company
or any of its subsidiaries, in either case at any time (A) after the
expiration of one year after the date of grant of this Option, except
as may be otherwise provided in Section 8(a)(7) below, during which
three-month period this Option shall be exercisable only to the extent
that it was exercisable at the date of the Associate's termination of
employment, or (B) after a Change of Control, except as may be
otherwise provided in Section 8(a)(7) below, during which three-month
period this Option shall be exercisable in full; or
(4) at the expiration of three months after the
involuntary termination of the Associate's employment, other than for
reasons of cause, moral turpitude, death or disability, with the
Company or any of its subsidiaries at any time (A) after the
expiration of one year after the date of grant of this Option, except
as may be otherwise provided in Section 8(a)(7) below, during which
three-month period this Option shall be exercisable to purchase the
greater of (i) a number of Shares determined pursuant to the Option
Formula (as set forth in Section 8(e) below) and (ii) the number of
Shares as to which this Option was exercisable at the date of the
Associate's termination of employment, or (B) after a Change of
Control, except as may be otherwise provided in Section 8(a)(7) below,
during which three-month period this Option shall be exercisable in
full; or
(5) at the expiration of three years after the date this
Option is scheduled to become exercisable in full under Section 3
above or three years after the termination of employment, whichever is
the later (but in no event later than the scheduled expiration time of
this Option), if the Associate's termination results from his normal
retirement at age 65 or thereafter ("Normal Retirement") or early
retirement after reaching age 60 and prior to age 65 with the consent
of the Company pursuant to any retirement plan ("Early Retirement"),
or such longer or shorter period as may be provided in Section 8(a)(6)
below, provided that (i) during the period between Normal Retirement
or Early Retirement, as the case may be, and termination of the Option
as specified in this Section 8(a)(5) (the "Exercisability Period"),
this Option shall continue to be exercisable by the Associate at such
times and to the same extent that it would have been exercisable had
the Associate continued his employment throughout the Exercisability
Period, except as may be otherwise provided in Section 8(a)(6) below,
and (ii) at the time of Normal Retirement or Early Retirement, as the
case may be, the Associate enters into an agreement not to engage,
directly or indirectly, in any business activity in competition with
any business then engaged in by the Company or any of its subsidiaries
during the Exercisability Period, and containing such other terms and
conditions as may be specified by the Company; or
(6) at the expiration of one year after the Associate's
death if the Associate dies while employed by the Company or any of
its subsidiaries or dies during the Exercisability Period specified in
Section 8(a)(5) above, during which one-year period this Option shall
be exercisable in full; or
(7) at the expiration of one year after the Associate's
death if the Associate dies during the three-month periods referred to
in Sections 8(a)(3) or (4) above, during which one-year period this
Option shall be exercisable to the same extent provided in Section
8(a)(3) or (4) above (whichever was applicable prior to the
Associate's death); or
(8) at the expiration of one year after the termination
of the Associate's employment with the Company or any of its
subsidiaries by reason of the Associate's permanent disability if the
Associate becomes permanently disabled while employed by the Company
or any of its subsidiaries, during which one-year period this Option
shall be exercisable in full.
(b) For purposes hereof, "cause" shall mean the Associate's
chronic neglect, refusal or failure to fulfill his or her employment duties
and responsibilities, other than for reasons of sickness, accident or other
similar causes beyond the Associate's control. Such neglect, refusal or
failure shall be determined in the sole and reasonable judgment of the
Committee.
(c) For purposes hereof, the existence of a "disability" shall be
determined by, or in accordance with criteria and standards adopted by, the
Committee.
(d) For purposes hereof, "moral turpitude" shall mean the
Associate's dishonesty or intentional wrongdoing committed against the
Company, its agents or Associates or otherwise in connection with his or
her employment by the Company or conviction of a crime, whether or not in
connection with employment, other than a traffic infraction or other minor
violation. The Committee shall have the sole discretion to determine
whether the Associate has committed an act of moral turpitude.
(e) For purposes hereof, the "Option Formula" shall be the product
of (i) the total number of Shares covered by this Option at the date of
termination of employment times (ii) a fraction, the numerator of which
shall be the lesser of five (5) or the number of full and partial years
that the Associate has been employed by the Company or any of its
subsidiaries between the date of grant of this Option and the date of
termination of employment and the denominator of which shall be the number
five (5), less any shares previously purchased by exercise of the Option.
(f) Except as provided in Section 9, an Associate shall not be
deemed to have terminated his employment for purposes of this Section 8 if
his employment terminates with the Company but thereafter continues with
one of the Company's subsidiaries or terminates with a subsidiary but
thereafter continues with the Company or another subsidiary.
9. CHANGE IN JOB STATUS
Should the Associate's job classification change, and as a result
of such change the Committee determines, in its sole discretion and prior
to any Change of Control, that the Associate is no longer employed in a
position which would enable him to contribute to the success of the Company
on at least as great a level as that to which he was enabled by his prior
job classification, then the Committee may deem the Associate's employment
with the Company or its subsidiaries to have been terminated involuntarily
(but not for cause or moral turpitude) in respect of all or a portion of
this Option.
10. LIMITS ON TRANSFER OF OPTION; BENEFICIARIES
No right or interest of Associate in this Option shall be pledged,
encumbered or hypothecated to or in favor of any third party or shall be
subject to any lien, obligation or liability of the Associate to any third
party. This Option shall not be transferable to any third party by the
Associate otherwise than by will or the laws of descent and distribution,
and this Option shall be exercisable, during the lifetime of the Associate,
only by the Associate; provided, however, that the Associate will be
entitled to designate a beneficiary or beneficiaries to exercise his rights
under this Option upon the death of Associate, in the manner and to the
extent permitted by the Committee under rules and regulations adopted by
the Committee under the Plan.
11. INVESTMENT REPRESENTATION
Unless, at the time of any exercise of this Option, the issuance
and delivery of Shares hereunder to the Associate is registered under a
then-effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), and complies with all applicable
registration requirements under state securities laws, the Associate shall
provide to the Company, as a condition to the valid exercise of this Option
and the delivery of any certificates representing Shares, appropriate
evidence, satisfactory in form and substance to the Company, that he is
acquiring the Shares for investment and not with a view to the distribution
of the Shares or any interest in the Shares, and a representation to the
effect that the Associate shall make no sale or other disposition of the
Shares unless (i) the Company shall have received an opinion of counsel
satisfactory to it in form and substance that such sale or other
disposition may be made without registration under the then-applicable
provisions of the Securities Act, the related rules and regulations of the
Securities and Exchange Commission, and applicable state securities laws
and regulations, or (ii) the sale or other disposition of the Shares shall
be registered under a currently effective registration statement under the
Securities Act of 1933 and complies with all applicable registration
requirements under state securities laws. The certificates representing
the Shares may bear an appropriate legend giving notice of the foregoing
restriction on transfer of the Shares, and any other restrictive legend
deemed necessary or appropriate by the Committee.
12. ASSOCIATE BOUND BY PLAN
The Associate hereby acknowledges receipt of the attached copy of
the Plan and agrees to be bound by all the terms and provisions thereof (as
presently in effect or hereafter amended), and by all decisions and
determinations of the Committee thereunder.
13. MISCELLANEOUS
This Agreement shall be binding upon the heirs, executors,
administrators and successors of the parties. This Agreement constitutes
the entire agreement between the parties with respect to the Option, and
supersedes any prior agreements or documents with respect to the Option.
No amendment, alteration, suspension, discontinuation or termination of
this Agreement which may impose any additional obligation upon the Company
or impair the rights of the Associate with respect to the Option shall be
valid unless in each instance such amendment, alteration, suspension,
discontinuation or termination is expressed in a written instrument duly
executed in the name and on behalf of the Company and by the Associate.
CHARMING SHOPPES, INC.
BY:______________________________________
(Authorized Officer)
ASSOCIATE:
______________________________________
EXHIBIT 10.2.33
Executive Severance
Agreement for (NAME)
Charming Shoppes, Inc.
July 1999
Contents
Article 1. Establishment, Term, and Purpose 1
Article 2. Definitions 2
Article 3. Severance Benefits 5
Article 4. Form and Timing of Severance Benefits 8
Article 5. Excise Tax Treatment 8
Article 6. The Company's Payment Obligation 8
Article 7. Legal Remedies 9
Article 8. Outplacement Assistance 9
Article 9. Successors and Assignment 9
Article 10. Miscellaneous 10
Charming Shoppes, Inc.
Executive Severance Agreement
THIS AGREEMENT is made and entered into as of the 15th day of July,
1999 (the "Effective Date"), by and between Charming Shoppes, Inc.
(hereinafter referred to as the "Company") and (NAME) (hereinafter referred
to as the "Executive").
WHEREAS, the Board of Directors of the Company has approved the Company
entering into severance agreements with certain key executives of the
Company;
WHEREAS, the Executive is a key executive of the Company;
WHEREAS, should the possibility of a Change in Control of the Company
arise, the Board believes it is imperative that the Company and the Board
should be able to rely upon the Executive to continue in his position, and
that the Company should be able to receive and rely upon the Executive's
advice, if requested, as to the best interests of the Company and its
shareholders without concern that the Executive might be distracted by the
personal uncertainties and risks created by the possibility of a Change in
Control; and
WHEREAS, should the possibility of a Change in Control arise, in
addition to his regular duties, the Executive may be called upon to assist
in the assessment of such possible Change in Control, advise management and
the Board as to whether such Change in Control would be in the best
interests of the Company and its shareholders, and to take such other
actions as the Board might determine to be appropriate.
NOW THEREFORE, to assure the Company that it will have the continued
dedication of the Executive and the availability of his advice and counsel
notwithstanding the possibility, threat, or occurrence of a Change in
Control of the Company, and to induce the Executive to remain in the employ
of the Company, and for other good and valuable consideration, the Company
and the Executive agree as follows:
Article 1. Establishment, Term, and Purpose
This Agreement will commence on the Effective Date and shall continue
in effect for three (3) full years (i.e., until the day before the third
anniversary of the Effective Date). However, at the end of such three (3)
year period and at the end of each additional year thereafter, the term of
this Agreement shall be extended automatically for one (1) additional year,
unless the Committee delivers written notice six (6) months prior to the
end of such term, or extended term, to each Executive, that the Agreement
will not be extended. In such case, the Agreement will terminate at the end
of the term, or extended term, then in progress.
However, in the event a Change in Control occurs during the original or
any extended term, this Agreement will remain in effect for the longer of:
(i) twenty-four (24) months beyond the month in which such Change in
Control occurred; or (ii) until all obligations of the Company hereunder
have been fulfilled, and until all benefits required hereunder have been
paid to the Executive.
Article 2. Definitions
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized.
2.1"Base Salary" means the salary of record paid to an Executive as
annual salary, excluding amounts received under incentive or other bonus
plans, whether or not any such salary or other amounts are deferred.
2.2"Beneficial Owner" shall have the meaning ascribed to such term
in Rule 13d-3 of the General Rules and Regulations under the Exchange Act
and shall include related terms such as "Beneficial Ownership."
2.3"Beneficiary" means the persons or entities designated or deemed
designated by the Executive pursuant to Section 10.2 herein.
2.4"Board" means the Board of Directors of the Company.
2.5"Cause" means: (a) the Executive's willful and continued failure to
substantially perform his duties with the Company (other than any such
failure resulting from Disability or occurring after issuance by the
Executive of a Notice of Termination for Good Reason), after a written
demand for substantial performance is delivered to the Executive that
specifically identifies the manner in which the Company believes that the
Executive has willfully failed to substantially perform his duties, and
after the Executive has failed to resume substantial performance of his
duties on a continuous basis within thirty (30) calendar days of receiving
such demand; (b) the Executive's willfully engaging in conduct (other than
conduct covered under (a) above) which is demonstrably and materially
injurious to the Company, monetarily or otherwise; or (c) the Executive's
having been convicted of a felony. For purposes of this subparagraph, no
act, or failure to act, on the Executive's part shall be deemed "willful"
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the action or omission was in the best
interests of the Company.
2.6"Change in Control" of the Company shall be deemed to have occurred
as of the first day after the Effective Date that any one or more of the
following conditions is satisfied:
(a) Any Person, other than the Company or a Related Party, acquires
directly or indirectly the Beneficial Ownership of any Voting
Security and immediately after such acquisition such Person has
directly or indirectly, the Beneficial Ownership of Voting
Securities representing twenty percent (20%) or more of the total
voting power of all the then-outstanding Voting Securities; or
(b) During any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the Board of Directors and
any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a
transaction described in paragraph (a) or (c) of this section)
whose election by the Board of Directors or nomination of election
by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute two-thirds (2/3) of the Board; or
(c) The shareholders of the Company approve a merger, consolidation,
recapitalization or reorganization of the Company, a reverse stock
split of outstanding Voting Securities, or an acquisition of
securities or assets by the Company (a "Transaction"), or
consummation of such a Transaction if shareholder approval is not
obtained, other than a Transaction which would result in the
holders of Voting Securities having at least eighty percent (80%)
of the total voting power represented by the Voting Securities
outstanding immediately prior thereto continuing to hold Voting
Securities or voting securities of the surviving entity having at
least sixty percent (60%) of the total voting power represented by
the Voting Securities or the voting securities of such surviving
entity outstanding immediately after such transaction and in or as
a result of which the voting rights of each Voting Security
relative to the voting rights of all other Voting Securities are
not altered; or
(d) The shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets other than any such transaction which would result
in Related Parties owning or acquiring more than fifty percent
(50%) of the assets owned by the Company immediately prior to the
transaction.
However, in no event shall a Change in Control be deemed to have
occurred, with respect to the Executive, if the Executive is part
of a purchasing group which consummates the Change-in-Control transaction.
The Executive shall be deemed "part of a purchasing group" for purposes of
the preceding sentence if the Executive is an equity participant in the
purchasing company or group (except for: (i) passive ownership of less than
three percent (3%) of the stock of the purchasing company; or
(ii) ownership of equity participation in the purchasing company or group
which is otherwise not significant, as determined prior to the Change in
Control by a majority of the nonemployee continuing Directors).
2.7"Code" means the United States Internal Revenue Code of 1986,
as amended, and any successors thereto.
2.8"Committee" means the Compensation Committee of the Board or any
other committee appointed by the Board to perform the functions of the
Compensation Committee.
2.9"Company" means Charming Shoppes, Inc., a Pennsylvania corporation,
or any successor thereto as provided in Article 9 herein. If the
Executive is an officer of Charming Shoppes of Delaware, Inc. only, or an
officer of both Charming Shoppes of Delaware, Inc. and Charming Shoppes,
Inc., the word "Company" shall be deemed to include not only Charming
Shoppes, Inc. but also Charming Shoppes of Delaware, Inc. with respect to
employment matters, including termination of employment, where appropriate.
References to the "Company" with respect to a Change in Control and matters
incidental to the determination of a Change in Control relate only to
Charming Shoppes, Inc.
2.10 "Disability" means complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which the
Executive was employed when such disability commenced.
2.11 "Effective Date" means the date of this Agreement set forth
above.
2.12 "Effective Date of Termination" means the date on which a
Qualifying Termination occurs which triggers the payment of Severance
Benefits hereunder.
2.13 "Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
2.14 "Good Reason" shall mean, without the Executive's express written
consent, the occurrence of any one or more of the following:
(a) The assignment of the Executive to duties materially inconsistent
with the Executive's authorities, duties, responsibilities, and
status (including offices and reporting requirements) as an
employee of the Company, or a reduction or alteration in the nature
or status of the Executive's authorities, duties, or
responsibilities from the greatest of: (i) those in effect on the
Effective Date; (ii) those in effect during the fiscal year
immediately preceding the year of the Change in Control; or (iii)
those in effect immediately preceding the Change in Control;
(b) The Company's requiring the Executive to be based at a location
which is at least fifty (50) miles farther from the current primary
residence than is such residence from the Company's current
headquarters, except for required travel on the Company's business
to an extent substantially consistent with the Executive's business
obligations as of the Effective Date;
(c) A reduction by the Company in the Executive's Base Salary as in
effect on the Effective Date or as the same shall be increased from
time to time or a failure by the Company to pay to the Executive
any portion of his compensation or any installment of deferred
compensation under any plan or program of the Company within thirty
(30) days after the date such payment is due;
(d) A material reduction in the Executive's level of participation and
compensation opportunities in any of the Company's short- and/or
long-term incentive compensation plans, or employee benefit or
retirement plans, policies, practices, or arrangements in which the
Executive participates from the greatest of the levels in place on:
(i) the Effective Date; (ii) the fiscal year immediately preceding
the Change in Control; or (iii) immediately preceding the Change in
Control; provided, however, that reductions in the levels of
participation in any such plans shall not be deemed to be "Good
Reason" if the Executive's reduced level of participation in each
such program remains substantially consistent with the average
level of participation of other executives of the Company, any
Person who then controls the Company, and any persons who have
positions commensurate with the Executive's position;
(e) The failure of the Company to obtain a satisfactory agreement from
any successor to the Company to assume and agree to perform this
Agreement, as contemplated in Article 9 herein; or
(f) Any purported termination of Executive's employment by the Company
that is not effected pursuant to a Notice of Termination.
The existence of Good Reason shall not be affected by the Executive's
temporary incapacity due to physical or mental illness not constituting a
Disability. The Executive's Retirement shall constitute a waiver of the
Executive's rights with respect to any circumstance constituting Good
Reason. The Executive's continued employment shall not constitute a waiver
of the Executive's rights with respect to any circumstance constituting
Good Reason.
2.15 "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon,
and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment
under the provision so indicated.
2.16 "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as provided in Section 13(d).
2.17 "Qualifying Termination" means any of the events described in
Section 3.2 herein, the occurrence of which triggers the payment of
Severance Benefits hereunder.
2.18 "Related Party" means (a) a majority-owned subsidiary of the
Company; or (b) a trustee or other fiduciary holding securities under an
employment plan of the Company or any majority-owned subsidiary; or (c) a
corporation owned directly or indirectly by the shareholders of the Company
in substantially the same proportion as their ownership of Voting
Securities.
2.19 "Retirement" means the Executive's voluntary termination of
employment in a manner which qualifies the Executive to receive immediately
payable retirement benefits under the Company's tax-qualified retirement
plan or under the successor or replacement of such retirement plan if it is
then no longer in effect. The term "Retirement" shall not mean a
termination of the Executive's employment under circumstances which
constitute Good Reason or that constitute an involuntary termination of the
Executive's employment by the Company.
2.20 "Severance Benefits" means the payment of severance compensation
as provided in Section 3.3 herein.
2.21 "Voting Securities" means any securities of the Company which
carry the right to vote generally in the election of directors.
Article 3. Severance Benefits
3.1Right to Severance Benefits. The Executive shall be entitled to
receive from the Company Severance Benefits, as described in Section 3.3
herein, if there has been a Change in Control of the Company and if, within
twenty-four (24) calendar months following the Change in Control, a Notice
of Termination for a Qualifying Termination of the Executive has been
delivered.
The Executive shall not be entitled to receive Severance Benefits if he
is terminated for Cause, or if his employment with the Company ends due to
death, Disability, or Retirement or due to a voluntary termination of
employment by the Executive without Good Reason.
3.2Qualifying Termination. The occurrence of any one or more of the
following events (as evidenced by a Notice of Termination) shall trigger
the payment of Severance Benefits to the Executive under this Agreement:
(a) An involuntary termination of the Executive's employment by the
Company for reasons other than Cause within twenty-four (24)
calendar months following the end of the month in which a Change in
Control of the Company occurred as evidenced by a Notice of
Termination delivered by the Executive to the Company;
(b) A voluntary termination by the Executive for Good Reason within
twenty-four (24) calendar months following the end of the month in
which a Change in Control of the Company occurred as evidenced by a
Notice of Termination delivered to the Company by the Executive; or
(c) The Company or any successor company breaches any of the provisions
of this Agreement.
3.3Description of Severance Benefits. In the event the Executive
becomes entitled to receive Severance Benefits, as provided in Sections 3.1
and 3.2 herein, the Company shall pay to the Executive and provide him with
the following:
(a) An amount equal to two (2) times the highest rate of the
Executive's annualized Base Salary in effect at any time from his
initial date of employment with the Company up to and including the
Effective Date of Termination.
(b) An amount equal to two (2) times the Executive's highest targeted
annual incentive award established for any plan year from his
initial date of employment with the Company up to and including the
year in which the Executive's Effective Date of Termination occurs,
regardless of whether the targeted annual incentive award was
earned.
(c) An amount equal to the Executive's unpaid targeted annual incentive
award, established for the year in which the Executive's Effective
Date of Termination occurs, multiplied by a fraction, the numerator
of which is the number of completed days in the then-existing
fiscal year through the Effective Date of Termination, and the
denominator of which is three hundred sixty-five (365);
(d) An amount equal to the Executive's unpaid Base Salary, accrued
vacation pay, and earned but not taken vacation pay through the
Effective Date of Termination.
(e) A continuation of the welfare benefits of health care, life and
accidental death and dismemberment, and disability insurance
coverage for two (2) full years after the Effective Date of
Termination. These benefits shall be provided to the Executive at
the same coverage level, as in effect as of the Executive's
Effective Date of Termination or, if greater, as in effect 90 days
prior to the date of the Change in Control, and at the same premium
cost to the Executive which was paid by the Executive at the time
such benefits were provided. However, in the event the premium cost
and/or level of coverage shall change for all employees of the
Company, or for management employees with respect to supplemental
benefits, the cost and/or coverage level, likewise, shall change
for the Executive in a corresponding manner.
The continuation of these welfare benefits shall be discontinued
prior to the end of the two (2) year period in the event the
Executive has available substantially similar benefits at a
comparable cost to the Executive from a subsequent employer, as
determined by the Committee.
(f) With regard to the Company's split-dollar life insurance
arrangement with the Executive, the following provisions shall
apply.
(i)The Company shall continue to pay the annual premiums on the
policy, that is subject to the split-dollar life insurance
agreement, in accordance with the most recent schedule provided
prior to the Change in Control by the insurance broker who
administers the split-dollar life insurance arrangement.
(ii) For purposes of making any determination under the split-
dollar life insurance agreement, the Executive's number of years
of employment with the Company, as of the Effective Date of
Termination, shall be deemed to be fifteen (15).
Incentive awards granted under the incentive arrangements adopted by
the Company shall be treated pursuant to the terms of the applicable plan.
The aggregate benefits accrued by the Executive as of the Effective
Date of Termination under the Charming Shoppes, Inc., and other savings and
retirement plans sponsored by the Company, shall be distributed pursuant to
the terms of the applicable plan.
Compensation which has been deferred under the Charming Shoppes
Variable Deferred Compensation Plan or other plans sponsored by the
Company, as applicable, together with all interest that has been credited
with respect to any such deferred compensation balances, shall be
distributed pursuant to the terms of the applicable plan.
3.4Termination for Disability. Following a Change in Control of the
Company, if an Executive's employment is terminated due to Disability, the
Executive shall receive his Base Salary and accrued vacation through the
Effective Date of Termination, at which point in time the Executive's
benefits shall be determined in accordance with the Company's disability,
retirement, insurance, and other applicable plans and programs then in
effect. In the event the Executive's employment is terminated due to
Disability, the Executive shall not be entitled to the Severance Benefits
described in Section 3.3.
3.5Termination for Retirement or Death. Following a Change in Control
of the Company, if the Executive's employment is terminated by reason of
his Retirement or death, the Executive's benefits shall be determined in
accordance with the Company's retirement, survivor's benefits, insurance,
and other applicable programs of the Company then in effect. In the event
the Executive's employment is terminated by reason of his Retirement or
death, the Executive shall not be entitled to the Severance Benefits
described in Section 3.3.
3.6Termination for Cause, or Other Than for Good Reason or Retirement.
Following a Change in Control of the Company, if the Executive's employment
is terminated either: (a) by the Company for Cause; or (b) by the
Executive (other than for Retirement, Good Reason, or under circumstances
giving rise to a Qualifying Termination described in Section 3.2(c)
herein), the Company shall pay the Executive his full Base Salary and
accrued vacation through the Effective Date of Termination, at the rate
then in effect, plus all other amounts to which the Executive is entitled
under any compensation plans of the Company, at the time such payments are
due, and the Company shall have no further obligations to the Executive
under this Agreement.
3.7Notice of Termination. Any termination of employment by the Company
or by the Executive for Good Reason shall be communicated by a Notice of
Termination.
Article 4. Form and Timing of Severance Benefits
4.1Form and Timing of Severance Benefits. The Severance Benefits
described in Sections 3.3(a), 3.3(b), 3.3(c), and 3.3(d) herein shall be
paid in cash to the Executive in a single lump sum as soon as practicable
following the Effective Date of Termination, but in no event beyond thirty
(30) days from such date.
4.2Withholding of Taxes. The Company shall be entitled to withhold from
any amounts payable under this Agreement all taxes as legally shall be
required to be withheld (including, without limitation, any United States
federal taxes and any other state, city, or local taxes).
Article 5. Excise Tax Treatment
5.1Excise Tax Treatment. In the event that a Change in Control occurs,
and a determination is made by the Company pursuant to Section 280G and
4999 of the Code that a golden parachute excise tax is due, the benefits
provided to the Executive under this Agreement that are classified as
"parachute payments" (as such term is defined in Section 280G of the Code),
shall be limited to the amount just necessary to avoid the excise tax.
However, this limitation shall be applied if, and only if, such a
limitation results in a greater net (of excise tax) cash benefit to the
Executive than he would receive had the benefits not been capped and an
excise tax been levied.
In the event the Internal Revenue Service subsequently adjusts the
excise tax computation herein described, the Company shall reimburse the
Executive for the full amount necessary to make the Executive whole (less
any amounts received by the Executive that he would not have received had
the computation initially been computed as subsequently adjusted),
including the value of benefits that were erroneously limited, the value of
any overpaid excise tax, and any related interest and/or penalties due to
the Internal Revenue Service.
Article 6. The Company's Payment Obligation
The Company's obligation to make the payments and the arrangements
provided for herein shall be absolute and unconditional, and shall not be
affected by any circumstances, including, without limitation, any offset,
counterclaim, recoupment, defense, or other right which the Company may
have against the Executive or anyone else. All amounts payable by the
Company hereunder shall be paid without notice or demand. Each and every
payment made hereunder by the Company shall be final, and the Company shall
not seek to recover all or any part of such payment from the Executive or
from whomsoever may be entitled thereto, for any reasons whatsoever.
The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision
of this Agreement, and the obtaining of any such other employment shall in
no event effect any reduction of the Company's obligations to make the
payments and arrangements required to be made under this Agreement, except
to the extent provided in Section 3.3(e) herein.
Article 7. Legal Remedies
7.1Payment of Legal Fees. To the extent permitted by law, the Company
shall pay all legal fees, costs of litigation, prejudgment interest, and
other expenses incurred in good faith by the Executive as a result of the
Company's refusal to provide the Severance Benefits to which the Executive
becomes entitled under this Agreement, or as a result of the Company's
contesting the validity, enforceability, or interpretation of this
Agreement, or as a result of any conflict (including conflicts related to
the calculation of parachute payments) between the parties pertaining to
this Agreement, subject to an overall limit on the payment of legal fees of
thirty-five thousand dollars ($35,000).
7.2Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled by arbitration, conducted
before a panel of three (3) arbitrators sitting in a location selected by
the Executive within fifty (50) miles from the location of his employment
with the Company, in accordance with the rules of the American Arbitration
Association then in effect.
Judgment may be entered on the award of the arbitrator in any court
having proper jurisdiction. All expenses of such arbitration, including the
fees and expenses of the counsel for the Executive, shall be borne by the
Company.
Article 8. Outplacement Assistance
Following a Qualifying Termination (as described in Section 3.2
herein), the Executive shall be reimbursed by the Company for the costs of
all outplacement services obtained by the Executive within the two (2) year
period after the Effective Date of Termination, provided, however, that the
total reimbursement shall be limited to an amount equal to thirty thousand
dollars ($30,000).
Article 9. Successors and Assignment
9.1Successors to the Company. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, or
otherwise) of all or substantially all of the business and/or assets of the
Company or of any division or subsidiary thereof to expressly assume and
agree to perform the Company's obligations under this Agreement in the same
manner and to the same extent that the Company would be required to perform
them if no such succession had taken place. The date on which any such
succession becomes effective shall be deemed to be the date of the Change
in Control.
9.2Assignment by the Executive. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees, and legatees. If the Executive dies while any
amount would still be payable to him hereunder had he continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's Beneficiary.
If the Executive has not named a Beneficiary, then such amounts shall be
paid to the Executive's devisee, legatee, or other designee, or if there is
no such designee, to the Executive's estate.
Article 10. Miscellaneous
10.1 Employment Status. Except as may be provided under any other
agreement between the Executive and the Company, the employment of the
Executive by the Company is "at will," and may be terminated by either the
Executive or the Company at any time, subject to applicable law.
10.2 Beneficiaries. The Executive may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. Such designation must
be in the form of a signed writing acceptable to the Committee. The
Executive may make or change such designations at any time.
10.3 Severability. In the event any provision of this Agreement shall
be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Agreement, and the Agreement
shall be construed and enforced as if the illegal or invalid provision had
not been included. Further, the captions of this Agreement are not part of
the provisions hereof and shall have no force and effect.
10.4 Modification. No provision of this Agreement may be modified,
waived, or discharged unless such modification, waiver, or discharge is
agreed to in writing and signed by the Executive and by an authorized
member of the Committee, or by the respective parties' legal
representatives and successors.
10.5 Applicable Law. To the extent not preempted by the laws of the
United States, the laws of the state of Pennsylvania shall be the
controlling law in all matters relating to this Agreement.
10.6 Disclosure of Information. The Executive recognizes that he has
access to and knowledge of certain confidential and proprietary information
of the Company which is essential to the performance of his duties under
this Agreement. The Executive will not, during or after the term of his
employment by the Company, in whole or in part, disclose such information
to any person, firm, corporation, association, or other entity for any
reason or purpose whatsoever, nor shall he make use of any such information
for his own purposes, so long as such information has not otherwise been
disclosed to the public or is not otherwise in the public domain except as
required by law or pursuant to legal process.
10.7 Covenants Regarding Other Employees. During the term of this
Agreement, and for a period of twenty-four (24) months following the
Effective Date of Termination, the Executive agrees not to attempt to
induce any employee of the Company to terminate his or her employment with
the Company or to interfere in a similar manner with the business of the
Company.
IN WITNESS WHEREOF, the parties have executed this Agreement on this
day of
, 1999.
CHARMING SHOPPES, INC. EXECUTIVE
_______________________________ ___________________________________
Dorrit J. Bern (NAME)
Its: President and Chief Executive Officer
ATTEST:________________________
Colin D. Stern
Secretary
Executive Severance
Agreement for (NAME)
Charming Shoppes, Inc.
January, 2000
Contents
Article 1. Establishment, Term, and Purpose 1
Article 2. Definitions 2
Article 3. Severance Benefits 6
Article 4. Form and Timing of Severance Benefits 8
Article 5. Excise Tax Treatment 8
Article 6. The Company's Payment Obligation 8
Article 7. Legal Remedies 9
Article 8. Outplacement Assistance 9
Article 9. Successors and Assignment 9
Article 10. Miscellaneous 10
Charming Shoppes, Inc.
Executive Severance Agreement
THIS AGREEMENT is made and entered into as of the ____ day of
January, 2000 (the "Effective Date"), by and between Charming
Shoppes, Inc. (hereinafter referred to as the "Company") and
(NAME) (hereinafter referred to as the "Executive").
WHEREAS, the Board of Directors of the Company has approved
the Company entering into severance agreements with certain key
executives of the Company;
WHEREAS, the Executive is a key executive of the Company;
WHEREAS, should the possibility of a Change in Control of the
Company arise, the Board believes it is imperative that the
Company and the Board should be able to rely upon the Executive
to continue in his position, and that the Company should be able
to receive and rely upon the Executive's advice, if requested, as
to the best interests of the Company and its shareholders without
concern that the Executive might be distracted by the personal
uncertainties and risks created by the possibility of a Change in
Control; and
WHEREAS, should the possibility of a Change in Control arise,
in addition to his regular duties, the Executive may be called
upon to assist in the assessment of such possible Change in
Control, advise management and the Board as to whether such
Change in Control would be in the best interests of the Company
and its shareholders, and to take such other actions as the Board
might determine to be appropriate.
NOW THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of his
advice and counsel notwithstanding the possibility, threat, or
occurrence of a Change in Control of the Company, and to induce
the Executive to remain in the employ of the Company, and for
other good and valuable consideration, the Company and the
Executive agree as follows:
Article 1. Establishment, Term, and Purpose
This Agreement will commence on the Effective Date and shall
continue in effect for three (3) full years (i.e., until the day
before the third anniversary of the Effective Date). However, at
the end of such three (3) year period and at the end of each
additional year thereafter, the term of this Agreement shall be
extended automatically for one (1) additional year, unless the
Committee delivers written notice six (6) months prior to the end
of such term, or extended term, to each Executive, that the
Agreement will not be extended. In such case, the Agreement will
terminate at the end of the term, or extended term, then in
progress.
However, in the event a Change in Control occurs during the
original or any extended term, this Agreement will remain in
effect for the longer of: (i) twenty-four (24) months beyond the
month in which such Change in Control occurred; or (ii) until all
obligations of the Company hereunder have been fulfilled, and
until all benefits required hereunder have been paid to the
Executive.
Article 2. Definitions
Whenever used in this Agreement, the following terms shall
have the meanings set forth below and, when the meaning is
intended, the initial letter of the word is capitalized.
2.1"Base Salary" means the salary of record paid to an
Executive as annual salary, excluding amounts received under
incentive or other bonus plans, whether or not any such salary or
other amounts are deferred.
2.2"Beneficial Owner" shall have the meaning ascribed to such
term in Rule 13d-3 of the General Rules and Regulations under the
Exchange Act and shall include related terms such as "Beneficial
Ownership."
2.3"Beneficiary" means the persons or entities designated or
deemed designated by the Executive pursuant to Section 10.2
herein.
2.4"Board" means the Board of Directors of the Company.
2.5"Cause" means: (a) the Executive's willful and continued
failure to substantially perform his duties with the Company
(other than any such failure resulting from Disability or
occurring after issuance by the Executive of a Notice of
Termination for Good Reason), after a written demand for
substantial performance is delivered to the Executive that
specifically identifies the manner in which the Company believes
that the Executive has willfully failed to substantially perform
his duties, and after the Executive has failed to resume
substantial performance of his duties on a continuous basis
within thirty (30) calendar days of receiving such demand; (b)
the Executive's willfully engaging in conduct (other than conduct
covered under (a) above) which is demonstrably and materially
injurious to the Company, monetarily or otherwise; or (c) the
Executive's having been convicted of a felony. For purposes of
this subparagraph, no act, or failure to act, on the Executive's
part shall be deemed "willful" unless done, or omitted to be
done, by the Executive not in good faith and without reasonable
belief that the action or omission was in the best interests of
the Company.
2.6"Change in Control" of the Company shall be deemed to have
occurred as of the first day after the Effective Date that any
one or more of the following conditions is satisfied:
(a) Any Person, other than the Company or a Related Party,
acquires directly or indirectly the Beneficial Ownership
of any Voting Security and immediately after such
acquisition such Person has directly or indirectly, the
Beneficial Ownership of Voting Securities representing
twenty percent (20%) or more of the total voting power of
all the then-outstanding Voting Securities; or
(b) During any period of two (2) consecutive years,
individuals who at the beginning of such period
constitute the Board of Directors and any new director
(other than a director designated by a person who has
entered into an agreement with the Company to effect a
transaction described in paragraph (a) or (c) of this
section) whose election by the Board of Directors or
nomination of election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors
at the beginning of the period or whose election or
nomination for election was previously so approved, cease
for any reason to constitute two-thirds (2/3) of the
Board; or
(c) The shareholders of the Company approve a merger,
consolidation, recapitalization or reorganization of the
Company, a reverse stock split of outstanding Voting
Securities, or an acquisition of securities or assets by
the Company (a "Transaction"), or consummation of such a
Transaction if shareholder approval is not obtained,
other than a Transaction which would result in the
holders of Voting Securities having at least eighty
percent (80%) of the total voting power represented by
the Voting Securities outstanding immediately prior
thereto continuing to hold Voting Securities or voting
securities of the surviving entity having at least sixty
percent (60%) of the total voting power represented by
the Voting Securities or the voting securities of such
surviving entity outstanding immediately after such
transaction and in or as a result of which the voting
rights of each Voting Security relative to the voting
rights of all other Voting Securities are not altered; or
(d) The shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for
the sale or disposition by the Company of all or
substantially all of the Company's assets other than any
such transaction which would result in Related Parties
owning or acquiring more than fifty percent (50%) of the
assets owned by the Company immediately prior to the
transaction.
However, in no event shall a Change in Control be deemed to
have occurred, with respect to the Executive, if the Executive is
part of a purchasing group which consummates the Change-in-
Control transaction. The Executive shall be deemed "part of a
purchasing group" for purposes of the preceding sentence if the
Executive is an equity participant in the purchasing company or
group (except for: (i) passive ownership of less than three
percent (3%) of the stock of the purchasing company; or
(ii) ownership of equity participation in the purchasing company
or group which is otherwise not significant, as determined prior
to the Change in Control by a majority of the nonemployee
continuing Directors).
2.7"Code" means the United States Internal Revenue Code of
1986, as amended, and any successors thereto.
2.8"Committee" means the Compensation Committee of the Board
or any other committee appointed by the Board to perform the
functions of the Compensation Committee.
2.9"Company" means Charming Shoppes, Inc., a Pennsylvania
corporation, or any successor thereto as provided in Article 9
herein. If the Executive is an officer of Charming Shoppes of
Delaware, Inc. only, or an officer of both Charming Shoppes of
Delaware, Inc. and Charming Shoppes, Inc., the word "Company"
shall be deemed to include not only Charming Shoppes, Inc. but
also Charming Shoppes of Delaware, Inc. with respect to
employment matters, including termination of employment, where
appropriate. References to the "Company" with respect to a
Change in Control and matters incidental to the determination of
a Change in Control relate only to Charming Shoppes, Inc.
2.10 "Disability" means complete and permanent inability by
reason of illness or accident to perform the duties of the
occupation at which the Executive was employed when such
disability commenced.
2.11 "Effective Date" means the date of this Agreement set
forth above.
2.12 "Effective Date of Termination" means the date on which
a Qualifying Termination occurs which triggers the payment of
Severance Benefits hereunder.
2.13 "Exchange Act" means the United States Securities
Exchange Act of 1934, as amended.
2.14 "Good Reason" shall mean, without the Executive's
express written consent, the occurrence of any one or more of the
following:
(a) The assignment of the Executive to duties materially
inconsistent with the Executive's authorities, duties,
responsibilities, and status (including offices and
reporting requirements) as an employee of the Company, or
a reduction or alteration in the nature or status of the
Executive's authorities, duties, or responsibilities from
the greatest of: (i) those in effect on the Effective
Date; (ii) those in effect during the fiscal year
immediately preceding the year of the Change in Control;
or (iii) those in effect immediately preceding the Change
in Control;
(b) The Company's requiring the Executive to be based at a
location which is at least fifty (50) miles farther from
the current primary residence than is such residence from
the Company's current headquarters, except for required
travel on the Company's business to an extent
substantially consistent with the Executive's business
obligations as of the Effective Date;
(c) A reduction by the Company in the Executive's Base Salary
as in effect on the Effective Date or as the same shall
be increased from time to time or a failure by the
Company to pay to the Executive any portion of his
compensation or any installment of deferred compensation
under any plan or program of the Company within thirty
(30) days after the date such payment is due;
(d) A material reduction in the Executive's level of
participation and compensation opportunities in any of
the Company's short- and/or long-term incentive
compensation plans, or employee benefit or retirement
plans, policies, practices, or arrangements in which the
Executive participates from the greatest of the levels in
place on: (i) the Effective Date; (ii) the fiscal year
immediately preceding the Change in Control; or
(iii) immediately preceding the Change in Control;
provided, however, that reductions in the levels of
participation in any such plans shall not be deemed to be
"Good Reason" if the Executive's reduced level of
participation in each such program remains substantially
consistent with the average level of participation of
other executives of the Company, any Person who then
controls the Company, and any persons who have positions
commensurate with the Executive's position;
(e) The failure of the Company to obtain a satisfactory
agreement from any successor to the Company to assume and
agree to perform this Agreement, as contemplated in
Article 9 herein; or
(f) Any purported termination of Executive's employment by
the Company that is not effected pursuant to a Notice of
Termination.
The existence of Good Reason shall not be affected by the
Executive's temporary incapacity due to physical or mental
illness not constituting a Disability. The Executive's Retirement
shall constitute a waiver of the Executive's rights with respect
to any circumstance constituting Good Reason. The Executive's
continued employment shall not constitute a waiver of the
Executive's rights with respect to any circumstance constituting
Good Reason.
2.15 "Notice of Termination" shall mean a written notice
which shall indicate the specific termination provision in this
Agreement relied upon, and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so
indicated.
2.16 "Person" shall have the meaning ascribed to such term
in Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a "group" as provided in
Section 13(d).
2.17 "Qualifying Termination" means any of the events
described in Section 3.2 herein, the occurrence of which triggers
the payment of Severance Benefits hereunder.
2.18 "Related Party" means (a) a majority-owned subsidiary
of the Company; or (b) a trustee or other fiduciary holding
securities under an employment plan of the Company or any
majority-owned subsidiary; or (c) a corporation owned directly or
indirectly by the shareholders of the Company in substantially
the same proportion as their ownership of Voting Securities.
2.19 "Retirement" means the Executive's voluntary
termination of employment in a manner which qualifies the
Executive to receive immediately payable retirement benefits
under the Company's tax-qualified retirement plan or under the
successor or replacement of such retirement plan if it is then no
longer in effect. The term "Retirement" shall not mean a
termination of the Executive's employment under circumstances
which constitute Good Reason or that constitute an involuntary
termination of the Executive's employment by the Company.
2.20 "Severance Benefits" means the payment of severance
compensation as provided in Section 3.3 herein.
2.21 "Voting Securities" means any securities of the Company
which carry the right to vote generally in the election of
directors.
Article 3. Severance Benefits
3.1Right to Severance Benefits. The Executive shall be
entitled to receive from the Company Severance Benefits, as
described in Section 3.3 herein, if there has been a Change in
Control of the Company and if, within twenty-four (24) calendar
months following the Change in Control, a Notice of Termination
for a Qualifying Termination of the Executive has been delivered.
The Executive shall not be entitled to receive Severance
Benefits if he is terminated for Cause, or if his employment with
the Company ends due to death, Disability, or Retirement or due
to a voluntary termination of employment by the Executive without
Good Reason.
3.2Qualifying Termination. The occurrence of any one or more
of the following events (as evidenced by a Notice of Termination)
shall trigger the payment of Severance Benefits to the Executive
under this Agreement:
(a) An involuntary termination of the Executive's employment
by the Company for reasons other than Cause within twenty-
four (24) calendar months following the end of the month
in which a Change in Control of the Company occurred as
evidenced by a Notice of Termination delivered by the
Executive to the Company;
(b) A voluntary termination by the Executive for Good Reason
within twenty-four (24) calendar months following the end
of the month in which a Change in Control of the Company
occurred as evidenced by a Notice of Termination
delivered to the Company by the Executive; or
(c) The Company or any successor company breaches any of the
provisions of this Agreement.
3.3Description of Severance Benefits. In the event the
Executive becomes entitled to receive Severance Benefits, as
provided in Sections 3.1 and 3.2 herein, the Company shall pay to
the Executive and provide him with the following:
(a) An amount equal to one (1) times the highest rate of the
Executive's annualized Base Salary in effect at any time
from his initial date of employment with the Company up
to and including the Effective Date of Termination.
(b) An amount equal to one (1) times the Executive's highest
targeted annual incentive award established for any plan
year from his initial date of employment with the Company
up to and including the year in which the Executive's
Effective Date of Termination occurs, regardless of
whether the targeted annual incentive award was earned.
(c) An amount equal to the Executive's unpaid targeted annual
incentive award, established for the year in which the
Executive's Effective Date of Termination occurs,
multiplied by a fraction, the numerator of which is the
number of completed days in the then-existing fiscal year
through the Effective Date of Termination, and the
denominator of which is three hundred sixty-five (365).
(d) An amount equal to the Executive's unpaid Base Salary,
accrued vacation pay, and earned but not taken vacation
pay through the Effective Date of Termination.
(e) A continuation of the welfare benefits of health care,
life and accidental death and dismemberment, and
disability insurance coverage for one (1) full year after
the Effective Date of Termination. These benefits shall
be provided to the Executive at the same coverage level,
as in effect as of the Executive's Effective Date of
Termination or, if greater, as in effect 90 days prior to
the date of the Change in Control, and at the same
premium cost to the Executive which was paid by the
Executive at the time such benefits were provided.
However, in the event the premium cost and/or level of
coverage shall change for all employees of the Company,
or for management employees with respect to supplemental
benefits, the cost and/or coverage level, likewise, shall
change for the Executive in a corresponding manner.
The continuation of these welfare benefits shall be
discontinued prior to the end of the one (1) year period
in the event the Executive has available substantially
similar benefits at a comparable cost to the Executive
from a subsequent employer, as determined by the
Committee.
(f) With regard to the Company's split-dollar life insurance
arrangement with the Executive, the following provisions
shall apply.
(i) The Company shall continue to pay the annual premiums
on the policy, that is subject to the split-dollar
life insurance agreement, in accordance with the most
recent schedule provided prior to the Change in
Control by the insurance broker who administers the
split-dollar life insurance arrangement.
(ii) For purposes of making any determination under the
split-dollar life insurance agreement, the
Executive's number of years of employment with the
Company, as of the Effective Date of Termination,
shall be deemed to be fifteen (15).
Committee.
(f) With regard to the Company's split-dollar life insurance
arrangement with the Executive, the following provisions
shall apply.
(i) The Company shall continue to pay the annual premiums
on the policy, that is subject to the split-dollar
life insurance agreement, in accordance with the most
recent schedule provided prior to the Change in
Control by the insurance broker who administers the
split-dollar life insurance arrangement.
(ii) For purpose of making any determination under the
split-dollar life insurance agreement, the
Executive's number of years of employment with the
Company, as of the Effective Date of Termination,
shall be deemed to be fifteen (15).
Incentive awards granted under the incentive arrangements
adopted by the Company shall be treated pursuant to the terms of
the applicable plan.
The aggregate benefits accrued by the Executive as of the
Effective Date of Termination under the Charming Shoppes, Inc.,
and other savings and retirement plans sponsored by the Company,
shall be distributed pursuant to the terms of the applicable
plan.
Compensation which has been deferred under the Charming
Shoppes Variable Deferred Compensation Plan or other plans
sponsored by the Company, as applicable, together with all
interest that has been credited with respect to any such deferred
compensation balances, shall be distributed pursuant to the terms
of the applicable plan.
3.4Termination for Disability. Following a Change in Control
of the Company, if an Executive's employment is terminated due to
Disability, the Executive shall receive his Base Salary and
accrued vacation through the Effective Date of Termination, at
which point in time the Executive's benefits shall be determined
in accordance with the Company's disability, retirement,
insurance, and other applicable plans and programs then in
effect. In the event the Executive's employment is terminated due
to Disability, the Executive shall not be entitled to the
Severance Benefits described in Section 3.3.
3.5Termination for Retirement or Death. Following a Change in
Control of the Company, if the Executive's employment is
terminated by reason of his Retirement or death, the Executive's
benefits shall be determined in accordance with the Company's
retirement, survivor's benefits, insurance, and other applicable
programs of the Company then in effect. In the event the
Executive's employment is terminated by reason of his Retirement
or death, the Executive shall not be entitled to the Severance
Benefits described in Section 3.3.
3.6Termination for Cause, or Other Than for Good Reason or
Retirement. Following a Change in Control of the Company, if the
Executive's employment is terminated either: (a) by the Company
for Cause; or (b) by the Executive (other than for Retirement,
Good Reason, or under circumstances giving rise to a Qualifying
Termination described in Section 3.2(c) herein), the Company
shall pay the Executive his full Base Salary and accrued vacation
through the Effective Date of Termination, at the rate then in
effect, plus all other amounts to which the Executive is entitled
under any compensation plans of the Company, at the time such
payments are due, and the Company shall have no further
obligations to the Executive under this Agreement.
3.7Notice of Termination. Any termination of employment by
the Company or by the Executive for Good Reason shall be
communicated by a Notice of Termination.
Article 4. Form and Timing of Severance Benefits
4.1Form and Timing of Severance Benefits. The Severance
Benefits described in Sections 3.3(a), 3.3(b), 3.3(c), and 3.3(d)
herein shall be paid in cash to the Executive in a single lump
sum as soon as practicable following the Effective Date of
Termination, but in no event beyond thirty (30) days from such
date.
4.2Withholding of Taxes. The Company shall be entitled to
withhold from any amounts payable under this Agreement all taxes
as legally shall be required to be withheld (including, without
limitation, any United States federal taxes and any other state,
city, or local taxes).
Article 5. Excise Tax Treatment
5.1Excise Tax Treatment. In the event that a Change in
Control occurs, and a determination is made by the Company
pursuant to Section 280G and 4999 of the Code that a golden
parachute excise tax is due, the benefits provided to the
Executive under this Agreement that are classified as "parachute
payments" (as such term is defined in Section 280G of the Code),
shall be limited to the amount just necessary to avoid the excise
tax. However, this limitation shall be applied if, and only if,
such a limitation results in a greater net (of excise tax) cash
benefit to the Executive than he would receive had the benefits
not been capped and an excise tax been levied.
In the event the Internal Revenue Service subsequently
adjusts the excise tax computation herein described, the Company
shall reimburse the Executive for the full amount necessary to
make the Executive whole (less any amounts received by the
Executive that he would not have received had the computation
initially been computed as subsequently adjusted), including the
value of benefits that were erroneously limited, the value of any
overpaid excise tax, and any related interest and/or penalties
due to the Internal Revenue Service.
Article 6. The Company's Payment Obligation
The Company's obligation to make the payments and the
arrangements provided for herein shall be absolute and
unconditional, and shall not be affected by any circumstances,
including, without limitation, any offset, counterclaim,
recoupment, defense, or other right which the Company may have
against the Executive or anyone else. All amounts payable by the
Company hereunder shall be paid without notice or demand. Each
and every payment made hereunder by the Company shall be final,
and the Company shall not seek to recover all or any part of such
payment from the Executive or from whomsoever may be entitled
thereto, for any reasons whatsoever.
The Executive shall not be obligated to seek other employment
in mitigation of the amounts payable or arrangements made under
any provision of this Agreement, and the obtaining of any such
other employment shall in no event effect any reduction of the
Company's obligations to make the payments and arrangements
required to be made under this Agreement, except to the extent
provided in Section 3.3(e) herein.
Article 7. Legal Remedies
7.1Payment of Legal Fees. To the extent permitted by law, the
Company shall pay all legal fees, costs of litigation,
prejudgment interest, and other expenses incurred in good faith
by the Executive as a result of the Company's refusal to provide
the Severance Benefits to which the Executive becomes entitled
under this Agreement, or as a result of the Company's contesting
the validity, enforceability, or interpretation of this
Agreement, or as a result of any conflict (including conflicts
related to the calculation of parachute payments) between the
parties pertaining to this Agreement, subject to an overall limit
on the payment of legal fees of thirty-five thousand dollars
($35,000).
7.2Arbitration. Any dispute or controversy arising under or
in connection with this Agreement shall be settled by
arbitration, conducted before a panel of three (3) arbitrators
sitting in a location selected by the Executive within fifty (50)
miles from the location of his employment with the Company, in
accordance with the rules of the American Arbitration Association
then in effect.
Judgment may be entered on the award of the arbitrator in any
court having proper jurisdiction. All expenses of such
arbitration, including the fees and expenses of the counsel for
the Executive, shall be borne by the Company.
Article 8. Outplacement Assistance
Following a Qualifying Termination (as described in
Section 3.2 herein), the Executive shall be reimbursed by the
Company for the costs of all outplacement services obtained by
the Executive within the one (1) year period after the Effective
Date of Termination, provided, however, that the total
reimbursement shall be limited to an amount equal to twenty
thousand dollars ($20,000).
Article 9. Successors and Assignment
9.1Successors to the Company. The Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) of all or substantially all of the
business and/or assets of the Company or of any division or
subsidiary thereof to expressly assume and agree to perform the
Company's obligations under this Agreement in the same manner and
to the same extent that the Company would be required to perform
them if no such succession had taken place. The date on which any
such succession becomes effective shall be deemed to be the date
of the Change in Control.
9.2Assignment by the Executive. This Agreement shall inure to
the benefit of and be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors,
heirs, distributees, devisees, and legatees. If the Executive
dies while any amount would still be payable to him hereunder had
he continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this
Agreement to the Executive's Beneficiary. If the Executive has
not named a Beneficiary, then such amounts shall be paid to the
Executive's devisee, legatee, or other designee, or if there is
no such designee, to the Executive's estate.
Article 10. Miscellaneous
10.1 Employment Status. Except as may be provided under any
other agreement between the Executive and the Company, the
employment of the Executive by the Company is "at will," and may
be terminated by either the Executive or the Company at any time,
subject to applicable law.
10.2 Beneficiaries. The Executive may designate one or more
persons or entities as the primary and/or contingent
Beneficiaries of any Severance Benefits owing to the Executive
under this Agreement. Such designation must be in the form of a
signed writing acceptable to the Committee. The Executive may
make or change such designations at any time.
10.3 Severability. In the event any provision of this
Agreement shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of
the Agreement, and the Agreement shall be construed and enforced
as if the illegal or invalid provision had not been included.
Further, the captions of this Agreement are not part of the
provisions hereof and shall have no force and effect.
10.4 Modification. No provision of this Agreement may be
modified, waived, or discharged unless such modification, waiver,
or discharge is agreed to in writing and signed by the Executive
and by an authorized member of the Committee, or by the
respective parties' legal representatives and successors.
10.5 Applicable Law. To the extent not preempted by the laws
of the United States, the laws of the state of Pennsylvania shall
be the controlling law in all matters relating to this Agreement.
10.6 Disclosure of Information. The Executive recognizes
that he has access to and knowledge of certain confidential and
proprietary information of the Company which is essential to the
performance of his duties under this Agreement. The Executive
will not, during or after the term of his employment by the
Company, in whole or in part, disclose such information to any
person, firm, corporation, association, or other entity for any
reason or purpose whatsoever, nor shall he make use of any such
information for his own purposes, so long as such information has
not otherwise been disclosed to the public or is not otherwise in
the public domain except as required by law or pursuant to legal
process.
10.7 Covenants Regarding Other Employees. During the term of
this Agreement, and for a period of twenty-four (24) months
following the Effective Date of Termination, the Executive agrees
not to attempt to induce any employee of the Company to terminate
his or her employment with the Company or to interfere in a
similar manner with the business of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement
on this day of
, 2000.
CHARMING SHOPPES, INC. EXECUTIVE
_______________________________
___________________________________
Dorrit J. Bern (NAME)
Its: President and Chief Executive Officer
ATTEST:________________________
Colin D. Stern
Secretary
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT
The following are the Company's subsidiaries, each of which is directly
and wholly owned by its immediate parent, Charming Shoppes, Inc. All
subsidiaries are included in the consolidated financial statements of
Charming Shoppes, Inc., and subsidiaries, except as noted.
Parenthetical references relate to footnotes found at end of listing.
<TABLE>
<CAPTION>
State or
Jurisdiction
Of
Name Organization
- ---- ------------
<S> <C> <C> <C>
C.S.A.C., INC. (2) DE
C.S.F., CORP. (2) DE
C.S.I.C., INC. (2) DE
CATHERINES, INC. DE
CATHERINES PARTNERS, LP TN
CATHERINES OF CALIFORNIA, INC. CA
CATHERINES OF PENNSYLVANIA, INC. TN
CATHERINES OF NEVADA, INC. NV
CATHERINES PARTNERS II, GP WA
CATHERINES STORES CORPORATION (2) TN
CATHERINES #5340, INC. (1) (2) PA
CATHERINES #5342, INC. (1) (2) PA
CATHERINES #5344, INC. (1) (2) NJ
CATHERINES #5345, INC. (1) (2) VA
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. (2) PA
CHARMING SHOPPES OF DELAWARE, INC. (2) PA
CHARMING SHOPPES OF ECHELON, INC. NJ
CHARMING SHOPPES OF NORRISTOWN, INC. (2) PA
CHARMING SHOPPES OF TRENTON, INC. NJ
CHARMING SHOPPES OF WOODBURY, INC NJ
CHARMING SHOPPES RECEIVABLES CORP. (2) DE
CHARMING SHOPPES SELLER, INC. (2) DE
CHARMING SHOPPES STREET, INC. (2) DE
CHARMING SHOPPES, INC. (2) PA
CHARMING SHOPPES/FASHION BUG OF OLEAN, INC. (2) PA
COLUMBIA #2589 DEVOLPMENT CO, INC. TN
COLUMBIA #3054 DEVELOPMENT CO., INC. (1) (2) SC
COLUMBIA DEVELOPMENT CO., INC. (1) (2) TN
CS INSURANCE LTD. (2) BERMUDA
CS INVESTMENT COMPANY (2) DE
CSBC, INC. (2) DE
CSD ACQUISITION CORP. (2) DE
CSHC, INC. (2) DE
CSI CHARITIES, INC. (2) PA
CSI INDUSTRIES, INC. (2) DE
CSI-DR, INC. (2) DR
DIVERSIFIED FASHIONS, INC. (2) PA
ERICOOL CO LTD. (2) HONG KONG
EVATONE TRADING LTD. (2) HONG KONG
F.B. PLUS WOMEN'S APPAREL OF JOHNSON CITY, INC. (2) PA
F.B. PLUS WOMEN'S APPAREL OF KINGSTON, INC. PA
F.B. PLUS WOMEN'S APPAREL OF PINE PLAZA, INC. (2) PA
F.B. PLUS WOMEN'S APPAREL OF RIVERSIDE, INC. (2) PA
F.B. PLUS WOMEN'S APPAREL OF WEST SENECA, INC. (2) NY
F.B. WOMEN'S APPAREL #2481 OF RIVERSIDE, INC. (2) PA
F.B. WOMEN'S APPAREL #3097 OF NEW HARTFORD, INC. (1) (2) NY
F.B. WOMEN'S APPAREL OF CLAY, INC. (2) PA
F.B. WOMEN'S APPAREL OF DELMAR, INC. PA
F.B. WOMEN'S APPAREL OF DEPEW, INC. PA
F.B. WOMEN'S APPAREL OF ONEONTA, INC. PA
F.B. WOMEN'S APPAREL OF PANORAMA PLAZA, INC. NY
F.B. WOMEN'S APPAREL OF YORKTOWN HEIGHTS, INC. (2) PA
FASHION BUG #108, INC. MI
FASHION BUG #123, INC. (2) NJ
FASHION BUG #138, INC. (2) IN
FASHION BUG #139, INC. IN
FASHION BUG #141, INC. NJ
FASHION BUG #144, INC. IN
FASHION BUG #157, INC. OH
FASHION BUG #168, INC. IN
FASHION BUG #2003, INC. OH
FASHION BUG #2004, INC. MI
FASHION BUG #2006, INC. KY
FASHION BUG #2007, INC. (1) (2) LA
FASHION BUG #2008, INC. (2) PA
FASHION BUG #2009, INC. PA
FASHION BUG #2010, INC. MI
FASHION BUG #2011, INC. MD
FASHION BUG #2014, INC. MI
FASHION BUG #2015, INC. IN
FASHION BUG #2018, INC. MI
FASHION BUG #2019, INC. (2) ND
FASHION BUG #2020, INC. VA
FASHION BUG #2021, INC. OH
FASHION BUG #2022, INC. IN
FASHION BUG #2023, INC. PA
FASHION BUG #2026, INC. (2) 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 #2034, INC. MO
FASHION BUG #2036, INC. OH
FASHION BUG #2037, INC. MI
FASHION BUG #2038, INC. (1) (2) KY
FASHION BUG #2039, INC. OH
FASHION BUG #2040, INC. KY
FASHION BUG #2043, INC. IN
FASHION BUG #2044, INC. NC
FASHION BUG #2045 OF EAST GREENBUSH, INC. NY
FASHION BUG #2047, INC. MA
FASHION BUG #2048, INC. (2) KY
FASHION BUG #2049, INC. MD
FASHION BUG #2050 OF MASSENA, INC. NY
FASHION BUG #2051, INC. IL
FASHION BUG #2052, INC. MN
FASHION BUG #2053, INC. MO
FASHION BUG #2055, INC. (1) (2) MA
FASHION BUG #2056, INC. (1) (2) OH
FASHION BUG #2057, INC. CT
FASHION BUG #2058, INC. MA
FASHION BUG #2063, INC. KS
FASHION BUG #2064, INC. (2) OH
FASHION BUG #2065, INC. 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 #2072 OF ISLANDIA, INC. NY
FASHION BUG #2074, INC. KY
FASHION BUG #2075, 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 #2084, INC. OH
FASHION BUG #2085, INC. KS
FASHION BUG #2086, INC. IL
FASHION BUG #2088, INC. CT
FASHION BUG #2090, INC. FL
FASHION BUG #2091, INC. FL
FASHION BUG #2092, INC. WI
FASHION BUG #2093, INC. IL
FASHION BUG #2095, INC. OH
FASHION BUG #2096, INC. MI
FASHION BUG #2097, INC. NJ
FASHION BUG #210, INC. (1) (2) KY
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
FASHION BUG #2105, INC. (2) NH
FASHION BUG #2106 OF DEPEW, INC. NY
FASHION BUG #2109, INC. GA
FASHION BUG #2111, INC. NJ
FASHION BUG #2112, INC. FL
FASHION BUG #2113, INC. GA
FASHION BUG #2114, INC. (2) MO
FASHION BUG #2115, INC. WI
FASHION BUG #2117, INC. (1) (2) OH
FASHION BUG #2118 OF NEWBURGH, INC. NY
FASHION BUG #2119, INC. OH
FASHION BUG #2120, INC. OH
FASHION BUG #2121, INC. IN
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. (2) VA
FASHION BUG #2141, INC. MI
FASHION BUG #2143, INC. NE
FASHION BUG #2144, INC. (2) VA
FASHION BUG #2145, INC. MI
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. (2) 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. (2) FL
FASHION BUG #2161, INC. (1) (2) NE
FASHION BUG #2162, INC. NC
FASHION BUG #2163, INC. NC
FASHION BUG #2164, INC. (2) FL
FASHION BUG #2165, INC. (2) FL
FASHION BUG #2166, INC. IA
FASHION BUG #2167, INC. WA
FASHION BUG #2169, INC. WA
FASHION BUG #2170, INC. WA
FASHION BUG #2171, INC. PA
FASHION BUG #2172, INC. (2) KY
FASHION BUG #2173, INC. IN
FASHION BUG #2174, INC. MI
FASHION BUG #2175, INC. CA
FASHION BUG #2177, INC. (2) PA
FASHION BUG #2180, INC. (2) 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 #2189, INC. IN
FASHION BUG #2190, INC. WI
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. (2) OH
FASHION BUG #2198, INC. IN
FASHION BUG #2199, INC. MD
FASHION BUG #2201, INC. (2) WA
FASHION BUG #2202, INC. (2) CA
FASHION BUG #2203, INC. ME
FASHION BUG #2204 OF HORNELL, INC. NY
FASHION BUG #2206, INC. NH
FASHION BUG #2208, INC. (2) VA
FASHION BUG #2209, INC. IL
FASHION BUG #2210 OF KINGSTON, INC. NY
FASHION BUG #2211, INC. (2) MD
FASHION BUG #2212, INC. WI
FASHION BUG #2214, INC. MN
FASHION BUG #2215, INC. FL
FASHION BUG #2217, INC. ID
FASHION BUG #2218, INC. MN
FASHION BUG #2219, INC. (2) WA
FASHION BUG #2220, INC. OH
FASHION BUG #2221, INC. OH
FASHION BUG #2222, INC. KY
FASHION BUG #2223, INC. (2) ID
FASHION BUG #2224, INC. WA
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 #2235, INC. IN
FASHION BUG #2236, INC. (2) MN
FASHION BUG #2237, INC. PA
FASHION BUG #2238, INC. MA
FASHION BUG #2239, INC. OR
FASHION BUG #2240, INC. ID
FASHION BUG #2242, INC. PA
FASHION BUG #2243, INC. WA
FASHION BUG #2244 OF CANANDAIGUA, INC. NY
FASHION BUG #2245, INC. MD
FASHION BUG #2246, INC. (2) 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. (2) CA
FASHION BUG #2252 OF BAYSHORE, INC. (2) NY
FASHION BUG #2253, INC. (2) CA
FASHION BUG #2254, INC. WI
FASHION BUG #2255, INC. MD
FASHION BUG #2256, INC. (2) CA
FASHION BUG #2257, INC. IL
FASHION BUG #2258, INC. IL
FASHION BUG #2259, INC. IL
FASHION BUG #2260, INC. IL
FASHION BUG #2262, INC. (2) WV
FASHION BUG #2263, INC. IN
FASHION BUG #2264, INC. OH
FASHION BUG #2266, INC. IL
FASHION BUG #2270, INC. (2) 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. (2) 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 #2283, INC. (2) OH
FASHION BUG #2284, INC. OH
FASHION BUG #2285, INC. CA
FASHION BUG #2286, INC. WI
FASHION BUG #2288, INC. (2) WA
FASHION BUG #2289 OF GARDEN CITY, INC. NY
FASHION BUG #229, INC. (2) MD
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. WV
FASHION BUG #2300, INC. (2) 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. (2) CA
FASHION BUG #2309, INC. IN
FASHION BUG #2310, INC. (1) (2) CA
FASHION BUG #2311, INC. (2) GA
FASHION BUG #2313, INC. WA
FASHION BUG #2314, INC. IN
FASHION BUG #2315, INC. WI
FASHION BUG #2318, INC. (2) DE
FASHION BUG #2320, INC. (2) TN
FASHION BUG #2322, INC. ME
FASHION BUG #2325, INC. MI
FASHION BUG #2326, INC. PA
FASHION BUG #2328, INC. MN
FASHION BUG #2329, INC. (2) CA
FASHION BUG #2330, INC. PA
FASHION BUG #2332, INC. VA
FASHION BUG #2334, INC. (2) CA
FASHION BUG #2335, INC. CA
FASHION BUG #2337, INC. OH
FASHION BUG #2338, INC. WI
FASHION BUG #2339, INC. RI
FASHION BUG #2340, INC. MI
FASHION BUG #2343, INC. WI
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. (2) GA
FASHION BUG #2357, INC. MI
FASHION BUG #2358, INC. ME
FASHION BUG #2359, INC. PA
FASHION BUG #2360, INC. PA
FASHION BUG #2362, INC. PA
FASHION BUG #2364 OF NORTH TONAWANDA, INC. NY
FASHION BUG #2366, INC. (2) NV
FASHION BUG #2368, INC. PA
FASHION BUG #2369, INC. SC
FASHION BUG #2370 OF MALONE, INC. NY
FASHION BUG #2371 OF POUGHKEEPSIE, INC. (2) NY
FASHION BUG #2373, INC. ME
FASHION BUG #2374, INC. WI
FASHION BUG #2375, INC. PA
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 #2382, INC. TN
FASHION BUG #2384 OF ROCHESTER, INC. NY
FASHION BUG #2385, INC. ME
FASHION BUG #2387, INC. (2) 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. (2) NJ
FASHION BUG #2393, INC. VT
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 #2403, INC. CT
FASHION BUG #2404, INC. MD
FASHION BUG #2405, INC. (2) NC
FASHION BUG #2406, INC. MO
FASHION BUG #2407, INC. NH
FASHION BUG #2409, INC. PA
FASHION BUG #2411, INC. MA
FASHION BUG #2412, INC. MA
FASHION BUG #2413, INC. (2) CT
FASHION BUG #2414, INC. GA
FASHION BUG #2415, INC. PA
FASHION BUG #2416, INC. MA
FASHION BUG #2418, INC. (2) SC
FASHION BUG #2419, INC. (2) 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 #2428, INC. (2) KY
FASHION BUG #2429, INC. IN
FASHION BUG #2430, INC. (2) MN
FASHION BUG #2431, INC. (2) SD
FASHION BUG #2432, INC. PA
FASHION BUG #2435, INC. OH
FASHION BUG #2436, INC. ME
FASHION BUG #2437, INC. PA
FASHION BUG #2439, INC. MA
FASHION BUG #2440, INC. PA
FASHION BUG #2443, INC. (2) MN
FASHION BUG #2444, INC. (2) MN
FASHION BUG #2446, INC. PA
FASHION BUG #2448, INC. OH
FASHION BUG #2449, INC. NV
FASHION BUG #2450, INC. AL
FASHION BUG #2452, INC. CT
FASHION BUG #2453, INC. PA
FASHION BUG #2454 OF SCHENECTADY, INC. (2) NY
FASHION BUG #2455 OF WILTON, INC. NY
FASHION BUG #2457, INC. (2) VA
FASHION BUG #2458, INC. NH
FASHION BUG #2459, INC. PA
FASHION BUG #2460, INC. MA
FASHION BUG #2461, INC. (2) SC
FASHION BUG #2462, INC. OR
FASHION BUG #2466, INC. PA
FASHION BUG #2467, INC. (2) KY
FASHION BUG #2468 OF BATH, INC. NY
FASHION BUG #2469, INC. (1) (2) IN
FASHION BUG #2470 OF BINGHAMPTON, INC. NY
FASHION BUG #2472, INC. CT
FASHION BUG #2473, INC. MI
FASHION BUG #2474, INC. OH
FASHION BUG #2475, INC. (2) 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 #2483, INC. (2) PA
FASHION BUG #2484, INC. (2) WA
FASHION BUG #2485, INC. MD
FASHION BUG #2486, INC. (2) IA
FASHION BUG #2487, INC. (2) IN
FASHION BUG #2488, INC. MN
FASHION BUG #2492, INC. PA
FASHION BUG #2493, INC. PA
FASHION BUG #2497, INC. MA
FASHION BUG #2501, INC. (2) MI
FASHION BUG #2502, INC. WI
FASHION BUG #2503, INC. PA
FASHION BUG #2505 OF HUDSON, INC. NY
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 #2516, INC. (2) NJ
FASHION BUG #2517, INC. (1) (2) CT
FASHION BUG #2518, INC. NH
FASHION BUG #2519 OF FULTON, INC. NY
FASHION BUG #2520, INC. (2) MA
FASHION BUG #2521, INC. (2) GA
FASHION BUG #2523, INC. FL
FASHION BUG #2524, INC. CA
FASHION BUG #2528, INC. (1) (2) AZ
FASHION BUG #2529, INC. AZ
FASHION BUG #2530, INC. AZ
FASHION BUG #2531, INC. GA
FASHION BUG #2533, INC. NJ
FASHION BUG #2534, INC. NJ
FASHION BUG #2536, INC. PA
FASHION BUG #2537, INC. KY
FASHION BUG #2538, INC. VA
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 #2547, INC. VA
FASHION BUG #2548, INC. (2) PA
FASHION BUG #2549, INC. (2) NE
FASHION BUG #255, INC. ME
FASHION BUG #2550, INC. VA
FASHION BUG #2551 OF CLAY, INC. NY
FASHION BUG #2553, INC. OH
FASHION BUG #2554, INC. PA
FASHION BUG #2555, INC. ME
FASHION BUG #2556, INC. OH
FASHION BUG #2557, INC. UT
FASHION BUG #2558, INC. (2) UT
FASHION BUG #2559, INC. UT
FASHION BUG #2560, INC. UT
FASHION BUG #2561, INC. OH
FASHION BUG #2562, INC. OH
FASHION BUG #2564, INC. KY
FASHION BUG #2565, INC. KY
FASHION BUG #2568, INC. FL
FASHION BUG #2571, INC. OH
FASHION BUG #2572, INC. (1) (2) PA
FASHION BUG #2573, INC. WI
FASHION BUG #2574, INC. NH
FASHION BUG #2575, INC. TN
FASHION BUG #2577, INC. KY
FASHION BUG #2578, INC. OH
FASHION BUG #2579, INC. PA
FASHION BUG #258, INC. TN
FASHION BUG #2580, INC. OH
FASHION BUG #2581, INC. (2) NE
FASHION BUG #2582, INC. SC
FASHION BUG #2583, INC. (1) (2) WV
FASHION BUG #2584 OF CORTLAND, INC. NY
FASHION BUG #2585, INC MD
FASHION BUG #2586, INC. OH
FASHION BUG #2587, INC. OH
FASHION BUG #2588, INC. PA
FASHION BUG #2589, INC. TN
FASHION BUG #2593, INC. AZ
FASHION BUG #2594, INC. CA
FASHION BUG #2597 OF COLONIE, INC. NY
FASHION BUG #2601, INC. IN
FASHION BUG #2603, INC. KY
FASHION BUG #2604 OF VESTAL, INC. NY
FASHION BUG #2605, INC. MD
FASHION BUG #2606, INC. (2) OH
FASHION BUG #2607, INC. (2) NJ
FASHION BUG #2608, INC. WI
FASHION BUG #2609, INC. WI
FASHION BUG #2610, INC. MI
FASHION BUG #2612, INC. AL
FASHION BUG #2613, INC. (1) (2) WV
FASHION BUG #2614, INC. (2) MS
FASHION BUG #2615, INC. (1) (2) CT
FASHION BUG #2616, INC. MA
FASHION BUG #2617, INC. WA
FASHION BUG #2618, INC. (2) VA
FASHION BUG #2619, INC. IL
FASHION BUG #2620, INC. (2) GA
FASHION BUG #2621, INC. PA
FASHION BUG #2623, INC. (2) ID
FASHION BUG #2626, INC. (2) IL
FASHION BUG #2627 OF WEST SENECA, INC. NY
FASHION BUG #2629, INC. MI
FASHION BUG #263, INC. OH
FASHION BUG #2631, INC. (2) TN
FASHION BUG #2635 OF GENESEO, INC. NY
FASHION BUG #2636, INC. NH
FASHION BUG #2637, INC. IA
FASHION BUG #2638, INC. (2) RI
FASHION BUG #2639, INC. AZ
FASHION BUG #2643, INC. OH
FASHION BUG #2644, INC. (2) UT
FASHION BUG #2646, INC. (2) CA
FASHION BUG #2647, INC. (2) CA
FASHION BUG #2649, INC. NM
FASHION BUG #265, INC. ME
FASHION BUG #2650, INC. IA
FASHION BUG #2651, INC. MN
FASHION BUG #2658, INC. PA
FASHION BUG #2659, INC VT
FASHION BUG #2661 OF LAKEWOOD, INC. NY
FASHION BUG #2662, INC. (1) (2) NJ
FASHION BUG #2663, INC. PA
FASHION BUG #2665, INC. WI
FASHION BUG #2666, INC. (2) VA
FASHION BUG #2667, INC. VA
FASHION BUG #2670, INC. (2) MD
FASHION BUG #2671, INC. MI
FASHION BUG #2673, INC. NC
FASHION BUG #2674, INC. (2) MA
FASHION BUG #2675, INC. (2) CO
FASHION BUG #2676, INC. OH
FASHION BUG #2677, INC. IL
FASHION BUG #2679, INC. CA
FASHION BUG #2680,INC. IA
FASHION BUG #2681, INC. (2) OH
FASHION BUG #2682, INC. CO
FASHION BUG #2684, INC. (2) UT
FASHION BUG #2685, INC. MO
FASHION BUG #2688, INC. KY
FASHION BUG #2689, INC. UT
FASHION BUG #2690, INC. DE
FASHION BUG #2692, INC. (2) OH
FASHION BUG #2694, INC. (2) CT
FASHION BUG #2695, INC. PA
FASHION BUG #2696, INC. (2) 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 #2705, INC. OH
FASHION BUG #2707, INC. MD
FASHION BUG #2708, INC. OH
FASHION BUG #2709, INC. OH
FASHION BUG #2711, INC. MI
FASHION BUG #2713, INC. (2) IA
FASHION BUG #2714, INC. (2) GA
FASHION BUG #2715 OF SYRACUSE, INC. (2) NY
FASHION BUG #2716, INC. IN
FASHION BUG #2717, INC. WI
FASHION BUG #2718, INC. (2) GA
FASHION BUG #2719, INC. IA
FASHION BUG #2720, INC. WV
FASHION BUG #2721, INC. PA
FASHION BUG #2722, INC. IN
FASHION BUG #2724, INC. IN
FASHION BUG #2727, INC. CA
FASHION BUG #2729, INC. WI
FASHION BUG #2730, INC. DE
FASHION BUG #2731, INC. DE
FASHION BUG #2732, INC. (2) GA
FASHION BUG #2733, INC. MO
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 KS
FASHION BUG #2741, INC. OH
FASHION BUG #2744, INC. (2) MA
FASHION BUG #2748, INC. (1) (2) IL
FASHION BUG #2749, INC. MN
FASHION BUG #2750, INC. PA
FASHION BUG #2751, INC. IN
FASHION BUG #2752, INC. (2) AL
FASHION BUG #2753, INC. (2) MS
FASHION BUG #2754, INC. (2) TN
FASHION BUG #2755, INC. (1) (2) MO
FASHION BUG #2756, INC. (2) ME
FASHION BUG #2757, INC. (2) SC
FASHION BUG #2758, INC. (2) GA
FASHION BUG #2759, INC. PA
FASHION BUG #2760, INC. (2) NC
FASHION BUG #2761, INC. (2) KY
FASHION BUG #2762, INC. (2) NJ
FASHION BUG #2763, INC. PA
FASHION BUG #2766, INC. PA
FASHION BUG #2767, INC. PA
FASHION BUG #2768, INC. IN
FASHION BUG #2769, INC. WY
FASHION BUG #2770, INC. (2) UT
FASHION BUG #2772, INC. (1) (2) OR
FASHION BUG #2773, INC. ID
FASHION BUG #2775, INC. IN
FASHION BUG #2777, INC. (1) (2) MI
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 #2783, INC. (2) MN
FASHION BUG #2786, INC. (2) NH
FASHION BUG #2787, INC. ME
FASHION BUG #2789, INC. VA
FASHION BUG #279, INC. PA
FASHION BUG #2790, INC. (2) WA
FASHION BUG #2791, INC. OH
FASHION BUG #2792, INC. (2) CA
FASHION BUG #2793, INC. (2) CA
FASHION BUG #2794, INC. NV
FASHION BUG #2795, INC. WI
FASHION BUG #2796 OF COBLESKILL, INC. NY
FASHION BUG #2797, INC. NJ
FASHION BUG #2798, INC. (2) FL
FASHION BUG #2799, INC. (1) (2) FL
FASHION BUG #2800, INC. (1) (2) NC
FASHION BUG #2802, INC. PA
FASHION BUG #2803, INC. (2) TX
FASHION BUG #2804, INC. (2) TX
FASHION BUG #2805, INC. (2) TX
FASHION BUG #2807, INC. IN
FASHION BUG #2808, INC. KS
FASHION BUG #2809, INC. IN
FASHION BUG #2810, INC. (2) OH
FASHION BUG #2811, INC. PA
FASHION BUG #2814, INC. (2) WY
FASHION BUG #2815, INC. (1) (2) FL
FASHION BUG #2816, INC. MA
FASHION BUG #2817, INC. (1) (2) MO
FASHION BUG #2818, INC. (2) IL
FASHION BUG #2820, INC. CT
FASHION BUG #2821, INC. VA
FASHION BUG #2822, INC. MI
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. (2) WA
FASHION BUG #2833, INC. (2) IA
FASHION BUG #2836, INC. (2) UT
FASHION BUG #2837, INC. (1) (2) GA
FASHION BUG #2838, INC. OR
FASHION BUG #2841, INC. IN
FASHION BUG #2842, INC. IL
FASHION BUG #2844, INC. PA
FASHION BUG #2845, INC. (2) CA
FASHION BUG #2850, INC. MI
FASHION BUG #2851, INC. NJ
FASHION BUG #2852, INC. CO
FASHION BUG #2853 OF ROME, INC. NY
FASHION BUG #2855, INC. IL
FASHION BUG #2856, INC. (2) WI
FASHION BUG #2857, INC. OH
FASHION BUG #2858, INC. CA
FASHION BUG #2861, INC. (2) AL
FASHION BUG #2863, INC. MA
FASHION BUG #2864, INC. OH
FASHION BUG #2868, INC. AZ
FASHION BUG #2869, INC. MD
FASHION BUG #2871 OF ALBANY, INC. NY
FASHION BUG #2872, INC. WI
FASHION BUG #2874, INC. IN
FASHION BUG #2877, INC. AL
FASHION BUG #2879, INC. OR
FASHION BUG #2880, INC. (2) CA
FASHION BUG #2881, INC. NH
FASHION BUG #2882, INC. (1) (2) NH
FASHION BUG #2883, INC. (1) (2) WV
FASHION BUG #2886, INC. IL
FASHION BUG #2891, INC. (2) TX
FASHION BUG #2892, INC. (2) ID
FASHION BUG #2893, INC. (2) MT
FASHION BUG #2894, INC. IL
FASHION BUG #2895, INC. (2) TN
FASHION BUG #2896, INC. (1) (2) UT
FASHION BUG #2898, INC. CA
FASHION BUG #2899, INC. WA
FASHION BUG #2902, INC. IA
FASHION BUG #2903, INC. (2) NE
FASHION BUG #2905, INC. IN
FASHION BUG #2906, INC. IN
FASHION BUG #2907, INC. IL
FASHION BUG #2909, INC. PA
FASHION BUG #2911, INC. TN
FASHION BUG #2912 OF VICTOR, INC. (2) NY
FASHION BUG #2913, INC. PA
FASHION BUG #2915, INC. MA
FASHION BUG #2919, INC. (2) FL
FASHION BUG #2920, INC. WA
FASHION BUG #2922, INC. PA
FASHION BUG #2923 OF AMSTERDAM, INC. NY
FASHION BUG #2924, INC. WI
FASHION BUG #2926, INC. (2) KS
FASHION BUG #2927, INC. (2) NJ
FASHION BUG #2928, INC. RI
FASHION BUG #2930, INC. IL
FASHION BUG #2932, INC. MA
FASHION BUG #2934, INC. CA
FASHION BUG #2937, INC. (2) GA
FASHION BUG #2941, INC. DE
FASHION BUG #2942, INC. (2) UT
FASHION BUG #2943, INC. (1) (2) UT
FASHION BUG #2944, INC. CA
FASHION BUG #2945 OF MEDIA, INC. NY
FASHION BUG #2948, INC. (2) FL
FASHION BUG #2951, INC. NC
FASHION BUG #2952, INC. OH
FASHION BUG #2954, INC. MI
FASHION BUG #2956, INC. MI
FASHION BUG #2957, INC. (2) MA
FASHION BUG #2958, INC. MI
FASHION BUG #2959 OF BUFFALO, INC. NY
FASHION BUG #2968, INC. (2) OR
FASHION BUG #2969, INC. WY
FASHION BUG #2974, INC. MI
FASHION BUG #2975, INC. (1) (2) MO
FASHION BUG #2978, INC. OH
FASHION BUG #2980, INC. (2) FL
FASHION BUG #2982, INC. VT
FASHION BUG #2983, INC. ME
FASHION BUG #2987, INC. (2) IN
FASHION BUG #2988, INC. IN
FASHION BUG #2989, INC. IN
FASHION BUG #2990, INC. WI
FASHION BUG #2992, INC. (2) CO
FASHION BUG #2994, INC. (2) VA
FASHION BUG #2995, INC. OH
FASHION BUG #2998, INC. PA
FASHION BUG #2999, INC. NC
FASHION BUG #3000, INC. (2) KS
FASHION BUG #3001, INC. VA
FASHION BUG #3003, INC. (2) MT
FASHION BUG #3005, INC. OH
FASHION BUG #3006, INC. AZ
FASHION BUG #3008, INC. MA
FASHION BUG #3009, INC. WI
FASHION BUG #3011, INC. PA
FASHION BUG #3016, INC. OH
FASHION BUG #3018, INC. WV
FASHION BUG #3022, INC. IL
FASHION BUG #3023, INC. WI
FASHION BUG #3026, INC. (2) WV
FASHION BUG #3027, INC. (1) (2) UT
FASHION BUG #3030, INC. AZ
FASHION BUG #3033, INC. NH
FASHION BUG #3034, INC. MO
FASHION BUG #3038, INC. (2) VT
FASHION BUG #3040, INC. MO
FASHION BUG #3042, INC. IN
FASHION BUG #3044, INC. GA
FASHION BUG #3046, INC. GA
FASHION BUG #3047, INC. TN
FASHION BUG #3048 OF WELLSVILLE, INC. NY
FASHION BUG #3049, INC. CT
FASHION BUG #3050, INC. MA
FASHION BUG #3052, INC. MO
FASHION BUG #3054, INC. IL
FASHION BUG #3056, INC. GA
FASHION BUG #3057, INC. PA
FASHION BUG #3058, INC. CT
FASHION BUG #3060, INC. (2) SD
FASHION BUG #3061, INC. DE
FASHION BUG #3062, INC. 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 #3069, INC. NJ
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 #3078, INC. IL
FASHION BUG #3079, INC. MO
FASHION BUG #3080, INC. (1) (2) ME
FASHION BUG #3081, INC. PA
FASHION BUG #3082, INC. (1) (2) CT
FASHION BUG #3088, INC. (1) (2) WA
FASHION BUG #3091, INC. PA
FASHION BUG #3092, INC. WI
FASHION BUG #3093, INC. (1) (2) MA
FASHION BUG #3094, INC. ME
FASHION BUG #3097, INC. (1) (2) NJ
FASHION BUG #3099, INC. MD
FASHION BUG #3100, INC. OH
FASHION BUG #3101, INC. MO
FASHION BUG #3102, INC. WV
FASHION BUG #3103, INC. IL
FASHION BUG #3104, INC. GA
FASHION BUG #3105 OF WILLIAMSVILLE, INC. NY
FASHION BUG #3106, INC. IN
FASHION BUG #3107, INC. PA
FASHION BUG #3108, INC. KY
FASHION BUG #3109, INC. (2) CT
FASHION BUG #3110, INC. IL
FASHION BUG #3111, INC. (2) IL
FASHION BUG #3112, INC. OH
FASHION BUG #3113, INC. FL
FASHION BUG #3114, INC. AZ
FASHION BUG #3115, INC. MI
FASHION BUG #3116, INC. MO
FASHION BUG #3117, INC. FL
FASHION BUG #3118, INC. CO
FASHION BUG #3119, INC. (1) (2) CT
FASHION BUG #3120, INC. AZ
FASHION BUG #3121, INC PA
FASHION BUG #3122, INC PA
FASHION BUG #3123, INC. MO
FASHION BUG #3124, INC. PA
FASHION BUG #3125, INC. MD
FASHION BUG #3126, INC. MA
FASHION BUG #3127, INC. MO
FASHION BUG #3128, INC. (1) (2) MD
FASHION BUG #3130, INC. NJ
FASHION BUG #3131, INC. OH
FASHION BUG #3132, INC. (1) (2) DE
FASHION BUG #3133, INC. CA
FASHION BUG #3134, INC. IL
FASHION BUG #3135 OF CORTLANDT, INC. NY
FASHION BUG #3136, INC. GA
FASHION BUG #3137, INC. (1) (2) PA
FASHION BUG #3138, INC. CA
FASHION BUG #3139, INC. OH
FASHION BUG #3140, INC. CA
FASHION BUG #3141, INC. (1) (2) VA
FASHION BUG #3142, INC. (1) (2) CA
FASHION BUG #3143 OF NORWICH, INC. NY
FASHION BUG #3144, INC. AZ
FASHION BUG #3145, INC. (1) (2) DE
FASHION BUG #3146, INC. FL
FASHION BUG #3147, INC. (2) GA
FASHION BUG #3148, INC. IL
FASHION BUG #3149, INC. OH
FASHION BUG #3150, INC. CA
FASHION BUG #3151, INC. (2) LA
FASHION BUG #3152, INC. LA
FASHION BUG #3153, INC. LA
FASHION BUG #3154, INC. MD
FASHION BUG #3155, INC. AZ
FASHION BUG #3156, INC. MD
FASHION BUG #3157, INC. MD
FASHION BUG #3158, INC. MD
FASHION BUG #3159, INC. NM
FASHION BUG #3160, INC. MI
FASHION BUG #3161, INC. NC
FASHION BUG #3162, INC. (1) (2) NC
FASHION BUG #3163, INC. NJ
FASHION BUG #3164, INC. NJ
FASHION BUG #3165, INC. (2) NJ
FASHION BUG #3166, INC. NJ
FASHION BUG #3169, INC. PA
FASHION BUG #3170, INC. TX
FASHION BUG #3171, INC. TX
FASHION BUG #3172, INC. TX
FASHION BUG #3173, INC. TX
FASHION BUG #3174, INC. VA
FASHION BUG #3175, INC. VA
FASHION BUG #3176, INC. VA
FASHION BUG #3177, INC. DE
FASHION BUG #3178, INC. (1) (2) CO
FASHION BUG #3179, INC. VA
FASHION BUG #3180, INC. VA
FASHION BUG #3181 OF SYRACUSE, INC. (2) WA
FASHION BUG #3182, INC. (1) (2) NM
FASHION BUG #3183, INC. MA
FASHION BUG #3184, INC. MI
FASHION BUG #3185, INC. NM
FASHION BUG #3186, INC. (1) (2) CO
FASHION BUG #3187, INC. KS
FASHION BUG #3188, INC. LA
FASHION BUG #3189, INC. TX
FASHION BUG #3190, INC. UT
FASHION BUG #3191, INC. LA
FASHION BUG #3192, INC. MD
FASHION BUG #3193, INC. PA
FASHION BUG #3194, INC. MI
FASHION BUG #3195, INC. MD
FASHION BUG #3196, INC. CA
FASHION BUG #3197, INC. (1) (2) MI
FASHION BUG #3198, INC. MO
FASHION BUG #3199, INC. MO
FASHION BUG #3200, INC. MI
FASHION BUG #3201, INC. PA
FASHION BUG #3202, INC. PA
FASHION BUG #3203, INC. TN
FASHION BUG #3204, INC. WI
FASHION BUG #3205, INC. WI
FASHION BUG #3206, INC. (1) OH
FASHION BUG #3207, INC. SC
FASHION BUG #3208, INC. (1) (2) AL
FASHION BUG #3209, INC. IA
FASHION BUG #3210, INC. CA
FASHION BUG #3211, INC. GA
FASHION BUG #3212, INC. TN
FASHION BUG #3213, INC. PA
FASHION BUG #3214, INC. LA
FASHION BUG #3215, INC. MI
FASHION BUG #3216, INC. CA
FASHION BUG #3217, INC. MI
FASHION BUG #3218, INC. IL
FASHION BUG #3219, INC. MN
FASHION BUG #3220, INC. IL
FASHION BUG #3221, INC. (1) (2) AL
FASHION BUG #3222, INC. (1) (2) WI
FASHION BUG #3223, INC. WI
FASHION BUG #3224, INC. NJ
FASHION BUG #3225, INC. PA
FASHION BUG #3226 OF AUBURN, INC. NY
FASHION BUG #3227, INC. CA
FASHION BUG #3228, INC. CA
FASHION BUG #3229, INC. CA
FASHION BUG #3230, INC. (1) (2) TX
FASHION BUG #3231, INC. WA
FASHION BUG #3232, INC. IN
FASHION BUG #3233, INC. (1) (2) PA
FASHION BUG #3234, INC. (1) WI
FASHION BUG #3235, INC. IN
FASHION BUG #3236, INC. PA
FASHION BUG #3237, INC. IL
FASHION BUG #3238, INC. TX
FASHION BUG #3239, INC. (1) NJ
FASHION BUG #3240, INC. (1) (2) NJ
FASHION BUG #3241, INC. GA
FASHION BUG #3242, INC. (1) (2) CA
FASHION BUG #3243, INC. WI
FASHION BUG #3244, INC. NC
FASHION BUG #3245, INC. WI
FASHION BUG #3246, INC. PA
FASHION BUG #3247, INC. MD
FASHION BUG #3248, INC. FL
FASHION BUG #3249, INC. GA
FASHION BUG #3250, INC. GA
FASHION BUG #3251, INC. (1) FL
FASHION BUG #3252, INC. (1) (2) NV
FASHION BUG #3253, INC. IA
FASHION BUG #3254, INC. (1) (2) MD
FASHION BUG #3255, INC. NE
FASHION BUG #3256, INC. CA
FASHION BUG #3258, INC. FL
FASHION BUG #3259, INC. FL
FASHION BUG #3260, INC. (1) IL
FASHION BUG #3261, INC. (1) (2) TX
FASHION BUG #3263, INC. (1) (2) NC
FASHION BUG #3264, INC. NC
FASHION BUG #3265, INC. MN
FASHION BUG #3266, INC. (1) (2) NV
FASHION BUG #3267, INC. CA
FASHION BUG #3268, INC. (1) (2) CA
FASHION BUG #3269, INC. (1) (2) CA
FASHION BUG #3270, INC. (1) (2) IN
FASHION BUG #3271, INC. MN
FASHION BUG #3272, INC. TN
FASHION BUG #3273, INC. (1) (2) GA
FASHION BUG #3274, INC. CA
FASHION BUG #3276, INC. (1) (2) IA
FASHION BUG #3277, INC. (1) (2) IL
FASHION BUG #3278, INC. FL
FASHION BUG #3279, INC. (1) (2) OR
FASHION BUG #3280, INC. (1) (2) TX
FASHION BUG #3281 OF SYRACUSE, INC. (1) (2) NY
FASHION BUG #3282, INC. (1) (2) FL
FASHION BUG #3283, INC. MO
FASHION BUG #3284 OF POUGHKEEPSIE, INC. (1) (2) NY
FASHION BUG #3285, INC. TN
FASHION BUG #3286, INC. WV
FASHION BUG #3287, INC. FL
FASHION BUG #3288, INC. MI
FASHION BUG #3289, INC. CA
FASHION BUG #3290, INC. OR
FASHION BUG #3291, INC. CA
FASHION BUG #3292, INC. MI
FASHION BUG #3293, INC. (1) (2) MI
FASHION BUG #3294, INC. TX
FASHION BUG #3295, INC. (1) (2) TX
FASHION BUG #3296, INC. MN
FASHION BUG #3297, INC. (1) (2) NJ
FASHION BUG #3299, INC. (1) (2) PA
FASHION BUG #3300, INC. PA
FASHION BUG #3301, INC. WA
FASHION BUG #3302, INC. (1) (2) VA
FASHION BUG #3303, INC. IA
FASHION BUG #3304, INC. MN
FASHION BUG #3305, INC. CA
FASHION BUG #3306, INC. CA
FASHION BUG #3307, INC. (1) (2) AL
FASHION BUG #3308, INC. (1) (2) IL
FASHION BUG #3309, INC. GA
FASHION BUG #3310, INC. CA
FASHION BUG #3311, INC. (1) (2) KY
FASHION BUG #3312, INC. (1) OH
FASHION BUG #3314, INC. (1) (2) MD
FASHION BUG #3315, INC. VT
FASHION BUG #3316, INC. CT
FASHION BUG #3317, INC. IL
FASHION BUG #3318, INC. (1) (2) WA
FASHION BUG #3319, INC. (1) (2) IN
FASHION BUG #3320, INC. (1) (2) IL
FASHION BUG #3321, INC. CA
FASHION BUG #3322, INC. (1) (2) CA
FASHION BUG #3323, INC. WA
FASHION BUG #3324, INC. TN
FASHION BUG #3325, INC. (1) (2) GA
FASHION BUG #3326, INC. NM
FASHION BUG #3327, INC. SC
FASHION BUG #3328, INC. (1) (2) TN
FASHION BUG #3329, INC. SC
FASHION BUG #3330, INC. (1) MN
FASHION BUG #3331, INC. ID
FASHION BUG #3332, INC. FL
FASHION BUG #3333, INC. MI
FASHION BUG #3335, INC. (1) (2) WI
FASHION BUG #3336, INC. TX
FASHION BUG #3337, INC. MN
FASHION BUG #3338, INC. (1) (2) MI
FASHION BUG #3339, INC. OH
FASHION BUG #3340, INC. (1) (2) TX
FASHION BUG #3341 OF LOCKPORT, INC. NY
FASHION BUG #3342, INC. (1) (2) NJ
FASHION BUG #3343, INC. (1) OH
FASHION BUG #3344, INC. (1) (2) NJ
FASHION BUG #3345, INC. (1) (2) IA
FASHION BUG #3346, INC. (1) (2) IL
FASHION BUG #3347, INC. CA
FASHION BUG #3348, INC. (1) (2) WA
FASHION BUG #3349, INC. (1) OR
FASHION BUG #3350, INC. (1) (2) TX
FASHION BUG #3351 OF ROCHESTER, INC. (1) (2) NY
FASHION BUG #3352, INC. TX
FASHION BUG #3353, INC. NJ
FASHION BUG #3354, INC. (1) (2) ME
FASHION BUG #3356, INC. (1) (2) FL
FASHION BUG #3357, INC. (1) (2) MS
FASHION BUG #3358, INC. (1) IN
FASHION BUG #3359, INC. (1) (2) CT
FASHION BUG #336, INC. IN
FASHION BUG #3360, INC. (1) (2) CA
FASHION BUG #3361, INC. (1) (2) IA
FASHION BUG #3362, INC. (1) (2) OK
FASHION BUG #3363, INC. (1) (2) TX
FASHION BUG #3364, INC. (1) WA
FASHION BUG #3365, INC. (1) (2) AL
FASHION BUG #3366, INC. (1) (2) TX
FASHION BUG #3367, INC. (1) CT
FASHION BUG #3368, INC. (1) (2) GA
FASHION BUG #3369, INC. (1) (2) KY
FASHION BUG #3370, INC. (1) WA
FASHION BUG #3371, INC. (1) (2) SC
FASHION BUG #3372, INC. (1) (2) CT
FASHION BUG #3373, INC. (1) (2) IL
FASHION BUG #3374, INC. (1) (2) VA
FASHION BUG #3375, INC. (1) (2) WA
FASHION BUG #3377, INC. (1) FL
FASHION BUG #3378, INC. (1) DE
FASHION BUG #3379, INC. (1) PA
FASHION BUG #3380, INC. (1) MI
FASHION BUG #3381, INC. (1) (2) PA
FASHION BUG #3382, INC. (1) (2) MN
FASHION BUG #3383, INC. (1) (2) PA
FASHION BUG #3384, INC. (1) (2) IL
FASHION BUG #3385, INC. (1) (2) MO
FASHION BUG #3386, INC. (1) (2) OH
FASHION BUG #3387, INC. (1) (2) TX
FASHION BUG #3389, INC. (1) (2) FL
FASHION BUG #3390, INC. (1) (2) MS
FASHION BUG #3391, INC. (1) (2) TN
FASHION BUG #3392, INC. (1) (2) MS
FASHION BUG #3393, INC. (1) (2) CA
FASHION BUG #3394, INC. (1) (2) AL
FASHION BUG #3395, INC. (1) (2) ME
FASHION BUG #3396, INC. (1) (2) MA
FASHION BUG #3397, INC. (1) (2) CA
FASHION BUG #3398, INC. (1) (2) NV
FASHION BUG #3399, INC. (1) (2) SC
FASHION BUG #3400, INC. (1) (2) TX
FASHION BUG #3401, INC. (1) (2) LA
FASHION BUG #3402, INC. (1) (2) TX
FASHION BUG #3403, INC. (1) (2) MI
FASHION BUG #3404, INC. (1) (2) WV
FASHION BUG #3405 OF RIVERHEAD, INC. (1) (2) NY
FASHION BUG #3406, INC. (1) (2) TX
FASHION BUG #3407, INC. (1) (2) MO
FASHION BUG #3408 OF HAMBURG, INC. (1) (2) NY
FASHION BUG #3409, INC. (1) (2) PA
FASHION BUG #3410, INC. (1) (2) CA
FASHION BUG #3411, INC. (1) (2) NJ
FASHION BUG #3412, INC. (1) (2) NM
FASHION BUG #3413, INC. (1) (2) TX
FASHION BUG #3414, INC. (1) (2) OK
FASHION BUG #3415, INC. (1) (2) OK
FASHION BUG #3416, INC. (1) (2) OK
FASHION BUG #3418, INC. (1) (2) NC
FASHION BUG #3419, INC. (1) (2) AL
FASHION BUG #3420, INC. (1) (2) NJ
FASHION BUG #3421, INC. (1) (2) TX
FASHION BUG #3422, INC. (1) (2) NJ
FASHION BUG #3423, INC. (1) (2) IN
FASHION BUG #3424, INC. (1) (2) IN
FASHION BUG #3427, INC. (1) (2) FL
FASHION BUG #3428, INC. (1) (2) CA
FASHION BUG #3429, INC. (1) (2) WI
FASHION BUG #3430, INC. (1) (2) KS
FASHION BUG #3431, INC. (1) (2) VA
FASHION BUG #3432, INC. (1) (2) NC
FASHION BUG #3433, INC. (1) (2) CA
FASHION BUG #3434, INC. (1) (2) TX
FASHION BUG #3435, INC. (1) (2) TX
FASHION BUG #3436, INC. (1) (2) IL
FASHION BUG #3440, INC. (1) (2) MS
FASHION BUG #3442 OF STATEN ISLAND, INC. (1) (2) NY
FASHION BUG #3443, INC. (1) (2) IL
FASHION BUG #3444, INC. (1) (2) VA
FASHION BUG #3446, INC. (1) (2) AZ
FASHION BUG #3448, INC. (1) (2) VT
FASHION BUG #3449, INC. (1) (2) FL
FASHION BUG #3450, INC. (1) (2) MS
FASHION BUG #3452, INC. (1) (2) NC
FASHION BUG #3453, INC. (1) (2) TX
FASHION BUG #3454, INC. (1) (2) AR
FASHION BUG #3455, INC. (1) (2) TX
FASHION BUG #3457, INC. (1) (2) NM
FASHION BUG #3458, INC. (1) (2) AZ
FASHION BUG #3906, INC. (1) (2) NJ
FASHION BUG #3907, INC. (1) (2) NJ
FASHION BUG #4001, INC. (2) NJ
FASHION BUG #4002, INC. CT
FASHION BUG #4004, INC. NJ
FASHION BUG #4005, INC. MA
FASHION BUG #4006, INC. PA
FASHION BUG #4007, INC. PA
FASHION BUG #4008, INC. NJ
FASHION BUG #4009, INC. RI
FASHION BUG #4010, INC. MA
FASHION BUG #4011, INC. NH
FASHION BUG #4012 OF BAYSHORE, INC. NY
FASHION BUG #4013, INC. NJ
FASHION BUG #418, INC. NJ
FASHION BUG #42, INC. (1) (2) MO
FASHION BUG #44, INC. PA
FASHION BUG #47, INC. IN
FASHION BUG #471, INC. MN
FASHION BUG #508, INC. PA
FASHION BUG #519, INC. WV
FASHION BUG #520, INC. MA
FASHION BUG #527, INC. KS
FASHION BUG #529 OF HAMBURG, INC. NY
FASHION BUG #534, INC. IN
FASHION BUG #538, INC. ME
FASHION BUG #545, INC. VT
FASHION BUG #548, INC. ME
FASHION BUG #554, INC. PA
FASHION BUG #558, INC. (2) TN
FASHION BUG #560 OF GLOVERSVILLE, INC. NY
FASHION BUG #561, INC. FL
FASHION BUG #562, INC. NJ
FASHION BUG #564, INC. MO
FASHION BUG #565, INC. MI
FASHION BUG #566, INC. IN
FASHION BUG #567, INC. IL
FASHION BUG #571, INC. (2) 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 #580, INC. ME
FASHION BUG #581, INC. NH
FASHION BUG #583, INC. KY
FASHION BUG #584 OF YONKERS, INC. NY
FASHION BUG #585, INC. NJ
FASHION BUG #586, INC. NJ
FASHION BUG #588, INC. IL
FASHION BUG #589, INC. (2) IL
FASHION BUG #591, INC. (2) MO
FASHION BUG #592, INC. (2) 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 #600 ,INC. (2) PA
FASHION BUG #601, INC. SC
FASHION BUG #602, INC. PA
FASHION BUG #603 OF HUDSON AVENUE, INC. (1) (2) NY
FASHION BUG #605, INC. (2) MI
FASHION BUG #606, INC. MI
FASHION BUG #607, INC. MI
FASHION BUG #610, INC. (1) (2) RI
FASHION BUG #611, INC. (1) (2) AL
FASHION BUG #612, INC. OH
FASHION BUG #614, INC. MA
FASHION BUG #615, INC. PA
FASHION BUG #617, INC. MA
FASHION BUG #618, INC. (2) SC
FASHION BUG #620, INC. (1) (2) IL
FASHION BUG #622, INC. WI
FASHION BUG #624, INC. MO
FASHION BUG #626, INC. (2) MD
FASHION BUG #627, INC. OH
FASHION BUG #629, INC. NJ
FASHION BUG #630, INC. IN
FASHION BUG #631, INC. PA
FASHION BUG #636, INC. IL
FASHION BUG #638, INC. MI
FASHION BUG #640, INC. (1) (2) NJ
FASHION BUG #641, INC. (2) 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. (2) OH
FASHION BUG #647, INC. ME
FASHION BUG #649, INC. PA
FASHION BUG #650, INC. (2) VA
FASHION BUG #651, INC. MI
FASHION BUG #653, INC. NJ
FASHION BUG #654, INC. AL
FASHION BUG #656, INC. FL
FASHION BUG #657, INC. MO
FASHION BUG #658, INC. MA
FASHION BUG #660 OF ALBANY, INC. (2) NY
FASHION BUG #661, INC. WV
FASHION BUG #662, INC. PA
FASHION BUG #663, INC. PA
FASHION BUG #664, INC. CO
FASHION BUG #666, INC. (1) (2) MI
FASHION BUG #667, INC. MI
FASHION BUG #668 OF SHIRLEY, INC. NY
FASHION BUG #670, INC. MA
FASHION BUG #671, INC. (1) (2) VA
FASHION BUG #672, INC. (2) 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 #678, INC. OH
FASHION BUG #679 OF WATERTOWN, INC. NY
FASHION BUG #680, INC. (2) PA
FASHION BUG #681, INC. IN
FASHION BUG #683, INC. (2) WI
FASHION BUG #684, INC. NC
FASHION BUG #686, INC. (2) IL
FASHION BUG #687, INC. IL
FASHION BUG #689, INC. PA
FASHION BUG #691, INC. MD
FASHION BUG #692, INC. (2) MO
FASHION BUG #693, INC. MI
FASHION BUG #694, INC. MI
FASHION BUG #697, INC. OH
FASHION BUG #698, INC. OH
FASHION BUG #712, INC. (2) IA
FASHION BUG #716, INC. (2) RI
FASHION BUG #719, INC. OH
FASHION BUG #720 OF OSWEGO, INC. NY
FASHION BUG #721, INC. MA
FASHION BUG #723, INC. (2) AL
FASHION BUG #724, INC. NH
FASHION BUG #725, INC. (1) (2) FL
FASHION BUG #727, INC. ME
FASHION BUG #729, INC. MI
FASHION BUG #730, INC. (2) 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 #736, INC. (2) MO
FASHION BUG #737, INC. MA
FASHION BUG #738, INC. NC
FASHION BUG #739, INC. (2) OH
FASHION BUG #740, INC. WI
FASHION BUG #741, INC. OH
FASHION BUG #742, INC. OH
FASHION BUG #743, INC. (2) OH
FASHION BUG #744, INC. (1) (2) FL
FASHION BUG #745, INC. PA
FASHION BUG #748, INC. OH
FASHION BUG #751, INC. MI
FASHION BUG #752, INC. VT
FASHION BUG #754, INC. (2) 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. PA
FASHION BUG #761, INC. (2) MO
FASHION BUG #762, INC. MO
FASHION BUG #763, INC. MO
FASHION BUG #764, INC. (2) IL
FASHION BUG #766, INC. OH
FASHION BUG #767, INC. (2) 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 #781, INC. OH
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 #790, INC. (2) OH
FASHION BUG #792, INC. NC
FASHION BUG #793, INC. VA
FASHION BUG #795, INC. MI
FASHION BUG #797, INC. KS
FASHION BUG #799, INC. VA
FASHION BUG #84 OF QUEENS, INC. NY
FASHION BUG #863, INC. IN
FASHION BUG #95, INC.(907) (2) MD
FASHION BUG & FASHION BUG PLUS #2179, INC. FL
FASHION BUG 3388, INC. (1) (2) FL
FASHION BUG ACQUISITION CORP (2) DE
FASHION BUG OF 640 PLAZA, INC. TN
FASHION BUG OF ALEXANDRIA, INC. (2) VA
FASHION BUG OF ALLENTOWN, INC. PA
FASHION BUG OF ALLIANCE, INC. PA
FASHION BUG OF ALPENA, INC. PA
FASHION BUG OF ALTOONA, INC. PA
FASHION BUG OF AMHERST, INC. NY
FASHION BUG OF ANDORRA, INC. PA
FASHION BUG OF APPLE VALLEY SQUARE, INC. PA
FASHION BUG OF ASBURY PARK, INC. PA
FASHION BUG OF AUDUBON, INC. NJ
FASHION BUG OF AURORA, INC. PA
FASHION BUG OF BARBERTON, INC. PA
FASHION BUG OF BEAVER FALLS, INC. (2) PA
FASHION BUG OF BECKLEY, INC. (2) PA
FASHION BUG OF BELLEVILLE, INC. PA
FASHION BUG OF BELMONT, INC. (2) PA
FASHION BUG OF BELVEDERE PLAZA, INC. (2) GA
FASHION BUG OF BETHLEHEM, INC. PA
FASHION BUG OF BIRMINGHAM, INC. AL
FASHION BUG OF BLOOMSBURG, INC. (2) PA
FASHION BUG OF BLUE ASH, INC. (2) PA
FASHION BUG OF BLUEFIELD, INC. PA
FASHION BUG OF BOLINGBROOK, INC. IL
FASHION BUG OF BOND, INC. PA
FASHION BUG OF BORDENTOWN, INC. PA
FASHION BUG OF BRADFORD, INC. PA
FASHION BUG OF BRICKTOWN PLAZA, INC. PA
FASHION BUG OF BRIDGEVIEW, INC. PA
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. PA
FASHION BUG OF BUCYRUS, INC. PA
FASHION BUG OF CALIFORNIA, INC. (1) (2) CA
FASHION BUG OF CAMBRIDGE, INC. MD
FASHION BUG OF CAPE MAY, INC. PA
FASHION BUG OF CARLISLE, INC. PA
FASHION BUG OF CASSELBERRY, INC. FL
FASHION BUG OF CASTOR AVENUE, INC. (2) PA
FASHION BUG OF CENTURY III MALL (2) PA
FASHION BUG OF CHARLOTTESVILLE, INC. VA
FASHION BUG OF CHESTERTOWN, INC. PA
FASHION BUG OF CHICOPEE, INC. (2) PA
FASHION BUG OF CHILLICOTHE, INC. PA
FASHION BUG OF CLARION, INC. PA
FASHION BUG OF CLARKSBURG, INC. (2) PA
FASHION BUG OF CLEARFIELD, INC. (2) PA
FASHION BUG OF CLEARVIEW MALL, INC. PA
FASHION BUG OF CLEVELAND, INC. OH
FASHION BUG OF COCKEYSVILLE, INC. (2) PA
FASHION BUG OF COLLEGE SQUARE, INC. PA
FASHION BUG OF CORBIN, INC. (2) PA
FASHION BUG OF COTTMAN, INC. PA
FASHION BUG OF COUNTRYSIDE, INC. (2) PA
FASHION BUG OF CRANBERRY, INC. PA
FASHION BUG OF CREST HILL, INC. (2) PA
FASHION BUG OF CROMWELL FIELD, INC. MD
FASHION BUG OF CRYSTAL LAKE, INC. (2) PA
FASHION BUG OF CULPEPPER, INC. VA
FASHION BUG OF CUMBERLAND MALL, INC. (2) GA
FASHION BUG OF CUYAHOGA FALLS, INC. PA
FASHION BUG OF DANBURY, INC. PA
FASHION BUG OF DANVILLE, INC. PA
FASHION BUG OF DAYTON MALL, INC. (2) PA
FASHION BUG OF DEARBORN, INC. PA
FASHION BUG OF DEKALB, INC. (2) IL
FASHION BUG OF DES PLAINES, INC. PA
FASHION BUG OF DEVON, INC. PA
FASHION BUG OF DOVER PLAZA, INC. PA
FASHION BUG OF DUBOIS, INC. PA
FASHION BUG OF DUNBAR, INC. PA
FASHION BUG OF EAST HARTFORD, INC. CT
FASHION BUG OF EAST MANSFIELD, INC. PA
FASHION BUG OF EAST PARK, INC. PA
FASHION BUG OF EAST WINDSOR, INC. PA
FASHION BUG OF EASTSIDE PLAZA, INC. PA
FASHION BUG OF EASTWOOD MALL, INC. PA
FASHION BUG OF EDGEWOOD, INC. PA
FASHION BUG OF EDWARDSVILLE, INC. PA
FASHION BUG OF EGG HARBOR, INC. (2) PA
FASHION BUG OF ELDERSBURG, INC. PA
FASHION BUG OF ELKTON, INC. PA
FASHION BUG OF ELWOOD CITY, INC. PA
FASHION BUG OF EVANSVILLE, INC. IN
FASHION BUG OF FAIRFIELD, INC. PA
FASHION BUG OF FAIRMONT, INC. PA
FASHION BUG OF FALL RIVER, INC. PA
FASHION BUG OF FALLS CHURCH, INC. (2) VA
FASHION BUG OF FLEMINGTON, INC. (2) PA
FASHION BUG OF FLINT, INC. (2) PA
FASHION BUG OF FOREST PARK MALL, INC. (2) PA
FASHION BUG OF FOREST PLAZA, INC. IL
FASHION BUG OF FORT SAGINAW, INC. (2) MI
FASHION BUG OF FOSTORIA, INC. (2) PA
FASHION BUG OF FRACKVILLE, INC. PA
FASHION BUG OF FRANKFORT, INC. PA
FASHION BUG OF FRANKLIN COUNTY, INC. PA
FASHION BUG OF FRANKLIN, INC. PA
FASHION BUG OF FREDERICKSBURG, INC. PA
FASHION BUG OF FREEHOLD, INC. NJ
FASHION BUG OF FRONT ROYAL, INC. VA
FASHION BUG OF FT. FINDLAY, INC. PA
FASHION BUG OF FT. MYERS, INC. (2) FL
FASHION BUG OF FULLERTON, INC. PA
FASHION BUG OF GARFIELD HEIGHTS, INC. PA
FASHION BUG OF GEORIA SQUARE, INC. (2) GA
FASHION BUG OF GIBBSTOWN, INC. NJ
FASHION BUG OF GLEN BURNIE, INC. PA
FASHION BUG OF GLEN ELLYN, INC. IL
FASHION BUG OF GORHAM, INC. NH
FASHION BUG OF GREENVILLE PLAZA, INC. PA
FASHION BUG OF GROVE CITY, INC. PA
FASHION BUG OF HACKENSACK, INC. (2) PA
FASHION BUG OF HACKETTSTOWN, INC. (2) PA
FASHION BUG OF HAGERSTOWN, INC. PA
FASHION BUG OF HAMILTON SQUARE, INC. PA
FASHION BUG OF HAMPTON, INC. (2) PA
FASHION BUG OF HANNIBAL, INC. MO
FASHION BUG OF HANOVER, INC. PA
FASHION BUG OF HARRISBURG, INC. PA
FASHION BUG OF HAZELTON, INC. PA
FASHION BUG OF HAZLET, INC. (2) NJ
FASHION BUG OF HERSHEY, INC. (2) PA
FASHION BUG OF HIGHLAND RIDGE, INC. OH
FASHION BUG OF HINESVILLE, INC. GA
FASHION BUG OF HOLYOKE, INC. MA
FASHION BUG OF HOMEWOOD, INC. (2) PA
FASHION BUG OF HONESDALE, INC. PA
FASHION BUG OF HOUGHTON, INC. PA
FASHION BUG OF HOWELL, INC. PA
FASHION BUG OF HUNTINGTON PLAZA, INC. IN
FASHION BUG OF HUNTINGTON, INC. (2) PA
FASHION BUG OF IROQUOIS MANOR, INC. PA
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 KEDZIE, INC. PA
FASHION BUG OF KENT, INC. PA
FASHION BUG OF KUTZTOWN, INC. PA
FASHION BUG OF LAKELAND, INC. (2) FL
FASHION BUG OF LAKEMORE PLAZA, INC. PA
FASHION BUG OF LANCASTER, INC. PA
FASHION BUG OF LANGLEY PARK, INC. (2) PA
FASHION BUG OF LANSING, INC. PA
FASHION BUG OF LAUREL, INC. (2) PA
FASHION BUG OF LAVALE, INC. PA
FASHION BUG OF LAWRENCEVILLE, INC. NJ
FASHION BUG OF LEBANON, INC. PA
FASHION BUG OF LEDGEWOOD, INC. PA
FASHION BUG OF LENOX SQUARE, INC. (2) GA
FASHION BUG OF LEWISBURG, INC. PA
FASHION BUG OF LEWISTON, INC. ME
FASHION BUG OF LEXINGTON, INC. (2) PA
FASHION BUG OF LIVONIA, INC. PA
FASHION BUG OF LOCKPORT, INC. (2) NY
FASHION BUG OF LOGAN, INC. PA
FASHION BUG OF LORAIN, INC. OH
FASHION BUG OF LOUISVILLE, INC. PA
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. PA
FASHION BUG OF MANCHESTER, N.H., INC. NH
FASHION BUG OF MAPLE HEIGHTS, INC. PA
FASHION BUG OF MARQUETTE, INC. MI
FASHION BUG OF MARTIN PLAZA, INC. (2) PA
FASHION BUG OF MASON CITY, INC. IA
FASHION BUG OF MASSILLON, INC. OH
FASHION BUG OF MATTESON, INC. (2) PA
FASHION BUG OF MAULDIN, INC. PA
FASHION BUG OF MAYFAIR, INC. PA
FASHION BUG OF MAYFIELD HEIGHTS, INC. (2) OH
FASHION BUG OF MCKEESPORT (2) PA
FASHION BUG OF MEADVILLE, INC. (2) PA
FASHION BUG OF MEDFORD, INC. PA
FASHION BUG OF MELROSE PARK, INC. (2) PA
FASHION BUG OF MERRITT ISLAND, INC. FL
FASHION BUG OF MIDDLESBORO, INC. PA
FASHION BUG OF MIDDLETOWN PLAZA, INC. PA
FASHION BUG OF MIDLAND PLAZA, INC. MI
FASHION BUG OF MIDWAY, INC. MN
FASHION BUG OF MONROE, INC. PA
FASHION BUG OF MONROEVILLE (2) PA
FASHION BUG OF MONROEVILLE, INC. PA
FASHION BUG OF MONTGOMERYVILLE, INC. (2) PA
FASHION BUG OF MONTPELIER, INC. VT
FASHION BUG OF MOORESTOWN MALL, INC. (2) PA
FASHION BUG OF MOOSIC, INC. PA
FASHION BUG OF MOREHEAD, INC. PA
FASHION BUG OF MORRIS COUNTY, INC. PA
FASHION BUG OF MOUNT PLEASANT, INC. PA
FASHION BUG OF MOUNT VERNON, INC. PA
FASHION BUG OF MT. CLEMENS, INC. PA
FASHION BUG OF MURRAY, INC. PA
FASHION BUG OF N. ROANOKE, INC. VA
FASHION BUG OF NANTICOKE, INC. PA
FASHION BUG OF NASHVILLE, INC. TN
FASHION BUG OF NATRONA, INC. (2) PA
FASHION BUG OF NEW BRITIAN, INC. CT
FASHION BUG OF NEW CASTLE, INC. PA
FASHION BUG OF NEW HOLLAND, INC. PA
FASHION BUG OF NEW LONDON, INC. PA
FASHION BUG OF NEW PHILADELPHIA, INC. PA
FASHION BUG OF NORTH ADAMS, INC. PA
FASHION BUG OF NORTH AVENUE, INC. (2) PA
FASHION BUG OF NORTH BRUNSWICK, INC. PA
FASHION BUG OF NORTH EAST, INC. PA
FASHION BUG OF NORTH POINT, INC. PA
FASHION BUG OF NORWELL, INC. PA
FASHION BUG OF NORWIN, INC. PA
FASHION BUG OF OAK RIDGE, INC. (2) PA
FASHION BUG OF OIL CITY, INC. PA
FASHION BUG OF OLEAN, INC. PA
FASHION BUG OF PADUCAH, INC. (2) PA
FASHION BUG OF PAINTSVILLE, INC. PA
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. PA
FASHION BUG OF PARKSIDE, INC. (2) PA
FASHION BUG OF PARLIN, INC. (2) PA
FASHION BUG OF PATCHOQUE, INC. NY
FASHION BUG OF PENNSVILLE, INC. PA
FASHION BUG OF PEORIA, INC. PA
FASHION BUG OF PERIMETER MALL, INC. (2) GA
FASHION BUG OF PERRING, INC. PA
FASHION BUG OF PHILLIPSBURG, INC. PA
FASHION BUG OF PIKEVILLE, INC. PA
FASHION BUG OF PITTSTON, INC. (2) PA
FASHION BUG OF PORTSMOUTH, INC. PA
FASHION BUG OF POTTSVILLE, INC. PA
FASHION BUG OF RAVENSWOOD, INC. PA
FASHION BUG OF RAYNHAM, INC. MA
FASHION BUG OF REISTERTOWN, INC. PA
FASHION BUG OF REVERE, INC. MA
FASHION BUG OF REYNOLDSBURG, INC. OH
FASHION BUG OF RISING SUN, INC. PA
FASHION BUG OF RIVERHEAD, INC. (2) NY
FASHION BUG OF RIVERSIDE SQUARE, INC. IL
FASHION BUG OF RIVERTOWNE COMMONS, INC. MD
FASHION BUG OF ROANOKE RAPIDS, INC. (2) PA
FASHION BUG OF ROGERS PLAZA, INC. PA
FASHION BUG OF ROYAL OAK, INC. (2) PA
FASHION BUG OF RUMFORD, INC. (2) RI
FASHION BUG OF SAGINAW, INC. PA
FASHION BUG OF SALEM, INC. MA
FASHION BUG OF SAUGUS, INC. (2) MA
FASHION BUG OF SCRANTON, INC. PA
FASHION BUG OF SEAFORD, INC. (2) PA
FASHION BUG OF SECURITY, INC. PA
FASHION BUG OF SHARON, INC. PA
FASHION BUG OF SHARONVILLE, INC. PA
FASHION BUG OF SMYRNA, INC. (2) GA
FASHION BUG OF SOLON, INC. OH
FASHION BUG OF SOMERS POINT, INC. NJ
FASHION BUG OF SOMERSET, INC. (2) PA
FASHION BUG OF SOUTH FLINT, INC. PA
FASHION BUG OF SOUTH HILLS VILLAGE (2) PA
FASHION BUG OF SOUTH PLAINFIELD, INC. NJ
FASHION BUG OF SOUTHFIELD, INC. (2) MI
FASHION BUG OF SOUTHGATE, INC. (2) MI
FASHION BUG OF SOUTHLAKE MALL, INC. (2) GA
FASHION BUG OF SPEEDWAY SHOPPING CENTER, INC. IN
FASHION BUG OF SPOTSYLVANIA, INC. (2) PA
FASHION BUG OF SPRINGFIELD PLAZA, INC. MA
FASHION BUG OF SPRINGFIELD, INC. (2) PA
FASHION BUG OF ST. ALBANS, INC. PA
FASHION BUG OF ST. CLAIR SHORES, INC. MI
FASHION BUG OF STATE COLLEGE, INC. PA
FASHION BUG OF STRATFORD, INC. CT
FASHION BUG OF STROUDSBURG, INC. PA
FASHION BUG OF STRUTHERS, INC. OH
FASHION BUG OF STURGIS, INC. MI
FASHION BUG OF TAYLOR, INC. MI
FASHION BUG OF TECH PLAZA, INC. PA
FASHION BUG OF THE MARKET PLACE, INC. (2) TN
FASHION BUG OF THORNDALE, INC. PA
FASHION BUG OF TIFFIN, INC. (2) PA
FASHION BUG OF TOMS RIVER, INC. PA
FASHION BUG OF TOPSHAM, INC. (2) ME
FASHION BUG OF TOTOWA, INC. NJ
FASHION BUG OF TOWN & COUNTRY, INC. (2) PA
FASHION BUG OF TROY, INC. NY
FASHION BUG OF TRUMBULL PLAZA, INC. PA
FASHION BUG OF TUNKHANNOCK, INC. PA
FASHION BUG OF UNION, INC. PA
FASHION BUG OF UNIONTOWN, INC. PA
FASHION BUG OF UNIVERSITY MALL, INC. OH
FASHION BUG OF UNIVERSITY PLAZA, INC. TN
FASHION BUG OF VALLEY PLAZA, INC. PA
FASHION BUG OF VAN BUREN, INC. PA
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 WARREN, INC. PA
FASHION BUG OF WARRENTON, INC. PA
FASHION BUG OF WARSAW, INC. IN
FASHION BUG OF WATERBURY, 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. PA
FASHION BUG OF WEST FRANKFORT, INC. PA
FASHION BUG OF WEST MANCHESTER, INC. PA
FASHION BUG OF WEST MIFFLIN, INC. PA
FASHION BUG OF WEST SPRINGFIELD, INC. (2) MA
FASHION BUG OF WHARTON SQUARE, INC. PA
FASHION BUG OF WHITMAN PLAZA, INC. PA
FASHION BUG OF WILKES BARRE, INC. PA
FASHION BUG OF WILLIAMSON, INC. PA
FASHION BUG OF WILLIAMSPORT, INC. PA
FASHION BUG OF WILLIAMSTOWN, INC. NJ
FASHION BUG OF WILMINGTON, INC. MA
FASHION BUG OF WISCONSIN RAPIDS, INC. WI
FASHION BUG OF WOODBRIDGE, INC. PA
FASHION BUG OF WOODLYN, INC. PA
FASHION BUG OF XENIA, INC. (2) PA
FASHION BUG OF YOUNGSTOWN, INC. PA
FASHION BUG OF ZANESVILLE, INC. PA
FASHION BUG PLUS #8005, INC. (2) NJ
FASHION BUG PLUS #8006, INC. (2) NJ
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 #8013, INC. (2) IN
FASHION BUG PLUS #8014, INC. PA
FASHION BUG PLUS #8016, INC. (2) MN
FASHION BUG PLUS #8017 OF RIVERHEAD, INC. (2) NY
FASHION BUG PLUS #8019, INC. PA
FASHION BUG PLUS #8023, INC. (2) VA
FASHION BUG PLUS #8024, INC. (2) NJ
FASHION BUG PLUS #8025, INC. (2) IA
FASHION BUG PLUS #8027, INC. (1) (2) OH
FASHION BUG PLUS #8028, INC. (2) CT
FASHION BUG PLUS #8030, INC. (2) PA
FASHION BUG PLUS #8031, INC. (2) MI
FASHION BUG PLUS #8032, INC. (2) PA
FASHION BUG PLUS #8034, INC. PA
FASHION BUG PLUS #8036, INC. (1) (2) NJ
FASHION BUG PLUS #8038, INC. (2) MD
FASHION BUG PLUS #8039, INC. (1) (2) OH
FASHION BUG PLUS #8040, INC. PA
FASHION BUG PLUS #8041, INC. CA
FASHION BUG PLUS #8043, INC. NJ
FASHION BUG PLUS #8044, INC. MA
FASHION BUG PLUS #811, INC. MI
FASHION BUG PLUS #818 OF AUBURN, INC. (2) NY
FASHION BUG PLUS #881, INC. (2) MI
FASHION BUG PLUS #904, INC. FL
FASHION BUG PLUS #932, INC. KY
FASHION BUG PLUS #950, INC. (2) MN
FASHION BUG PLUS #955 OF FLUSHING, INC. (1) (2) NY
FASHION BUG PLUS #957, INC. (2) PA
FASHION BUG PLUS #958, INC. (2) SD
FASHION BUG PLUS #960, INC. (2) IA
FASHION BUG PLUS #961, INC. (1) (2) IN
FASHION BUG PLUS #962, INC. (2) WV
FASHION BUG PLUS #963, INC. (2) MI
FASHION BUG PLUS #964, INC. OH
FASHION BUG PLUS #966, INC. WV
FASHION BUG PLUS #969, INC. (2) MN
FASHION BUG PLUS #970, INC. GA
FASHION BUG PLUS #971, INC. (2) NJ
FASHION BUG PLUS #972, INC. (2) IL
FASHION BUG PLUS #973, INC. (2) WI
FASHION BUG PLUS #975 OF HORSEHEADS, INC. NY
FASHION BUG PLUS #976, INC. (2) 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 #993, INC. (1) (2) NJ
FASHION BUG PLUS OF ADRIAN, INC. (2) PA
FASHION BUG PLUS OF AMERICAN MALL, INC. (2) PA
FASHION BUG PLUS OF APPLETON, INC. PA
FASHION BUG PLUS OF BALTIMORE, INC. MD
FASHION BUG PLUS OF BEAVER VALLEY, INC. (2) PA
FASHION BUG PLUS OF BELOIT, INC. (2) WI
FASHION BUG PLUS OF BRICKTOWN, INC. (2) PA
FASHION BUG PLUS OF CAPITAL HEIGHTS, INC. (2) MD
FASHION BUG PLUS OF CAPITAL PLAZA, INC. (2) MD
FASHION BUG PLUS OF CHAMPAIGN, INC. (2) IL
FASHION BUG PLUS OF CHARLESTON, INC. (2) PA
FASHION BUG PLUS OF CLEVELAND HEIGHTS, INC. (2) PA
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 DUBOIS, INC. PA
FASHION BUG PLUS OF ERIE, INC. PA
FASHION BUG PLUS OF ESSEXVILLE, INC. (2) PA
FASHION BUG PLUS OF FLINT, INC. MI
FASHION BUG PLUS OF FORESTVILLE, INC. (2) MD
FASHION BUG PLUS OF FORT WAYNE, INC. (2) PA
FASHION BUG PLUS OF FREDERICK, INC. PA
FASHION BUG PLUS OF GREENFIELD, INC. (2) PA
FASHION BUG PLUS OF HADLEY, INC. PA
FASHION BUG PLUS OF HAGERSTOWN, INC. (2) PA
FASHION BUG PLUS OF HARRISBURG, INC. (2) PA
FASHION BUG PLUS OF HARVARD SQUARE, INC. MI
FASHION BUG PLUS OF HICKORY POINT, INC. (2) PA
FASHION BUG PLUS OF HIGHLAND RIDGE, INC. (2) OH
FASHION BUG PLUS OF HUNTINGTON, INC. (2) NY
FASHION BUG PLUS OF HUTCHINSON, INC. (2) MN
FASHION BUG PLUS OF HYATTSVILLE, INC. (2) PA
FASHION BUG PLUS OF JANESVILLE, INC. (2) PA
FASHION BUG PLUS OF LANCASTER PLAZA, INC. PA
FASHION BUG PLUS OF LAWNSIDE, INC. NJ
FASHION BUG PLUS OF LINCOLN MALL, INC. (2) PA
FASHION BUG PLUS OF LIVONIA MALL, INC. (2) PA
FASHION BUG PLUS OF MANITOWOC, INC. (2) WI
FASHION BUG PLUS OF MARION, INC. (2) PA
FASHION BUG PLUS OF MARTIN PLAZA, INC. (2) PA
FASHION BUG PLUS OF MELROSE PARK, INC. IL
FASHION BUG PLUS OF MEMPHIS, INC. (2) TN
FASHION BUG PLUS OF MONROEVILLE, INC. (2) PA
FASHION BUG PLUS OF MT. GREENWOOD, INC. IL
FASHION BUG PLUS OF MUNCIE, INC. (2) PA
FASHION BUG PLUS OF NEW BEDFORD, INC. (2) MA
FASHION BUG PLUS OF NORTH FT MYERS, INC. FL
FASHION BUG PLUS OF NORTHWEST PLAZA, INC. (2) PA
FASHION BUG PLUS OF ORLANDO, INC. (2) FL
FASHION BUG PLUS OF OWENSBORO, INC. (2) KY
FASHION BUG PLUS OF PEKIN, INC, PA
FASHION BUG PLUS OF PERU, INC. (2) PA
FASHION BUG PLUS OF PONTIAC, INC. (2) MI
FASHION BUG PLUS OF RAINBOW CENTRE, INC. (2) NY
FASHION BUG PLUS OF RANDOLPH, INC. (2) PA
FASHION BUG PLUS OF ROSEVILLE, INC. (2) PA
FASHION BUG PLUS OF SANDUSKY, INC. (2) PA
FASHION BUG PLUS OF SHARON HILL, INC. PA
FASHION BUG PLUS OF SHEBOYGAN, INC. WI
FASHION BUG PLUS OF SOUTH ATTLEBORO, INC. (2) PA
FASHION BUG PLUS OF SOUTH MALL, INC. (2) PA
FASHION BUG PLUS OF SOUTHINGTON, INC. (2) CT
FASHION BUG PLUS OF SPRINGFIELD, INC. (2) MA
FASHION BUG PLUS OF ST AUGUSTINE, INC. (2) FL
FASHION BUG PLUS OF ST CLAIRSVILLE, INC. (2) PA
FASHION BUG PLUS OF TURFLAND MALL, INC. PA
FASHION BUG PLUS OF WALLKILL, INC. NY
FASHION BUG PLUS OF WESTWOOD PLAZA, INC. (2) PA
FASHION BUG PLUS OF WHITEHAVEN, INC. (2) TN
FASHION BUG PLUS OF WORCESTER, INC. (2) PA
FASHION BUG PLUS OF YOUNGSTOWN, INC. (2) OH
FASHION SERVICE CORP. (2) PA
FASHION SERVICE FULFILLMENT CORPORATION (2) DE
FB APPAREL, INC. (2) IN
FB CLOTHING, INC. (1) (2) IN
FB DISTRO, INC. (2) IN
FESTUS #2733 DEVELOPMENT CO., INC. MO
FSC SERVICE CORP. (2) PA
FSHC, INC. (2) DE
I.E. WAREHOUSE #4001, INC. (2) NJ
I.E. WAREHOUSE #4002, INC. (2) CT
I.E. WAREHOUSE #4004, INC. (2) NJ
I.E. WAREHOUSE #4005, INC. (2) MA
I.E. WAREHOUSE #4006, INC. (2) PA
I.E. WAREHOUSE #4007, INC. (2) PA
I.E. WAREHOUSE #4008, INC. (2) NJ
I.E. WAREHOUSE #4009, INC. (2) RI
I.E. WAREHOUSE #4010, INC. (2) MA
I.E. WAREHOUSE #4011, INC. (2) NH
I.E. WAREHOUSE #4012, INC. (2) NY
I.E. WAREHOUSE #4013, INC. (2) NJ
INTERNATIONAL APPAREL, INC. (2) PA
J.M. BALTER CO. (2) PA
J.P.A. CLOTHING COMPANY (2) GA
J.P.A. SERVICE CO. (2) PA
KAFCO DEVELOPMENT CO., INC. (2) PA
KIRKSTONE LTD (2) HONG KONG
KS INVESTMENTS LTD. (2) HONG KONG
MACOMB #2619 DEVELOPMENT CO., INC. IL
MODERN WOMAN #6001, INC. (1) (2) IN
MODERN WOMAN #6002, INC. (1) (2) IL
MODERN WOMAN, INC. PA
MODERN WOMAN, INC. MI
MODERN WOMAN HOLDINGS, INC. (2) PA
MODERN WOMAN SPECIALTY RETAIL, INC. PA
MODERN WOMAN NAME HOLDING, INC. (1) (2) DE
ORLE (2) DE
PRESQUE ISLE #2756 DEVELOPMENT CO., INC. (2) ME
PRICE APPEAL #5001 OF STATEN ISLAND, INC. (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) PA
PRICE APPEAL #5009, INC. (2) VA
PRICE APPEAL #5013, INC. (2) PA
PRICE APPEAL #5014, INC. (2) CT
PRICE APPEAL #5015, INC. (2) NJ
PRICE APPEAL #5020, INC. (2) OH
PRICE APPEAL #5024, INC. (2) NJ
PRICE APPEAL #5044, INC. (2) MD
PRICE APPEAL #5045, INC. (2) OH
PRICE APPEAL #5050, INC. (2) MI
PRICE APPEAL #5059, INC. (2) OH
PRICE APPEAL #5060, INC. (2) MI
P'ZAZZ FASHIONS OF BARBOURSVILLE, INC. (2) WV
P'ZAZZ FASHIONS OF HAGERSTOWN, INC. (2) MD
P'ZAZZ FASHIONS OF KALAMAZOO, INC. (2) MI
P'ZAZZ FASHIONS OF OZONE, INC. (2) NY
P'ZAZZ FASHIONS OF UNIONTOWN, INC. (2) PA
ROLLA #2685 DEVELOPMENT CO., INC. MO
ROSE MERGE SUB, INC. (2) TN
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) HONG KONG
SIKESTON #2736 DEVELOPMENT CO., INC. MO
SPECIALTY FIXTURES, INC. (2) DE
SPIRIT OF AMERICA NATIONAL BANK (2) OH
SPIRIT OF AMERICA PROMOTIONS, INC. (2) OH
SPIRIT OF AMERICA, INC. (2) DE
VICTORIA #2972 DEVELOPMENT CO., INC. (2) TX
W.L. DISTRIBUTORS, INC. (2) PA
WINKS LANE, INC. (2) PA
YARDARM TRADING LTD. (2) HONG KONG
YUCCA #2524 DEVELOPMENT CO., INC. CA
</TABLE>
- -----------------
[FN]
(1) These companies are not included in the consolidated financial
statements for the fiscal year ended January 29, 2000, as they had not
then commenced operations and the original capitalization was not then
paid in.
(2) These companies do not currently operate stores.
</FN>
EXHIBIT 23
Consent Of Independent Auditors
We consent to the incorporation by reference in the Registration Statements
No. 333-88899, 333-43117, 333-22323, 33-56145, 33-56147, 33-39558, and
2-92975 on Form S-8 of Charming Shoppes, Inc., of our report dated March 9,
2000, with respect to the consolidated financial statements of Charming
Shoppes, Inc. included in this Annual Report (Form 10-K) for the year ended
January 29, 2000.
ERNST & YOUNG, LLP
Philadelphia, Pennsylvania
April 27, 2000
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<FISCAL-YEAR-END> JAN-29-2000
<PERIOD-END> JAN-29-2000
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<INVENTORY> 260,792
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0
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<SALES> 1,196,529
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<OTHER-EXPENSES> 0
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<NET-INCOME> 45,059
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