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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) July 22, 1999
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Charming Shoppes Master Trust
(Issuer and Co-Registrant)
Charming Shoppes Receivables Corp.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
333-71757 51-0383871
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(Commission File Number) (I.R.S. Employer Identification No.)
3411 Silverside Road
Wilmington, Delaware 19810
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(Address of Principal Executive Offices) (Zip Code)
(302) 479-5510
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Description of Series 1999-1.
On July 22, 1999, Charming Shoppes Master Trust (the "Trust") issued a
series of asset-backed certificates, entitled Series 1999-1 ("Series 1999-1"),
pursuant to the Series 1999-1 Supplement, dated as of July 22, 1999, attached
hereto as Exhibit 4.2, to the Second Amended and Restated Pooling and Servicing
Agreement, dated as of November 25, 1997, as amended by the First Amendment
thereto on July 22, 1999 (the "Pooling and Servicing Agreement"), attached
hereto as Exhibit 4.1, among Charming Shoppes Receivables Corp., as Seller (the
"Seller"), Spirit of America, Inc., as Servicer (the "Servicer"), and First
Union National Bank, as Trustee (the "Trustee").
Series 1999-1 consists of four classes identified as the Class A
Floating Rate Asset Backed Certificates (the "Class A Certificates"), the Class
B Floating Rate Asset Backed Certificates (the "Class B Certificates"), the
Class C Floating Rate Asset Backed Certificates (the "Class C Certificates") and
the Class D Floating Rate Asset Backed Certificates (the "Class D
Certificates"). The Class A and Class B Certificates were publicly offered, as
described in a Prospectus, dated July 16, 1999, pursuant to an Underwriting
Agreement (the "Underwriting Agreement") dated July 16, 1999, attached hereto as
Exhibit 1.1, among the Seller, the Servicer, Fashion Service Corp. and Bear,
Stearns & Co. Inc. (the "Underwriter"), as representative, and the Terms
Agreement (the "Terms Agreement") dated July 16, 1999, attached hereto as
Exhibit 1.2, among the Seller, the Servicer, Fashion Service Corp. and the
Underwriter, as representative. The Seller sold the Class C Certificates
pursuant to a certificate purchase agreement dated July 22, 1999, among the
Trustee, the Seller, the Servicer, and the purchaser named therein. The Seller
sold the Class D Certificates pursuant to a certificate purchase agreement dated
July 22, 1999, among the Trustee, the Seller, the Servicer, and the purchasers
named therein.
The Class A Certificates have an initial principal balance of
$98,250,000. The Class B Certificates have an initial principal balance of
$27,000,000. The Class C Certificates have an initial principal balance of
$9,000,000. The Class D Certificates have an initial principal balance of
$15,750,000.
Concurrently with the issuance of Series 1999-1, Spirit of America
National Bank, as Originator, and the Seller entered into the First Amendment,
dated as of July 22, 1999, attached hereto as Exhibit 10.1, to the Purchase and
Sale Agreement, dated as of November 25, 1997, pursuant to which the Originator
sells receivables to the Seller.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable
(b) Not applicable
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(c) Exhibits
A list of exhibits filed herewith is contained in the Index to Exhibits
hereto, which is incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CHARMING SHOPPES RECEIVABLES CORP.
(Registrant)
Dated: July 30, 1999 By: /s/ Kirk R. Simme
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Name: Kirk R. Simme
Title: Vice President
SPIRIT OF AMERICA, INC., as Servicer on behalf
of Charming Shoppes Master Trust
(Co-Registrant)
Dated: July 30, 1999 By: /s/ Kirk R. Simme
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Name: Kirk R. Simme
Title: Vice President
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INDEX TO EXHIBITS
EXHIBIT
NO. DOCUMENT DESCRIPTION
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1.1 Underwriting Agreement, dated July 16, 1999, among Charming Shoppes
Receivables Corp., Spirit of America National Bank, Fashion Service
Corp. and Bear, Stearns & Co. Inc., as representative.
1.2 Terms Agreement, dated July 16, 1999, among Charming Shoppes
Receivables Corp., Spirit of America National Bank, Fashion Service
Corp. and Bear, Stearns & Co. Inc., as representative.
4.1 Second Amended and Restated Pooling and Servicing Agreement, dated
as of November 25, 1997, as amended by the First Amendment thereto
on July 22, 1999, among Charming Shoppes Receivables Corp., as
Seller, Spirit of America, Inc., as Servicer, and First Union
National Bank, as Trustee.
4.2 Series 1999-1 Supplement to the Second Amended and Restated Pooling
and Servicing Agreement, dated as of November 25, 1997, as amended
by the First Amendment thereto on July 22, 1999, among Charming
Shoppes Receivables Corp., as Seller, Spirit of America, Inc., as
Servicer, and First Union National Bank, as Trustee.
10.1 First Amendment to the Purchase and Sale Agreement, dated as of July
22, 1999, among Charming Shoppes Receivables Corp., as Seller,
Spirit of America National Bank, and Spirit of America, Inc.
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EXHIBIT 1.1
CHARMING SHOPPES RECEIVABLES CORP.,
as Seller
SPIRIT OF AMERICA, INC.,
as Servicer
CHARMING SHOPPES MASTER TRUST ASSET BACKED CERTIFICATES
July 16, 1999
UNDERWRITING AGREEMENT
(Standard Terms)
Bear, Stearns & Co. Inc.,
as Underwriter or as a Representative
of the Underwriters named in the Terms Agreement
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
Charming Shoppes Receivables Corp. ("CSRC") has duly authorized the
issuance of the Series of Asset Backed Certificates designated in the applicable
Terms Agreement (as hereinafter defined) and the sale, pursuant to this
Agreement of the Class A Asset Backed Certificates (the "Class A Certificates")
and the Class B Asset Backed Certificates (the "Class B Certificates") included
in such series (such Class A Certificates and the Class B Certificates,
collectively, the "Certificates"). The Certificates will be issued pursuant to
the Second Amended and Restated Pooling and Servicing Agreement, dated as of
November 25, 1997, as amended by the First Amendment thereto to be dated as of
July 22, 1999 (the "First Amendment"). Such Second Amended and Restated Pooling
and Servicing Agreement as so amended is among CSRC, as Seller, Spirit of
America, Inc., as Servicer, and First Union National Bank, as trustee (the
"Trustee") (the Second Amended and Restated Pooling and Servicing Agreement as
amended by the First Amendment and as amended from time to time hereafter is, in
this Agreement referred to as the "Pooling and Servicing Agreement"). The terms
of the Certificates as well as the Class C Certificates and Class D Certificates
described herein will be set forth in the Series Supplement having the date
stated in the applicable Terms Agreement, among CSRC, as Seller, Spirit of
America, Inc., as Servicer, and the Trustee (the "Supplement").
The Certificates designated in the applicable Terms Agreement may be
sold in a public offering by the Trust (as hereinafter defined) through Bear,
Stearns & Co. Inc. ("Bear
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Stearns"), as sole underwriter, or through certain underwriters which include
Bear Stearns, one or more of which may with Bear Stearns act as representative
of such underwriters listed on Schedule I to the applicable Terms Agreement (any
underwriter through which Certificates are sold shall be referred to herein as
an "Underwriter" or, collectively, all such underwriters may be referred to as
the "Underwriters"; any representatives thereof may be referred to herein as a
"Representative," which, if the context herein does require, shall include Bear
Stearns in its capacity as sole underwriter of any Series, or the
"Representatives"). The Certificates sold to the Underwriters for which Bear
Stearns is a Representative shall be sold pursuant to a Terms Agreement by and
among CSRC, Fashion Service Corp. ("FSC"), Spirit of America, Inc. ("SOAI"), and
the Underwriters, a form of which is attached hereto as Exhibit A (a "Terms
Agreement"), which incorporates by reference this Underwriting Agreement (the
"Agreement," which may include the applicable Terms Agreement if the context so
requires). The standard provisions set forth herein shall not be construed as an
obligation of CSRC to sell any of the Certificates. The obligation of CSRC to
sell the Certificates shall be evidenced by the applicable Terms Agreement.
Credit enhancement for the Certificates will be provided by the
issuance, as part of the same series as the Certificates, of two subordinated
classes, designated as the Class C Asset Backed Certificates (the "Class C
Certificates") and the Class D Asset Backed Certificates (the "Class D
Certificates"). The Class C Certificates will be sold in a private transaction
and not pursuant to this Agreement. The Class D Certificates will be sold in a
private transaction and not pursuant to this Agreement, and all or a portion of
the Class D Certificates may be purchased by an affiliate of CSRC. The term
"applicable Terms Agreement" means the Terms Agreement dated the date hereof.
Each Certificate will represent a specified percentage of undivided interest in
the Charming Shoppes Master Trust (the "Trust"). The assets of the Trust
include, among other things, certain amounts due (the "Receivables") on a pool
of private label credit card accounts owned by Spirit of America National Bank
(the "Bank") and proceeds of credit insurance policies relating to the
Receivables. The Receivables originated by the Bank have been and will be
conveyed to and purchased by CSRC under the terms of a Purchase and Sale
Agreement dated as of November 25, 1997, as amended by the First Amendment
thereto to be dated as of July 22, 1999 (as amended by the First Amendment and
as amended from time to time hereafter, the "Purchase Agreement"). To the extent
not defined herein, capitalized terms used herein shall have the meanings
specified in the Pooling and Servicing Agreement.
Unless otherwise stated herein or in the applicable Terms Agreement, as
the context otherwise requires or if such term is otherwise defined in the
Pooling and Servicing Agreement, each capitalized term used or defined herein or
in the applicable Terms Agreement shall relate only to the Certificates
designated in the applicable Terms Agreement and no other Asset Backed
Certificates issued by the Trust.
CSRC has prepared and filed with the Securities and Exchange Commission
(the "Commission") in accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-1 (having the
registration number stated in the applicable Terms Agreement), including a form
of prospectus, relating to the Certificates. The registration
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statement as amended has been declared effective by the Commission. If any
post-effective amendment has been filed with respect thereto, prior to the
execution and delivery of the applicable Terms Agreement, the most recent such
amendment has been declared effective by the Commission. Such registration
statement, as amended at the time of effectiveness, including all material
incorporated by reference therein and including all information (if any) deemed
to be part of the registration statement at the time of effectiveness pursuant
to Rule 430A under the Act, is referred to in the Agreement as the "Registration
Statement," and the form of prospectus relating to the applicable Certificates,
as first filed with the Commission pursuant to and in accordance with Rule
424(b) ("Rule 424(b)") or (if no such filing is required) as included in the
Registration Statement, including all material incorporated by reference in such
prospectus under the Act, is referred to in this Agreement as the "Prospectus."
Upon the execution of the applicable Terms Agreement, CSRC agrees with
the Underwriters as follows:
1. Subject to the terms and conditions herein set forth and in the
applicable Terms Agreement, CSRC agrees to sell and deliver the Certificates to
the several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from CSRC the respective principal amount of the Class A Certificates set forth
opposite such Underwriter's name in the applicable Terms Agreement and the
respective principal amount of the Class B Certificates set forth opposite such
Underwriter's name in the applicable Terms Agreement. The Certificates are to be
purchased by the Underwriters at the purchase price or purchase prices set forth
in such Terms Agreement.
2. CSRC understands that the Underwriters intend (i) to make a public
offering of their respective portions of the Certificates as soon after the
Registration Statement and this Agreement and the applicable Terms Agreement
have become effective as in the judgment of the Representative is advisable and
(ii) initially to offer the Certificates upon the terms set forth in the
Prospectus.
3. Unless otherwise provided in the applicable Terms Agreement, payment
for Certificates shall be made to CSRC or to its order by wire transfer of same
day funds at the offices of Mayer, Brown & Platt in Chicago, Illinois at 9:00
a.m., Central time, on the Closing Date (as hereinafter defined), or at such
other time on the same or such other date, not later than the fifth Business Day
thereafter, as the Representative and CSRC may agree upon in writing. The time
and date of such payment for the applicable Series of Certificates are referred
to herein as the "Closing Date." As used herein, the term "Business Day" means
any day other than a day on which banks are permitted or required to be closed
in New York City. Unless otherwise provided in the applicable Terms Agreement,
payment for the Certificates shall be made against delivery to the
Representative for the respective accounts of the several Underwriters of the
Certificates registered in the name of Cede & Co. as nominee of The Depository
Trust Company and in such denominations as the Representative shall request in
writing not later than two full Business Days prior to the Closing Date, with
any transfer taxes payable in connection with the transfer to the Underwriters
of the Certificates duly paid by FSC. The Certificates will be made
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available for inspection by the Representative at the offices of Mayer, Brown &
Platt not later than five hours before the close of business in New York City on
the Business Day prior to the Closing Date.
4. Upon the execution of the applicable Terms Agreement, CSRC
represents and warrants to and agrees with each Underwriter that:
(a) The Registration Statement on Form S-1 (having the registration
number stated in the applicable Terms Agreement), including the Prospectus
and such amendments thereto as may have been required on the date of the
applicable Terms Agreement, relating to the Certificates, has been filed
with the Commission, and such Registration Statement as amended has been
declared effective by the Commission. The conditions to the use of a
registration statement on Form S-1 under the Act as set forth in the General
Instructions to Form S-1 have been satisfied with respect to CSRC and the
Registration Statement.
(b) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of CSRC, threatened by the Commission, and
on the effective date of the Registration Statement, the Registration
Statement and the Prospectus conformed in all respects to the requirements
of the Act and the rules and regulations of the Commission under the Act
(the "Rules and Regulations"), and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and on
the date of the applicable Terms Agreement, the Registration Statement and
the Prospectus conform, and at the time of filing of the Prospectus pursuant
to Rule 424(b), such documents will conform in all respects to the
requirements of the Act and the Rules and Regulations, and on the Closing
Date the Registration Statement and the Prospectus will conform in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents will include on the date of the applicable Terms
Agreement and on the Closing Date any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein not misleading; provided that CSRC makes no
representations or warranties with respect to the Underwriters' Information.
(c) As of the Closing Date, the representations and warranties of CSRC,
as Seller, in the Pooling and Servicing Agreement will be true and correct
in all material respects, except as they expressly relate to prior dates.
(d) CSRC is duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has full corporate power, authority
and legal right to own its properties and conduct its business as described
in the Prospectus, and is duly qualified to do business and is in good
standing (or is exempt from such requirements) under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not have a material adverse
effect on CSRC and its Affiliates, taken as a whole.
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(e) The Certificates have been duly authorized, and, when issued and
delivered pursuant to the Pooling and Servicing Agreement and the
Supplement, duly authenticated by the Trustee and paid for by the
Underwriters in accordance with the terms of this Agreement and the
applicable Terms Agreement, will be duly and validly executed,
authenticated, issued and delivered and entitled to the benefits provided by
the Pooling and Servicing Agreement and the Supplement; each of the Pooling
and Servicing Agreement, the Supplement and the Purchase Agreement have been
duly authorized, executed and delivered by CSRC and constitute the valid,
binding and enforceable agreements of CSRC and this Agreement and the
applicable Terms Agreement have been duly authorized by CSRC and when
executed and delivered by CSRC, SOAI, FSC and the other parties thereto,
each of this Agreement and the applicable Terms Agreement will constitute a
valid, binding and enforceable agreement of CSRC; provided that with respect
to all such documents such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect affecting the enforcement of creditors' rights in
general and such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity) and subject to the
unenforceability, under certain circumstances, of provisions indemnifying a
party against liability where such indemnification is contrary to public
policy; and the Class C Certificates and the Class D Certificates have been
duly authorized, and, when issued and delivered pursuant to the Pooling and
Servicing Agreement and the Supplement, duly authenticated by the Trustee
and paid for by the respective purchasers thereof, will be duly and validly
executed, authenticated, issued and delivered and entitled to the benefits
provided by the Pooling and Servicing Agreement and the Supplement and will
be subordinated to the Certificates and provide credit enhancement for the
Certificates.
(f) No consent, approval, authorization or order of, or filing with,
any court or governmental agency or body is required to be obtained or made
by CSRC for the consummation of the transactions contemplated by this
Agreement, the applicable Terms Agreement, the Purchase Agreement, the
Pooling and Servicing Agreement or the Supplement or for the issuance of the
Certificates or the Class C Certificates or the Class D Certificates except
such as have been obtained and made under the Act, such as may be required
under state securities laws and the filing of any financing statements
required to perfect CSRC's and the Trust's interest in the Receivables.
(g) CSRC is not in violation of its Certificate of Incorporation or
By-Laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or instrument to
which it is a party or by which it or its properties is bound which would
have a material adverse effect on the transactions contemplated herein or in
the Pooling and Servicing Agreement and the Supplement. The execution,
delivery and performance of this Agreement, the applicable Terms Agreement,
the Pooling and Servicing Agreement, the Supplement, the Purchase Agreement,
and the issuance and sale of the Certificates, the Class C Certificates and
the Class D Certificates and compliance with the terms and provisions
thereof will not result in a breach or
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violation of any of the terms and provisions of, or constitute a default
under, any statute, rule, regulation or order of any governmental agency or
body or any court having jurisdiction over CSRC or any of its properties or
any agreement or instrument to which CSRC is a party or by which CSRC is
bound or to which any of the properties of CSRC is subject, or the
Certificate of Incorporation or By-laws of CSRC.
(h) CSRC has full power and authority to authorize, issue and sell the
Certificates as contemplated by this Agreement and the applicable Terms
Agreement and to enter into this Agreement, the applicable Terms Agreement,
the Pooling and Servicing Agreement, the Supplement, the Purchase Agreement
and to issue the Class C Certificates and Class D Certificates.
(i) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the knowledge of
CSRC, threatened to which any of CSRC or its Affiliates is or may be a party
or to which any property of CSRC or its Affiliates is or may be the subject
which, if determined adversely to CSRC, could individually or in the
aggregate reasonably be expected to have a material adverse effect on the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of CSRC and its Affiliates,
taken as a whole or that would reasonably be expected to materially
adversely affect the interests of the holders of the Certificates; and there
are no contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required;
(j) This Agreement and the applicable Terms Agreement have been duly
executed and delivered by CSRC.
(k) Except as set forth in or contemplated in the Registration
Statement and the Prospectus, there has been no material adverse change in
the condition (financial or otherwise) of CSRC or any of its subsidiaries
since May 1, 1999.
(l) Any taxes, fees and other governmental charges in connection with
the execution, delivery and performance of this Agreement, the applicable
Terms Agreement, the Pooling and Servicing Agreement, the Supplement, the
Purchase Agreement, the Certificates, the Class C Certificates and the Class
D Certificates shall have been paid or will be paid by or on behalf of CSRC
at or prior to the Closing Date to the extent then due.
5. Upon the execution of the applicable Terms Agreement, FSC represents
and warrants to and agrees with each Underwriter that:
(a) FSC is duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has full corporate power, authority
and legal right to own its properties and conduct its business as described
in the Prospectus, and is duly qualified to do business and is in good
standing (or is exempt from such requirements) under the laws
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of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where
the failure to be so qualified or in good standing would not have a material
adverse effect on FSC and its Affiliates, taken as a whole.
(b) The Bank is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of
America, and has full corporate power, authority and legal right to own its
properties and conduct its business as described in the Prospectus, and is
duly qualified to do business and is in good standing (or is exempt from
such requirements) under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to require such
qualification, other than where the failure to be so qualified or in good
standing would not have a material adverse effect on the Bank and its
Affiliates, taken as a whole.
(c) As of the Closing Date, the representations and warranties of the
Bank in the Purchase Agreement will be true and correct in all material
respects, except as they expressly relate to prior dates.
(d) The Purchase Agreement has been duly authorized, executed and
delivered by the Bank and constitutes the valid, binding and enforceable
agreement of the Bank, and this Agreement and the applicable Terms Agreement
have been duly authorized by FSC and, when executed and delivered by FSC,
CSRC and SOAI, each of this Agreement and the applicable Terms Agreement
will constitute a valid, binding and enforceable agreement of FSC; provided
that, with respect to each of such documents, such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general, the rights of creditors of national banking
associations and such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity) and subject to the
unenforceability, under certain circumstances, of provisions indemnifying a
party against liability where such indemnification is contrary to public
policy.
(e) No consent, approval, authorization or order of, or filing with,
any court or governmental agency or body is required to be obtained or made
by FSC for the consummation of the transactions contemplated by this
Agreement and the applicable Terms Agreement, or by the Bank for the
consummation of the transactions contemplated by the Purchase Agreement,
except such as have been obtained and made under the Act, such as may be
required under state securities laws and the filing of any financing
statements required to perfect the Seller's and the Trust's interest in the
Receivables.
(f) FSC is not in violation of its Certificate of Incorporation or
By-Laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or instrument to
which it is a party or by which it or its properties are bound which would
have a material adverse effect on the transactions contemplated herein. The
execution, delivery and performance of this Agreement and the applicable
Terms Agreement will not result in a breach or violation of any of the terms
and
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provisions of, or constitute a default under, any statute, rule, regulation
or order of any governmental agency or body or any court having jurisdiction
over FSC; or any of its properties or any agreement or instrument to which
FSC is a party or by which FSC is bound or to which any of the property of
FSC is subject, or the Certificate of Incorporation or By-Laws of FSC.
(g) The Bank is not in violation of its Articles of Association or
By-Laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or instrument to
which it is a party or by which it or its properties are bound which would
have a material adverse effect on the transactions contemplated in the
Purchase Agreement, the Pooling and Servicing Agreement and the Supplement.
The execution, delivery and performance of the Purchase Agreement will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the Bank;
or any of its properties or any agreement or instrument to which the Bank is
a party or by which the Bank is bound or to which any of the property of the
Bank is subject, or the Articles of Association or By-Laws of the Bank.
(h) The Bank had at the time of execution thereof and continues to have
full power and authority to enter into the Purchase Agreement and convey the
Receivables as provided therein and carry out the other obligations of the
Bank therein, and FSC has full power and authority to enter into the
applicable Terms Agreement and to enter into this Agreement.
(i) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the knowledge of
FSC, threatened to which any of FSC or its Affiliates is or may be a party
or to which any property of FSC or its Affiliates is or may be the subject
which, if determined adversely to FSC, could individually or in the
aggregate reasonably be expected to have a material adverse effect on the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of FSC and its Affiliates,
taken as a whole or that would reasonably be expected to materially
adversely affect the interests of the holders of the Certificates; and there
are no contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required.
(j) This Agreement and the applicable Terms Agreement have been duly
executed and delivered by FSC.
(k) Except as set forth in or contemplated in the Registration
Statement and the Prospectus, there has been no material adverse change in
the condition (financial or otherwise) of FSC or any of its subsidiaries
since May 1, 1999.
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(l) Any taxes, fees and other governmental charges in connection with
the execution, delivery and performance of this Agreement and the applicable
Terms Agreement shall have been paid or will be paid by or on behalf of FSC
at or prior to the Closing Date to the extent then due.
6. Upon the execution of the applicable Terms Agreement, SOAI
represents and warrants to and agrees with each Underwriter that:
(a) As of the Closing Date, the representations and warranties of SOAI
in the Pooling and Servicing Agreement will be true and correct in all
material respects, except as they expressly relate to prior dates.
(b) SOAI is duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has full corporate power, authority
and legal right to own its properties and conduct its business as described
in the Prospectus, and is duly qualified to do business and is in good
standing (or is exempt from such requirements) under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not have a material adverse
effect on SOAI and its Affiliates, taken as a whole.
(c) The First Amendment has been duly authorized, executed and
delivered by the Servicer and was entered into in full compliance with the
terms of the Pooling and Servicing Agreement as it existed immediately prior
to such amendment.
(d) The Pooling and Servicing Agreement and the Supplement have been
duly authorized, executed and delivered by SOAI and constitute the valid,
binding and enforceable agreements of SOAI and this Agreement and the
applicable Terms Agreement have been duly authorized by SOAI and when
executed and delivered by SOAI, CSRC and FSC, this Agreement and the
applicable Terms Agreement will constitute a valid, binding and enforceable
agreement of SOAI; provided that, with respect to each of such documents,
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditors' rights in general and such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity) and subject to the
unenforceability, under certain circumstances, of provisions indemnifying a
party against liability where such indemnification is contrary to public
policy.
(e) No consent, approval, authorization or order of, or filing with,
any court or governmental agency or body is required to be obtained or made
by SOAI for the consummation of the transactions contemplated by this
Agreement, the applicable Terms Agreement, the Pooling and Servicing
Agreement or the Supplement except such as have been obtained and made under
the Act, such as may be required under state securities laws and the filing
of any financing statements required to perfect the Trust's interest in the
Receivables.
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(f) SOAI is not in violation of its Certificate of Incorporation or
By-Laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or instrument to
which it is a party or by which it or its properties is bound which would
have a material adverse effect on the transactions contemplated herein or in
the Pooling and Servicing Agreement and the Supplement. The execution,
delivery and performance of this Agreement, the applicable Terms Agreement,
the Pooling and Servicing Agreement and the Supplement and compliance with
the terms and provisions thereof will not result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
statute, rule, regulation or order of any governmental agency or body or any
court having jurisdiction over SOAI; or any of its properties or any
agreement or instrument to which SOAI is a party or by which SOAI is bound
or to which any of the properties of SOAI is subject, or the Certificate of
Incorporation or By-Laws of SOAI; and SOAI has full power and authority to
enter into this Agreement, the applicable Terms Agreement, the Pooling and
Servicing Agreement and the Supplement.
(g) Other than as set forth or contemplated in the Prospectus, there
are no legal or governmental proceedings pending or, to the knowledge of
SOAI, threatened to which any of SOAI or its Affiliates is or may be a party
or to which any property of SOAI or its Affiliates is or may be the subject
which, if determined adversely to SOAI, could individually or in the
aggregate reasonably be expected to have a material adverse effect on the
general affairs, business, prospects, management, financial position,
stockholders' equity or results of operations of SOAI and its Affiliates,
taken as a whole or that would reasonably be expected to materially
adversely affect the interests of the holders of the Certificates; and there
are no contracts or other documents of a character required to be filed as
an exhibit to the Registration Statement or required to be described in the
Registration Statement or the Prospectus which are not filed or described as
required;
(h) This Agreement and the applicable Terms Agreement have been duly
authorized, executed and delivered by SOAI.
(i) Any taxes, fees and other governmental charges in connection with
the execution, delivery and performance of this Agreement, the applicable
Terms Agreement, the Pooling and Servicing Agreement and the Supplement
shall have been paid or will be paid by or on behalf of SOAI at or prior to
the Closing Date to the extent then due.
7. Upon the execution of the applicable Terms Agreement, CSRC covenants
and agrees with the several Underwriters that:
(a) CSRC will file the final Prospectus with the Commission within the
time periods specified by Rule 424(b) and Rule 430A under the Act.
(b) CSRC will deliver, at the expense of CSRC, to the Representative,
two signed copies of the Registration Statement and each amendment thereto,
in each case including
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<PAGE> 11
exhibits, and to each other Underwriter a conformed copy of the Registration
Statement and each amendment thereto, in each case without exhibits, and,
during the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all amendments and
supplements thereto) as the Representative may reasonably request.
(c) Before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the
Registration Statement becomes effective, CSRC will furnish to the
Representative a copy of the proposed amendment or supplement for review and
will not file any such proposed amendment or supplement to which the
Representative reasonably objects.
(d) CSRC will advise the Representative promptly, and will confirm such
advice in writing, (i) when the Registration Statement shall become
effective, (ii) when any amendment to the Registration Statement shall
become effective, (iii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the
Prospectus or for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceeding
for that purpose, and (v) of the receipt by CSRC of any notification with
respect to any suspension of the qualification of the Certificates for offer
and sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and to use its best efforts to prevent the
issuance of any such stop order or notification and, if issued, to obtain as
soon as possible the withdrawal thereof.
(e) CSRC will if (i) during such period of time after the first date of
the public offering of the Certificates as in the opinion of counsel for the
Underwriters a Prospectus relating to the Certificates is required by law to
be delivered in connection with sales by an Underwriter or dealer, (ii) any
event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or (iii) it is necessary to amend or supplement the
Prospectus to comply with the law, forthwith prepare and furnish, at the
expense of CSRC, to the Underwriters and to the dealers (whose names and
addresses the Representative will furnish to CSRC) to which Certificates may
have been sold by the Representative on behalf of the Underwriters and to
any other dealers upon request, such amendments or supplements to the
Prospectus as may be necessary so that the statements in the Prospectus as
so amended or supplemented will not, in the light of the circumstances when
the Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus will comply with the law.
(f) CSRC will endeavor to qualify the Certificates for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and will continue such qualification
in effect so long as reasonably required for distribution of the
Certificates and to pay all fees and expenses (including fees and
disbursements of counsel to the Underwriters) reasonably incurred in
connection with such
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<PAGE> 12
qualification and in connection with the determination of the eligibility of
the Certificates for investment under the laws of such jurisdictions as the
Representative may designate; provided, however, that CSRC shall not be
obligated to qualify to do business in any jurisdiction in which it is not
currently so qualified; and provided further that CSRC shall not be required
to file a general consent to service of process in any jurisdiction.
(g) On or before December 31 of the year following the year in which
the Closing Date occurs, CSRC will cause the Trust to make generally
available to Certificateholders and to the Representative as soon as
practicable an earnings statement covering a period of at least twelve
months beginning with the first fiscal quarter of the Trust occurring after
the effective date of the Registration Statement, which shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 of the Commission
promulgated thereunder.
(h) So long as any of the Certificates are outstanding, CSRC will
furnish to the Representative copies of all reports or other communications
(financial or other) furnished to holders of the Certificates and copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange.
(i) For a period from the date of this Agreement until the retirement
of the Certificates CSRC will furnish to the Representative copies of each
certificate and the annual statements of compliance delivered to the Trustee
pursuant to Article III of the Pooling and Servicing Agreement and the
annual independent certified public accountant's servicing reports furnished
to the Trustee pursuant to Article III of the Pooling and Servicing
Agreement, by first-class mail as soon as practicable after such statements
and reports are furnished to the Trustee.
(j) During the period beginning on the date hereof and continuing to
and including the Business Day following the Closing Date, CSRC will not
offer, sell, contract to sell or otherwise dispose of any debt securities of
or guaranteed by CSRC which are substantially similar to the Certificates
without the prior written consent of the Representative.
(k) CSRC will cause the Certificates to be registered in a timely
manner pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
8. Upon the execution of the applicable Terms Agreement, FSC, CSRC and
SOAI each severally covenant and agree with the several Underwriters that to the
extent, if any, that the rating provided with respect to the Certificates by the
rating agency or rating agencies rating the Certificates (the "Rating Agency")
is conditional upon the furnishing of documents or the taking of any other
action by CSRC, FSC, the Bank or SOAI agreed upon on or prior to the Closing
Date, CSRC, FSC, the Bank and SOAI each shall use its best efforts to furnish
such documents and take any such other action.
9. CSRC will pay all costs and expenses incident to the performance of
its obligations under this Agreement and the related Terms Agreement, including
without limiting the generality of the foregoing, all costs and expenses (i)
incident to the preparation, issuance,
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<PAGE> 13
execution, authentication and delivery of the Certificates, (ii) incident to the
preparation, printing and filing under the Act of the Registration Statement,
the Prospectus and any preliminary prospectus (including in each case all
exhibits, amendments and supplements thereto), (iii) incurred in connection with
the registration or qualification and determination of eligibility for
investment of the Certificates under the laws of such jurisdictions as the
Underwriters may designate (including fees of counsel for the Underwriters and
their disbursements), (iv) related to any filing with the National Association
of Securities Dealers, Inc., (v) in connection with the printing (including word
processing and duplication costs) and delivery of this Agreement, the applicable
Terms Agreement, the Pooling and Servicing Agreement and any Blue Sky Memorandum
and the furnishing to Underwriters and dealers of copies of the Registration
Statement and the Prospectus as herein provided, (vi) the fees and disbursements
of CSRC's counsel and accountants, and (vii) payable to each Rating Agency in
connection with the rating of the Certificates.
10. The several obligations of the Underwriters hereunder are subject
to the performance by each of CSRC, FSC and SOAI of its obligations hereunder
and under the applicable Terms Agreement and to the following additional
conditions:
(a) On or prior to the date of this Agreement, the Representative shall
have received a letter, dated the date of the applicable Terms Agreement, of
Ernst & Young LLP (or such other independent accountants as shall be named
in the applicable Terms Agreement) confirming that they are independent
public accountants within the meaning of the Act and the applicable
published Rules and Regulations thereunder and substantially in the form
heretofore agreed and otherwise in form and in substance satisfactory to the
Representative and its counsel.
(b) The Prospectus shall have been filed with the Commission pursuant
to Rule 424(b) within the applicable time period prescribed for such filing
by the Rules and Regulations and in accordance with Section 7(a) of this
Agreement; and, as of the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or, to the knowledge of
CSRC, threatened by the Commission, and all requests for additional
information from the Commission with respect to the Registration Statement
shall have been complied with to the satisfaction of the Representative.
(c) The representations and warranties of each of CSRC, FSC and SOAI
contained herein are true and correct on and as of the Closing Date as if
made on and as of the Closing Date, and each of CSRC, FSC and SOAI shall
have complied with all agreements and all conditions on its part to be
performed or satisfied hereunder and under the applicable Terms Agreement at
or prior to the Closing Date.
(d) The Representative shall have received an opinion of Colin D.
Stern, Esq., Executive Vice President and General Counsel of Charming
Shoppes, Inc. (or such other counsel as may be named in the applicable Terms
Agreement), dated the Closing Date, in
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<PAGE> 14
form and substance reasonably satisfactory to the Representative and its
counsel, to the effect that:
(i) CSRC is duly organized, validly existing and in good standing
under the laws of the State of Delaware; SOAI is duly organized,
validly existing and in good standing under the laws of the State of
Delaware; FSC is duly organized, validly existing and in good standing
under the laws of the State of Delaware; the Bank is a national banking
association duly organized, validly existing and in good standing under
the laws of the United States of America; neither CSRC, SOAI, FSC nor
the Bank is required to qualify, nor to register as a foreign
corporation, in any state in order to conduct its business, except
those states where it has so qualified or registered or where the
failure to so qualify or register would not have a material adverse
effect upon the Certificateholders; each of CSRC, SOAI, FSC and the
Bank has full power and authority to own its assets and to transact its
business as described in the Prospectus; and the Bank had at all
relevant times, and now has, the power, authority and legal right to
acquire and own the Accounts and sell and convey the Receivables; CSRC
had all relevant times and now has the power, authority and legal right
to purchase, own and sell the Receivables;
(ii) CSRC has and at all relevant times had the power and
authority to execute and deliver this Agreement, the applicable Terms
Agreement, the Purchase Agreement, the Pooling and Servicing Agreement
and the Supplement and to consummate the transactions contemplated
herein and therein; SOAI has the power and authority to execute and
deliver this Agreement, the applicable Terms Agreement, the Pooling and
Servicing Agreement and the Supplement and to consummate the
transactions contemplated herein and therein; FSC has the power and
authority to execute and deliver this Agreement and the applicable
Terms Agreement; and the Bank has the power and authority to execute
and deliver the First Amendment and the Purchase Agreement and to
consummate the transactions contemplated herein and therein;
(iii) Neither the execution, delivery and performance by CSRC of
its obligations under this Agreement, the applicable Terms Agreement,
the Purchase Agreement, the Supplement or the Pooling and Servicing
Agreement, the purchase of the Receivables or the transfer of the
Receivables to the Trust, the issuance and sale of the Certificates,
the issuance and sale of the Class C Certificates and the Class D
Certificates nor the consummation of any other of the transactions
contemplated herein, in the applicable Terms Agreement, the Purchase
Agreement, the Supplement or the Pooling and Servicing Agreement will
conflict with, result in a breach of or violation of any material term
of, or constitute a default under, the certificate of incorporation or
by-laws of CSRC, each as amended, or any order of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over CSRC or the material terms of any material indenture or other
material agreement or instrument known to such counsel to which CSRC is
a
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<PAGE> 15
party or by which it or its properties are bound (except as set forth
in such opinion or the Prospectus);
(iv) Neither the execution, delivery and performance by SOAI of
its obligations under this Agreement, the applicable Terms Agreement,
the Supplement, the Pooling and Servicing Agreement nor the
consummation of any other of the transactions contemplated herein, in
the applicable Terms Agreement, the Supplement, the Pooling and
Servicing Agreement, will conflict with, result in a breach of or
violation of any material term of, or constitute a default under, the
certificate of incorporation or by-laws of SOAI, each as amended, or
any order of any court, regulatory body, administrative agency or
governmental body having jurisdiction over SOAI or the material terms
of any material indenture or other material agreement or instrument
known to such counsel to which SOAI is a party or by which it or its
properties are bound (except as set forth in such opinion or the
Prospectus);
(v) Neither the execution, delivery and performance by FSC of its
obligations under this Agreement and the applicable Terms Agreement nor
the consummation of any other of the transactions contemplated herein
or in the applicable Terms Agreement, will conflict with, result in a
breach or violation of any material term of, or constitute a default
under, the Certificate of Incorporation or By-Laws of FSC, each as
amended, or any order of any court, regulatory body, administrative
agency or governmental body having jurisdiction over FSC or the
material terms of any material indenture or other material agreement or
instrument known to such counsel to which FSC is a party or by which it
or its properties are bound (except as set forth in such opinion or the
Prospectus);
(vi) Neither the execution, delivery and performance by the Bank
of its obligations under the Purchase Agreement or the First Amendment
nor the consummation of any other of the transactions contemplated in
the Supplement or the First Amendment, will conflict with, result in a
breach of or violation of any material term of, or constitute a default
under, the Articles of Association or By-Laws of the Bank, each as
amended, or any order of any court, regulatory body, administrative
agency or governmental body having jurisdiction over the Bank or the
material terms of any material indenture or other material agreement or
instrument known to such counsel to which the Bank is a party or by
which it or its properties are bound (except as set forth in such
opinion or the Prospectus);
(vii) Except as otherwise disclosed in the Prospectus or the
Registration Statement, there are no actions, proceedings or
investigations pending or, to the best of such counsel's knowledge,
threatened before any court, administrative agency or other tribunal
(A) asserting the invalidity of this Agreement, the applicable Terms
Agreement, the Purchase Agreement, the Supplement, the Pooling and
Servicing Agreement or the Certificates or the Class C Certificates or
the Class D Certificates, (B) seeking to prevent the issuance of the
Certificates or
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<PAGE> 16
the consummation of any of the transactions contemplated by this
Agreement, the applicable Terms Agreement, the Purchase Agreement, the
Supplement or the Pooling and Servicing Agreement or the Certificates,
which might materially and adversely affect the performance by any of
CSRC, SOAI, FSC or the Bank of its obligations under, or the validity
or enforceability of, this Agreement, the applicable Terms Agreement,
the Purchase Agreement, the Supplement, the Pooling and Servicing
Agreement or the Certificates, or (C) seeking adversely to affect the
federal income tax attributes of the Certificates as described in the
Prospectus under the headings "Summary -- Tax Status" and "U.S. Federal
Income Tax Consequences"; and
(viii) Each of the applicable Terms Agreement, incorporating by
reference this Agreement, the Pooling and Servicing Agreement, the
First Amendment, the Supplement, the Certificates and the Purchase
Agreement has been duly authorized, executed and delivered by CSRC;
each of the applicable Terms Agreement, incorporating by reference this
Agreement, the Pooling and Servicing Agreement, the First Amendment and
the Supplement has been duly authorized, executed and delivered by
SOAI; the applicable Terms Agreement, incorporating by reference this
Agreement, has been delivered authorized, executed and delivered by
FSC; and the First Amendment and the Purchase Agreement have been duly
authorized, executed and delivered by the Bank.
(e) The Representative shall have received an opinion of Mayer, Brown &
Platt (or such other counsel as may be named in the applicable Terms
Agreement), special counsel for CSRC, SOAI, FSC and the Bank dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative and its counsel, to the effect that:
(i) The Certificates, when duly executed and authenticated in
accordance with the terms of the Pooling and Servicing Agreement and
the Supplement and delivered and paid for pursuant to this Agreement
and the applicable Terms Agreement, will be duly issued and outstanding
and will be entitled to the benefits afforded by the Pooling and
Servicing Agreement and the Supplement;
(ii) No consent, approval, authorization or other action by, or
notice to or filing with, any Federal or New York State governmental
authority or regulatory body is required for the consummation of the
transactions contemplated herein, in the applicable Terms Agreement,
the Pooling and Servicing Agreement, the Security Agreement, the
Supplement or the Purchase Agreement;
(iii) The applicable Terms Agreement, incorporating by reference
this Agreement, the Purchase Agreement, the Pooling and Servicing
Agreement, the First Amendment and the Supplement each constitutes the
legal, valid and binding agreement of CSRC, enforceable against CSRC in
accordance with its terms, the applicable Terms Agreement,
incorporating by reference this Agreement, the
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<PAGE> 17
Pooling and Servicing Agreement, the First Amendment and the Supplement
each constitutes the legal, valid and binding agreement of SOAI,
enforceable against SOAI in accordance with its terms; the applicable
Terms Agreement, incorporating by reference this Agreement, constitutes
the legal, valid and binding agreement of FSC; and the First Amendment,
the Security Agreement and the Purchase Agreement each constitutes the
legal, valid and binding agreement of the Bank enforceable against the
Bank in accordance with its terms; provided that, as to enforcement,
such opinions are subject to (A) the effect of bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership, or other
similar laws (including any such laws relating to the insolvency of
banks) now or hereafter in effect relating to or affecting the rights
and remedies of creditors (B) the effect of general principles of
equity (including without limitation concepts of materiality,
reasonableness, good faith and fair dealing) regardless of whether
enforceability is considered in a proceeding in equity or at law and
the discretion of the court before which any proceeding therefor may be
brought and (C) the unenforceability under certain circumstances of
provisions indemnifying a party against liability or requiring
contribution from a party for liability where such indemnification or
contribution is contrary to public policy;
(iv) The Registration Statement has become effective under the
Act and the Prospectus has been filed with the Commission pursuant to
Rule 424(b) promulgated under the Act; to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued or threatened and no proceedings
for that purpose have been instituted or are pending; and the
Registration Statement and the Prospectus (other than the financial and
statistical information contained therein as to which such counsel
express no belief) as of their respective effective date or date of
issuance complied as to form in all material respects with the
requirements of the Act and the rules and regulations promulgated
thereunder;
(v) The Pooling and Servicing Agreement, the Supplement, the
Purchase Agreement, and the Certificates, the Class C Certificates and
the Class D Certificates conform in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus;
(vi) The Pooling and Servicing Agreement and the Supplement will
not be required to be qualified under the Trust Indenture Act of 1939,
as amended, and the Trust is not now, and immediately following the
sale of the Certificates pursuant hereto will not be, an "investment
company" required to be registered under the Investment Company Act of
1940, as amended;
(vii) The statements contained in the Prospectus under the
headings "Structural Summary--Federal Tax Status of Offered
Certificates and the Trust" (to the extent relating to Federal income
tax consequences), "U.S. Federal Income Tax Consequences" and "Legal
Aspects of the Receivables," to the extent they
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<PAGE> 18
constitute matters of law or legal conclusions with respect thereto,
are correct in all material respects;
(viii) The statements in the Prospectus under the headings
"Structural Summary--ERISA Considerations for Investors" and "ERISA
Considerations," to the extent they constitute matters of law or legal
conclusions with respect thereto, accurately describe the material
consequences to the holders of the Class A and Class B Certificates
under ERISA;
(ix) The execution, delivery and performance by CSRC of its
obligations under this Agreement, the applicable Terms Agreement, the
Supplement, the Pooling and Servicing Agreement or the Purchase
Agreement, will not conflict with, result in a breach of or violation
of any Federal or New York rule, statute or regulation.
(x) The execution, delivery and performance by SOAI of its
obligations under this Agreement, the applicable Terms Agreement, the
Supplement or the Pooling and Servicing Agreement will not conflict
with, result in a breach of or violation of any Federal or New York
rule, statute or regulation;
(xi) The execution, delivery and performance by FSC of its
obligations under this Agreement and the applicable Terms Agreement
will not conflict with, result in a breach or violation of any Federal
or New York rule, statute or regulation; and
(xii) The execution, delivery and performance by the Bank of its
obligations under the Purchase Agreement will not conflict with, result
in a breach of or violation of any Federal or New York rule, statute or
regulation.
Such counsel also shall make the following statement in a
separate letter: such counsel has not independently checked or verified
the accuracy, completeness or fairness of the statements contained in
the Registration Statement and the Prospectus and such counsel is not
passing upon, and does not assume responsibility for, the accuracy,
completeness or fairness of any such statement. Such counsel has,
however, participated in the preparation of the Registration Statement
and Prospectus. During the course of such preparation, such counsel has
examined various documents, including (i) this Agreement, (ii) the
Pooling and Servicing Agreement, (iii) the Supplement, (iv) the
Purchase Agreement, (v) the Security Agreement, (vi) the Certificates,
(vii) the Registration Statement and (viii) the Prospectus, and various
corporate records of Spirit of America National Bank, SOAI and CSRC and
participated in meetings and telephonic conferences with certain
officers and employees of Spirit of America National Bank, SOAI and
CSRC, representatives of the Representative and of its counsel, during
which the contents of the Registration Statement and the Prospectus and
certain related matters were discussed. Based upon such counsel's
participation in such
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<PAGE> 19
conferences and its document review, no facts have come to such
counsel's attention that have caused it to believe that (a) the
Registration Statement at its effective date contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (b) the
Prospectus at the date it bears and as of the Closing Date contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, such counsel expresses no opinion, conclusion or belief with
respect to any financial statements, schedules or other financial or
statistical data contained or incorporated by reference in either the
Registration Statement or Prospectus. Except as set forth above, such
counsel expresses no conclusion, opinion or belief as to any statements
or information set forth in the Registration Statement and Prospectus.
(f) The Representative shall have received an opinion or opinions of
Mayer, Brown & Platt (or such other counsel as may be named in the
applicable Terms Agreement), special counsel for the Bank and CSRC, dated
the Closing Date, in form and substance reasonably satisfactory to the
Representative and its counsel, with respect to certain matters relating to
the transfer of the Receivables to CSRC and to the Trust, with respect to
the perfection of the Trust's interest in the Receivables, with respect to
the claims of any Receivable Purchaser against the Receivables not being
superior to the claims of the Trustee against the Receivables on behalf of
the Investor Certificateholders, with respect to the nonconsolidation of FSC
with CSRC or of Charming Shoppes, Inc. with CSRC in a bankruptcy case, with
respect to the applicability of certain provisions of the National Bank Act
and the Federal Deposit Insurance Act, as amended by the Financial
Institutions, Reform, Recovery and Enforcement Act of 1989 with respect to
the effect of receivership of the Bank on such interest in the Receivables,
and with respect to other related matters in a form previously approved by
the Representative and its counsel.
(g) The Representative shall have received from Orrick, Herrington &
Sutcliffe LLP (or such other counsel as may be named in the applicable Terms
Agreement), special counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, in form and substance satisfactory to the
Representative, with respect to the organization of each of CSRC, SOAI, FSC
and the Bank, the validity of the Certificates, the Registration Statement,
the Prospectus and other related matters as the Representative may require,
and each of CSRC and FSC shall have furnished to such counsel such documents
as they may request for the purpose of enabling them to pass upon such
matters.
(h) The Representative shall have received a certificate or
certificates, dated the Closing Date, of a Vice President or more senior
officer of each of CSRC, SOAI and FSC in which such officer, to the best of
his or her knowledge after reasonable investigation, shall state that (A)
the representations and warranties of each of CSRC, SOAI and FSC in this
Agreement are true and correct in all material respects on and as of the
Closing Date,
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<PAGE> 20
(B) each of CSRC, SOAI and FSC has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
and under the applicable Terms Agreement at or prior to the Closing Date,
(C) the representations and warranties of CSRC, SOAI and the Bank,
respectively in the Supplement, in the Pooling and Servicing Agreement and
in the Purchase Agreement are true and correct as of the dates specified in
the Supplement, in the Pooling and Servicing Agreement and in the Purchase
Agreement, and are true on the Closing Date except to the extent such
representations and warranties relate to an earlier date, (D) the
Registration Statement has become effective, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are threatened by the
Commission and (E) subsequent to the date of the Prospectus, there has been
no material adverse change in the condition (financial or otherwise) of
CSRC, SOAI or FSC or any of their respective Affiliates except as set forth
in or contemplated in the Registration Statement and the Prospectus or as
described in such certificate;
(i) The Representative shall have received an opinion of Squire,
Sanders & Dempsey LLP, special counsel for the Bank and CSRC, dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative and its counsel, with respect to the characterization of the
Certificates under Ohio tax law; and, with respect to the perfection of the
Trust's interest in the Receivables and with respect to other related
matters in a form previously approved by the Representative and its counsel.
The Representative shall also have received an opinion of Richards, Layton &
Finger, P.A., special counsel for CSRC, dated the Closing Date, with respect
to the perfection of the Trust's interest in the Receivables in a form
previously approved by the Representative and its counsel.
(j) The Representative shall have received an opinion of Pepper
Hamilton LLP (or such other counsel as may be named in the applicable Terms
Agreement), counsel to the Trustee, dated the Closing Date, in form and
substance reasonably satisfactory to the Representative and its counsel, to
the effect that:
(i) The Trustee is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States of America, has full power and authority to transact the
business of banking and has the power and authority to enter into and
to perform all actions required of it under the Pooling and Servicing
Agreement and the Supplement;
(ii) Each of the Pooling and Servicing Agreement and the
Supplement has been duly authorized, executed and delivered by the
Trustee and constitutes a legal, valid and binding obligation of the
Trustee, enforceable against the Trustee in accordance with its terms,
except as such enforceability may be limited by (A) bankruptcy,
insolvency, liquidation, reorganization, moratorium,
20
<PAGE> 21
conservatorship, receivership or other similar laws now or hereafter in
effect relating to the enforcement of creditors' rights in general, as
such laws would apply in the event of a bankruptcy, insolvency,
liquidation, reorganization, moratorium, conservatorship, receivership
or similar occurrence affecting the Trustee, and (B) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) as well as concepts of reasonableness,
good faith and fair dealing;
(iii) The Certificates have been duly authenticated and delivered
by the Trustee;
(iv) The execution and delivery of the Pooling and Servicing
Agreement and the Supplement by the Trustee and the performance by the
Trustee of their respective terms do not conflict with or result in a
violation of (A) any law or regulation of the United States of America
or the State of Pennsylvania governing the banking or trust powers of
the Trustee, or (B) the Certificate of Incorporation or By-laws of the
Trustee; and
(v) No approval, authorization or other action by, or filing
with, any governmental authority of the United States of America or the
State of Pennsylvania having jurisdiction over the banking or trust
powers of the Trustee is required in connection with the execution and
delivery by the Trustee of the Pooling and Servicing Agreement and the
Supplement or the performance by the Trustee thereunder.
(k) The Representative shall have received a letter, dated the Closing
Date, of Ernst & Young LLP which meets the requirements of subsection (a) of
this Section 10.
(l) The Representative shall have received evidence satisfactory to it
that the Certificates shall be rated in accordance with the applicable Terms
Agreement by each Rating Agency.
CSRC will furnish the Representative, or cause the Representative to be
furnished with, such conformed copies of such opinions, certificates, letters
and documents as the Representative reasonably requests.
11. (a) Each of CSRC, SOAI and FSC agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and expenses (including, without limitation, the
reasonable legal fees and other reasonable expenses incurred in connection
with any suit, action or proceeding or any claim asserted) caused by any
untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if
CSRC shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses are caused by any untrue statement
or omission or
21
<PAGE> 22
alleged untrue statement or omission made in reliance upon and in conformity
with information relating to any Underwriter furnished to CSRC in writing by
such Underwriter through the Representative expressly for use in the
Prospectus. Each of CSRC, SOAI and FSC hereby acknowledge that the only
information relating to any Underwriter furnished to CSRC for use in the
Prospectus is the following (the "Underwriters' Information"): the
information on the cover page in the chart under the headings Class A
Certificates and Class B Certificates, the "Price to public for
certificate"; the first sentence under the caption "Risk Factors--It may not
be possible to find an investor to purchase your certificates"; and, under
the caption "Underwriting," the information in the table, the second and
third paragraphs following the table and the last paragraph under such
"Underwriting" caption. The Underwriters agree, however, that the foregoing
indemnity with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any such losses, claims,
damages, liabilities or expenses purchased Certificates if such untrue
statement or omission or alleged untrue statement or omission made in such
preliminary prospectus is eliminated or remedied in the Prospectus (as
amended or supplemented if CSRC shall have furnished any amendments or
supplements thereto) and, if required by law, a copy of the Prospectus (as
so amended or supplemented) shall not have been furnished to such person at
or prior to the written confirmation of the sale of such Certificates to
such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless each of CSRC, SOAI and FSC, its directors, its officers
who sign the Registration Statement and each person who controls CSRC, SOAI
or FSC within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act, to the same extent as the indemnity from each of CSRC,
SOAI and FSC to each Underwriter in paragraph (a) of this Section 11, but
only with reference to the Underwriters' Information.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either paragraph (a) or (b) of this Section 11, such person (the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (the "Indemnifying Person") in writing, and the
Indemnifying Person, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in
such proceeding and shall pay the reasonable fees and reasonable expenses of
such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying
Person has failed within a reasonable time to retain counsel reasonably
satisfactory to the Indemnified Person or (iii) the named parties in any
such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is
22
<PAGE> 23
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. Any such separate firm for the
Underwriters and such control persons of Underwriters shall be designated in
writing by the Representative and any such separate firm for CSRC, SOAI and
FSC, its directors, its officers who sign the Registration Statement and
such control persons of CSRC, SOAI and FSC or authorized representatives
shall be designated in writing by CSRC, SOAI and FSC. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be
a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. No Indemnifying Person shall, without
the prior written consent of the Indemnified Person, effect any settlement
of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnity could have been sought
hereunder by such Indemnified Person, unless such settlement includes an
unconditional release of such Indemnified Person from all liability on
claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraphs (a) and (b) of
this Section 11 is unavailable to an Indemnified Person in respect of all
losses, claims, damages, liabilities or expenses referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by CSRC, SOAI and FSC on the one hand
and the Underwriters on the other hand from the offering of the Certificates
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of CSRC, SOAI and FSC on the one hand and the Underwriters on the
other in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or expenses, as well as any other
relative equitable considerations. The relative benefits received by CSRC,
SOAI and FSC on the one hand and the Underwriters on the other shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of such Certificates (before deducting expenses) received by CSRC
and the total underwriting discounts and the commissions received by the
Underwriters bear to the aggregate public offering price of the
Certificates. The relative fault of CSRC, SOAI and FSC on the one hand and
the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by CSRC, SOAI or FSC or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
23
<PAGE> 24
(e) CSRC, SOAI and FSC and the Underwriters agree that it would not be
just and equitable if contribution pursuant to paragraph (d) of this Section
11 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
such paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages, liabilities and expenses referred to
in paragraph (d) of this Section 11 shall be deemed to include, subject to
the limitations set forth above, any reasonable legal or other reasonable
expenses incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 11, in no event shall an Underwriter be required
to contribute any amount in excess of the amount by which the underwriting
discount on the Certificates purchased by such Underwriter exceeds the
amount of any damages that such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 11 are several in proportion to the respective principal amount
of the Certificates set forth opposite their names in Schedule I to the
Terms Agreement and not joint.
The indemnity and contribution agreements contained in this Section 11
are in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 11
and the representations and warranties of each of CSRC, SOAI and FSC set forth
in this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or by or on behalf of each of CSRC, SOAI and the Bank,
its officers or directors or any other person controlling each of CSRC, SOAI and
the Bank and (iii) acceptance of and payment for any of the Certificates.
12. Notwithstanding anything herein contained, this Agreement and the
applicable Terms Agreement may be terminated in the absolute discretion of the
Representative, by notice given to CSRC, if after the execution and delivery of
this Agreement and the applicable Terms Agreement and prior to the Closing Date
(i) there has occurred any material adverse change or any development involving
a prospective material adverse change, in or affecting the general affairs,
business, prospects, management, financial position, stockholders' equity or
results of operation of CSRC, SOAI or FSC or Charming Shoppes, Inc., and their
respective subsidiaries, taken as a whole, the effect of which in the reasonable
judgment of the Representative after consultation with CSRC, SOAI, FSC and
Charming Shoppes, Inc. materially impairs the investment quality of the
Certificates; (ii) there has occurred any downgrading or placement on "credit
watch" for possible downgrade in the rating accorded any securities of or
guaranteed by CSRC, SOAI or FSC or Charming Shoppes, Inc., by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Act; (iii) trading generally shall have
been suspended or materially limited on or by, as the case
24
<PAGE> 25
may be, the New York Stock Exchange; (iv) trading of any securities of or
guaranteed by CSRC or FSC or Charming Shoppes, Inc. shall have been suspended on
any exchange or in any over-the-counter market; (v) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities; or (vi) there shall have occurred any
outbreak or escalation of hostilities in which the United States is involved,
any declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the reasonable judgment of the
Representative, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impracticable or inadvisable to proceed with
completion of the sale and payment for the Certificates.
13. If any Underwriter defaults in its obligations to purchase
Certificates hereunder and the aggregate principal amount of the Certificates
that such defaulting Underwriter agreed but failed to purchase does not exceed
15% of the total principal amount of such Certificates, the Representative may
make arrangements satisfactory to CSRC for the purchase of such Certificates by
other persons, including the non-defaulting Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated, in proportion to their commitments hereunder, to purchase the
Certificates that such defaulting Underwriter agreed but failed to purchase. If
any Underwriter so defaults and the aggregate principal amount of the
Certificates with respect to which such default or defaults occur exceeds 10% of
the total principal amount of such Certificates and arrangements satisfactory to
the Representative and CSRC for the purchase of such Certificates by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any nondefaulting Underwriter or
CSRC, except as provided in Section 9. In any such case, either the
Representative or CSRC shall have the right to postpone the Closing Date, but in
no event for longer than seven days, in order that the required changes, if any,
in the Registration Statement and in the Prospectus or in any other documents
may be effected. Any action taken under this paragraph shall not relieve a
defaulting Underwriter from liability for its default.
14. If for any reason other than as set forth in Section 13 the
purchase of the Certificates by the Underwriters is not consummated, CSRC shall
remain responsible for the expenses to be paid or reimbursed by it pursuant to
Section 9 and the respective obligations of CSRC and the Underwriters pursuant
to Section 11 shall remain in effect. If the purchase of the Certificates by the
Underwriters is not consummated for any reason other than solely because of the
occurrence of any event specified in clauses (iii), (iv), (v) or (vi) of Section
12, CSRC will reimburse the Underwriters for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) reasonably incurred by
it in connection with the offering of the Certificates.
15. Any action by the Underwriters hereunder may be taken by Bear
Stearns on behalf of the Underwriters, and any such action taken by Bear Stearns
shall be binding upon the Underwriters. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be given to the Representative, c/o Bear, Stearns & Co. Inc.,
245 Park Avenue, New York, New York 10167 (Facsimile No.: 212-272-7294),
Attention: Asset Backed Securities Group. Notices to CSRC shall be given to it,
c/o
25
<PAGE> 26
Charming Shoppes, Inc., 450 Winks Lane, Bensalem, Pennsylvania 19020, Attention:
General Counsel.
16. This Agreement shall become effective upon execution and delivery
of the applicable Terms Agreement.
17. This Agreement shall inure to the benefit of and be binding upon
CSRC, SOAI, FSC, the Underwriters, any controlling persons referred to herein
and their respective successors and assigns. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person, firm
or corporation any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. No purchaser of
Certificates from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
18. THIS AGREEMENT MAY BE SIGNED IN COUNTERPARTS, EACH OF WHICH SHALL
BE AN ORIGINAL AND ALL OF WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME
INSTRUMENT. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
26
<PAGE> 27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon it will
become a binding agreement among CSRC, SOAI, FSC and the several Underwriters in
accordance with its terms.
Very truly yours,
CHARMING SHOPPES RECEIVABLES CORP.
By: /s/ Eric M. Specter
------------------------------
Name: Eric M. Specter
Title: President
SPIRIT OF AMERICA, INC.
By: /s/ Kirk R. Simme
------------------------------
Name: Kirk R. Simme
Title: Vice President
FASHION SERVICE CORP.
By: /s/ Colin D. Stern
------------------------------
Name: Colin D. Stern
Title: Vice President
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
BEAR, STEARNS & CO. INC.,
as Representative of the Underwriters
named in Schedule I to the Terms Agreement
By: /s/ Thomas S. Dunstan
-----------------------------
Name: Thomas S. Dunstan
Title: Managing Director
<PAGE> 28
EXHIBIT A
[FORM OF TERMS AGREEMENT]
CHARMING SHOPPES MASTER TRUST
Series ______ [___%] [Floating Rate]
Asset Backed Certificates
TERMS AGREEMENT
Dated: ___________ , 19__
To: Charming Shoppes Receivables Corp.
Spirit of America, Inc.
Fashion Service Corp.
Re: Underwriting Agreement dated _____________ , 19__.
Underwriters: The Underwriters named on Schedule I attached hereto are the
"Underwriters" for the purpose of this Agreement and for the
purposes of the above referenced Underwriting Agreement as such
Underwriting Agreement is incorporated herein and made a part
hereof.
Terms of Certificates:
<TABLE>
<S> <C> <C>
Initial Investor Interest Interest Rate or Formula Price to Public (1)
- ------------------------- ------------------------ -------------------
</TABLE>
(1) Plus accrued interest at the applicable rate from ____________ , 199_.
Certificate Rating [s]: ["______" by Moody's Investors Service, Inc.] ["______"
by Standard & Poor's Corporation] [other]
Distribution Dates: ________________.
Closing Date: ___________
<PAGE> 29
Credit Enhancement Provider:
Trustee:
Pooling and Servicing Agreement:
Supplement:
Purchase Price:
The purchase price payable by the Underwriters for the Certificates
covered by this Agreement will be the following percentage of the principal
amounts to be issued:
Per Certificate _________%
Registration Statement:
Underwriting Commissions, Concessions and Discounts:
The Underwriters' discounts and commissions, the concessions that the
Underwriters may allow to certain dealers, and the discounts that such dealers
may reallow to certain other dealers, each expressed as a percentage of the
principal amount of the Certificates, shall be as follows:
Underwriting
Discounts and Selling
Concessions Concessions Reallowance
- ----------- ----------- -----------
% % %
Location of Closing:
Payment for the Certificates:
Opinion Modifications:
<PAGE> 30
The Underwriters agree, severally and not jointly, subject to the terms
and provisions of the above referenced Underwriting Agreement which is
incorporated herein in its entirety and made a part hereof, to purchase the
respective principal amounts of the above referenced Series of Certificates set
forth opposite their names on Schedule I hereto.
BEAR, STEARNS & CO. INC.
as Representative of the Underwriters
named in Schedule I hereto
By: _______________________________________
Name:
Title:
Accepted:
CHARMING SHOPPES RECEIVABLES CORP.
By: _______________________________________
Name:
Title:
SPIRIT OF AMERICA, INC.
By: _______________________________________
Name:
Title:
FASHION SERVICE CORP.
By: _______________________________________
Name:
Title:
S-1
<PAGE> 31
SCHEDULE I
UNDERWRITERS
$_______________ Principal Amount of Series __________ [____%]
[Floating Rate] Asset Backed Certificates.
Principal Amount
----------------
[Name of Underwriter] $
------------------
------------------
<PAGE> 1
EXHIBIT 1.2
CHARMING SHOPPES MASTER TRUST
SERIES 1999-1
$98,250,000 Floating Rate Class A Asset Backed Certificates
$27,000,000 Floating Rate Class B Asset Backed Certificates
TERMS AGREEMENT
Dated: July 16, 1999
To: Charming Shoppes Receivables Corp.
Spirit of America, Inc.
Fashion Service Corp.
Re: Underwriting Agreement dated July 16, 1999.
Underwriters: The Underwriters named on Schedule I attached hereto are the
"Underwriters" for the purpose of this Agreement and for the
purposes of the above referenced Underwriting Agreement as such
Underwriting Agreement is incorporated herein and made a part
hereof.
Terms of Class A Certificates:
<TABLE>
<CAPTION>
Initial Investor Interest Interest Rate or Formula Price to Public (1)
- ------------------------- -------------------------- -------------------
<S> <C> <C>
$98,250,000 One-Month LIBOR + 0.45% ______________100%
</TABLE>
(1) Plus accrued interest at the applicable rate from July 22, 1999.
Terms of Class B Certificates:
<TABLE>
<CAPTION>
Initial Investor Interest Interest Rate or Formula Price to Public (1)
- ------------------------- -------------------------- -------------------
<S> <C> <C>
$27,000,000 One-Month LIBOR + 0.70% ______________100%
</TABLE>
(1) Plus accrued interest at the applicable rate from July 22, 1999.
Certificate Rating
Class A: "Aaa" Moody's Investors Service Inc.
"AAA" Standard & Poor's Rating Group
Class B: "A2" Moody's Investors Service Inc.
<PAGE> 2
Distribution Dates: The fifteenth day of each month (or if such day is not a
Business Day, the next Business Day), starting with
September 15, 1999.
Closing Date: July 22, 1999.
Trustee: First Union National Bank
Pooling and Servicing Agreement: Second Amended and Restated Pooling and
Servicing Agreement dated as of November 25, 1997 as amended by the First
Amendment to be dated as of July 22, 1999
Supplement: Series 1999-1 Supplement dated as of July 22, 1999
- ----------
Purchase Price:
The purchase price payable by the Underwriters for the Class A
Certificates covered by this Agreement will be the following percentage of the
principal amounts to be issued:
Per Certificate 99.575%
The purchase price payable by the Underwriters for the Class B
Certificates covered by this Agreement will be the following percentage of the
principal amounts to the issued:
Per Certificate 99.400%
Registration Statement: 333-71757
Underwriting Commissions, Concessions and Discounts:
The Underwriters' discounts and commissions, the concessions that
the Underwriters may allow to certain dealers, and the discounts that such
dealers may reallow to certain other dealers, each expressed as a percentage of
the principal amount of the Certificates, shall be as follows:
Underwriting Selling Reallowance
Discounts and Concessions -----------
Concessions -----------
-----------
Class A 0.425% 0.30% 0.20%
Class B 0.600% 0.40% 0.25%
Location of Closing: Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603-3441
Payment for the Certificates: Wire transfer of immediately available funds.
<PAGE> 3
The Underwriters agree, severally and not jointly, subject to the
terms and provisions of the above referenced Underwriting Agreement which is
incorporated herein in its entirety and made a part hereof, to purchase the
respective principal amounts of the above referenced Series of Certificates set
forth opposite their names on Schedule I hereto.
BEAR, STEARNS & CO. INC.
as Representative of the Underwriters
named in Schedule I hereto
By: /s/ Thomas S. Dunstan
-------------------------------------
Name: Thomas S. Dunstan
Title: Managing Director
Accepted:
CHARMING SHOPPES RECEIVABLES CORP.
By: /s/ Eric M. Specter
-------------------------------------
Name: Eric M. Specter
Title: President
SPIRIT OF AMERICA, INC.
By: /s/ Kirk R. Simme
-------------------------------------
Name: Kirk R. Simme
Title: Vice President
FASHION SERVICE CORP.
By: /s/ Colin D. Stern
-------------------------------------
Name: Colin D. Stern
Title: Vice President
<PAGE> 4
SCHEDULE I
CLASS A
UNDERWRITERS
$98,250,000 Principal Amount of Floating Rate Class A Asset Backed
Certificates.
Principal Amount
----------------
Bear, Stearns & Co. Inc. $58,250,000
----------------
J.P. Morgan Securities Inc. $20,000,000
----------------
Salomon Smith Barney Inc. $20,000,000
----------------
$98,250,000
----------------
CLASS B
UNDERWRITER
$27,000,000 Principal Amount of Floating Rate Class B Asset Backed
Certificates.
Principal Amount
----------------
Bear, Stearns & Co. Inc. $27,000,000
----------------
<PAGE> 1
EXHIBIT 4.1
- -------------------------------------------------------------------------------
CHARMING SHOPPES RECEIVABLES CORP.
Seller
SPIRIT OF AMERICA, INC.
Servicer
and
FIRST UNION NATIONAL BANK
Trustee
Charming Shoppes Master Trust
-------------------
SECOND AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT
Dated as of November 25, 1997
(as amended as of July 22, 1999)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I DEFINITIONS
Section 1.1 Definitions........................................................................ 1
Section 1.2 Other Definitional Provisions...................................................... 23
Section 1.3 Purchaser Representatives.......................................................... 24
ARTICLE II CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables.......................................................... 24
Section 2.2 Acceptance by Trustee.............................................................. 26
Section 2.3 Representations and Warranties of the Seller....................................... 27
Section 2.4 Representations and Warranties of the Seller Relating to the Receivables;
Notice of Breach.............................................................. 28
Section 2.5 Covenants of the Seller............................................................ 33
Section 2.6 Addition of Accounts............................................................... 37
Section 2.7 Removal of Accounts................................................................ 41
Section 2.8 Trustee May Perform................................................................ 42
Section 2.9 No Assumption of Liability......................................................... 42
Section 2.10 Discount Option.................................................................... 42
ARTICLE III ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters Relating to the Servicer............... 43
Section 3.2 Servicing Compensation............................................................. 44
Section 3.3 Representations, Warranties and Covenants of the Servicer.......................... 44
Section 3.4 Reports and Records for the Trustee................................................ 47
Section 3.5 Annual Servicer's Certificate...................................................... 47
Section 3.6 Annual Independent Accountants' Servicing Report................................... 48
Section 3.7 Tax Treatment...................................................................... 49
Section 3.8 Notices to the Seller.............................................................. 49
ARTICLE IV RIGHTS OF CERTIFICATEHOLDERS AND RECEIVABLES
PURCHASERS AND ALLOCATION AND APPLICATION OF
COLLECTIONS
Section 4.1 Rights of Certificateholders and Receivables Purchasers............................ 49
Section 4.2 Establishment of Accounts.......................................................... 50
Section 4.3 Collections and Allocations........................................................ 51
</TABLE>
ii
<PAGE> 3
<TABLE>
<S> <C> <C>
ARTICLE V DISTRIBUTIONS AND REPORTS TO RECEIVABLES
PURCHASERS AND CERTIFICATEHOLDERS
ARTICLE VI THE CERTIFICATES AND RECEIVABLES PURCHASE INTERESTS
Section 6.1 Certificates....................................................................... 55
Section 6.2 Authentication of Certificates..................................................... 56
Section 6.3 Registration of Transfer and Exchange of Certificates.............................. 56
Section 6.4 Mutilated, Destroyed, or Stolen Certificates....................................... 60
Section 6.5 Persons Deemed Owners.............................................................. 61
Section 6.6 Appointment of Paying Agent........................................................ 61
Section 6.7 Access to List of Certificateholders' and Receivables Purchasers' Names and
Addresses..................................................................... 62
Section 6.8 Authenticating Agent............................................................... 62
Section 6.9 Tender of Exchangeable Seller Certificate.......................................... 63
Section 6.10 Book-Entry Certificates............................................................ 66
Section 6.11 Notices to Clearing Agency......................................................... 66
Section 6.12 Definitive Certificates............................................................ 66
Section 6.13 Global Certificate; Exchange Date.................................................. 67
Section 6.14 Meetings of Certificateholders..................................................... 69
Section 6.15 Uncertificated Classes............................................................. 71
Section 6.16 Conveyance of Receivables Purchase Interests by the Trust.......................... 71
Section 6.17 Notice of Receivables Purchase Series.............................................. 71
Section 6.18 Principal Terms of Receivables Purchase Series..................................... 72
ARTICLE VII OTHER MATTERS RELATING
TO THE SELLER
Section 7.1 Liability of the Seller............................................................ 72
Section 7.2 Merger or Consolidation of, or Assumption of the Obligations of, the Seller........ 73
Section 7.3 Limitation on Liability............................................................ 73
Section 7.4 Indemnification.................................................................... 74
ARTICLE VIII OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer.......................................................... 74
Section 8.2 Merger or Consolidation of, or Assumption of the Obligations of, the Servicer...... 74
Section 8.3 Limitation on Liability............................................................ 75
Section 8.4 Servicer Indemnification of the Trust and the Trustee.............................. 76
Section 8.5 The Servicer Not to Resign......................................................... 76
Section 8.6 Access to Certain Documentation and Information Regarding the Receivables.......... 77
Section 8.7 Delegation of Duties............................................................... 77
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Section 8.8 Examination of Records............................................................. 77
ARTICLE IX EARLY AMORTIZATION EVENTS
Section 9.1 Early Amortization Events.......................................................... 78
Section 9.2 Additional Rights Upon the Occurrence of Certain Events............................ 78
ARTICLE X SERVICER DEFAULTS
Section 10.1 Servicer Defaults.................................................................. 79
Section 10.2 Trustee to Act; Appointment of Successor........................................... 82
Section 10.3 Notification of Servicer Default and Successor Servicer............................ 84
Section 10.4 Waiver of Past Defaults............................................................ 84
ARTICLE XI THE TRUSTEE
Section 11.1 Duties of Trustee.................................................................. 84
Section 11.2 Certain Matters Affecting the Trustee.............................................. 86
Section 11.3 Trustee Not Liable for Recitals in Certificates.................................... 87
Section 11.4 Trustee May Own Certificates and Purchase Receivables.............................. 88
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses.................................... 88
Section 11.6 Eligibility Requirements for Trustee............................................... 88
Section 11.7 Resignation or Removal of Trustee.................................................. 89
Section 11.8 Successor Trustee.................................................................. 89
Section 11.9 Merger or Consolidation of Trustee................................................. 90
Section 11.10 Appointment of Co-Trustee or Separate Trustee...................................... 90
Section 11.11 Tax Return......................................................................... 91
Section 11.12 Trustee May Enforce Claims without Possession of Certificates...................... 92
Section 11.13 Suits for Enforcement.............................................................. 92
Section 11.14 Rights of Purchaser Representatives and Investor Certificateholders to
Direct Trustee................................................................ 94
Section 11.15 Representations and Warranties of the Trustee...................................... 94
Section 11.16 Maintenance of Office or Agency.................................................... 94
ARTICLE XII TERMINATION
Section 12.1 Termination of Trust............................................................... 95
Section 12.2 Optional Purchase.................................................................. 96
Section 12.3 Final Payment with Respect to Any Certificate Series............................... 97
Section 12.4 Termination of Rights of Holder of Exchangeable Seller Certificate................. 98
Section 12.5 Defeasance......................................................................... 98
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ARTICLE XIII MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.......................................................................... 99
Section 13.2 Protection of Right, Title and Interest to Trust...................................101
Section 13.3 Limitation on Rights of Certificateholders.........................................102
Section 13.4 Limitation on Rights of Receivables Purchasers and Purchaser
Representatives...............................................................103
Section 13.5 Governing Law......................................................................104
Section 13.6 Notices............................................................................104
Section 13.7 Severability of Provisions.........................................................105
Section 13.8 Assignment.........................................................................105
Section 13.9 Certificates Non-Assessable and Fully Paid.........................................105
Section 13.10 Further Assurances.................................................................105
Section 13.11 Non-petition Covenant..............................................................105
Section 13.12 No Waiver; Cumulative Remedies.....................................................106
Section 13.13 Counterparts.......................................................................106
Section 13.14 Third-Party Beneficiaries..........................................................106
Section 13.15 Actions by Certificateholders......................................................106
Section 13.16 Rule 144A Information..............................................................106
Section 13.17 Merger and Integration.............................................................106
Section 13.18 Headings...........................................................................107
Section 13.19 Inconsistent Provisions............................................................107
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EXHIBITS
Exhibit A - Form of Exchangeable Seller Certificate
Exhibit B - Form of Assignment of Receivables in Additional Accounts
Exhibit C - Form of Monthly Servicer's Report
Exhibit D - Form of Opinion of Counsel Regarding Additional Accounts
Exhibit E-1 - Form of Reassignment of Receivables in Removed Accounts
Exhibit E-2 - Form of Reassignment of Removed Receivables
Exhibit F - Form of Annual Servicer's Certificate
Exhibit G - Procedures of Independent Accountants
Exhibit H-1 - Form of Certificate Legend
Exhibit H-2 - Form of Representation Letter
Exhibit H-3 - Form of Certificate Legend
Exhibit I-1 - Form of Foreign Clearing Agency Certificate
Exhibit I-2 - Form of U.S. Investor Certificate to Foreign Clearing Agency
Exhibit I-3 - Form of Certificate to Foreign Clearing Agency
Exhibit J - Form of Conveyance to Holder of Exchangeable Seller
Certificate
Exhibit K - Form of Annual Opinion of Counsel
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SECOND AMENDED AND RESTATED POOLING AND SERVICING AGREEMENT, dated as
of November 25, 1997 as amended as of , 1999, by and between
Charming Shoppes Receivables Corp., a Delaware corporation, as Seller, Spirit
of America, Inc., a Delaware corporation ("Spirit Inc."), as Servicer, and
First Union National Bank, a national banking association, as Trustee.
WHEREAS, Spirit of America National Bank, as seller and servicer, and
the Trustee are parties to that certain Pooling and Servicing Agreement dated as
of December 24, 1992, as amended and restated as of May 4, 1994, and as amended
by Amendment No. 1, dated as of December 22, 1995, and Amendment No. 2, dated as
of March 22, 1996 and amended and restated as of November 25, 1997 (the "Prior
PSA"); and
WHEREAS, the parties desire to amend in its entirety the Prior PSA in
order to, among other things, provide for the substitution of Spirit Inc. for
Spirit of America National Bank, as Servicer;
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the Prior PSA is hereby amended in its entirety to read as follows and
each party agrees as follows for the benefit of the other parties, the
Certificateholders, any Receivables Purchasers and any Enhancement Provider (to
the extent provided herein and in any Supplement or Receivables Purchase
Agreement):
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Agreement, the following
words and phrases shall have the following meanings, and the definitions of such
terms are applicable to the singular as well as the plural forms of such terms
and to the masculine as well as the feminine and neuter genders of such terms:
"Account" shall mean each Spirit of America National Bank revolving
credit card account, including, without limitation, accounts which have been
written off as uncollectible, issued to an Obligor pursuant to a Cardholder
Agreement between the Originator and any Person, which account is an Eligible
Account on the Initial Cut Off Date (or, in the case of Additional Accounts, as
of the applicable Addition Cut Off Date), and which is identified by account
number, Obligor name, Obligor address and Receivable balance as of the Cut Off
Date (or, in the case of Additional Accounts, as of the applicable Addition Cut
Off Date) in each computer file or microfiche list delivered to the Trustee by
the Servicer pursuant to Section 2.1 or 2.6. The term Account shall include each
"Renumbered Account". The term "Account" shall be deemed to refer to an
Additional Account only from and after the Addition Date with respect thereto,
and the term "Account" shall be deemed to refer to any Removed Account only
prior to the Removal Date with respect thereto.
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"Account Information" shall have the meaning specified in subsection
2.2(b).
"Accumulation Period" shall mean, with respect to any Series, if
applicable, a period following the Revolving Period, which shall be the
accumulation or other period in which Collections of Principal Receivables are
accumulated in an account for the benefit of the Investor Certificateholders or
Receivables Purchasers of such Series, in each case as defined for such Series
in the related Supplement or Receivables Purchase Agreement.
"Addition Cut Off Date" shall mean, with respect to Additional Accounts
the Receivables of which are Conveyed to the Trust on any Addition Date, the
date, which shall be not less than 3, nor more than 20, days prior to the
applicable Addition Date, specified by the Seller in the related Addition Notice
in accordance with subsection 2.6(d)(i).
"Addition Date" shall mean each date as of which Additional Accounts
will be included as Accounts pursuant to Section 2.6.
"Addition Notice" shall have the meaning specified in subsection
2.6(d)(i).
"Addition Notice Date" shall have the meaning specified in subsection
2.6(d)(i).
"Additional Account" shall mean each revolving credit card account
established pursuant to a Cardholder Agreement, which account is designated
pursuant to Section 2.6 to be included as an Account and is identified in a
computer file, microfiche or written list delivered to the Trustee by the
Servicer pursuant to Sections 2.1 and 2.6.
"Additional Assignment" shall have the meaning specified in the
Purchase Agreement.
"Adjusted Investor Interest" shall mean with respect to any Certificate
Series, the meaning provided in the related Supplement.
"Administrative Servicer" shall mean, initially, Alliance Data and
shall also include any other Person who succeeds to the functions performed by
the Administrative Servicer, as provided in the Administrative Servicer
Agreement.
"Administrative Servicer Agreement" shall mean the Credit Processing
Agreement effective as of July 8, 1988, as amended from time to time, between
Fashion Service Corp. and the Administrative Servicer and assigned by Fashion
Service Corp. to Spirit of America National Bank, and by Spirit of America
National Bank to Spirit Inc. and all agreements, instruments and documents
attached thereto or delivered in connection therewith, as any of the same may
from time to time be hereafter amended, supplemented, or otherwise modified in
accordance with the terms thereof.
"Affiliate" of any Person shall mean any other Person controlling,
controlled by or under common control with such Person.
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"Aggregate Addition Limit" shall have the meaning specified in
subsection 2.6(c).
"Aggregate Investor/Purchaser Interest" shall mean, as of any date of
determination, the aggregate amount of the sum of the Investor Interests of all
Certificate Series issued and outstanding on such date of determination, the sum
of the Enhancement Invested Amounts, if any, for all outstanding Series on such
date of determination, and the sum of the Receivables Purchase Interests of all
Receivables Purchase Series outstanding on such date of determination.
"Aggregate Minimum Seller Interest" shall mean, as of any date of
determination, the greater of (i) the sum of the Minimum Seller Interests of all
Series and (ii) zero.
"Agreement" shall mean this Second Amended and Restated Pooling and
Servicing Agreement and all amendments hereof, including any Supplement.
"Alliance Data" means Alliance Data Services, Inc., a Delaware
corporation, and its successors.
"Allocated Interchange" means Interchange arising out of transactions
in each Account on or after the Addition Cut-Off Date for such Account.
"Amendment Date" shall mean July 22, 1999.
"Amortization Period", with respect to any Series, shall have the
meaning specified in the related Supplement, and with respect to any Receivables
Purchase Series, shall have the meaning specified in the related Receivables
Purchase Agreement.
"Applicants" shall have the meaning specified in Section 6.7.
"Appointment Day" shall have the meaning specified in subsection
9.2(a).
"Approved Rating" shall mean a rating of P-1 by Moody's and a rating of
A-1+ by Standard & Poor's.
"Assignment" shall have the meaning specified in subsection 2.6(d)(ii).
"Authorized Newspaper" shall mean a newspaper of general circulation in
the Borough of Manhattan, The City of New York, printed in the English language
(and with respect to any Certificate Series, if and so long as the Investor
Certificates of such Series are listed on the Luxembourg Stock Exchange and such
exchange shall so require, in Luxembourg, printed in any language satisfying the
requirements of such exchange) and customarily published on each Business Day,
whether or not published on Saturdays, Sundays or holidays.
"Automatic Additional Account" shall mean each revolving credit card
account established pursuant to a Credit Card Agreement, which account is
designated pursuant to
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Section 2.6(c) to be included as an Account and is identified in a computer
file, microfiche or written list delivered to the Trustee by the Servicer
pursuant to Sections 2.1 and 2.6.
"Bank Portfolio" shall mean the revolving credit card accounts acquired
by the Seller.
"Bearer Certificate" shall have the meaning specified in Section 6.1.
"Benefit Plan" shall have the meaning specified in subsection 6.3(c).
"BIF" shall mean the Bank Insurance Fund administered by the FDIC.
"Book-Entry Certificates" shall mean certificates evidencing a
beneficial interest in the Investor Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 6.10; provided, that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer authorized and Definitive
Certificates are to be issued to the Certificate Owners, such certificates shall
no longer be "Book-Entry Certificates."
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions in New York, New York, Philadelphia,
Pennsylvania, or Milford, Ohio (and, with respect to any Series, any additional
city or state specified in the related Supplement or Receivables Purchase
Agreement), are authorized or obligated by law, executive order or governmental
decree to be closed.
"Cardholder Agreement" shall mean the agreement (and the related
application) for any Account, as such agreement may be amended, modified or
otherwise changed from time to time in accordance with the terms hereof.
"Cardholder Guidelines" shall mean the Originator's policies and
procedures relating to the operation of its credit card business in effect on
the date hereof, including, without limitation, the policies and procedures for
determining the creditworthiness of potential and existing credit card
customers, and relating to the maintenance of credit card accounts and
collection of credit card receivables, as such policies and procedures may be
amended from time to time.
"Cedel" shall mean Cedel S.A.
"Certificate" shall mean any one of the Investor Certificates of any
Certificate Series or the Exchangeable Seller Certificate.
"Certificateholder" or "Holder" shall mean the Person in whose name a
Certificate is registered in the Certificate Register and, if applicable, the
holder of any Bearer Certificate or Coupon, as the case may be.
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"Certificate Interest" shall mean interest payable in respect of the
Investor Certificates of any Certificate Series pursuant to the Supplement for
such Certificate Series.
"Certificate Owner" shall mean, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as may be reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly or
as an indirect participant, in accordance with the rules of such Clearing
Agency).
"Certificate Principal" shall mean principal payable in respect of the
Investor Certificates of any Certificate Series pursuant to the Supplement for
such Certificate Series.
"Certificate Rate" shall mean, with respect to any Series of
Certificates, the percentage (or formula on the basis of which such rate shall
be determined) stated in the related Supplement.
"Certificate Register" shall mean the register maintained pursuant to
Section 6.3, providing for the registration of the Certificates and transfers
and exchanges thereof.
"Certificate Series" shall mean any series of Investor Certificates.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Class" shall mean a class of Certificates of a particular Certificate
Series.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency or Foreign Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency or Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any Certificate Series, the
date of issuance of such Series of Certificates, as specified in the related
Supplement, or, with respect to any Receivables Purchase Series, the date of the
initial Conveyance of the related Receivables Purchase Interest, as specified in
the related Receivables Purchase Agreement.
"Co-Branded Program" means a program of the Originator to originate
charges on a general purpose credit card under the Visa or MasterCard system,
which credit card will be co-branded with Fashion Bug, as specified in the
Cardholder Guidelines.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection" shall mean any payment by or on behalf of Obligors
received by the Originator, Seller, Servicer or Trustee in respect of the
Receivables, in the form of cash, checks, wire transfers, electronic transfers,
ATM transfers or other form of payment on any Receivables,
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including, without limitation, all Recoveries. The term "Collection" shall
include Insurance Proceeds and other amounts constituting Recoveries generally,
but shall exclude Insurance Proceeds and other amounts constituting Recoveries
of Receivables to the extent the aggregate Insurance Proceeds and other
Recoveries received in respect of Receivables during any Due Period exceed the
Loss Amount for such Due Period and any prior Due Periods; which excess shall be
distributed to the Seller on the Distribution Date related to such Due Period. A
Collection processed on an Account in excess of the aggregate amount of
Receivables in such Account as of the date of receipt by the Originator, Seller,
Servicer or Trustee of such Collection shall be deemed to be a payment in
respect of Principal Receivables to the extent of such excess.
"Collection Account" shall have the meaning specified in subsection
4.2(a).
"Convey" shall mean to transfer, reassign, assign, set over and
otherwise convey.
"Conveyance" shall mean the act of Conveying property.
"Corporate Trust Office" shall mean the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at 123 South Broad Street, M.B.O., 18th Floor, Philadelphia, PA 19109,
Attention: Corporate Trust Administration.
"Coupon" shall have the meaning specified in Section 6.1.
"Cut Off Date" shall mean the Initial Cut Off Date and any Addition Cut
Off Date.
"Cycle" shall mean each monthly billing cycle for an Account, as
determined by the Seller in accordance with its normal practice.
"Debtor Relief Laws" shall mean the Bankruptcy Code of the United
States of America and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments or similar debtor relief laws from time to time in effect
affecting the rights of creditors (including creditors of national banking
associations generally), and general principles of equity (whether considered in
a suit at law or in equity).
"Defeasance" shall have the meaning specified in subsection 12.5(a).
"Defeased Series" shall have the meaning specified in subsection
12.5(a).
"Definitive Certificate" shall have the meaning specified in Section
6.10.
"Definitive Euro-Certificate" shall have the meaning specified in
Section 6.13.
"Depository" shall have the meaning specified in Section 6.10.
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"Depository Agreement" shall mean, with respect to each Certificate
Series, the agreement, if any, among the Seller, the Trustee and the Clearing
Agency, or as otherwise provided in the related Supplement.
"Depository Bank" means any of the banks holding one or more Initial
Depository Accounts.
"Depository Bank Agreement" shall mean an agreement from the Servicer
to any Depository Bank.
"Determination Date" shall mean the second Business Day preceding each
Distribution Date.
"Dilution Amount" shall have, with respect to any Due Period, the
meaning specified in subsection 4.3(d).
"Discount Option Date" shall mean each date on which a Discount
Percentage designated by the Seller pursuant to Section 2.10 takes effect.
"Discount Option Receivables" shall have the meaning specified in
Section 2.10. The aggregate amount of Discount Option Receivables on any date
occurring on or after the Discount Option Date shall equal the sum of (a) the
aggregate Discount Option Receivables at the end of the prior date (which
amount, prior to the Discount Option Date, shall be zero) plus (b) any new
Discount Option Receivables created on such date minus (c) any Discount Option
Receivable Collections received on such date. Discount Option Receivables
created on any date shall mean the product of the amount of any Principal
Receivables created on such date (without giving effect to the proviso in the
definition of Principal Receivables) and the Discount Percentage.
"Discount Option Receivable Collections" shall mean on any date
occurring in any Due Period succeeding the Due Period in which the Discount
Option Date occurs, the product of (a) a fraction the numerator of which is the
Discount Option Receivables and the denominator of which is the sum of the
Principal Receivables and the Discount Option Receivables in each case (for both
the numerator and the denominator) at the end of the preceding Due Period and
(b) Collections of Principal Receivables on such date (without giving effect to
the proviso in the definition of Principal Receivables).
"Discount Percentage" shall mean the percentages, if any, designated by
the Seller pursuant to Section 2.10.
"Distribution Date" shall mean the fifteenth day of each month, or if
such day is not a Business Day, the next succeeding Business Day; provided, that
the initial Distribution Date for any Series shall be set forth in the related
Supplement or Receivables Purchase Agreement. Notwithstanding the foregoing, in
the event a Total Systems Failure exists on any Distribution Date, the date of
such Distribution Date shall mean the fourth Business Day after the date on
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which the Seller or the Servicer delivers the monthly report in the form of
Exhibit C; provided, that in no event shall a Distribution Date be postponed
more than 10 Business Days due to a Total Systems Failure.
"Dollars", "$" or "U.S. $" shall mean United States dollars.
"Due Period" shall mean, initially, the period from the close of
business on March 28, 1994 to the close of business on the last day of the last
Cycle for the month of April, 1994, and thereafter, the period from the close of
business on the last day of the prior Due Period to the close of business on the
last day of the last Cycle for the following month.
"Early Amortization Event" shall mean, with respect to each Series, a
Trust Early Amortization Event or a Series Early Amortization Event.
"Effective Date" shall mean November 25, 1997.
"Eligible Account" shall mean, as of the Initial Cut Off Date (or, with
respect to Additional Accounts as of the relevant Addition Cut Off Date), each
Account:
1.1.1 which is payable in Dollars;
1.1.2 which has been originated in connection with the extension
of credit through a Specified Program to an Obligor whose application for the
extension of credit was processed through the Originator or an Affiliate of the
Originator or which has been acquired by the Originator from a third party and
determined by the Originator to be in compliance with the Cardholder Guidelines,
including those relating to the extension of credit; provided that an Account
originated in a Specified Program other than the Private Label Program shall be
an Eligible Account only if the Rating Agency Condition has been satisfied with
respect thereto;
1.1.3 which the Originator has not classified on its electronic
records as counterfeit, canceled or fraudulent, and with respect to which any
card issued in connection therewith has not been stolen or lost;
1.1.4 the Obligor on which has provided, as its most recent
billing address, an address which is located in the United States; provided,
that an Account, the Obligor on which has provided, as its most recent billing
address, an address which is located in Canada, shall be an Eligible Account,
but only to the extent that the aggregate amount of Principal Receivables in all
such Accounts shall be less than 1.0% of the aggregate Principal Receivables of
all Accounts averaged as of the last day of any two consecutive Due Periods;
provided, further, that the Receivables of any such Account shall not be treated
as Receivables for purposes of calculating the Seller Interest, the Aggregate
Minimum Seller Interest or Minimum Aggregate Principal Receivables or the
Investor/Purchaser Percentage of any Series;
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1.1.5 which the Originator has not charged off in its customary
and usual manner for charging off such Accounts as of the Initial Cut Off Date
(or with respect to Additional Accounts, as of the relevant Addition Cut Off
Date); and
1.1.6 with respect to which all filings, consents, licenses,
approvals or authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or given by the
Originator in connection with the creation of the underlying Receivable in such
Account or the execution, delivery and performance by the Originator of the
Cardholder Agreement pursuant to which such underlying Receivable was created,
have been duly obtained, effected or given and are in full force and effect as
of such date of creation.
"Eligible Receivable" shall mean each Receivable which satisfies each
of the following conditions:
(a) which has arisen under an Eligible Account;
(b) which was created in compliance, in all material respects, with
all Requirements of Law applicable to the Originator and pursuant to a
Cardholder Agreement that complies in all material respects with all
Requirements of Law applicable to the Originator;
(c) as to which, at the time of and at all times after the creation of
such Receivable, the Originator, the Seller or the Trust had good and marketable
title thereto, free and clear of all Liens arising under or through the
Originator, the Seller or any of their Affiliates;
(d) which is the legal, valid and binding payment obligation of the
Obligor thereon, enforceable against such Obligor in accordance with its terms,
subject to Debtor Relief Laws; and
(e) which constitutes an "account" or a "general intangible" under
Article 9 of the UCC as then in effect in any applicable jurisdiction.
"Enhancement" shall mean, with respect to any Series, the cash
collateral account, letter of credit, surety bond, guaranteed rate agreement,
maturity guaranty facility, tax protection agreement, interest rate swap or any
other contract or agreement for the benefit of the Investor Certificateholders
or the Receivables Purchasers of such Series (including any subordinated
interest and any subordination of one Series to another), as designated in the
applicable Supplement or Receivables Purchase Agreement.
"Enhancement Invested Amount" shall have the meaning, if applicable
with respect to any Certificate Series, specified in the related Supplement.
"Enhancement Provider" shall mean, with respect to any Series, the
Person or Persons, if any, designated as such in the related Supplement or
Receivables Purchase Agreement.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"Euroclear Operator" shall mean Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear System.
"Excess Funding Account" shall have the meaning specified in subsection
4.3(e).
"Excess Funding Amount" shall mean the amount on deposit in the Excess
Funding Account.
"Exchange" shall mean the procedure described under Section 6.9.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Exchange Date" shall have the meaning, with respect to any Certificate
Series issued pursuant to an Exchange, specified in subsection 6.9(b).
"Exchange Notice" shall have the meaning, with respect to any
Certificate Series issued pursuant to an Exchange, specified in subsection
6.9(b).
"Exchangeable Seller Certificate" shall mean the certificate or
certificates executed and authenticated by the Trustee, substantially in the
form of Exhibit A and exchangeable as provided in Section 6.9.
"Extended Trust Termination Date" shall have the meaning specified in
subsection 12.1(a).
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor.
"Finance Charge Receivables" shall mean (i) all amounts billed to the
Obligors on any Account in the ordinary course of the Originator's business in
respect of (a) periodic rate finance charges, (b) late payment fees, (c) annual
fees, if any, with respect to Accounts (excluding any membership fees payable
with respect to any special program credit cards which fees shall not be deemed
to be Finance Charge Receivables but shall be deemed to be Principal
Receivables), (d) returned check charges, and (e) any other fees with respect to
the Accounts designated by the Seller by notice to the Trustee at any time and
from time to time to be included as Finance Charge Receivables and (ii) all
amounts paid to the Originator in respect of Allocated Interchange; provided,
however, that after the Discount Option Date, Finance Charge Receivables on any
date of determination thereafter shall mean Finance Charge Receivables as
otherwise determined pursuant to this definition plus the amount of any Discount
Option Receivables.
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"Finance Charge Shortfalls" shall have the meaning specified in
subsection 4.3(g).
"Foreign Clearing Agency" shall mean CEDEL and the Euroclear Operator.
"Global Certificate" shall have the meaning specified in Section 6.13.
"Governmental Authority" shall mean the United States of America, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Group" shall mean, with respect to any Certificate Series, the group
of Certificate Series, if any, in which the related Supplement specifies such
Series is to be included.
"Holder of the Exchangeable Seller Certificate" shall mean Charming
Shoppes Receivables Corp., a Delaware corporation, and its successors and
assigns.
"Ineligible Receivable" shall have the meaning specified in subsection
2.4(d)(iii).
"Initial Closing Date" shall mean December 24, 1992.
"Initial Cut off Date" shall mean the close of business of the Seller
on November 28, 1992.
"Initial Depository Account" shall mean an account established by the
Originator for the purpose of collecting payments made by Obligors, as specified
in writing by the Seller to the Trustee and each Purchaser Representative;
provided, that each of the Originator and the Seller shall have assigned all of
its right, title and interest in such account to the Trustee; provided, further,
that the establishment of such account shall be agreed to by the Trustee and
each Purchaser Representative; provided, further, that upon the occurrence of a
Servicer Default and the appointment of a Successor Servicer pursuant to Article
X, Initial Depository Account shall mean an account established by such
Successor Servicer for the purpose of collecting payments made by Obligors as
shall be agreed to by such Successor Servicer, the Trustee and each Purchaser
Representative.
"Initial Investor Interest" shall mean, with respect to any Certificate
Series, the amount specified as such in the related Supplement.
"Insolvency Event" shall have the meaning specified in Section 9.2(a).
"Insurance Proceeds" shall mean any amounts recovered by the Servicer
pursuant to any credit life, credit disability or unemployment insurance
policies covering any Obligor with respect to Receivables under such Obligor's
Account to the extent such amounts are used to make payments on such Account.
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"Interchange" means interchange fees payable to the Originator in its
capacity as credit card issuer.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended from time to time.
"Investor Certificate" shall mean any one of the certificates including
the Bearer Certificates, the Registered Certificates or any Global Certificates
executed and authenticated by the Trustee substantially in the form of the
investor certificate attached to the related Supplement evidencing an Undivided
Trust Interest, other than the Exchangeable Seller Certificate.
"Investor Certificateholder" shall mean the holder of record of an
Investor Certificate.
"Investor Exchange" shall have the meaning specified in subsection
6.9(b).
"Investor Interest" of any Certificate Series shall have the meaning
specified in the related Supplement.
"Investor Monthly Servicing Fee" for any Certificate Series, shall have
the meaning specified in the related Supplement.
"Investor/Purchaser Percentage" with respect to Collections of
Principal Receivables, Collections of Finance Charge Receivables, Series
Dilution Amounts or Loss Amounts, for any Certificate Series or Receivables
Purchase Series, shall have the meaning specified in the related Supplement or
Receivables Purchase Agreement.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, participation or equity interest deposit arrangement, encumbrance,
lien (statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; provided,
that any Conveyance of any Receivables Purchase Interest pursuant to a
Receivables Purchase Agreement, any issuance of an Undivided Trust Interest
pursuant to any Supplement, any assignment pursuant to Section 8.2 hereof, and
any Lien created by or in connection with this Agreement or the Purchase
Agreement shall not be deemed to constitute a Lien.
"Loss Amount" for any Due Period means an amount (which shall not be
less than zero) equal to (a) the principal balance of any Account, or any
portion thereof, that has been written off or, consistent with the Cardholder
Guidelines, should have been written off the Originator's books as uncollectible
during such Due Period, minus (b) the amount of Recoveries received in
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such Due Period with respect to Receivables previously charged off as
uncollectible or as otherwise defined in the applicable Series Supplement.
"Manager" shall mean the lead manager, manager or co-manager or person
performing a similar function with respect to an offering of Definitive
Euro-Certificates.
"Minimum Aggregate Principal Receivables," (x) on the last Business Day
of any Due Period occurring prior to the payment in full of all Certificate
Series outstanding prior to November 25, 1997, shall equal the sum of the
aggregate Series Investor Interests for all Certificate Series, and the
aggregate Receivables Purchase Interests for all Receivables Purchase Series,
issued and outstanding on such date, and (y) thereafter, shall equal zero.
"Minimum Seller Interest", with respect to any Series, shall have the
meaning specified in the related Supplement or Receivables Purchase Agreement.
"Monthly Period" shall mean the period from and including the first day
of a calendar month to and including the last day of a calendar month.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.2.
"Moody's" shall mean Moody's Investors Service, Inc.
"Obligor" shall mean, with respect to any Account, the Person or
Persons obligated to make payments with respect to such Account, including any
guarantor thereof.
"Officer's Certificate" shall mean a certificate signed by any Vice
President or more senior officer of the Originator, Seller or Servicer, as
applicable.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be counsel for or an employee of the Person providing the opinion, and who shall
be reasonably acceptable to the Trustee, and in the case of an opinion to be
delivered to the Originator, Seller, any Enhancement Provider or any Purchaser
Representative, reasonably acceptable to the Originator, Seller, such
Enhancement Provider or such Purchaser Representative.
"Original Pooling and Servicing Agreement" shall have the meaning
specified in the preamble to this Agreement.
"Originator" shall mean Spirit of America National Bank, a national
banking association.
"Paired Series" shall mean one Series that, in its Supplement, is
designated as the "Paired Series" for another Series, it being understood that
the Series Investor Interest of the Paired Series will increase as the Series
Investor Interest of the other Series is reduced; provided that no Series shall
be designated as a Paired Series unless the Rating Agency Condition is satisfied
with respect to such designation.
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"Paying Agent" shall mean any paying agent appointed pursuant to
Section 6.6 and shall initially be the Trustee.
"Permitted Investments" shall mean, unless otherwise provided in the
Supplement or the Receivables Purchase Agreement with respect to any Series,
book-entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form which evidence any of the following:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America or any agency or instrumentality of
the United States of America, the obligations of which are backed by
the full faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by, or federal funds sold by, any
depository institution or trust company (including the Trustee or any
agent of the Trustee, acting in their respective commercial capacities)
incorporated under the laws of the United States of America, any State
thereof or the District of Columbia or any foreign depository
institution with a branch or agency licensed under the laws of the
United States of America or any State, subject to supervision and
examination by Federal and/or State banking authorities and having an
Approved Rating at the time of such investment or contractual
commitment providing for such investment or otherwise approved in
writing by each Rating Agency and Purchaser Representative or (B) any
other demand or time deposit or certificate of deposit which is fully
insured by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (A) any security
described in clause (i) above or (B) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (ii)(A) above;
(iv) short-term debt securities bearing interest or sold at a
discount issued by any corporation incorporated under the laws of the
United states of America or any State, the short-term unsecured
obligations of which have an Approved Rating at the time of such
investment; provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the corpus of
the Trust to exceed 10% of amounts held in the Collection Account;
(v) commercial paper having an Approved Rating at the time of
such investment or pledge as security; or
(vi) any other investments approved in writing by each Rating
Agency and each Purchaser Representative; provided, that such
investments shall be made only so long as
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making such investments will not require the Trust to register as an
investment company under the Investment Company Act of 1940, as
amended.
"Person" shall mean any legal person, including any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, limited liability company, governmental
entity or other entity of similar nature.
"Pool Factor", as such term is used in any Supplement, shall mean a
number carried out to seven decimals representing the ratio of the applicable
Investor Interest as of the last Business Day of the preceding Due Period
(determined after taking into account any reduction in the Investor Interest
that will occur on the following Distribution Date) to the applicable Initial
Investor Interest.
"Pool Index File" shall mean the file on the Originator's computer
system that identifies revolving credit card accounts of the Originator, which
file is designated by the Originator as its "Pool Index File."
"Principal Receivables" shall mean (a) all amounts (other than amounts
which represent Finance Charge Receivables) billed to the Obligor on any
Account, including without limitation amounts billed in respect of purchases of
merchandise or services or credit insurance premiums and (b) all other fees
(other than Finance Charge Receivables) billed to Obligors on the Accounts;
provided, however, that after the Discount Option Date, Principal Receivables on
any date of determination thereafter shall mean Principal Receivables as
otherwise determined pursuant to this definition minus the amount of any
Discount Option Receivables. In calculating the aggregate amount of Principal
Receivables on any day, the amount of Principal Receivables shall be reduced by
the aggregate amount of credit balances in the Accounts on such day. Any
Receivables that the Seller is unable to transfer to the Trust as provided in
Sections 2.1 and 2.6 shall not be included in calculating the aggregate amount
of Principal Receivables.
"Principal Sharing Series" shall mean a Certificate Series that,
pursuant to the Supplement therefor, is entitled to receive Shared Principal
Collections.
"Principal Shortfalls" shall have the meaning specified in subsection
4.3(f).
"Principal Terms", with respect to any Certificate Series issued
pursuant to an Exchange, shall have the meaning specified in subsection 6.9(c),
and with respect to any Receivables Purchase Series, shall have the meaning
specified in Section 6.18.
"Prior PSA" shall have the meaning specified in the recitals hereto.
"Private Holder" shall mean each holder of a right to receive interest
or principal in respect of any direct or indirect interest in the Trust,
including any financial instrument or contract the value of which is determined
in whole or part by reference to the Trust (including the Trust's assets, income
of the Trust or distributions made by the Trust), excluding any interest
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in the Trust represented by any Series, Class of Certificates, Receivables
Purchase Interest, or any other interests as to which the Seller has received an
Opinion of Counsel to the effect that such Series, Class, Receivables Purchase
Interest or other interest will be treated as debt or otherwise not as an equity
interest in either the Trust or the Receivables for federal income tax purposes
(unless such interest is convertible or exchangeable into an interest in the
Trust or the Trust's income or such interest provides for payment of equivalent
value). Notwithstanding the immediately preceding sentence, "Private Holder"
shall also include any other Person that the Seller determines is a "partner"
within the meaning of Section 1.7704-1(h)(1)(ii) of the U.S. Treasury
Regulations (including by reason of Section 1.7704-1(h)(3)) or any successor
provision of law. Any Person holding more than one interest in the Trust, each
of which separately would cause such Person to be a Private Holder, shall be
treated as a single Private Holder. Each holder of an interest in a Private
Holder which is a partnership, S corporation or a grantor trust under the
Internal Revenue Code shall be treated as a Private Holder unless excepted with
the consent of the Seller (which consent shall be based on an Opinion of Counsel
generally to the effect that the action taken pursuant to the consent will not
cause the Trust to become a publicly traded partnership treated as a
corporation). Notwithstanding anything to the contrary herein, each Person
designated as a "Private Holder" in any Supplement or Receivables Purchase
Agreement shall be considered to be a Private Holder.
"Private Label Program" means the Originator's program of originating
private label credit card receivables primarily from sales at Fashion Bug and
Fashion Bug Plus stores, as specified in the Cardholder Guidelines.
"Purchase Agreement" shall mean the Purchase and Sale Agreement, dated
as of November 25, 1997 between the Seller and the Originator, as amended or
otherwise modified from time to time.
"Purchaser Representative" shall have the meaning specified in Section
1.3.
"Qualified Depository Institution" shall mean the Trustee or a
depository institution or trust company organized under the laws of the United
States of America or any one of the states thereof or the District of Columbia
(or the domestic branch of a foreign depository institution), with deposit
insurance provided by BIF or SAIF, the short-term deposits of which have an
Approved Rating.
"Quarterly Period" shall have the meaning specified in Section 2.6(c).
"Rating Agency" shall mean, with respect to any Certificate Series, the
rating agency or agencies, if any, selected by the Seller to rate the Investor
Certificates of such Certificate Series.
"Rating Agency Condition" shall mean, with respect to any action, that
each Rating Agency shall have notified the Seller, the Servicer and the Trustee
in writing that such action will not result in a reduction or withdrawal of its
rating on any Investor Certificates.
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"Reassignment" shall have the meaning specified in subsection
2.7(b)(ii).
"Reassignment Date" shall have the meaning specified in subsection
2.4(e).
"Receivables" shall mean Principal Receivables and Finance Charge
Receivables; provided, that upon the reassignment by the Trustee to the Seller
of Receivables pursuant to Section 2.4 or upon the removal of Receivables from
the Trust pursuant to Section 2.7, such Conveyed Receivables, as of the date of
such reassignment or removal, shall no longer be treated as Receivables.
"Receivables Purchase Agreement", shall mean each agreement between the
Trust and one or more Persons providing for the Conveyance by the Trust to such
Person or Persons of undivided ownership interests in Receivables, including,
without limitation, any "Receivables Purchase Agreement" or "Parallel Purchase
Commitment".
"Receivables Purchase Date", with respect to any Receivables Purchase
Series, shall have the meaning specified in Section 6.17.
"Receivables Purchase Interest" of any Receivables Purchase Series
shall have the meaning specified in the related Receivables Purchase Agreement.
"Receivables Purchase Notice", with respect to any Receivables Purchase
Series, shall have the meaning specified in Section 6.17.
"Receivables Purchase Series" shall mean the Series created pursuant to
any Receivables Purchase Agreement.
"Receivables Purchase Series Interest" shall have, with respect to any
Receivables Purchase Series, the meaning specified in the related Receivables
Purchase Agreement.
"Receivables Purchaser" shall mean any Person acquiring (or entering
into a commitment to acquire) an undivided percentage ownership interest in
Receivables pursuant to any Receivables Purchase Agreement.
"Receivables Purchaser Monthly Servicing Fee" for any Receivables
Purchase Series, shall have the meaning specified in the related Receivables
Purchase Agreement.
"Record Date" shall mean, with respect to any Distribution Date, the
last calendar day of the preceding calendar month.
"Recoveries" shall mean all amounts received (net of out-of-pocket
costs of collection) with respect to Receivables previously charged off as
uncollectible and all Insurance Proceeds.
"Registered Certificates" shall have the meaning specified in Section
6.1.
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"Removal Cut Off Date" shall mean, with respect to Receivables in
certain designated Removed Accounts, the date, which shall be not less than 3
nor more than 20 days prior to the applicable Removal Date, specified as such in
the computer file or microfiche or written list required to be delivered by the
Seller pursuant to subsection 2.7(b)(ii)(B).
"Removal Date" shall mean the date on which Receivables in certain
designated Removed Accounts will be reassigned by the Trustee to an entity
designated by the Seller.
"Removal Notice Date" shall have the meaning specified in subsection
2.7(a).
"Removed Accounts" shall have the meaning specified in subsection
2.7(a).
"Renumbered Account" shall mean an Account with respect to which a new
credit account number has been issued by the Servicer or the Originator under
circumstances resulting from a lost or stolen credit card, from the transfer
from one group to another group, from the transfer from one Obligor to another
Obligor or from the addition of any Obligor and not requiring standard
application and credit evaluation procedures under the Cardholder Guidelines,
and which in any such case can be traced or identified by reference to or by way
of the computer files or microfiche or written lists delivered to the Trustee
pursuant to subsection 2.1, 2.6(d)(ii) or 2.7(b)(ii)(B) as an Account which has
been renumbered.
"Required Addition Event" shall mean, as of any date of determination,
that:
(i) the Dilution Amount for a Due Period shall be greater than
the sum of (x) the Seller Interest as of the last day of such Due
Period minus (y) the Aggregate Minimum Seller Interest as of the last
day of such Due Period; or
(ii) the average of the Seller Interest over any 30 day period
ending on the last day of a Due Period is less than the Aggregate
Minimum Seller Interest.
"Required Designation Date" shall have the meaning specified in
subsection 2.6(a).
"Requirements of Law" means any law, treaty, rule or regulation, or
determination of an arbitrator of, the United States of America, any state or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, whether federal, state or local (including any usury law, the
Federal Truth-in-Lending Act and Regulation Z of the Board of Governors of the
Federal Reserve System), and, when used with respect to any Person, the
certificate of incorporation and by-laws or other charter or other governing
documents of such Person.
"Responsible Officer" shall mean any officer within the Corporate Trust
Office (or any successor group of the Trustee), including any Vice President,
any Assistant Secretary or any other officer of the Trustee customarily
performing functions similar to those performed by any person who at the time
shall be an above-designated officer and also, with respect to a subject, a
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particular officer to whom any corporate trust matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"Revolving Period" shall have, with respect to any Series, the meaning
specified in the related Supplement or Receivables Purchase Agreement.
"SAIF" shall mean the Savings Association Insurance Fund administered
by the FDIC.
"Secured Account Program" means a credit card program of the Originator
under which the Obligors are required to maintain a security deposit against
amounts charged, as specified in the Cardholder Guidelines.
"Secured Obligations" shall have the meaning set forth in the Security
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Security Agreement" means the security interest letter agreement,
dated as of the date hereof between the Originator and the Trustee.
"Seller" shall mean Charming Shoppes Receivables Corp., a Delaware
corporation.
"Seller Allocations" shall mean, with respect to any Due Period,
amounts required to be allocated to the Exchangeable Seller Certificate in
respect of Finance Charge Receivables pursuant to subsections 4.3(c), 4.3(e) or
4.3(g).
"Seller Exchange" shall have the meaning specified in subsection
6.9(b).
"Seller Interest" shall mean at any time the aggregate amount of
Principal Receivables in the Trust plus the amounts on deposit in the Excess
Funding Account minus the Aggregate Investor/Purchaser Interest. It is
understood and agreed that the Seller Interest may be less than zero and
expressed as a negative number.
"Seller Monthly Servicing Fee" shall mean, with respect to any Due
Period, an amount equal to one-twelfth of the product of 2% and the Seller
Interest as of the last day of the preceding Due Period.
"Seller Percentage" shall mean, on any date of determination, when used
with respect to Principal Receivables and Finance Charge Receivables, a
percentage equal to 100% minus the aggregate Investor/Purchaser Percentages for
all Series with respect to such categories of Receivables.
"Series" shall mean a Certificate Series or a Receivables Purchase
Series.
"Series Account" shall mean, with respect to any Series, any account or
accounts established pursuant to the related Supplement or Receivables Purchase
Agreement for the benefit of such Series.
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"Series Dilution Amount" shall have the meaning specified in Section
4.3(d).
"Series Early Amortization Event" shall mean, with respect to any
Series, each "Early Amortization Event" or "Series Early Amortization Event"
specified in the related Supplement or Receivables Purchase Agreement.
"Series Investor Interest", with respect to any Certificate Series,
shall have the meaning specified in the related Supplement.
"Series Percentage" shall mean, for any Series with respect to any Due
Period, the percentage equivalent of a fraction, the numerator of which is the
Series Investor Interest or the Receivables Purchase Series Interest, as the
case may be, for such Series as of the last day of the immediately preceding Due
Period and the denominator of which is the sum of the Series Investor Interests
and the Receivables Purchase Series Interests for all outstanding Series, in
each case as of the last day of the immediately preceding Due Period.
"Series Servicing Fee Percentage" shall mean, with respect to any
Series, the amount specified in the related Supplement or Receivables Purchase
Agreement.
"Series Termination Date" shall mean, with respect to any Series, the
date specified in the related Supplement or Receivables Purchase Agreement.
"Series Unfunded Dilution Amount" shall have the meaning specified in
subsection 4.3(d).
"Servicer" shall mean Spirit Inc., a Delaware corporation, and its
permitted successors and assigns and thereafter any Person appointed Successor
Servicer as herein provided.
"Servicer Default" shall have the meaning specified in Section 10.1.
"Servicer Termination Notice" shall have the meaning specified in
Section 10.1.
"Servicing Officer" shall mean any officer of the Servicer involved in,
or responsible for, the administration and servicing of the Receivables whose
name appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Shared Excess Finance Charge Collections" shall have the meaning
specified in subsection 4.3(g).
"Shared Principal Collections" shall have the meaning specified in
subsection 4.3(f).
"Specified Programs" means (i) the Private Label Program, (ii) the
Co-Branded Program, (iii) the Secured Account Program, (iv) the Unaffiliated
Retailer Program, or (v) any other credit card origination program initiated by
the Originator.
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"Spirit Inc." shall have the meaning specified in the preamble.
"Standard & Poor's" shall mean Standard & Poor's.
"Store" shall mean a retail location of any Affiliate of the
Originator.
"Store Account" shall mean a deposit account established by a Store for
the purpose of collecting Store Payments.
"Store Payment" shall mean any payment by an Obligor on account of a
Receivable made by means of cash or check delivered in person by such Obligor to
an employee at any Store.
"Subject Instrument" shall mean any Certificate or Receivables Purchase
Interest with respect to which the Seller shall not have received an Opinion of
Counsel to the effect that such Certificate or Receivables Purchase Interest
will be treated as debt for Federal income tax purposes.
"Successor Servicer" shall have the meaning specified in subsection 10.2(a).
"Supplement" shall mean, with respect to any Certificate Series, a
supplement to this Agreement complying with the terms of Section 6.9 of this
Agreement, executed in conjunction with any issuance of any Series of
Certificates, and all amendments and supplements thereto.
"Tax Opinion" shall mean, with respect to any action, an Opinion of
Counsel to the effect that, for Federal income tax purposes, such action will
not adversely affect the federal income tax characterization of Investor
Certificates of any outstanding Certificate Series.
"Total Systems Failure" means, in respect of any Distribution Date, a
total failure of the computer system (including but not limited to off-site
backup systems) of the Servicer or the Administrative Servicer which contain
records relating to the Receivables, the effect of which would make it
impossible or impracticable for the Servicer or the Administrative Servicer to
perform the acts required to be performed hereunder on or in anticipation of
such Distribution Date.
"Transaction Documents" shall mean this Agreement, the Purchase
Agreement, each Assignment, each Additional Assignment, the Security Agreement,
each Supplement, each Receivables Purchase Agreement, each Investor Certificate,
each agreement to purchase Investor Certificates, and each other agreement
designated as a Transaction Document in any Supplement or Receivables Purchase
Agreement.
"Transfer Agent and Registrar" shall have the meaning specified in
Section 6.3 and shall initially be the Trustee.
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"Trust" shall mean the Charming Shoppes Master Trust created by the
Prior PSA and this Agreement (formerly known as the Spirit of America Master
Trust), the corpus of which shall consist of the Receivables now existing or
hereafter created, all monies due or to become due with respect thereto, all
Collections, all Recoveries, all rights, remedies powers and privileges with
respect to such Receivables, all rights, remedies, powers and privileges of the
Seller under the Purchase Agreement, such funds as from time to time are
deposited in the Collection Account and any Series Account and the rights to any
Enhancement with respect to any Series, and all proceeds of the foregoing;
provided, that the corpus of the Trust shall not include any undivided
percentage ownership interest in Receivables to the extent Conveyed by the Trust
pursuant to any Receivables Purchase Agreement; provided further, that any
Series Account or Enhancement shall be held by the Trust for the benefit of the
related Series.
"Trust Early Amortization Event" shall have the meaning specified in
Section 9.1.
"Trust Extension" shall have the meaning specified in subsection
12.1(a).
"Trust Termination Date" shall mean the earlier of (a) the date of the
termination of the Trust pursuant to subsection 9.2(b), (b) (i) unless a Trust
Extension shall have occurred, the day after the Distribution Date following the
date on which funds shall have been deposited in the applicable Series Accounts
(A) for the payment of Investor Certificateholders of each Certificate Series
then issued and outstanding sufficient to pay in full the Investor Interest and,
if applicable, the Enhancement Invested Amount of each such Certificate Series
(including any unreimbursed Loss Amounts allocated to such Certificate Series to
the extent such amounts are required to be reimbursed pursuant to the related
Supplement) plus accrued interest at the applicable Certificate Rate through the
date specified in the related Supplement with respect to each such Certificate
Series plus all fees and expenses of the Trustee, the Servicer, any Enhancement
Provider and any other Person as specified therein and (B) for the repayment of
the Receivables Purchase Interest of each Receivables Purchase Series then
outstanding sufficient to pay in full the Receivables Purchase Interest of each
such Receivables Purchase Series (including any unreimbursed Loss Amounts
allocated to such Receivables Purchase Series to the extent such amounts may be
reimbursed pursuant to the related Receivables Purchase Agreement) plus accrued
interest at the applicable rate through the date specified in the related
Receivables Purchase Agreement with respect to each such Receivables Purchase
Series plus all fees and expenses of the Trustee, the Servicer, any Enhancement
Provider and any other Person as specified therein; and (ii) if a Trust
Extension shall have occurred, the Extended Trust Termination Date, and (c)
December 24, 2025.
"Trustee" shall mean First Union National Bank, a national banking
association, in its capacity as trustee on behalf of the Trust, and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee
appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time to
time, as in effect in the Commonwealth of Pennsylvania, the State of Ohio, the
State of New York, and any
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other state where the filing of a financing statement is required or advisable
to perfect an interest in the Receivables and the proceeds thereof, or in any
other specified jurisdiction.
"Unaffiliated Retailer Program" means a credit card program of the
Originator to allow holders of its private label Fashion Bug credit card to use
the card at certain unaffiliated retail locations, as specified in the
Cardholder Guidelines.
"Undivided Trust Interest" shall mean the undivided interest in the
Trust evidenced by a Certificate.
"U.S. Person" or "United States Person" shall mean a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States, or an estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source.
"Variable Certificate" means any Investor Certificate that is
designated as a variable funding certificate in the related Supplement.
"Yield Change" shall have the meaning specified in subsection 2.5(c).
Section 1.2 Other Definitional Provisions.
1.2.1 All terms defined in this Agreement or any Supplement shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
1.2.2 As used herein and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1, and accounting terms partially defined in Section 1.1 to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles or regulatory accounting principles, as
applicable. To the extent that the definitions of accounting terms herein are
inconsistent with the meanings of such terms under generally accepted accounting
principles or regulatory accounting principles, the definitions contained herein
shall control.
1.2.3 The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and Section, subsection,
Schedule and Exhibit references contained in this Agreement are references to
Sections, subsections, Schedules and Exhibits in or to this Agreement, unless
otherwise specified. The Monthly Servicer Report, the form of which is attached
as Exhibit C to this Agreement, shall be in substantially the form of Exhibit C,
with such additional information with respect to any Series as shall be
specified in the related Supplement or Receivables Purchase Agreement, and such
changes as the Servicer may determine to be necessary or desirable; provided,
however, that no such change shall serve to exclude information required by the
Agreement, any Supplement or any Receivables Purchase
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Agreement. The Servicer shall, upon making such determination, deliver to the
Trustee an Officer's Certificate to which shall be annexed the form of the
related Exhibit, as so changed. Upon the delivery of such Officer's Certificate
to the Trustee, the related Exhibit, as so changed, shall for all purposes of
this Agreement constitute such Exhibit. The Trustee may conclusively rely upon
such Officer's Certificate in determining whether the related Exhibit, as
changed, conforms to the requirements of this Agreement.
Section 1.3 Purchaser Representatives. Receivables Purchasers of any
Receivables Purchase Series, pursuant to the related Receivables Purchase
Agreement, shall appoint a purchaser representative (each, a "Purchaser
Representative") who shall have the right to vote, or to give or receive any
request, demand, authorization, direction, notice, consent or waiver, hereunder
on behalf of all of the Receivables Purchasers of the related Receivables
Purchase Series, all to the extent set forth in this Agreement and in the
related Receivables Purchase Agreement.
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables. The Seller does hereby Convey to
the Trust without recourse (except as expressly provided herein), all of its
right, title and interest in and to the Receivables now existing and hereafter
created and arising from time to time in connection with the Accounts, until the
termination of the Trust, all monies due or to become due with respect thereto,
all Collections, all Recoveries, all rights, remedies, powers and privileges
with respect to the Receivables, all of its rights, remedies, powers and
privileges under the Purchase Agreement, and all proceeds of the foregoing.
In connection with such Conveyance, the Seller agrees to record and
file, at its own expense, a financing statement or financing statements
(including any continuation statements with respect to each such financing
statement when applicable) with respect to the Receivables now existing and
hereafter created meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect the Conveyance of
the Receivables to the Trust and the first priority nature of the Trustee's
interest in the Receivables, and to deliver a file-stamped copy of such
financing statement or continuation statement or other evidence of such filing
(which may, for purposes of this Section 2.1, consist of telephone confirmation
of such filing followed by delivery of a file-stamped copy as soon as
practicable) to the Trustee, as soon as practicable after receipt thereof by the
Seller. The foregoing Conveyance shall be made to the Trust for the benefit of
the Certificateholders, any Receivables Purchasers and any Enhancement Providers
(to the extent set forth in the related Supplement or Receivables Purchase
Agreement) and each reference in this Agreement to such Conveyance shall be
construed accordingly.
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In connection with such Conveyance, the Servicer agrees, on behalf of
the Seller, as an expense of the Servicer, paid out of the Seller's Monthly
Servicing Fee, (i) to indicate in the Pool Index File maintained in its computer
files that Receivables created in connection with the Accounts have been
Conveyed to the Trust pursuant to this Agreement, and (ii) to deliver to the
Trustee a computer file or microfiche or written list containing a true and
complete list of all such Accounts, identified by account number, Obligor name
and Obligor address and setting forth the Receivable balance as of .
Such file or list shall be marked as Schedule 1 to this Agreement, delivered to
the Trustee as confidential and proprietary, and is hereby incorporated into and
made a part of this Agreement. The Servicer further agrees not to alter the file
designation referenced in clause (i) of this paragraph with respect to any
Account during the term of this Agreement unless and until such Account becomes
a Removed Account.
The parties intend that if, and to the extent that, such Conveyance is
not deemed to be a sale, the Seller shall be deemed hereunder to have granted to
the Trust a first priority perfected security interest (to secure the Secured
Obligations) in all of the Seller's right, title and interest in, to and under
the Receivables now existing and hereafter created and arising from time to time
in connection with the Accounts until the termination of the Trust, all monies
due or to become due with respect thereto, all Collections, all Recoveries, all
rights, remedies, powers and privileges with respect to the Receivables, all of
its rights, remedies, powers and privileges under the Purchase Agreement, and
all proceeds of the foregoing, and that this Agreement shall constitute a
security agreement under applicable law.
Pursuant to the request of the Seller, the Trustee shall cause
Certificates in authorized denominations evidencing the entire interest in the
Trust to be duly authenticated and delivered to or upon the order of the Seller
pursuant to Section 6.2.
By executing and delivering this Agreement and the Purchase Agreement,
the parties do not intend to cancel, release or in any way impair any conveyance
made by the Originator to the Trustee under the Prior PSA. Without limiting the
foregoing, the parties hereto acknowledge and agree as follows:
(i) Any Conveyance by the Originator to the Seller of assets
hereunder or under any other Transaction Document shall be subject to
any rights in such assets granted by the Originator to the Trustee
pursuant to the Prior PSA.
(ii) The trust created by and maintained under the Prior PSA
shall continue to exist and be maintained under this Agreement.
(iii) All series of certificates or purchased interests issued
under the Prior PSA shall constitute Series issued and outstanding
under this Agreement, and any supplement or receivables purchase
agreement executed in connection with such series shall constitute a
Supplement or Receivables Purchase Agreement (as applicable) executed
hereunder.
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(iv) All references to the Prior PSA in any other instruments
or documents shall be deemed to constitute references to this
Agreement. All references in such instruments or documents to the
Originator in its capacity as the seller of receivables and related
assets under the Prior PSA shall be deemed to include reference to the
Seller in such capacity hereunder.
(v) The Seller hereby assumes and agrees to perform all
obligations of Spirit of America National Bank, in its capacity as
seller (but not as servicer) under or in connection with the Prior PSA
(as amended and restated by this Agreement) and any supplements to the
Prior PSA.
(vi) To the extent this Agreement requires that certain
actions are to be taken as of the Initial Cut Off Date or another date
prior to the date of this Agreement, the Originator's execution of such
action under the Prior PSA shall constitute satisfaction of such
requirement.
Section 2.2 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on behalf of the
Trust, of all right, title and interest previously held by the Seller in and to
the Receivables now existing and hereafter created from time to time and arising
in connection with the Accounts until the termination of the Trust, all monies
due or to become due with respect thereto, all Collections, all Recoveries, all
rights, remedies, powers and privileges with respect to the Receivables, all
rights, remedies, powers and privileges under the Purchase Agreement, and all
proceeds of the foregoing, and declares that it shall maintain such right, title
and interest, upon the Trust herein set forth, for the benefit of all
Certificateholders, any Receivables Purchasers and any Enhancement Providers (to
the extent set forth in the related Supplement or Receivables Purchase
Agreement). The Trustee further acknowledges that, on or prior to the Initial
Closing Date, it has received from the Servicer (on behalf of the Seller) the
computer file or microfiche or written list required to be delivered to it
pursuant to the third paragraph of Section 2.1.
(b) The Trustee hereby agrees not to disclose to any Person any of the
account numbers or other information contained in the computer files or
microfiche or written lists delivered to the Trustee pursuant to Sections 2.1,
2.6 and 2.7 ("Account Information") except as is required in connection with the
performance of its duties hereunder or in enforcing the rights of the
Certificateholders and Receivables Purchasers or to a Successor Servicer
appointed pursuant to Section 10.2 or as mandated pursuant to any Requirement of
Law applicable to the Trustee. The Trustee agrees to take such measures as shall
be reasonably requested by the Seller to protect and maintain the security and
confidentiality of such information, and, in connection therewith, shall allow
the Seller to inspect the Trustee's security and confidentiality arrangements
from time to time during normal business hours. In the event that the Trustee is
required by law to disclose any Account Information, the Trustee shall provide
the Seller with prompt written notice, unless such notice is prohibited by law,
of any such request or requirement so that the Seller may request a protective
order or other appropriate remedy. The Trustee shall use its best efforts to
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provide the Seller with written notice no later than five days prior to any
disclosure pursuant to this subsection 2.2(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
Section 2.3 Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Trust as of the Initial Closing Date, the
Effective Date and the Amendment Date:
(a) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing under the laws of the State of Delaware and has
full corporate power, authority and legal right to own its properties and
conduct its business as such properties are presently owned and such business is
presently conducted, and to execute, deliver and perform its obligations under
this Agreement and the other Transaction Documents to which it is a party and to
execute and deliver to the Trustee the Certificates pursuant hereto.
(b) Due Qualification. The Seller is duly qualified to do business and
is in good standing (or is exempt from such requirement) in any state required
in order to conduct its business, and has obtained all necessary licenses and
approvals with respect to the Seller required under applicable law.
(c) Due Authorization. The execution and delivery by the Seller of this
Agreement and the other Transaction Documents to which it is a party and the
consummation of the transactions provided for in this Agreement and each other
Transaction Document to which the Seller is a party have been duly authorized by
the Seller by all necessary corporate action on its part and this Agreement and
each such Transaction Document will remain, from the time of its execution, an
official record of the Seller.
(d) Enforceability. Each of this Agreement and each other Transaction
Document to which the Seller is a party constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms, except as such enforceability may be limited by Debtor Relief Laws.
(e) No Conflict. The execution and delivery of this Agreement and each
other Transaction Document to which the Seller is a party, the performance of
the transactions contemplated hereunder and thereunder and the fulfillment of
the terms hereof and thereof will not conflict with, result in any breach of any
of the material terms and provisions of, or constitute (with or without notice
or lapse of time or both) a default under, any indenture, contract, agreement,
mortgage, deed of trust, or other instrument to which the Seller is a party or
by which it or any of its properties are bound.
(f) No Violation. The execution and delivery of this Agreement, the
Certificates and each other Transaction Document to which the Seller is a party,
the performance of the
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transactions contemplated hereunder and thereunder and the fulfillment of the
terms hereof and thereof will not conflict with or violate in any material
respect any Requirements of Law applicable to the Seller.
(g) No Proceedings. There are no proceedings pending or, to the best
knowledge of the Seller, threatened against the Seller before any court,
regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement, the Certificates
or any other Transaction Document to which the Seller is a party, (ii) seeking
to prevent the issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Certificates or any other
Transaction Document to which the Seller is a party, (iii) seeking any
determination or ruling that, in the reasonable judgment of the Seller, would
materially and adversely affect the performance by the Seller of its obligations
under this Agreement or any other Transaction Document to which the Seller is a
party, (iv) seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement, the
Certificates or any other Transaction Document to which the Seller is a party or
(v) seeking to affect adversely the income tax attributes of the Trust.
(h) All Consents Required. All appraisals, authorizations, consents,
orders or other actions of any Person or of any governmental body or official
required in connection with the execution and delivery of this Agreement, the
Certificates and each other Transaction Document to which the Seller is a party,
the performance of the transactions contemplated hereunder and thereunder and
the fulfillment of the terms hereof and thereof have been obtained.
(i) Eligibility of Accounts. As of the Initial Cut Off Date (or in the
case of an Additional Account, the applicable Addition Cut Off Date), each
Account was an Eligible Account and no selection procedures adverse to the
Investor Certificateholders or Receivables Purchasers have been employed by the
Seller in selecting the Accounts from among the Eligible Accounts in the Bank
Portfolio.
(j) Originator's Deposit Accounts. As of the Initial Closing Date, the
Effective Date and the Amendment Date, deposits in Originator's deposit accounts
were insured to the limits provided by law by BIF.
The representations and warranties set forth in this Section 2.3 shall
survive the transfer and assignment of the respective Receivables to the Trust
and the termination of the rights and obligations of the Servicer pursuant to
Section 10.1. The Seller hereby represents and warrants to the Trust, with
respect to any Series, as of its Closing Date, unless otherwise specified in the
related Supplement or Receivables Purchase Agreement, that the representations
and warranties of the Seller set forth in this Section 2.3 are true and correct
as of such date.
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Section 2.4 Representations and Warranties of the Seller Relating to
the Receivables; Notice of Breach.
(a) Valid Conveyance and Assignment; Eligibility of Receivables.
The Seller hereby represents and warrants to the Trust as of the
Initial Closing Date, the Effective Date and the Amendment Date, and with
respect to any Additional Accounts, as of the related Addition Date:
(i) This Agreement constitutes either (A) a valid sale to the
Trust of all right, title and interest of the Seller in and to the
Receivables now existing and hereafter created and arising from time to
time in connection with the Accounts until the termination of the
Trust, all monies due or to become due with respect thereto, all
Collections, all Recoveries, all rights, remedies, powers and
privileges with respect to the Receivables, all of its rights,
remedies, powers and privileges under the Purchase Agreement, and all
proceeds of the foregoing, and such property will be held by the Trust
free and clear of any Lien of any Person claiming through or under the
Seller or any of its Affiliates, or (B) a grant of a security interest
(as defined in the UCC as in effect in any applicable jurisdiction) in
such property to the Trust, which is enforceable with respect to the
Receivables now existing and hereafter created and arising from time to
time in connection with the Accounts until the termination of the
Trust, all monies due or to become due with respect thereto, all
Collections, all Recoveries, all rights, remedies, powers and
privileges with respect to the Receivables, all of its rights,
remedies, powers and privileges under the Purchase Agreement, and all
proceeds of the foregoing, upon such creation. To the extent that this
Agreement constitutes the grant of a security interest to the Trust in
such property, upon the filing of the financing statements described in
Section 2.1 and in the case of the Receivables hereafter created, all
monies due or to be become due with respect thereto, all Collections,
all Recoveries, all rights, remedies, powers and privileges with
respect to such Receivables, and the proceeds of the foregoing, upon
such creation, the Trust shall have a first priority perfected security
interest in such property (subject to Section 9-306 of the UCC as in
effect in any applicable jurisdiction). Neither the Seller nor any
Person claiming through or under the Seller shall have any claim to or
interest in the Collection Account or any Series Account, except for
the Seller's rights to receive interest accruing on, and investment
earnings in respect of, the Collection Account, as provided in this
Agreement (and, if applicable, any Series Account as provided in any
Supplement or any Receivables Purchase Agreement),to the extent that
this Agreement constitutes the grant of a security interest in such
property, except for the interest of the Seller in such property as a
debtor for purposes of the UCC as in effect in any applicable
jurisdiction.
(ii) Each Receivable is an Eligible Receivable.
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(iii) Each Receivable then existing has been Conveyed to the
Trust free and clear of any Lien of any Person claiming through or
under the Seller, the Originator, or any of their Affiliates and in
compliance, in all material respects, with all Requirements of Law
applicable to the Seller.
(iv) With respect to each Receivable, all consents, licenses,
approvals or authorizations of or registrations or declarations with
any Governmental Authority required to be obtained, effected or given
by the Seller in connection with the Conveyance of such Receivable to
the Trust have been duly obtained, effected or given and are in full
force and effect.
(v) On each day on which any new Receivable is created, the
Seller shall be deemed to represent and warrant to the Trust that (A)
each Receivable created on such day is an Eligible Receivable, (B) each
Receivable created on such day has been Conveyed to the Trust in
compliance, in all material respects, with all Requirements of Law
applicable to the Seller, (C) with respect to each such Receivable, all
consents, licenses, approvals or authorizations of or registrations or
declarations with, any Governmental Authority required to be obtained,
effected or given by the Seller in connection with the Conveyance of
such Receivable to the Trust have been duly obtained, effected or given
and are in full force and effect and (D) the representations and
warranties set forth in subsection 2.4(a)(i) are true and correct with
respect to each Receivable created on such day as if made on such day.
(vi) As of the Initial Cut Off Date, and, with respect to
Additional Accounts, as of the related Addition Cut Off Date, Schedule
1 to this Agreement and the related computer file or microfiche or
written list referred to in subsection 2.6(d)(ii), is an accurate and
complete listing in all material respects of all the Accounts, and the
information contained therein with respect to the identity of such
Accounts and the Receivables existing thereunder is true and correct in
all material respects as of the Initial Cut Off Date or such applicable
Addition Cut Off Date, and as of the Initial Cut Off Date, the
aggregate amount of Receivables in all the Accounts was $45,431,401 of
which $45,431,401 were Principal Receivables.
(b) Survival. The representations and warranties set forth in this
Section 2.4 shall survive the Conveyance of any of the respective Receivables to
the Trust.
(c) Notice of Breach. Upon discovery by the Seller, the Servicer or the
Trustee of a breach of any of the representations and warranties set forth in
Section 2.3 or 2.4, the party discovering such breach shall give prompt written
notice to the other parties hereto, each Purchaser Representative and each
Enhancement Provider as soon as practicable and in any event within three
Business Days following such discovery.
(d) Transfer of Ineligible Receivables.
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(i) Automatic Removal. In the event of a breach with respect
to a Receivable of any representations and warranties set forth in
subsection 2.4(a)(iii), or in the event that a Receivable is not an
Eligible Receivable as a result of the failure to satisfy the
conditions set forth in clause (d) of the definition of Eligible
Receivable, and any of the following three conditions is met: (A) as a
result of such breach or event such Receivable is charged off as
uncollectible or the Trust's rights in, to or under such Receivable or
its proceeds are impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of any Lien; (B)
the Lien upon the subject Receivable (1) arises in favor of the United
States of America or any State or any agency or instrumentality thereof
and involves taxes or liens arising under Title IV of ERISA or (2) has
been consented to by the Originator or the Seller; or (C) the unsecured
short term debt rating of the Originator is not at least P-1 by Moody's
and the Lien upon the subject Receivable ranks prior to the Lien
created pursuant to this Agreement; then, upon the earlier to occur of
the discovery of such breach or event by the Seller or the Servicer or
receipt by the Seller of written notice of such breach or event given
by the Trustee, each such Receivable shall be automatically removed
from the Trust on the terms and conditions set forth in subsection
2.4(d)(iii) and shall no longer be treated as a Receivable; provided,
that if such Lien does not have a material adverse effect on the
collectibility of the Receivables or on the interests of the
Certificateholders or Receivables Purchasers of any Series or the
Enhancement Provider, the Seller shall have 10 days within which to
remove any such Lien.
(ii) Removal After Cure Period. In the event of a breach of
any of the representations and warranties set forth in subsection
2.4(a)(ii)-(vi), other than a breach or event as set forth in clause
(d)(i) above, and as a result of such breach the Receivable becomes
charged off or the Trust's rights in, to or under the Receivable or its
proceeds are impaired or the proceeds of such Receivable are not
available for any reason to the Trust free and clear of any Lien, then,
upon the expiration of 60 days from the earlier to occur of the
discovery of any such event by either the Seller or the Servicer, or
receipt by the Seller of written notice of any such event given by the
Trustee or any Purchaser Representative, each such Receivable shall be
removed from the Trust on the terms and conditions set forth in
subsection 2.4(d)(iii) and shall no longer be treated as a Receivable;
provided, however, that no such removal shall be required to be made
if, on any day within such applicable period, such representations and
warranties with respect to such Receivable shall then be true and
correct in all material respects as if such Receivable had been created
on such day.
(iii) Procedures for Removal. When the provisions of
subsection 2.4(d)(i) or (ii) above require removal of a Receivable, the
Seller shall accept reassignment of each such Receivable (an
"Ineligible Receivable") by directing the Servicer to deduct the
principal balance of each such Ineligible Receivable from the Principal
Receivables in the Trust and to decrease the Seller Interest by such
amount (but not below zero). On and after the date of such removal,
each Ineligible Receivable shall be deducted from the aggregate amount
of Principal Receivables used in the calculation of any
Investor/Purchaser
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Percentage, the Seller Percentage or the Seller Interest. In the event
that the exclusion of an Ineligible Receivable from the calculation of
the Seller Interest would cause the Seller Interest to be reduced below
the Aggregate Minimum Seller Interest, the Seller shall immediately,
but in no event later than 10 Business Days after such event, or, if
earlier, the next succeeding Distribution Date, make a deposit in the
Excess Funding Account (except that the portion of such amount
allocable to any Receivables Purchase Series shall be deposited in the
Collection Account for the benefit of such Receivables Purchase Series)
in immediately available funds in an amount equal to the amount by
which the Seller Interest would be reduced below the Aggregate Minimum
Seller Interest. Upon the reassignment to the Seller of an Ineligible
Receivable, the Trust shall automatically and without further action be
deemed to Convey to the Seller, without recourse, representation or
warranty, all the right, title and interest of the Trust in and to such
Ineligible Receivable (and if all the Receivables of an Account are
Ineligible Receivables, all Receivables then existing and thereafter
created in the related Account), all monies due or to become due with
respect thereto, all Collections, all Recoveries, all rights, remedies,
powers and privileges with respect to such Ineligible Receivable, and
all proceeds of the foregoing and any such reassigned Ineligible
Receivable shall no longer be treated as a Receivable. The Trustee
shall execute such documents and instruments of transfer or assignment,
including a written assignment in substantially the form of Exhibit
E-2, and take other actions as shall reasonably be requested by the
Seller to evidence the Conveyance of such Ineligible Receivable
pursuant to this subsection 2.4(d)(iii). The obligation of the Seller
set forth in this subsection 2.4(d)(iii), or the automatic removal of
such Receivable from the Trust, as the case may be, shall constitute
the sole remedy respecting any breach of the representations and
warranties set forth in the above-referenced subsections with respect
to such Receivable available to Certificateholders or Receivables
Purchasers or the Trustee on behalf of Certificateholders or
Receivables Purchasers, except as otherwise specified in any Supplement
or Receivables Purchase Agreement.
(e) Reassignment of Trust Portfolio. In the event of a breach of the
representations and warranties set forth in subsection 2.3(d) or 2.4(a)(i) of
this Agreement or subsection 2.1(d) or 2.2(a)(i) of the Purchase Agreement,
either (i) the Trustee or the Holders of Investor Certificates evidencing
Undivided Trust Interests aggregating more than 50% of the aggregate Investor
Interests of all Certificate Series or (ii) any Purchaser Representative, by
notice then given in writing to the Seller (and to the Trustee and the Servicer,
if given by the Investor Certificateholders or any Purchaser Representative) may
direct the Seller to accept reassignment of an amount of Principal Receivables
(as specified below) within 60 days of such notice and the Seller shall be
obligated to accept reassignment of such Principal Receivables on a Distribution
Date specified by such Person (such Distribution Date, the "Reassignment Date")
occurring within such applicable period on the terms and conditions set forth
below; provided, however, that no such reassignment shall be required to be made
if, at any time during such applicable period, the representations and
warranties contained in subsection 2.3(d) and 2.4(a)(i) of this Agreement and
Subsection 2.1(d) and 2.2(a)(i) of the Purchase Agreement shall then be true and
correct in all material respects. The Trustee shall promptly notify each
Purchaser Representative
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of any such notice of reassignment, and each Purchaser Representative may, by
notice to the Seller and the Trustee, designate the Series it represents as
participating in such reassignment. The Seller shall deposit on the Reassignment
Date an amount equal to the reassignment deposit amount for such Receivables in
the applicable Series Account, as provided in the related Supplement or
Receivables Purchase Agreement, for distribution to the Investor
Certificateholders pursuant to Article XII or the Receivables Purchasers
pursuant to the related Receivables Purchase Agreement or any Enhancement
Provider pursuant to the applicable Supplement. The reassignment deposit amount
for each Series with respect to which a notice directing reassignment has been
given, unless otherwise stated in the related Supplement or Receivables Purchase
Agreement, shall be equal to (a) in the case of any Certificate Series, (i) the
Investor Interest of such Series and, if applicable, the Enhancement Invested
Amount at the end of the day on the last day of the Due Period preceding the
Reassignment Date, less the amount, if any, previously allocated for payment of
principal to such Certificateholders on the related Distribution Date in the Due
Period in which the Reassignment Date occurs, plus (ii) an amount equal to all
interest accrued but unpaid on the Investor Certificates and, if applicable, the
Enhancement Invested Amount of such Series at the applicable Certificate Rate
through such last day, less the amount, if any, previously allocated for payment
of interest to the Certificateholders of such Series on the related Distribution
Date in the Due Period in which the Reassignment Date occurs, and (b) in the
case of any Receivables Purchase Series, all principal and accrued interest on
such Receivables Purchase Series through such Reassignment Date and all accrued
and unpaid fees and expenses and unreimbursed Loss Amounts under the related
Receivables Purchase Agreement. Payment of the reassignment deposit amount with
respect to each Series and all other amounts in the applicable Series Account in
respect of the preceding Due Period shall be considered a prepayment in full of
the interest in the Receivables represented by such Series. On the Distribution
Date on which such amount has been deposited in full into the applicable Series
Account, Receivables with an aggregate principal balance equal to the aggregate
Investor Interests and Receivables Purchase Interests of all Series with respect
to which a notice directing reassignment has been given and all monies due or to
become due with respect thereto, all Collections, all Recoveries, and all
proceeds of such Receivables be released to the Seller after payment of all
amounts otherwise due hereunder on or prior to such dates and the Trustee shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty, as shall be prepared by and as are
reasonably requested by the Seller to vest in the Seller, all right, title and
interest of the Trust in and to the Receivables then existing and thereafter
created in the related Accounts, all monies due or to become due with respect
thereto, all Collections, all Recoveries, all rights, remedies, powers and
privileges with respect to such Receivables, and all proceeds of the foregoing.
If the Trustee, the Investor Certificateholders or the Purchaser Representatives
give notice directing the Seller to accept reassignment as provided above, the
obligation of the Seller to accept reassignment of the Receivables and pay the
reassignment deposit amount pursuant to this subsection 2.4(e) shall constitute
the sole remedy respecting a breach of the representations and warranties
contained in subsections 2.3(d) and 2.4(a)(i) available to the Investor
Certificateholders, the Trustee on behalf of the Investor Certificateholders or
the Receivables Purchasers.
Section 2.5 Covenants of the Seller. The Seller hereby covenants that:
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(a) Receivables to be Accounts. The Seller will take no action to cause
any Receivable to be evidenced by any instrument (as defined in the UCC as in
effect in any applicable jurisdiction). Each Receivable shall be payable
pursuant to a contract which does not create a Lien on any goods purchased
thereunder. The Seller will take no action to cause any Receivable to be
anything other than an "account," or a "general intangible" or the "proceeds" of
either for purposes of the UCC as in effect in any applicable jurisdiction.
(b) Security Interests. Except for the Conveyances contemplated
hereunder, the Seller will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on any
Receivable, whether now existing or hereafter created, or any interest therein;
the Seller will promptly notify the Trustee of the existence of any Lien on any
Receivable; and the Seller shall defend the right, title and interest of the
Trust in, to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Seller or the Originator; provided, however, that nothing in this subsection
2.5(b) shall prevent or be deemed to prohibit the Seller from suffering to exist
upon any of the Receivables any Liens for municipal and other local taxes if
such taxes shall not at the time be due and payable or if the Seller or the
Originator, as applicable, shall currently be contesting the validity thereof in
good faith by appropriate proceedings and shall have set aside on its books
adequate reserves with respect thereto.
(c) Cardholder Agreements and Cardholder Guidelines. The Seller shall
enforce the covenant in the Purchase Agreement requiring the Originator to
comply with and perform its obligations under the Cardholder Agreements relating
to the Accounts and the Cardholder Guidelines except insofar as any failure to
comply or perform would not materially and adversely affect the rights of the
Trust, the Certificateholders, any Enhancement Provider or any Receivables
Purchasers. The Seller may permit the Originator to change the terms and
provisions of the Cardholder Agreements or the Cardholder Guidelines in any
respect (including, without limitation, the reduction of the required minimum
monthly payment, the calculation of the amount, or the timing, of charge-offs
and the periodic finance charges and other fees to be assessed thereon), unless
such change would have a material adverse effect on the collectibility of the
Receivables; provided, however, that the Seller may not permit the Originator to
change the required minimum monthly payment or periodic finance charge
(collectively, a "Yield Change") unless, after five Business Days' prior written
notice to the Rating Agency of a Yield Change, the Rating Agency shall have
provided written notice to the Seller that the Rating Agency Condition shall be
satisfied or unless such Yield Change is mandated by applicable law.
(d) Account Allocations. In the event that the Seller is unable for any
reason to transfer Receivables to the Trust in accordance with the provisions of
this Agreement (including, without limitation, by reason of the application of
the provisions of Section 9.1(a) or 9.1(b) or by an order by any federal or
state governmental agency having regulatory authority over the Seller or any
court of competent jurisdiction that the Seller not transfer any additional
Principal Receivables to the Trust) then, in any such event, (A) the Seller
agrees to allocate and pay to the Trust, after the date of such inability, all
Collections with respect to Principal Receivables, and all amounts which would
have constituted Collections with respect to Principal Receivables but
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for the Seller's inability to transfer such Receivables (up to an aggregate
amount equal to the amount of Principal Receivables in the Trust on such date);
(B) the Seller agrees to have such amounts applied as Collections in accordance
with Article IV; and (C) for only so long as all Collections and all amounts
which would have constituted Collections are allocated and applied in accordance
with clauses (A) and (B) above, Principal Receivables (and all amounts which
would have constituted Principal Receivables but for the Seller's inability to
transfer Receivables to the Trust) that are charged off as uncollectible in
accordance with this Agreement shall continue to be allocated in accordance with
Article IV, and all amounts that would have constituted Principal Receivables
but for the Seller's inability to transfer Receivables to the Trust shall be
deemed to be Principal Receivables for the purpose of calculating (i) the
applicable Investor/Purchaser Percentage with respect to any Series and (ii) the
Aggregate Investor/Purchaser Interest thereunder. If the Seller is unable
pursuant to any Requirement of Law to allocate Collections as described above,
the Seller agrees that it shall in any such event allocate, after the occurrence
of such event, payments on each Account with respect to the principal balance of
such Account first to the oldest principal balance of such Account and to have
such payments applied as Collections in accordance with Article IV. The parties
hereto agree that Finance Charge Receivables, whenever created, accrued in
respect of Principal Receivables that have been conveyed to the Trust, or that
would have been conveyed to the Trust but for the above described inability to
transfer such Receivables, shall continue to be a part of the Trust
notwithstanding any cessation of the transfer of additional Principal
Receivables to the Trust and Collections with respect thereto shall continue to
be allocated and paid in accordance with Article IV.
(e) Delivery of Collections. The Seller agrees to pay to the Servicer
all payments received by the Seller in respect of the Receivables as soon as
practicable after receipt thereof by the Seller.
(f) Conveyance of Accounts. The Seller covenants and agrees that it
will not Convey the Accounts to any person prior to the termination of this
Agreement pursuant to Article XII.
(g) Notice of Adverse Claims. The Seller shall notify the Trustee, each
Purchaser Representative and each Enhancement Provider after becoming aware of
any Lien on any Receivable.
(h) Information Provided to Rating Agencies. The Seller will use its
best efforts to cause all information provided to any Rating Agency pursuant to
this Agreement or in connection with any action required or permitted to be
taken under this Agreement to be complete and accurate in all material respects.
(i) Notice of Certain Events. The Seller shall notify the Trustee, each
Rating Agency and each Purchaser Representative of any Early Amortization Event
or Servicer Default of which it has knowledge, promptly upon obtaining such
knowledge.
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(j) Offices, Records and Books of Account. The Seller will keep its
principal place of business and chief executive office and the office where it
keeps its records concerning the Receivables at the address of the Seller set
forth under its name on the signature page to the Agreement or, upon 30 days'
prior written notice to the Trustee and each Purchaser Representative, at any
other locations in jurisdictions where all actions reasonably requested by the
Trustee and any Purchaser Representative to protect and perfect the interest in
the Receivables have been taken and completed. The Seller also will maintain and
implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables and related
Cardholder Agreements in the event of the destruction of the originals thereof),
and keep and maintain all documents, books, records and other information
reasonably necessary or advisable for the collection of all Receivables
(including, without limitation, records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable).
(k) Amendments to Purchase Agreement. The Seller shall make no
amendment to the Purchase Agreement that would adversely affect in any material
respect the interests of the Investor Certificateholders, any Receivables
Purchaser or any Enhancement Provider. Promptly after the execution of any
amendment to the Purchase Agreement, the Seller shall furnish a copy thereof to
the Trustee and each Purchaser Representative.
(l) Separate Corporate Existence. The Seller hereby acknowledges that
the Trustee and the Investor Certificateholders are, and will be, entering into
the transactions contemplated by the Transaction Documents in reliance upon
Seller's identity as a legal entity separate from the Originator, Servicer and
any other Person. Therefore, Seller shall take all reasonable steps to maintain
its existence as a corporation separate and apart from the Originator, the
Servicer, and any other Affiliate of the Originator or the Servicer. Without
limiting the generality of the foregoing, Seller shall:
(i) (a) observe the corporate procedures required by its
certificate of incorporation, its by-laws and the corporate law of the
State of Delaware, including, without limitation, holding separate
director and shareholder meetings from those of any other Person and
otherwise ensuring at all times that it is maintained as a separate
corporate entity from any other Person and (b) not amend or modify any
provision of its Certificate of Incorporation or by-laws unless the
Rating Agency Condition shall have been satisfied with respect to such
amendment or modification;
(ii) (a) ensure that its Board of Directors duly authorizes
all of its corporate actions, and (b) keep correct and complete books
and records of account separate from those of any other Person, and
correct and complete minutes of the meetings and other proceedings of
its stockholders and Board of Directors, and (c) where necessary,
obtain proper authorization from its directors or stockholders, as
appropriate, for corporate action;
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(iii) provide for its operating expenses and liabilities
from its own funds and maintain deposit accounts and other bank
accounts separate from those of the Originator, the Servicer, or any of
their respective Affiliates;
(iv) act solely in its corporate name and through its duly
authorized officers or agents in the conduct of its business and ensure
that neither the Originator nor the Servicer nor any of their
respective Affiliates controls any corporate decisions made by it;
(v) to the extent that it obtains any services from the
Originator or the Servicer or any of their respective Affiliates,
ensure that the terms of such arrangements are comparable to those that
would be obtained in an arm's-length transaction;
(vi) ensure that its assets are not commingled with those
of the Originator, the Servicer, or any other Person;
(vii) maintain separate corporate records and books of
account from those of the Originator, the Servicer or any other Person;
(viii) not conduct any business or engage in any activities
other than in accordance with its Certificate of Incorporation;
(ix) (a) not hold itself out, or permit itself to be held
out, as having agreed to pay, or as being liable for, the debts of the
Originator, the Servicer, or any other Person; (b) maintain an
arm's-length relationship with the Originator and the Servicer and
their respective Affiliates with respect to any transactions between
itself and such other Person; and (c) continuously maintain as official
records the resolutions, agreements and other instruments underlying
the transactions contemplated by this Agreement;
(x) select and at all times maintain as its Independent
Director (as defined in the Seller's Certificate of Incorporation) a
Person who meets the following qualifications (which qualifications are
in addition to those set forth in the its Certificate of
Incorporation): the Independent Director shall have (a) prior
experience as an independent director for a corporation whose charter
documents require the unanimous written consent of all independent
directors thereof before such corporation could consent to the
institution of bankruptcy or insolvency proceedings against it or could
file a petition seeking relief under any applicable federal or state
law relating to bankruptcy, and (b) at least three years of employment
experience with one or more entities that provide, in the ordinary
course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities.
(m) Enforcement of Purchase Agreement. The Seller covenants and agrees
that it will perform all of its obligations under the Purchase Agreement in all
material respects and, if
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requested by the Trustee, enforce (for the benefit of the Trust) the obligations
of the Originator under the Purchase Agreement.
Section 2.6 Addition of Accounts.
(a) Required Additions. If, a Required Addition Event occurs, the
Seller shall on or prior to the close of business on the 10th Business Day
following the last Business Day of such Due Period (the "Required Designation
Date"), unless the Seller Interest exceeds the Aggregate Minimum Seller Interest
as of the close of business on any day after the last Business Day of such Due
Period and prior to the Required Designation Date, designate additional Eligible
Accounts to be included as Accounts as of the Required Designation Date
("Additional Accounts") or any earlier date in a sufficient amount such that
after giving effect to such addition, the Seller Interest as of the close of
business on the Addition Date is at least equal to the Aggregate Minimum Seller
Interest on such date. The failure of any condition set forth in paragraph (c)
or (d) below as the case may be, shall not relieve the Seller of its obligation
pursuant to this paragraph; provided, however, that the failure of the Seller to
transfer Receivables to the Trust as provided in this paragraph solely as a
result of the unavailability of a sufficient amount of Eligible Receivables
shall not constitute a breach of this Agreement; provided further, that any such
failure which has not been timely cured will nevertheless result in the
occurrence of a Series Early Amortization Event with respect to each Series for
which, pursuant to the Supplement therefor, a failure by the Seller to convey
Receivables in Additional Accounts to the Trust by the day on which it is
required to convey such Receivables constitutes a "Series Early Amortization
Event" (as defined in such Supplement).
(b) Permitted Additions. The Seller may from time to time, at its sole
discretion, subject to the conditions specified in paragraph (c) or (d) below,
as the case may be, designate additional Eligible Accounts to be included as
Accounts in either case as of the applicable Addition Date.
(c) Automatic Additional Accounts. (i) The Seller may from time to
time, at its sole discretion, subject to and in compliance with the limitations
specified in clause (ii) below and the applicable conditions specified in
paragraph (d) below, designate Eligible Accounts to be included as Accounts as
of the applicable Addition Date.
(ii) Unless each Rating Agency otherwise consents, the Receivables in
such Automatic Additional Accounts plus the Receivables in Additional Accounts
added pursuant to Section 2.6(a), without satisfaction of the Rating Agency
Condition described under Section 2.6(d)(vi), shall not exceed during any of the
three consecutive Monthly Periods commencing in January, April, July and October
of each calendar year, commencing in July 1994 (each, a "Quarterly Period"), the
amount of Receivables equal to 10% of the Receivables as of the first day of the
calendar year during which such Quarterly Period commences (or the Addition Date
occurring on May 4, 1994, in the case of 1994) and during each 12 month period
ending as of the most recent Addition Date shall not exceed the amount of
Receivables equal to 15% of the Receivables as of the first day of such 12 month
period (collectively, the "Aggregate
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Addition Limit"). Additionally, the conditions set forth in Section 2(d)(ii),
2(d)(vii) and 2(d)(viii) shall only be required to be delivered on the last day
of any Due Period in which Receivables have been conveyed to the Trust pursuant
to this Section 2.6(c). Following the addition of any such Automatic Additional
Accounts and any Additional Accounts made pursuant to Section 2.6(a), the
Servicer shall provide information (x) to Moody's with respect to such
Additional Accounts not later than the last Business Day of the month following
the Quarterly Period in which such addition occurs in the form approved from
time to time by Moody's and the Servicer and (y) to any Rating Agency such
information as shall be requested by such Rating Agency with respect to such
Additional Accounts.
(d) Conditions to Additions. The Seller agrees that any such
Conveyance of Receivables from Additional Accounts under subsection 2.6(a), (b)
or (c) shall satisfy the following conditions (to the extent provided below)
(provided, however, that the conditions set forth in clauses (i) and (vi) shall
not apply to Additional Accounts which are governed by Section 2.6(c)):
(i) on or before the tenth Business Day prior to the
Addition Date with respect to additions pursuant to subsection
2.6(a) and subsection 2.6(b) (the "Addition Notice Date"), the
Seller shall give the Trustee, the Servicer, the Rating
Agencies, each Purchaser Representative and each Enhancement
Provider written notice that such Additional Accounts will be
included, which notice (the "Addition Notice") shall specify
the approximate aggregate amount of the Receivables to be
Conveyed and the applicable Addition Cut Off Date;
(ii) on or before the Addition Date, the Seller shall
have delivered to the Trustee a written assignment in
substantially the form of Exhibit B (the "Assignment"), with a
copy to each Purchaser Representative, and the Servicer shall
have indicated in its computer files that the Receivables
created in connection with the Additional Accounts have been
Conveyed to the Trust and, within five Business Days
thereafter, the Servicer (on behalf of the Seller) shall have
delivered to the Trustee a computer file or microfiche or
written list containing a true and complete list of all
Additional Accounts, identified by account number and the
aggregate amount of the Receivables in such Additional
Accounts, as of the Addition Cut Off Date, which computer file
or microfiche or written list shall be as of the date of such
Assignment incorporated into and made a part of such
Assignment and this Agreement;
(iii) the Seller shall represent and warrant that no
selection procedures believed by the Seller to be materially
adverse to the interests of the Investor Certificateholders or
any Receivables Purchasers were utilized in selecting the
Additional Accounts from the available Eligible Accounts from
the Bank Portfolio and that as of the Addition Date, the
Seller is not insolvent;
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(iv) the Seller shall represent and warrant that, as
of the Addition Date, the Assignment constitutes either (x) a
valid sale to the Trust of all right, title and interest of
the Seller in and to the Receivables then existing and
thereafter created from time to time in the Additional
Accounts until the termination of the Trust, all monies due or
to become due with respect thereto, all Collections, all
Recoveries, all rights, remedies, powers and privileges with
respect to the Receivables, and all proceeds of the foregoing
and such property will be held by the Trust free and clear of
any Lien of any Person claiming through or under the Seller or
any of its Affiliates, or (y) a grant of a security interest
(as defined in the UCC as in effect in any applicable
jurisdiction) in such property to the Trust, which is
enforceable with respect to then existing Receivables in the
Additional Accounts, all monies due or to become due with
respect thereto, all Collections, all Recoveries, and all
proceeds of the foregoing, upon the Conveyance of such
Receivables to the Trust, and which will be enforceable with
respect to the Receivables thereafter created from time to
time in respect of Additional Accounts conveyed on such
Addition Date until the termination of the Trust, all monies
due or to become due with respect thereto, all Collections,
all Recoveries, all rights, remedies, powers and privileges
with respect to the Receivables, and all proceeds of the
foregoing upon such creation; and (z) if the Assignment
constitutes the grant of a security interest to the Trust in
such property, upon the filing of financing statements as
described in Section 2.1 with respect to such Additional
Accounts and the Receivables thereafter created from time to
time in such Additional Accounts until the termination of the
Trust, monies due or to become due with respect thereto, all
Collections, all Recoveries, all rights, remedies, powers and
privileges with respect to the Receivables, and proceeds of
the foregoing, upon the creation of such property, the Trust
shall have a first priority perfected security interest in
such property (subject to Section 9-306 of the UCC as in
effect in any applicable jurisdiction), free and clear of any
Lien of any Person claiming through or under the Seller or any
of its Affiliates;
(v) the Seller shall represent and warrant that each
Additional Account is, as of the Addition Cut Off Date, an
Eligible Account, and each Receivable in such Additional
Account is, as of the Addition Cut Off Date, an Eligible
Receivable;
(vi) if any Certificate Series is outstanding, the
Seller shall have received written evidence that the Rating
Agency Condition has been satisfied, and if no Certificate
Series shall be outstanding, the Seller shall have received
the written consent of each Purchaser Representative;
(vii) the Seller shall deliver to the Trustee and
each Purchaser Representative an Officer's Certificate
substantially in the form of Schedule 2 to Exhibit B
confirming the items set forth in clauses (iii), (iv) and (v)
above; and
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(viii) the Seller shall deliver to the Trustee an Opinion of
Counsel addressed to the Trustee, each Rating Agency, Purchaser
Representative and Enhancement Provider with respect to the Receivables
substantially in the form of Exhibit D and such opinion shall be of an
independent, nationally recognized law firm; provided, however, that
such Opinion of Counsel may be delivered at such other times as may be
permitted by the Rating Agencies as evidenced by written notice
thereof.
(e) No account shall be added to the Trust hereunder if such
addition would be prohibited by or inconsistent with the terms of any
Supplement or Receivables Purchase Agreement.
Section 2.7 Removal of Accounts.
(a) Subject to the conditions set forth below, the Seller may, but
shall not be obligated to, designate Accounts the Receivables of which will be
removed from the Trust ("Removed Accounts"); provided, however, that the Seller
shall not make more than one such designation in any Due Period. On or before
the fifth Business Day (the "Removal Notice Date") prior to the date on which
the Receivables in the designated Removed Accounts will be reassigned by the
Trust to the Seller (the "Removal Date"), the Seller shall give the Trustee, the
Servicer, each Purchaser Representative and each Enhancement Provider written
notice that the Receivables from such Removed Accounts are to be removed from
the Trust and reassigned to it.
(b) The Seller shall be permitted to designate and require
reassignment to it of the Receivables from Removed Accounts only upon
satisfaction of the following conditions:
(i) the removal of any Receivables of any Removed Accounts
on any Removal Date shall not, in the reasonable belief of the Seller,
(A) cause an Early Amortization Event to occur; or (B) result in the
failure to make any payment specified in the related Supplement or
Receivables Purchase Agreement with respect to any Series;
(ii) on or prior to the Removal Date, the Seller shall have
delivered to the Trustee (with a copy to each Purchaser Representative)
(A) for execution, a written assignment in substantially the form of
Exhibit E-1 (the "Reassignment"), and (B) a computer file or microfiche
or written list containing a true and complete list of all Removed
Accounts identified by account number and the aggregate amount of the
Receivables in such Removed Accounts as of the Removal Cut Off Date
specified therein, which computer file or microfiche or written list
shall as of the Removal Date modify and amend and be made a part of
this Agreement;
(iii) the Seller shall represent and warrant that no
selection procedures believed by the Seller to be materially adverse to
the interests of the Investor Certificateholders or any Receivables
Purchasers or any Enhancement Provider were utilized in selecting the
Removed Accounts to be removed from the Trust;
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(iv) on or before the tenth Business Day prior to the
Removal Date, each Rating Agency shall have received notice of such
proposed removal of the Receivables of such Accounts and the Seller
shall have received written evidence that the Rating Agency Condition
has been satisfied;
(v) the Seller shall have delivered to the Trustee, each
Purchaser Representative and each Enhancement Provider an Officer's
Certificate confirming the items set forth in clauses (i) through (iii)
above. The Trustee may conclusively rely on such Officer's Certificate,
shall have no duty to make inquiries with regard to the matters set
forth therein and shall incur no liability in so relying; and
(vi) no Early Amortization Event shall have occurred with
respect to any Series.
Upon satisfaction of the above conditions, the Trustee shall execute
and deliver the Reassignment to the Seller (with a copy to each Purchaser
Representative), and the Receivables from the Removed Accounts shall no longer
constitute a part of the Trust.
(c) No Account shall be removed from the Trust hereunder if
such removal would be prohibited by or inconsistent with the terms of any
Supplement or Receivables Purchase Agreement.
Section 2.8 Trustee May Perform. If the Seller fails to perform any of
its agreements or obligations under this Agreement, the Trustee may (but shall
not be obligated to) itself perform, or cause performance of, such agreement or
obligation, and the expenses incurred in connection therewith shall be payable
by the Seller as provided in Section 11.5.
Section 2.9 No Assumption of Liability. Nothing in this Agreement shall
constitute or is intended to result in the creation or assumption by the Trust,
the Trustee, or any Purchaser Representative, Certificateholder, Certificate
Owner, Receivables Purchaser or Enhancement Provider of any obligation of the
Originator, the Seller or the Servicer or any other Person to any Obligor in
connection with the Receivables, the Accounts, the Cardholder Agreements or
other agreement or instrument relating thereto.
Section 2.10 Discount Option.
(a) The Seller shall have the option to designate at any time
and from time to time a percentage or percentages from 0% to 4%, which may be a
fixed percentage or a variable percentage based on a formula, but in no event
greater than 4% (the "Discount Percentage"), of all or any specified portion of
Principal Receivables created after the Discount Option Date to be treated as
Finance Charge Receivables ("Discount Option Receivables"). The Seller shall
provide to the Servicer, the Trustee, each Purchaser Representative, each
Enhancement Provider and each Rating Agency 30 days prior written notice of the
Discount Option Date, and such designation shall become effective on the
Discount Option Date (i) unless such designation in
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the reasonable belief of the Seller would cause an Early Amortization Event with
respect to any Series to occur, or an event which, with notice or lapse of time
or both, would constitute an Early Amortization Event with respect to any Series
and (ii) only if the Rating Agency Condition shall have been satisfied with
respect to such designation.
(b) After the Discount Option Date, the Seller shall treat Discount
Option Receivable Collections as Collections of Finance Charge Receivables for
the purposes of this Agreement until such time as the Seller shall designate
upon 30 days prior written notice to the Servicer, the Trustee, each Purchaser
Representative, each Enhancement Provider and each Rating Agency.
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and Other Matters Relating to
the Servicer.
(a) Spirit Inc. agrees to act as the Servicer under this Agreement. The
Investor Certificateholders of each Certificate Series, by their acceptance of
the related Certificates, and the Receivables Purchasers, by their purchase of a
Receivables Purchase Interest, consent to Spirit Inc. acting as Servicer
hereunder.
(b) The Servicer shall service and administer the Receivables and shall
collect payments due under the Receivables in accordance with its customary and
usual servicing procedures for servicing credit card receivables comparable to
the Receivables and in accordance with the Cardholder Guidelines and applicable
laws, rules and regulations and shall have full power and authority, acting
alone or through any party properly designated by it hereunder, to do any and
all things in connection with such servicing and administration which it may
deem necessary or desirable. Without limiting the generality of the foregoing
and subject to Section 10.1, the Servicer is hereby authorized and empowered (i)
to make deposits to and withdrawals from, and to instruct the Trustee to make
deposits to and withdrawals from, the Collection Account and the Excess Funding
Account as set forth in this Agreement, (ii) to make withdrawals and payments
from, and to instruct the Trustee to make withdrawals and payments from, any
Series Account, in accordance with the related Supplement or Receivables
Purchase Agreement, (iii) to instruct the Trustee in writing, as set forth in
this Agreement, (iv) to execute and deliver, on behalf of the Trust for the
benefit of the Certificateholders and any Receivables Purchasers, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and all other comparable instruments, with respect to the Receivables
and, after the delinquency of any Receivable and to the extent permitted under
and in compliance with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivables and (v) to make any filings,
reports, notices, applications, registrations with, and to seek any consents or
authorizations from, the Securities and Exchange Commission and any state
securities authority on behalf of the Trust as may be necessary or advisable to
comply with any federal or state securities or reporting requirements. The
Trustee agrees that it shall promptly
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follow the instructions of the Servicer to withdraw funds from the Collection
Account or any Series Account (unless, with respect to any portion of such funds
allocable to any Receivables Purchase Series, such instruction is contrary to
the instructions of the Purchaser Representative for such Receivables Purchase
Series who is entitled to instruct the Trustee in such matter pursuant to the
related Receivables Purchase Agreement) and to take any action required under
this Agreement, any Supplement or any Receivables Purchase Agreement. The
Trustee shall execute at the Servicer's written request such documents prepared
by the Seller and acceptable to the Trustee as may be necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
hereunder.
(c) The Servicer shall not be obligated to use separate servicing
procedures, offices, employees or accounts for servicing the Receivables from
the procedures, offices, employees and accounts used by the Servicer in
connection with servicing other credit card receivables.
(d) The Servicer shall maintain fidelity bond coverage insuring against
losses through the wrongdoing of its officers who are involved in the servicing
of credit card receivables covering such actions and in such amounts as the
Servicer believes to be reasonable from time to time.
Section 3.2 Servicing Compensation. As compensation for its servicing
activities hereunder and reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be entitled to receive a
monthly servicing fee in respect of any Due Period prior to the termination of
the Trust pursuant to Section 12.1 (with respect to each Due Period, the
"Monthly Servicing Fee") which shall equal the sum of (i) the Seller Monthly
Servicing Fee (payable only out of Collections allocable to the Seller
Interest), (ii) the aggregate amount of all Investor Monthly Servicing Fees as
specified in each Supplement (payable only to the extent set forth in the
related Supplement) and (iii) the aggregate amount of all Receivables Purchaser
Monthly Servicing Fees specified in each Receivables Purchase Agreement (payable
only to the extent set forth in the related Receivables Purchase Agreement).
The Servicer's expenses include the amounts due to the Trustee pursuant
to Section 11.5 and the reasonable fees and disbursements of independent public
accountants and all other expenses incurred by the Servicer in connection with
its activities hereunder; provided, that the Servicer shall not be liable for
any liabilities, costs or expenses of the Trust, any Purchaser Representative,
any Enhancement Provider, the Investor Certificateholders, the Certificate
Owners or any Receivables Purchasers, arising under any tax law, including
without limitation any federal, state or local income or franchise taxes or any
other tax imposed on or measured by income (or any interest or penalties with
respect thereto or arising from a failure to comply therewith). The Servicer
shall be required to pay such expenses for its own account and shall not be
entitled to any payment therefor other than the Monthly Servicing Fee.
Section 3.3 Representations, Warranties and Covenants of the Servicer.
Spirit Inc., as initial Servicer, hereby makes, and any Successor Servicer by
its appointment hereunder shall make, the following representations, warranties
and covenants (the representations and
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warranties below to be modified, if appropriate, with respect to any Successor
Servicer to reflect a different jurisdiction of organization or type of
institution) on which the Trustee has relied in accepting the Receivables in
trust:
(a) Organization and Good Standing. The Servicer is a corporation duly
organized and validly existing under the laws of Delaware and has full corporate
power, authority and legal right to own its properties and conduct its credit
card servicing business as such properties are presently owned and such business
is presently conducted, and to execute, deliver and perform its obligations
under this Agreement and each other Transaction Document to which it is a party.
(b) Due Qualification. The Servicer is not required to qualify nor
register as a foreign corporation in any state in order to service the
Receivables as required by this Agreement and has obtained all licenses and
approvals necessary in order to so service the Receivables as required under
applicable law. If the Servicer shall be required by any Requirement of Law to
so qualify or register or obtain such license or approval, then it shall do so.
(c) Due Authorization. The execution, delivery and performance of this
Agreement and each other Transaction Document to which the Servicer is a party
have been duly authorized by the Servicer by all necessary corporate action on
the part of the Servicer and this Agreement and each other Transaction Document
to which the Servicer is a party will remain, from the time of its execution, an
official record of the Servicer.
(d) Binding Obligation. This Agreement and each other Transaction
Document to which the Servicer is a party constitutes a legal, valid and binding
obligation of the Servicer, enforceable in accordance with its terms, except as
enforceability may be limited by Debtor Relief Laws.
(e) No Violation. The execution and delivery by the Servicer of this
Agreement and each other Transaction Document to which it is a party, and the
performance of the transactions contemplated hereunder and thereunder and the
fulfillment of the terms hereof and thereof applicable to the Servicer, will not
conflict with, violate, result in any breach of any of the material terms and
provisions of, constitute (with or without notice or lapse of time or both) a
default under, or require any authorization, consent, order or approval of or
registration or declaration with any Governmental Authority (other than as have
been obtained) under, any Requirement of Law applicable to the Servicer or any
indenture, contract, agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings pending or, to the best
knowledge of the Servicer, threatened against the Servicer before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, any Supplement, any Receivables Purchase
Agreement, any Enhancement or any other Transaction Document to which it is a
party, or seeking any determination or ruling that, in the reasonable judgment
of the Servicer, would materially and adversely affect the performance by the
Servicer of its obligations under
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this Agreement, any Supplement, any Receivables Purchase Agreement, any
Enhancement or any other Transaction Document to which it is a party, or seeking
any determination or ruling that would materially and adversely affect the
validity or enforceability of this Agreement, any Supplement, any Receivables
Purchase Agreement, any Enhancement or any other Transaction Document to which
it is a party.
(g) Compliance with Requirements of Law. The Servicer shall duly
satisfy all obligations on its part to be fulfilled under or in connection with
each Receivable and the related Account, will maintain in effect all
qualifications required under Requirements of Law in order to service properly
each Receivable and the related Account and will comply in all material respects
with all other Requirements of Law in connection with servicing each Receivable
and the related Account the failure to comply with which would have a material
adverse effect on the Investor Certificateholders, any Receivables Purchasers or
any Enhancement Providers.
(h) No Rescission or Cancellation. The Servicer shall not permit any
rescission or cancellation of any Receivable except as ordered by a court of
competent jurisdiction or other Governmental Authority.
(i) Protection of Certificateholders', Enhancement Providers' and
Receivables Purchasers' Rights. The Servicer shall take no action which, nor
omit to take any action the omission of which, would impair the rights of
Investor Certificateholders or Receivables Purchasers in, or to receive,
Collections, or would impair the rights of any Enhancement Provider, nor shall
it reschedule, revise or defer payments due on any Receivable except in
accordance with the Cardholder Agreements and the Cardholder Guidelines.
(j) Receivables Not to be Evidenced by Promissory Notes. Except in
connection with its enforcement or collection of a Receivable, the Servicer will
take no action to cause any Receivable to be evidenced by any "instrument" (as
defined in the UCC).
(k) Total Systems Failure. The Servicer shall promptly notify the
Trustee, each Purchaser Representative and each Enhancement Provider of any
Total Systems Failure and shall advise the Trustee and each Purchaser
Representative of the estimated time required in order to remedy such Total
Systems Failure and of the estimated date on which a monthly Servicer's report
can be delivered. Until a Total Systems Failure is remedied, the Servicer will
(i) furnish to the Trustee, each Purchaser Representative and each Enhancement
Provider such periodic status reports and other information relating to such
Total Systems Failure as the Trustee, any Purchaser Representative and each
Enhancement Provider may reasonably request and (ii) promptly notify the Trustee
and each Purchaser Representative and each Enhancement Provider if the Servicer
believes that such Total Systems Failure cannot be remedied by the estimated
date, which notice shall include a description of the circumstances which gave
rise to such delay, and the action proposed to be taken in response thereto, and
a revised estimate of the date on which a monthly Servicer's report can be
delivered. The Servicer shall promptly notify the Trustee, each Purchaser
Representative and each Enhancement Provider when a Total Systems Failure has
been remedied.
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(l) Change in Payment Instructions to Obligors. The Servicer will not
add or terminate any Depository Bank, or make any change in its instructions to
Obligors regarding the method by which payments are to be made in respect of
Receivables, unless the Trustee, each Purchaser Representative and each
Enhancement Provider shall have received notice of such addition, termination or
change and copies of Depository Bank Agreements with each new Depository Bank,
duly executed by the Originator, assigned to the Seller and duly acknowledged by
such Depository Bank, or such other notice or acknowledgments as the Trustee,
each Purchaser Representative or each Enhancement Provider may reasonably
request. The names and addresses of all the Depository Banks, together with the
account numbers of the Initial Depository Accounts of the Servicer at such
Depository Banks, are specified in Schedule II hereto (or at such other
Depository Banks and/or with such other Initial Depository Accounts as have been
notified to the Trustee and each Purchaser Representative in accordance with
this subsection.)
Section 3.4 Reports and Records for the Trustee.
(a) Daily Reports. On each Business Day after an Early Amortization
Event has occurred with respect to any Series, the Servicer, with prior notice,
shall prepare and make available to the Trustee and each Purchaser
Representative, upon request, a report setting forth (i) the Collections in
respect of the Receivables processed by the Servicer on or prior to the second
preceding Business Day and (ii) the amount of Receivables as of the close of
business on the second preceding Business Day.
(b) Monthly Servicer's Certificate. Unless otherwise stated in the
related Supplement or Receivables Purchase Agreement with respect to any Series,
on each Determination Date, the Servicer shall forward to the Trustee, the
Paying Agent, any Enhancement Provider, the Rating Agencies and each Purchaser
Representative a certificate of a Servicing Officer in the form of Exhibit C
(which includes the Schedule thereto specified as such in any Supplement or
Receivables Purchase Agreement) setting forth (i) the aggregate amount of
Collections processed during the preceding Due Period, (ii) the aggregate amount
of Collections of Principal Receivables processed by the Servicer pursuant to
Article IV during the preceding Due Period, (iii) the aggregate amount of
Collections of Finance Charge Receivables processed by the Servicer pursuant to
Article IV during the preceding Due Period, (iv) the aggregate amount of
Principal and Finance Charge Receivables processed as of the end of the last day
of the preceding Due Period, (v) the amounts on deposit in the Excess Funding
Account and other accounts established pursuant to the related Supplements; (vi)
amounts drawn on any Enhancement; (vii) amounts to be paid to an Enhancement
Provider; (viii) the sum of all amounts payable to the Investor
Certificateholders of each Certificate Series on the succeeding Distribution
Date in respect of Certificate Principal and Certificate Interest, (ix) the sum
of all amounts payable to the Receivables Purchasers of each Receivables
Purchase Series on the succeeding Distribution Date in respect of Receivables
Purchase Interests and accrued interest thereon and (x) such other matters as
are set forth in Exhibit C.
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Section 3.5 Annual Servicer's Certificate. On or prior to the date of
the delivery of each accountant's report pursuant to Section 3.6(a), the
Servicer will deliver to the Trustee, each Purchaser Representative and each
Enhancement Provider an Officer's Certificate substantially in the form of
Exhibit F stating that (a) a review of the activities of the Servicer during the
prior calendar year and of its performance under this Agreement was made under
the supervision of the officer signing such certificate and (b) to the best of
such officer's knowledge, based on such review, the Servicer has fully performed
all its obligations under this Agreement throughout such period, or, if there
has been a default in the performance of any such obligation, specifying each
such default known to such officer and the nature and status thereof. A copy of
such certificate may be obtained by any Investor Certificateholder or any
Receivables Purchaser by a request in writing to the Trustee addressed to the
Corporate Trust Office, or as set forth in any Supplement or Receivables
Purchase Agreement.
Section 3.6 Annual Independent Accountants' Servicing Report. (a) On or
before May 30 of each calendar year, beginning with May 30, 1994, the Servicer
shall cause a firm of nationally recognized independent certified public
accountants (who may also render other services to the Servicer, the Seller or
the Originator) to furnish a report to the Trustee, each Purchaser
Representative and each Enhancement Provider, to the effect that such firm has
made a study and evaluation, in accordance with the procedures specified in
Exhibit G, of the Servicer's internal accounting controls relative to the
servicing of Accounts under this Agreement, any Supplement and any Receivables
Purchase Agreement for the prior calendar year, and that, on the basis of such
study and evaluation, such firm is of the opinion (assuming the accuracy of any
reports generated by the Servicer's third party agents) that the system of
internal accounting controls in effect on the date set forth in such report,
relating to servicing procedures performed by the Servicer, taken as a whole,
was sufficient for the prevention and detection of errors and irregularities in
amounts that would be material to the financial statements of Charming Shoppes,
Inc. or the assets of the Trust and that such servicing was conducted in
compliance with this Agreement during the period covered by such report, except
for such exceptions, errors or irregularities as such firm shall believe to be
immaterial to the financial statements of Charming Shoppes, Inc. or immaterial
to the assets of the Trust and such other exceptions, errors or irregularities
as shall be set forth in such report. The Servicer shall investigate and correct
such material exceptions, errors or irregularities at its own expense. A copy of
such report may be obtained by any Investor Certificateholder or Receivables
Purchaser by a request in writing to the Trustee addressed to the Corporate
Trust Office or as set forth in any Supplement or Receivables Purchase
Agreement.
(b) On or before May 30 of each calendar year, beginning with May 30,
1994, the Servicer shall cause a firm of nationally recognized independent
certified Public accountants (who may also render other services to the
Servicer, the Seller or the Originator) to furnish a report to the Trustee, each
Purchaser Representative and each Enhancement Provider, prepared using generally
accepted auditing standards, to the effect that such firm has compared the
mathematical calculations of each amount set forth in the monthly certificates
forwarded by the Servicer pursuant to subsection 3.4(b) during the prior
calendar year with the Servicer's computer reports which were the source of such
amounts and that on the basis of such
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comparison, such firm is of the opinion that such amounts are in agreement,
except for such exceptions as it believes to be immaterial to the accuracy of
the information set forth in such certificates of the Servicer and such other
exceptions as shall be set forth in such report. A copy of such report may be
obtained by any Investor Certificateholder or Receivables Purchaser by a request
in writing to the Trustee addressed to the Corporate Trust Office or as set
forth in any Supplement or Receivables Purchase Agreement.
Section 3.7 Tax Treatment. The Seller has structured this Agreement,
the Investor Certificates and the Receivables Purchase Interests with the
intention that the Investor Certificates and the Receivables Purchase Interests
will qualify under applicable federal, state and local tax law as indebtedness.
The Seller, the Servicer, the Holder of the Exchangeable Seller Certificate,
each Investor Certificateholder, each Certificate Owner and each Receivables
Purchaser agree to treat and to take no action inconsistent with the treatment
of the Investor Certificates (or beneficial interest therein) or the Receivables
Purchase Interests as indebtedness for purposes of federal, state and local
income or franchise taxes and any other tax imposed on or measured by income.
Each Investor Certificateholder and the Holder of the Exchangeable Seller
Certificate, by acceptance of its Certificate, each Certificate Owner, by
acquisition of a beneficial interest in a Certificate, and each Receivables
Purchaser, by its purchase of a Receivables Purchase Interest, agree to be bound
by the provisions of this Section 3.7. Each Certificateholder agrees that it
will cause any Certificate Owner acquiring an interest in a Certificate through
it to comply with this Agreement as to treatment as indebtedness under
applicable tax law, as described in this Section 3.7.
Section 3.8 Notices to the Seller. In the event that Spirit Inc. is no
longer acting as Servicer, any Successor Servicer appointed pursuant to Section
10.2 shall deliver or make available to the Seller each certificate and report
required to be prepared, forwarded or delivered thereafter pursuant to Sections
3.4, 3.5 and 3.6.
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND RECEIVABLES PURCHASERS
AND ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Certificateholders and Receivables Purchasers.
(a) Each Certificate Series shall represent an undivided interest in the Trust,
including the benefits of any Enhancement issued with respect to the related
Certificate Series and the right to receive the Collections and other amounts at
the times and in the amounts specified in this Article IV to be deposited in the
Collection Account or the Excess Funding Account or to be paid to the Investor
Certificateholders of such Certificate Series; provided, however, that the
aggregate interest represented by such Certificate Series at any time in the
Principal Receivables shall not exceed an amount equal to the Investor Interest
at such time. The Exchangeable Seller Certificate shall represent the remaining
undivided interest in the Trust (provided, that the Trust shall not include any
undivided percentage ownership interest in Receivables to the extent sold by the
Trust pursuant to any Receivables Purchase Agreement), including the right to
receive the Collections
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and other amounts at the times and in the amounts specified in this Article IV
to be paid to the Holder of the Exchangeable Seller Certificate; provided,
however, that the aggregate interest represented by such Exchangeable Seller
Certificate at any time in the Principal Receivables shall not exceed the Seller
Interest at such time and such Exchangeable Seller Certificate shall not
represent any interest in the Collection Account or the Excess Funding Account,
except as provided in this Agreement, or the benefits of any Enhancement issued
with respect to any Certificate Series, except as set forth in the related
Supplement.
(b) Each Receivables Purchase Interest shall represent undivided
interests in the Receivables, including the benefits of any Enhancement issued
with respect to such Receivables Purchase Interest and the right to receive the
Collections and other amounts at the times and in the amounts specified in this
Article IV to be deposited in the Collection Account or to be paid to the
Receivables Purchasers of such Receivables Purchase Interest; provided, however,
that the aggregate interest represented by such Receivables Purchase Interest at
any time in the Principal Receivables shall not exceed an amount equal to the
Receivables Purchase Interest at such time.
Section 4.2 Establishment of Accounts.
(a) The Collection Account. The Servicer, for the benefit of the
Certificateholders and any Receivables Purchasers, shall establish and maintain,
with an office or branch of a Qualified Depository Institution, in the name of
the Trustee and on behalf of the Trust, a segregated account (the "Collection
Account") bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Certificateholders, any
Receivables Purchasers and any Enhancement Provider. The Trustee, for the
ratable benefit of the Investor Certificateholders in accordance with their
Investor Interests, the Receivables Purchasers, to the extent of their undivided
interest in the Receivables, the Holder of the Exchangeable Seller Certificate
(to the extent of the Seller Interest) and any Enhancement Provider to the
extent of any Enhancement Invested Amount, shall possess all right, title and
interest in all funds on deposit from time to time in the Collection Account and
in all proceeds thereof. The Collection Account shall be under the sole dominion
and control of the Trustee for the ratable benefit of the Investor
Certificateholders, the Receivables Purchasers, the Holder of the Exchangeable
Seller Certificate and any Enhancement Provider to the extent of any Enhancement
Invested Amount, as set forth above. Except as expressly provided in this
Agreement, the Servicer agrees that it shall have no right of set-off or
banker's lien against, and no right to otherwise deduct from, any funds held in
the Collection Account for any amount owed to it by the Trustee, the Trust, the
Seller, the Originator, or any Certificateholder, Receivables Purchaser,
Purchaser Representative or Enhancement Provider. Upon the occurrence of an
Early Amortization Event with respect to any Series, Collections shall be
withdrawn from the Initial Depository Accounts and deposited in the Collection
Account as specified in Section 4.3(a). Pursuant to authority granted to it
hereunder, the Servicer shall have the power to instruct the Trustee or such
Qualified Depository Institution to withdraw funds from the Collection Account
for the purpose of carrying out the Servicer's duties hereunder; provided, that
upon the occurrence of an Early Amortization Event with respect to any
Receivables Purchase Series, if so authorized pursuant to the related
Receivables Purchase Agreement for such Receivables Purchase Series, the related
Purchaser
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Representative shall have the power to instruct the Trustee or such Qualified
Depository Institution (to the extent of the undivided interest of the related
Receivables Purchase Series in the Receivables and Collections thereof) to
withdraw funds from the Collection Account as authorized pursuant to such
Receivables Purchase Agreement.
(b) Series Accounts. Any Supplement or Receivables Purchase Agreement
may provide for additional accounts ("Series Accounts") for the purpose of
allocation and distribution of amounts allocated hereunder for the related
Series.
(c) Administration of the Collection Account. Funds on deposit in the
Collection Account shall at all times be invested in Permitted Investments. Any
such investment shall mature and such funds shall be available for withdrawal on
or prior to the next following Distribution Date; provided, that if, upon the
occurrence of an Early Amortization Event with respect to any Receivables
Purchase Series, the Purchaser Representative is authorized pursuant to the
related Receivables Purchase Agreement for such Receivables Purchase Series to
direct the Trustee to withdraw funds from the Collection Account prior to the
next succeeding Distribution Date, the portion of such amounts in the Collection
Account allocable to such Series must be invested in investments which mature on
or prior to such day upon which such withdrawal of funds is authorized. Subject
to the conditions set forth herein, the Servicer shall have the authority to
instruct the Trustee with respect to the investment of such funds. At the end of
each month, all interest and earnings (net of losses and investment expenses) on
funds on deposit in the Collection Account shall be treated as Collections of
Finance Charge Receivables.
Section 4.3 Collections and Allocations.
(a) Collections. The Seller and the Servicer hereby agree: (i) (A) to
cause all Collections which may be sent by Obligors by mail to be delivered to
the Administrative Servicer; (B) to cause the Administrative Servicer to deposit
all such Collections into the Initial Depository Account within two Business
Days of receipt by the Administrative Servicer; and (C) upon the occurrence of
an Early Amortization Event with respect to any Series, to cause all such
payments to be deposited into the Collection Account within two Business Days of
deposit of such payment into the Initial Depository Account; and (ii) (A) to
cause all Store Payments to be deposited in the related Store Account; (B) to
cause all such Store Payments to be deposited into the Initial Depository
Account within two Business Days of deposit of such payments into a Store
Account; and (C) upon the occurrence of an Early Amortization Event with respect
to any Series, to cause all such Store Payments to be deposited into the
Collection Account within two Business Days of deposit of such Store Payments
into the Initial Depository Account. Notwithstanding the foregoing, unless the
certificates of deposit, short-term deposits or commercial paper or the
long-term unsecured debt obligations (other than any obligation whose rating is
based on collateral or on the credit of a Person other than the Servicer) of the
Servicer shall have a credit rating from Moody's and Standard & Poor's of P-1
and A-1+ (or, from and after the Series Termination Date for all Certificate
Series outstanding prior to the Effective Date, A-1), respectively, in the case
of the certificates of deposit, short-term deposits or commercial paper, or a
rating from Moody's of at least Aa3 and from Standard & Poor's of at
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least AA- in the case of the long term unsecured debt obligations, all amounts
deposited into the Initial Depository Account on any Business Day shall on the
same Business Day be withdrawn from the Initial Depository Account and deposited
into the Collection Account.
The Servicer hereby agrees not to deposit or otherwise credit, or cause
or permit to be so deposited or credited, to the Collection Account or the
Initial Depository Account cash or cash proceeds other than Collections of
Receivables. The Seller and Servicer agree to clearly and unambiguously identify
each Account (including any Additional Account designated pursuant to Section
2.6) in its computer or other records to reflect that an interest in the
Receivables arising in such Account has been sold pursuant to this Agreement and
any Receivables Purchase Agreements and shall, prior to the sale or transfer to
a third party of any Receivable held in its custody, examine its computer and
other records to determine that an interest in such Receivable has not been
sold.
(b) Series Allocations. The Servicer shall allocate Collections of
Principal Receivables, Collections of Finance Charge Receivables, Series
Dilution Amounts and Loss Amounts to each Certificate Series, each Receivables
Purchase Series and to the Holder of the Exchangeable Seller Certificate, based
on the Investor/Purchaser Percentage for each such Series and the Seller
Percentage for the Exchangeable Seller Certificate, in accordance with this
Article IV and shall withdraw the required amounts from the Collection Account
or the Initial Depository Account or the Excess Funding Account to pay such
amounts in accordance with this Article IV and any Supplement or Receivables
Purchase Agreement. The Servicer shall make such deposits or payments on the
date indicated therein by wire transfer or as otherwise provided in the related
Supplement or Receivables Purchase Agreement with respect to any Series.
(c) Allocations for the Exchangeable Seller Certificate. Throughout the
existence of the Trust, unless otherwise stated in any Supplement or any
Receivables Purchase Agreement, the Servicer shall allocate to the Holder of the
Exchangeable Seller Certificate an amount equal to the sum of (i) the product of
(A) the Seller Percentage and (B) the aggregate amount of such Collections
allocated to Principal Receivables and Finance Charge Receivables, respectively,
in respect of each Due Period, and (ii) any additional amounts out of the
Aggregate Investor/Purchaser Interest allocated to the "Seller Interest"
pursuant to any Supplement or Receivables Purchase Agreement; provided, however,
that the Servicer, at the option of the Seller, may allocate all or a portion of
such amounts to maintain any cash collateralization requirement in connection
with the Investor Interest under any Variable Certificate from time to time.
Unless otherwise stated in any Supplement or Receivables Purchase Agreement, the
Servicer need not deposit this amount or any other amounts so allocated to the
Exchangeable Seller Certificate pursuant to any Supplement or Receivables
Purchase Agreement into the Collection Account and shall pay such amounts as
collected to the Holder of the Exchangeable Seller Certificate; provided,
however, the Servicer shall be entitled to deduct from such amounts and retain
an amount equal to the unpaid portion of any Seller Monthly Servicing Fee then
due and payable.
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(d) Adjustments for Miscellaneous Credits and Fraudulent Charges. With
respect to each Due Period, the aggregate amount of Principal Receivables (i)
which were created in respect of merchandise refused or returned by the Obligor
thereunder or as to which the Obligor thereunder has asserted a counterclaim or
defense, (ii) which were reduced by the Servicer by any rebate, refund,
charge-back or adjustment (including Servicer errors) or (iii) which were
created as a result of a fraudulent or counterfeit charge (with respect to such
Due Period, the "Dilution Amount") will be allocated initially to the Seller
Interest, and the aggregate amount of Principal Receivables used to calculate
the Seller Interest will be reduced by an amount equal to the Dilution Amount so
allocated. If any such reduction causes a Required Addition Event to occur, the
Seller shall be required to take the actions specified below on or prior to the
Required Designation Date for such Due Period:
(i) Convey Receivables arising in Additional Accounts to the Trust,
(ii) instruct the Servicer to deposit (or cause to be deposited) all or
a portion of the Seller Allocations in the Excess Funding Account, and
(iii) to the extent the Seller is not able to eliminate the deficiency
through the actions specified in clauses (i) and (ii), make a deposit
in the Excess Funding Account in immediately available funds, such that
upon such deposit and/or Conveyance the Seller Interest shall be at
least equal to the Aggregate Minimum Seller Interest.
If the Seller shall fail to take such actions, any remaining Dilution
Amount (with respect to each Due Period, the "Series Dilution Amount") will be
allocated to each Series based upon the Series Percentage for such Series. The
Series Dilution Amount for each Receivables Purchase Series will be provided for
in the related Receivables Purchase Agreement. If available funds for any
Series, including funds allocated to any Series on any Distribution Date as
described in subsection (b) above, are insufficient to cover the Series Dilution
Amount for such Series on such Distribution Date pursuant to the terms of the
related Supplement or Receivables Purchase Agreement, as applicable, such
Supplement or Receivables Purchase Agreement may provide that the remaining
Series Dilution Amount for such Series shall be reallocated to, and reduce, the
Seller Interest (as calculated as of the last day of the related Due Period).
If so provided for any Series in the related Supplement or Receivables
Purchase Agreement, as applicable, any Series Dilution Amount remaining for such
Series, after giving effect to any deposit and/or Conveyance by the Seller
described in the preceding paragraph (such amount, for any Series its "Series
Unfunded Dilution Amount") shall be reallocated to such Series and shall reduce
the Investor Interest of that Series to the extent provided in the related
Supplement or Receivables Purchase Agreement, as applicable.
(e) Excess Funding Account. The Servicer, for the benefit of the
Investor 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 for the benefit of the Investor
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Certificateholders (the "Excess Funding Account"). The Trustee shall possess all
right, title and interest in all funds on deposit from time to time in the
Excess Funding Account and in all proceeds thereof. The Excess Funding Account
shall be under the sole dominion and control of the Trustee for the benefit of
the Investor 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 Excess
Funding Account for any amount owed to it by the Trustee, the Trust, any
Certificateholder, any Receivables Purchaser or any Enhancement Provider. If, at
any time, the institution holding the Excess Funding Account ceases to be a
Qualified Depository Institution, the Trustee upon notice by Servicer (or the
Servicer on its behalf) shall promptly establish a new Excess Funding Account
with a Qualified Depository Institution meeting the conditions specified above,
transfer any cash or any investments to such new Excess Funding Account and from
the date such new Excess Funding Account is established, it shall be the "Excess
Funding Account."
Funds on deposit in the Excess Funding 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 Investor Certificateholders. The Trustee shall maintain for
the benefit of the Investor Certificateholders possession of the negotiable
instruments or securities, if any, evidencing such Permitted Investments. Funds
on deposit in the Excess Funding Account on any date (after giving effect to any
withdrawals from the Excess Funding Account on such date) will be invested in
Permitted Investments that will mature so that funds will be available at the
close of business 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 Excess Funding Account and deposit in the
Collection Account all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Excess Funding Account, for
application as Collections of Finance Charge Receivables (allocable to the
Certificates Series pro rata based on the Investor/Purchaser Percentage of each
Certificate Series until paid in full) with respect to the prior Due Period.
Interest (including reinvested interest) and other investment income and
earnings on funds on deposit in the Excess Funding Account shall not be
considered part of the Excess Funding Amount for purposes of this Agreement. On
any Determination Date on which no Certificate Series is in an Accumulation
Period or Amortization Period, the Servicer shall determine the amount by which
the Seller Interest exceeds the Aggregate Minimum Seller Interest on such date
and shall instruct the Trustee to withdraw such amount from the Excess Funding
Account on the related Distribution Date and pay such amount to the Holder of
the Exchangeable Seller Certificate. On any Determination Date on which one or
more Certificate Series is in an Accumulation Period or Amortization Period, the
Servicer shall determine the aggregate amount of Principal Shortfalls, if any,
with respect to each such Certificate Series that is a Principal Sharing Series
(after giving effect to the allocation and payment provisions in the Supplement
with respect to each such Certificate Series), and the Servicer shall instruct
the Trustee to withdraw such amount (up to the Excess Funding Amount) from the
Excess Funding Account on the succeeding Distribution Date and allocate such
amount among each such Certificate Series as Shared Principal Collections as
specified in each related Supplement.
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(f) Shared Principal Collections. On each Business Day other than a
Distribution Date, if permitted by the related Supplement or Receivables
Purchase Agreement for any Series, Shared Principal Collections from such Series
may, at the option of Seller, be withdrawn and paid as principal to the holder
of any Variable Certificate (or held in the Collection Account for later
allocation as principal to any Variable Certificate), so long as no Series that
is in an Amortization Period will have a Principal Shortfall on the next
Distribution Date after giving effect to such allocation and the other
allocations to be made on the next Distribution Date (assuming no Early
Amortization Event occurs). On each Distribution Date, (i) the Servicer shall
allocate Shared Principal Collections not previously applied pursuant to the
preceding sentence to each Principal Sharing Series in a Group, pro rata, in
proportion to the Principal Shortfalls, if any, with respect to each such Series
and (ii) the Servicer shall withdraw from the Collection Account or the Excess
Funding Account and pay to the Holder of the Exchangeable Seller Certificate an
amount equal to the excess, if any, of (x) the aggregate amount for all such
Series of Collections of Principal Receivables that the related Supplements or
this Agreement specify are to be treated as "Shared Principal Collections" for
such Distribution Date over (y) the aggregate amount for all such Series that
the related Supplements specify are "Principal Shortfalls" for such Distribution
Date; provided, however, that such amounts shall be paid to the Holder of the
Exchangeable Seller Certificate only if the Seller Interest for such
Determination Date (determined after giving effect to any Principal Receivables
transferred to the Trust on such date) exceeds the Aggregate Minimum Seller
Interest; and provided further that, if on any Distribution Date the Seller
Interest is less than or equal to the Aggregate Minimum Seller Interest, the
Servicer will not distribute to the Holder of the Exchangeable Seller
Certificate any Shared Principal Collections then on deposit in the Collection
Account that otherwise would be distributed to such Holder, but shall deposit
such funds in the Excess Funding Account.
(g) Shared Excess Finance Charge Collections. On each Distribution
Date, (i) the Servicer shall allocate Shared Excess Finance Charge Collections
with respect to the Certificate Series in a Group to each Certificate Series in
such Group, pro rata, in proportion to the Finance Charge Shortfalls, if any,
with respect to each such Certificate Series and (ii) the Servicer shall
withdraw (or shall instruct the Trustee to withdraw) from the Collection Account
and pay to the Holder of the Exchangeable Seller Certificate an amount equal to
the excess, if any, of (x) the aggregate amount for all outstanding Certificate
Series in a Group of the amounts that the related Supplements specify are to be
treated as "Shared Excess Finance Charge Collections" for such Distribution Date
over (y) the aggregate amount for all outstanding Certificate Series in such
Group that the related Supplements specify are "Finance Charge Shortfalls" for
such Distribution Date; provided, however, that the sharing of Shared Excess
Finance Charge Collections among Certificate Series in a Group will continue
only until such time, if any, at which the Seller shall deliver to the Trustee
an Officer's Certificate to the effect that, in the reasonable belief of the
Seller or its counsel, the continued sharing of Shared Excess Finance Charge
Collections among Certificate Series in any Group would have adverse regulatory
implications with respect to the Originator. Following the delivery by the
Seller of such an Officer's Certificate to the Trustee there will not be any
further sharing of such Shared Excess Finance Charge Collections among
Certificate Series in any Group.
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ARTICLE V
DISTRIBUTIONS AND REPORTS TO RECEIVABLES
PURCHASERS AND CERTIFICATEHOLDERS
Distributions shall be made to, and reports shall be provided to,
Certificateholders and Receivables Purchasers of each Series as set forth in the
applicable Supplement or Receivables Purchase Agreement.
ARTICLE VI
THE CERTIFICATES AND RECEIVABLES PURCHASE INTERESTS
Section 6.1 Certificates. The Investor Certificates of each Certificate
Series may be issued, (i) if not issued to a United States Person and such
Certificate Series otherwise meets the requirements specified in Treas. Reg.
ss.5f.163-1, in bearer form ("Bearer Certificates") with attached interest
coupons and any other applicable coupon (collectively, the "Coupons") or (ii) in
fully registered form ("Registered Certificates") and shall be substantially in
the form of the exhibits with respect thereto attached to the related
Supplement. The Exchangeable Seller Certificate shall be substantially in the
form of Exhibit A. The Investor Certificates and the Exchangeable Seller
Certificate shall, upon issue pursuant hereto or to Section 6.9 or Section 6.10,
be executed and delivered by the Seller to the Trustee for authentication and
redelivery as provided in Sections 2.1 and 6.2. Any Investor Certificate shall
be issuable in a minimum denomination of $1,000 and integral multiples thereof,
unless otherwise specified in any Supplement, and shall be issued upon original
issuance in an aggregate original principal amount equal to the Initial Investor
Interest for the related Certificate Series. The Exchangeable Seller Certificate
shall be initially issued as a single certificate to the Seller. Each
Certificate shall be executed by manual or facsimile signature on behalf of the
Trustee by a duly authorized signatory. Certificates bearing the manual or
facsimile signature of the individual who was, at the time when such signature
was affixed, authorized to sign on behalf of the Trustee shall not be rendered
invalid, notwithstanding that such individual has ceased to be so authorized
prior to the authentication and delivery of such Certificates or does not hold
such office at the date of such Certificates. No Certificate shall be entitled
to any benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication substantially in the
form provided for herein, executed by or on behalf of the Trustee by the manual
signature of a duly authorized signatory, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication, except that Bearer
Certificates shall be dated the related Closing Date.
Section 6.2 Authentication of Certificates. The Trustee shall
authenticate and deliver any Series of Investor Certificates, upon the written
order of the Seller, to such Person as shall be designated by the Seller,
against payment to the Seller of the applicable Initial Investor Interest (net
of any discount). Upon the receipt of such payment and the issuance of the
Investor
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Certificates, such Investor Certificates shall be fully paid and non-assessable.
The Trustee shall authenticate and deliver the Exchangeable Seller Certificate
to the Seller simultaneously with the initial Conveyance to the Trust of
Receivables. Upon an Exchange as provided in Section 6.9 and the satisfaction of
certain other conditions specified therein, the Trustee shall authenticate and
deliver the Investor Certificates of additional Certificate Series (with the
designation provided in the related Supplement), upon the order of the Seller,
to the persons designated in such Supplement. Upon the order of the Seller, the
Certificates of any Certificate Series shall be duly authenticated by or on
behalf of the Trustee, in authorized denominations equal to (in the aggregate)
the Initial Investor Interest of such Certificate Series. If specified in the
related Supplement for any Certificate Series, the Trustee shall authenticate
Book-Entry Certificates that are issued upon original issuance thereof, upon the
written order of the Seller, to a Clearing Agency or its nominee as provided in
Section 6.10 against payment of the purchase price thereof. If specified in the
related Supplement for a Certificate Series, the Trustee shall authenticate and
deliver outside the United States the Global Certificate that is issued upon
original issuance thereof.
Section 6.3 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the office or agency to be
maintained by a transfer agent and registrar (the "Transfer Agent and
Registrar"), in accordance with the provisions of Section 11.16, a register (the
"Certificate Register") in which, subject to such reasonable regulations as it
may prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Certificate Series (unless
otherwise provided in the related Supplement) and of transfers and exchanges of
the Investor Certificates as herein provided. First Union National Bank, is
hereby initially appointed Transfer Agent and Registrar for the purposes of
registering the Investor Certificates and transfers and exchanges of the
Investor Certificates as herein provided. Any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and
co-registrar including, if and so long as any Series is listed on the Luxembourg
Stock Exchange and such exchange shall so require, a co-transfer agent and
co-registrar in Luxembourg, unless the context otherwise requires. The Trustee
shall be permitted to resign as Transfer Agent and Registrar upon 30 days'
written notice to the Servicer. In the event that the Trustee shall no longer be
the Transfer Agent and Registrar, the Trustee shall appoint a successor Transfer
Agent and Registrar.
The Trustee may revoke such appointment, or any subsequent appointment,
and remove the Transfer Agent and Registrar if the Trustee determines in its
sole discretion that the Transfer Agent and Registrar has failed to perform its
obligations under this Agreement in any material respect. The Transfer Agent and
Registrar shall be permitted to resign as Transfer Agent and Registrar upon 30
days' notice to the Seller, the Servicer, the Trustee and each Purchaser
Representative; provided, that such resignation shall not be effective and the
Transfer Agent and Registrar shall continue to perform its duties as Transfer
Agent and Registrar until the Trustee has appointed a successor Transfer Agent
and Registrar reasonably acceptable to the Seller.
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Upon surrender for registration of transfer of any Certificate at any
office or agency of the Transfer Agent and Registrar, the Trustee shall execute,
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of like
aggregate Undivided Trust Interests. Registered Certificates, including
Registered Certificates received in exchange for Bearer Certificates, may not be
exchanged for Bearer Certificates. At the option of the Holder of a Bearer
Certificate, subject to applicable laws and regulations, Bearer Certificates may
be exchanged for other Bearer Certificates or Registered Certificates (of the
same Certificate Series) of authorized denominations of like aggregate Undivided
Trust Interests, upon surrender of the Bearer Certificates to be exchanged at an
office or agency of the Transfer Agent and Registrar located outside the United
States. Each Bearer Certificate surrendered pursuant to this Section shall have
attached thereto all unmatured Coupons; provided, that any Bearer Certificate,
so surrendered after the close of business on the Record Date preceding the
relevant payment date after the expected final payment date need not have
attached the Coupon relating to such payment date (in each case as specified in
the related Supplement).
At the option of an Investor Certificateholder, Registered Certificates
may be exchanged for other Registered Certificates of the same Certificate
Series in authorized denominations of like aggregate Undivided Trust Interests
in the Trust, upon surrender of the Registered Certificates to be exchanged at
any office or agency of the Transfer Agent and Registrar maintained for such
purpose.
Whenever any Investor Certificates of any Certificate Series are so
surrendered for exchange, the Seller shall execute, and the Trustee shall
authenticate and (unless the Transfer Agent and Registrar is different than the
Trustee, in which case the Transfer Agent and Registrar shall) deliver (in the
case of Bearer Certificates, outside the United States), the Investor
Certificates of such Certificate Series which the Certificateholder making the
exchange is entitled to receive. Every Investor Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in a form satisfactory to the Trustee and the
Transfer Agent and Registrar duly executed by the Certificateholder thereof or
his attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3 notwithstanding, the
Trustee or the Transfer Agent and Registrar, as the case may be, shall not be
required to register the transfer of or exchange any Investor Certificate of any
Certificate Series for a period of 15 days preceding the due date for any
payment with respect to the Investor Certificates of such Certificate Series.
Unless otherwise provided in the related Supplement, no service charge
shall be made for any registration of transfer or exchange of Certificates, but
the Transfer Agent and Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
All Investor Certificates (together with any Coupons) surrendered for
registration of transfer and exchange shall be canceled by the Transfer Agent
and Registrar and disposed of in a
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manner satisfactory to the Trustee. The Trustee shall cancel and destroy any
Global Certificate upon its exchange in full for Definitive Euro-Certificates
and shall deliver a certificate of destruction to the Seller. Such certificate
shall also state that a certificate or certificates of a Foreign Clearing Agency
to the effect referred to in Section 6.13 was received with respect to each
portion of the Global Certificate exchanged for Definitive Euro-Certificates.
The Seller shall execute and deliver to the Trustee or the Transfer
Agent and Registrar, as applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are necessary to enable the
Trustee to fulfill its responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 6.9 or in any Supplement, in no
event shall the Exchangeable Seller Certificate or any interest therein be
transferred hereunder, in whole or in part to a person other than the Seller or
an Affiliate of the Seller, unless the Seller shall have consented in writing to
such transfer and unless the Trustee shall have received a Tax Opinion.
(c) (i) Registration of transfer of Investor Certificates containing
a legend substantially to the effect set forth on Exhibit H-1 shall be effected
only if such transfer (x) is made pursuant to an effective registration
statement under the Securities Act, or is exempt from the registration
requirements under the Securities Act, and (y) is made to a Person which is not
an employee benefit plan, trust or account, including an individual retirement
account, that is an "employee benefit plan" within the meaning of Section 3(3)
of ERISA (whether or not subject to ERISA) or that is a "plan" described in
Section 4975(e)(1) of the Code or an entity whose underlying assets include plan
assets by reason of a plan's investment in such entity (each, a "Benefit Plan"),
unless such Person is an insurance company purchasing the Investor Certificates
with assets of its general account, and at the time of acquisition and
throughout the period of holding (a) it meets all of the requirements of and is
eligible for exemptive relief under Prohibited Transaction Class Exemption 95-60
and (B) less than 25% of the assets of such account are Benefit Plan assets. In
the event that registration of a transfer is to be made in reliance upon an
exemption from the registration requirements under the Securities Act, the
transferor or the transferee shall deliver, at its expense, to the Seller, the
Servicer and the Trustee, an investment letter from the transferee,
substantially in the form of the investment and ERISA representation letter
attached hereto as Exhibit H-2, and no registration of transfer shall be made
until such letter is so delivered.
Investor Certificates issued upon registration or transfer of, or
Investor Certificates issued in exchange for, Investor Certificates bearing the
legend referred to above shall also bear such legend unless the Seller, the
Servicer, the Trustee and the Transfer Agent and Registrar receive an Opinion of
Counsel, satisfactory to each of them, to the effect that such legend may be
removed.
Whenever an Investor Certificate containing the legend referred to
above is presented to the Transfer Agent and Registrar for registration of
transfer, the Transfer Agent and Registrar shall promptly seek instructions from
the Servicer regarding such transfer and shall be entitled to
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receive instructions signed by a Servicing Officer prior to registering any such
transfer. The Seller hereby agrees to indemnify the Transfer Agent and Registrar
and the Trustee and to hold each of them harmless against any loss, liability or
expense incurred without gross negligence or bad faith on their part arising out
of or in connection with actions taken or omitted by them in relation to any
such instructions furnished pursuant to this clause (i).
(ii) Registration or transfer of Investor Certificates containing a
legend to the effect set forth in Exhibit H-3 shall be effected only if such
transfer is made to a Person which is not a Benefit Plan. By accepting and
holding any such Investor Certificate, an Investor Certificateholder shall be
deemed to have represented and warranted that it is not a Benefit Plan. By
acquiring any interest in a Book-Entry Certificate which contains such legend, a
Certificate Owner shall be deemed to have represented and warranted that it is
not a Benefit Plan, unless such Person is an insurance company purchasing the
Investor Certificates with assets of its general account, and at the time of
acquisition and throughout the period of holding (a) it meets all of the
requirements of and is eligible for exemptive relief under Prohibited
Transaction Class Exemption 95-60 and (B) less than 25% of the assets of such
account are Benefit Plan assets.
(iii) if so requested by the Seller, the Trustee will make available to
any prospective purchaser of Investor Certificates who so requests, a copy of a
letter provided to the Trustee by or on behalf of the Seller relating to the
transferability of any Series to a Benefit Plan.
(d) The Transfer Agent and Registrar shall maintain at its expense in
the Borough of Manhattan, the City of New York and, if and so long as any
Certificate Series is listed on the Luxembourg Stock Exchange, Luxembourg shall
maintain at Seller's expense (and subject to this Section 6.3, if specified in
the related Supplement for any Certificate Series, any other city designated in
such Supplement) an office or offices or an agency or agencies where Investor
Certificates of such Certificate Series may be surrendered for registration of
transfer or exchange (except that Bearer Certificates may not be surrendered for
exchange at any such office or agency in the U.S.).
(e) Notwithstanding anything to the contrary in this Section 6.3,
Seller shall not execute, and (if given prior written notice by the Servicer of
the inability of the Seller to execute any Subject Instrument by operation of
this clause (e)) the Transfer Agent and Registrar shall not register the
transfer of, any Subject Instrument if after giving effect to the execution or
transfer of such Subject Instrument, there would be more than 100 Private
Holders. No transfer, assignment or other conveyance of, or sale of a
participation interest in, a Subject Instrument shall be permitted unless the
Transfer Agent and Registrar is permitted to register the same in accordance
with the immediately preceding sentence. Additionally, no Subject Instrument, or
portion thereof, shall be transferred on or through (i) an "established
securities market" within the meaning of Section 7704(b)(1) of the Internal
Revenue Code and any proposed, temporary or final treasury regulation
thereunder, including, without limitation, an over-the-counter market or an
interdealer quotation system that regularly disseminates firm buy or sell
quotations or (ii) "secondary market" or "substantial equivalent thereof" within
the meaning of Section 7704(b)(2) of the Internal Revenue Code and any proposed,
temporary or final treasury regulation
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thereunder, including a market wherein interests in the Trust are regularly
quoted by any Person making a market in such interests and a market wherein any
Person regularly makes available bid or offer quotes with respect to interests
in the Trust and stands ready to effect buy or sell transactions at the quoted
prices for itself or on behalf of others. Any attempted transfer, assignment,
conveyance, participation or subdivision in contravention of the preceding
restrictions, as reasonably determined by the Seller, shall be void ab initio
and the purported transferor, seller or subdivider of such Subject Instrument
shall be treated as the Holder of such Subject Instrument for all purposes of
this Agreement.
Section 6.4 Mutilated, Destroyed, or Stolen Certificates. If (a) any
mutilated Certificate (together, in the case of Bearer Certificates, with all
unmatured Coupons (if any) appertaining thereto) is surrendered to the Transfer
Agent and Registrar, or the Transfer Agent and Registrar receives evidence to
its satisfaction of the destruction, loss or theft of any Certificate and (b)
there is delivered to the Transfer Agent and Registrar and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee that such Certificate has been
acquired by a bona fide purchaser, the Seller shall execute and the Trustee
shall authenticate and (unless the Transfer Agent and Registrar is different
from the Trustee, in which case the Transfer Agent and Registrar shall) deliver
(in compliance with applicable law, and in the case of Bearer Certificates,
outside the United States), in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
aggregate Undivided Trust Interest. In connection with the issuance of any new
Certificate under this Section 6.4, the Trustee or the Transfer Agent and
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Transfer Agent
and Registrar) connected therewith. Any duplicate Certificate issued pursuant to
this Section 6.4 shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 6.5 Persons Deemed Owners. Prior to due presentation of a
Registered Certificate for registration of transfer, the Trustee, the Paying
Agent, the Transfer Agent and Registrar and any agent of any of them may treat
the Person in whose name any Registered Certificate is registered as the owner
of such Registered Certificate for the purpose of receiving distributions
pursuant to any Supplement and for all other purposes whatsoever, and treat the
bearer of a Bearer Certificate or Coupon as the owner of such Bearer Certificate
or Coupon for the purpose of receiving distributions pursuant to the terms of
the applicable Supplement and for all purposes whatsoever; and in any such case
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar nor any
agent of any of them shall be affected by any notice to the contrary; provided,
however, for purposes of voting or the giving of any request, demand,
authorization, direction, notice, consent or waiver hereunder, Investor
Certificates owned by the Originator, the Seller, the Servicer or any Affiliate
thereof shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Investor
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Certificates which a Responsible Officer in the Corporate Trust Office of the
Trustee knows to be so owned shall be so disregarded. Investor Certificates so
owned that have been pledged in good faith shall not be disregarded as
outstanding, if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Investor Certificates and that
the pledgee is not the Originator, the Seller, the Servicer or an Affiliate
thereof.
Section 6.6 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions to Investor
Certificateholders from the appropriate account or accounts maintained for the
benefit of Investor Certificateholders as specified in any Supplement. Any
Paying Agent shall have the revocable power to withdraw funds from such
appropriate account or accounts for the purpose of making distributions referred
to above and shall report such withdrawals to the Trustee. The Trustee (or the
Servicer if the Trustee is the Paying Agent) may revoke such power and remove
the Paying Agent, if the Trustee (or the Servicer if the Trustee is the Paying
Agent) determines in its sole discretion that the Paying Agent shall have failed
to perform its obligations under this Agreement in any material respect or for
other good cause. The Paying Agent shall initially be the Trustee and any
co-paying agent chosen by the Seller and acceptable to the Trustee, including,
if and so long as any Certificate Series is listed on the Luxembourg Stock
Exchange and such exchange so requires, a co-paying agent in Luxembourg or
another Western European city. The Trustee shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Servicer. In the event that the
Trustee shall no longer be the Paying Agent, the Trustee shall appoint a
successor to act as Paying Agent who shall be acceptable to the Seller and the
Trustee. The provisions of Sections 11.1, 11.2 and 11.3 shall apply to the
Trustee also in its role as Paying Agent, for so long as the Trustee shall act
as Paying Agent. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
(b) The Trustee shall cause the Paying Agent (other than itself) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums, if any,
held by it for payment to the Investor Certificateholders in trust for the
benefit of the Investor Certificateholders entitled thereto until such sums
shall be paid to such Investor Certificateholders, and shall agree, and if the
Trustee is the Paying Agent it hereby agrees, that it shall comply with all
requirements of the Code regarding the withholding by the Trustee of payments in
respect of federal income taxes due from Certificate Owners (consistent with the
treatment of the Investor Certificates as debt instruments for federal income
tax purposes).
Section 6.7 Access to List of Certificateholders' and Receivables
Purchasers' Names and Addresses. The Trustee shall furnish or cause to be
furnished by the Transfer Agent and Registrar to the Servicer or the Paying
Agent, within five Business Days after receipt by the Trustee of a request
therefor from the Servicer or the Paying Agent, respectively, in writing, a list
in such form as the Servicer or the Paying Agent may reasonably require, of the
names and addresses of the Registered Certificateholders and Receivables
Purchasers as of the most recent Record Date. Unless otherwise provided in the
related Supplement or Receivables Purchase
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Agreement, Holders of Investor Certificates evidencing Undivided Trust Interests
aggregating not less than 10% of the Undivided Trust Interest of any Certificate
Series or Receivables Purchasers whose Receivables Purchase Interest evidences
not less than 10% of the Receivables Purchase Interest of any Receivables
Purchase Series or any Purchaser Representative (the "Applicants") may apply in
writing to the Trustee, and if such application states that the Applicants
desire to communicate with other Investor Certificateholders of any Certificate
Series and other Receivables Purchasers of any Receivables Purchase Series with
respect to their rights under this Agreement and is accompanied by a copy of the
communication which such Applicants propose to transmit, then the Trustee, after
having been adequately indemnified by such Applicants for its costs and
expenses, shall afford or shall cause the Transfer Agent and Registrar to afford
such Applicants access during normal business hours to the most recent list of
Registered Certificateholders or Receivables Purchasers of such Series or all
outstanding Series, as applicable, held by the Trustee and shall give the
Servicer notice that such request has been made, within five Business Days after
the receipt of such application. The Trustee shall keep in as current a form as
is reasonably practicable the most recent list available to it of
Certificateholders and Receivables Purchasers. Every Registered
Certificateholder, by receiving and holding a Registered Certificate, and every
Receivables Purchaser, by its purchase of a Receivables Purchase Interest,
agrees with the Trustee that neither the Trustee, the Transfer Agent and
Registrar, nor any of their respective agents shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Registered Certificateholders or the Receivables Purchasers hereunder,
regardless of the source from which such information was obtained.
Section 6.8 Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf of the
Trustee in authenticating the Certificates in connection with the issuance,
delivery, registration of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentication of
Certificates by the Trustee or the Trustee's certificate of authentication, such
reference shall be deemed to include authentication on behalf of the Trustee by
an authenticating agent and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Seller.
(b) Any institution succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.
(c) An authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Seller. The Trustee may at any
time terminate the agency of an authenticating agent by giving notice of
termination to such authenticating agent and to the Seller. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time an
authenticating agent shall cease to be acceptable to the Trustee or the Seller,
the Trustee promptly may appoint a successor authenticating agent. Any successor
authenticating agent
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upon acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an authenticating agent. No successor authenticating agent
shall be appointed unless acceptable to the Trustee and the Seller.
(d) The Trustee agrees to pay each authenticating agent from time to
time reasonable compensation for its services under this Section 6.8, and the
Trustee shall be entitled to be reimbursed and the Servicer shall reimburse the
Trustee for such reasonable payments actually made, subject to the provisions of
Section 11.5.
(e) The provisions of Sections 11.1, 11.2 and 11.3 shall be
applicable to any authenticating agent.
(f) Pursuant to an appointment made under this Section 6.8, the
Certificates may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the certificates described in the Pooling and Servicing
Agreement.
------------------------------------
as Authenticating Agent
for the Trustee,
By:
---------------------------------
Authorized Officer
Section 6.9 Tender of Exchangeable Seller Certificate.
(a) Upon any Exchange (as defined below) the Trustee shall issue to
the Holder of the Exchangeable Seller Certificate under Section 6.1, for
execution and redelivery to the Trustee for authentication under Section 6.2,
one or more new Series of Investor Certificates. Any such Series of Investor
Certificates shall be substantially in the form specified in the related
Supplement and shall bear, upon its face, the designation for the Certificate
Series to which it belongs, as selected by the Seller. Except as specified in
any Supplement for a related Certificate Series, all Investor Certificates of
any Certificate Series shall rank pari passu and be equally and ratably entitled
as provided herein to the benefits hereof (except that the Enhancement and any
Series Accounts provided for any Certificate Series shall not be available for
any other Certificate Series) without preference, priority or distinction on
account of the actual time or times of authentication and delivery, all in
accordance with the terms and provisions of this Agreement and the related
Supplement.
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(b) The Holder of the Exchangeable Seller Certificate may tender the
Exchangeable Seller Certificate to the Trustee in exchange for (i) one or more
newly issued Series of Investor Certificates and (ii) a reissued Exchangeable
Seller Certificate (any such tender, a "Seller Exchange"). In addition, to the
extent permitted for any Series of Investor Certificates as specified in the
related Supplement, the Investor Certificateholders of such Certificate Series
may tender their Investor Certificates and the Holder of the Exchangeable Seller
Certificate may tender the Exchangeable Seller Certificate to the Trustee
pursuant to the terms and conditions set forth in such Supplement in exchange
for (i) one or more newly issued Series of Investor Certificates and (ii) a
reissued Exchangeable Seller Certificate (an "Investor Exchange"). The Seller
Exchange and Investor Exchange are referred to collectively herein as an
"Exchange." The Holder of the Exchangeable Seller Certificate may perform an
Exchange by notifying the Trustee in writing at least five days in advance (an
"Exchange Notice") of the date upon which the Exchange is to occur (an "Exchange
Date"). Any Exchange Notice shall state the designation of any Certificate
Series to be issued on the Exchange Date and, with respect to each such
Certificate Series: (a) its Initial Investor Interest (or the method for
calculating such Initial Investor Interest), which at any time may not be
greater than the current principal amount of the Exchangeable Seller Certificate
at such time, (b) its Certificate Rate (or the method for allocating interest
payments or other cash flows to such Certificate Series), if any, and (c) the
Enhancement Provider, if any, with respect to such Certificate Series. The
Seller shall also notify each Purchaser Representative of an Exchange in writing
at least five days in advance of the date upon which the Exchange is to occur
specifying the Exchange Date, the designation of any Certificate Series to be
issued on the Exchange Date and the Initial Investor Interest (or the method for
calculating such Initial Investor Interest) of such Certificate Series. On the
Exchange Date, the Trustee shall authenticate and deliver any such Series of
Investor Certificates only upon delivery to it of the following: (a) a
Supplement satisfying the criteria set forth in subsection 6.9(c) executed by
the Seller and specifying the Principal Terms of such Certificate Series, (b)
the applicable Enhancement, if any, (c) the agreement, if any, pursuant to which
the Enhancement Provider agrees to provide the Enhancement, if any, (d) written
confirmation that the Rating Agency Condition has been satisfied with respect to
the Exchange, (e) an Officer's Certificate of the Seller, a copy of which shall
be delivered to each Purchaser Representative, that on the Exchange Date, after
giving effect to the Exchange, the Seller Interest will be at least equal to the
Aggregate Minimum Seller Interest and the aggregate amount of Principal
Receivables will be at least equal to the Minimum Aggregate Principal
Receivables, and (f) the existing Exchangeable Seller Certificate or applicable
Investor Certificates, as the case may be. If any Certificate Series or
Receivables Purchase Series is outstanding, it is a condition to the issuance of
any newly created Series of Investor Certificates that the Trustee and (if any
such outstanding Certificate Series is rated) each Rating Agency shall have
received an Opinion of Counsel that, (i) the issuance of such new Series of
Investor Certificates will not cause the Trust to be treated as an association
(or publicly traded partnership) taxable as a corporation and (ii) the issuance
of the newly issued Series of Investor Certificates will not adversely affect
the federal income tax characterization of any outstanding Investor Certificates
or Receivables Purchase Interests. Upon satisfaction of such conditions, the
Trustee shall cancel the existing Exchangeable Seller Certificate or applicable
Investor Certificates, as the case may be, and issue, as provided above, such
Series of Investor Certificates and a new Exchangeable Seller
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Certificate, dated the Exchange Date. There is no limit to the number of
Exchanges that may be performed under this Agreement.
(c) In conjunction with an Exchange, the parties hereto shall execute
a Supplement, which shall specify the relevant terms with respect to any newly
issued Series of Investor Certificates, which may include without limitation:
(i) its name or designation, (ii) an Initial Investor Interest and Series
Investor Interest or the method of calculating the Initial Investor Interest or
the Series Investor Interest, as the case may be, (iii) the Certificate Rate (or
formula for the determination thereof), (iv) the Closing Date, (v) the rating
agency or agencies rating such Certificate Series, (vi) the interest payment
date or dates and the date or dates from which interest shall accrue, (vii) the
name of the Clearing Agency, if any, (viii) the method of allocating Collections
with respect to Principal Receivables, Finance Charge Receivables and Loss
Amounts for such Certificate Series and the method by which the principal amount
of Investor Certificates of such Certificate Series shall amortize or accrete,
(ix) the names of any accounts to be used by such Certificate Series and the
terms governing the operation of any such accounts, (x) the Investor Monthly
Servicing Fee, (xi) the Minimum Seller Interest (if any), (xii) the Enhancement
Provider, if applicable, and the terms of any Enhancement with respect to such
Certificate Series, (xiii) the base rate applicable to such Certificate Series,
(xiv) the terms on which the Certificates of such Series may be repurchased or
remarketed to other investors, (xv) the Series Termination Date, (xvi) any
deposit into any account provided for such Certificate Series, (xvii) the
priority of such Certificate Series with respect to any other Series, (xviii)
the rights, if any, of the Holder of the Exchangeable Seller Certificate that
have been transferred to the holders of such Certificate Series, (xix) the Pool
Factor, (xx) the Minimum Aggregate Principal Receivables, (xxi) whether such
Certificate Series will be part of a Group, and (xxii) any other relevant terms
(including whether or not such Certificate Series will be pledged as collateral
for the issuance of any other securities, including commercial paper) (all such
terms, the "Principal Terms" of such Certificate Series). The terms of such
Supplement may modify or amend the terms of this Agreement solely as applied to
such new Certificate Series.
Section 6.10 Book-Entry Certificates. Unless otherwise provided in any
related Supplement, the Investor Certificates, upon original issuance, shall be
issued in the form of typewritten Certificates representing Book-Entry
Certificates, to be delivered to the depository specified in such Supplement
(the "Depository") which shall be the Clearing Agency by or on behalf of such
Certificate Series. The Investor Certificates of each Certificate Series shall,
unless otherwise provided in the related Supplement, initially be registered on
the Certificate Register in the name of the nominee of the Clearing Agency. No
Certificate Owner shall receive a definitive certificate representing such
Certificate Owner's interest in the related Series of Investor Certificates,
except as provided in Section 6.12. Unless and until definitive, fully
registered Investor Certificates of any Certificate Series ("Definitive
Certificates") have been issued to Certificate Owners pursuant to Section 6.12:
(i) the provisions of this Section 6.10 shall be in full
force and effect with respect to each such Certificate Series;
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(ii) the Seller, the Servicer, the Paying Agent, the
Transfer Agent and Registrar and the Trustee may deal with the Clearing
Agency and the Clearing Agency Participants for all purposes (including
the making of distributions on the Investor Certificates of each such
Certificate Series) as the authorized representatives of the
Certificate Owners;
(iii) to the extent that the provisions of this Section 6.10
conflict with any other provisions of this Agreement, the provisions of
this Section 6.10 shall control with respect to each such Certificate
Series; and
(iv) the rights of Certificate Owners of each such
Certificate Series shall be exercised only through the Clearing Agency
and the applicable Clearing Agency Participants and shall be limited to
those established by law and agreements between such Certificate Owners
and the Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Depository Agreement applicable to a Certificate
Series, unless and until Definitive Certificates of such Certificate
Series are issued pursuant to Section 6.12, the initial Clearing Agency
will make book-entry transfers among the Clearing Agency Participants
and receive and transmit distributions of principal and interest on the
Investor Certificates to such Clearing Agency Participants.
Section 6.11 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to Certificate Owners
pursuant to Section 6.12, the Trustee shall give all such notices and
communications specified herein to be given to Holders of the Investor
Certificates to the Clearing Agency for distribution to Holders of Investor
Certificates.
Section 6.12 Definitive Certificates. If (i) (A) the Seller advises the
Trustee in writing that the Clearing Agency for any Certificate Series is no
longer willing or able to discharge properly its responsibilities under the
applicable Depository Agreement, and (B) the Trustee or the Seller is unable to
locate a qualified successor, (ii) the Seller, at its option, advises the
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency with respect to any Certificate Series or (iii) after the
occurrence of a Servicer Default, Certificate Owners of any Class of a
Certificate Series representing beneficial interests aggregating more than
66-2/3% of the Investor Interest of such Class advise the Trustee and the
applicable Clearing Agency through the applicable Clearing Agency Participants
in writing that the continuation of a book-entry system through the applicable
Clearing Agency is no longer in the best interests of such Certificate Owners,
the Trustee shall notify all Certificate Owners of such Certificate Series or
Class, as applicable, through the applicable Clearing Agency Participants, of
the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Owners of such Certificate Series or Class
requesting the same. Upon surrender to the Trustee of the Investor Certificates
of such Certificate Series or Class by the applicable Clearing Agency,
accompanied by registration instructions from the applicable Clearing Agency for
registration, the Trustee shall issue the Definitive Certificates of such
Certificate Series or Class. Neither the Seller nor the Trustee shall be liable
for any delay in delivery of such
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instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates of a Certificate
Series or Class, all references herein to obligations imposed upon or to be
performed by the applicable Clearing Agency shall cease and the functions
relating to registration, transfers and payment contained in Article VI hereof
shall be performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize the Holders of the
Definitive Certificates of such Certificate Series or Class as
Certificateholders hereunder.
Section 6.13 Global Certificate; Exchange Date.
(a) If specified in the related Supplement for any Series, the
Investor Certificates for such Series will initially be issued in the form of a
single temporary global Certificate (the "Global Certificate") in bearer form,
without interest coupons, in the denomination of the entire aggregate principal
amount of such Series and substantially in the form set forth in the exhibit
with respect thereto attached to the related Supplement. The Global Certificate
will be executed by the Seller and authenticated by the Trustee upon the same
conditions, in substantially the same manner and with the same effect as the
Definitive Certificates. The Global Certificate may be exchanged as described
below for Bearer or Registered Certificates in definitive form (the "Definitive
Euro-Certificates").
(b) The Manager shall, upon its determination of the date of
completion of the distribution of the Investor Certificates of such Series, so
advise the Trustee, the Seller, the Depositaries, and each Foreign Clearing
Agency forthwith. Without unnecessary delay, but in any event not prior to the
Exchange Date, the Seller will execute and deliver to the Trustee at its
designated agent outside the United States definitive Bearer Certificates in an
aggregate principal amount equal to the entire aggregate principal amount of
such Series. All Bearer Certificates so issued and delivered will have Coupons
attached. The Global Certificate may be exchanged for an equal aggregate
principal amount of Definitive Euro-Certificates only on or after the Exchange
Date. An investor that is a U.S. Person may exchange the portion of the Global
Certificate beneficially owned by it only for an equal aggregate principal
amount of Registered Certificates bearing the applicable legend set forth in the
form of Registered Certificates attached to the related Supplement and having a
minimum denomination of $500,000, which may be in temporary form if the Seller
so elects. The Seller may waive the $500,000 minimum denomination requirement if
it so elects. Upon any demand for exchange for Definitive Euro-Certificates in
accordance with this paragraph, the Seller shall cause the Trustee to
authenticate and deliver the Definitive Euro-Certificates to the Holder (x)
outside the United States, in the case of Bearer Certificates, and (y) according
to the instructions of the Holder, in the case of Registered Certificates, but
in either case only upon presentation to the Trustee of a written statement
substantially in the form of Exhibit I-1 with respect to the Global Certificate
or portion thereof being exchanged, signed by a Foreign Clearing Agency and
dated on the Exchange Date or a subsequent date, to the effect that it has
received in writing or by tested telex a certification substantially in the form
of (i) in the case of beneficial ownership of the Global Certificate or a
portion thereof being exchanged by a United States investor pursuant to the
second preceding sentence, the certificate in the form of Exhibit I-2 signed by
the Manager
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which sold the relevant Certificates or (ii) in all other cases, the certificate
in the form of Exhibit I-3, the certificate referred to in this clause (ii)
being dated on the earlier of the first actual payment of interest in respect of
such Certificates and the date of the delivery of such Certificate in definitive
form. Upon receipt of such certification, the Trustee shall cause the Global
Certificate to be endorsed in accordance with paragraph (d) below. Any exchange
as provided in this Section shall be made free of charge to the Holders and the
beneficial owners of the Global Certificate and to the beneficial owners of the
Definitive Euro-Certificates issued in exchange, except that a person receiving
Definitive Euro-Certificates must bear the cost of insurance, postage,
transportation and the like in the event that such person does not receive such
Definitive Euro-Certificates in person at the offices of a Foreign Clearing
Agency.
(c) The delivery to the Trustee by a Foreign Clearing Agency of any
written statement referred to above may be relied upon by the Seller and the
Trustee as conclusive evidence that a corresponding certification or
certifications has or have been delivered to such Foreign Clearing Agency
pursuant to the terms of this Agreement.
(d) Upon any such exchange of all or a portion of the Global
Certificate for a Definitive Euro-Certificate or Certificates, such Global
Certificate shall be endorsed by or on behalf of the Trustee to reflect the
reduction of its principal amount by an amount equal to the aggregate principal
amount of such Definitive Euro-Certificates. Until so exchanged in full, such
Global Certificate shall in all respects be entitled to the same benefits under
this Agreement as Definitive Euro-Certificates authenticated and delivered
hereunder except that the beneficial owners of such Global Certificate shall not
be entitled to receive payments of interest on the Certificates until they have
exchanged their beneficial interests in such Global Certificate for Definitive
Euro-Certificates.
Section 6.14 Meetings of Certificateholders.
(a) If at the time any Bearer Certificates are issued and outstanding
with respect to any Series to which any meeting described below relates, the
Servicer or the Trustee may at any time call a meeting of Investor
Certificateholders of any Certificate Series or of all Certificate Series, to be
held at such time and at such place as the Servicer or the Trustee, as the case
may be, shall determine, for the purpose of approving a modification of or
amendment to, or obtaining a waiver of any covenant or condition set forth in,
this Agreement, any Supplement or the Investor Certificates or of taking any
other action permitted to be taken by Investor Certificateholders hereunder or
under any Supplement. Notice of any meeting of Investor Certificateholders,
setting forth the time and place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be given in accordance with Section
13.6, the first mailing and publication to be not less than 20 nor more than 180
days prior to the date fixed for the meeting. To be entitled to vote at any
meeting of Investor Certificateholders a person shall be (i) a Holder of one or
more Investor Certificates of the applicable Certificate Series or (ii) a person
appointed by an instrument in writing as proxy by the Holder of one or more such
Investor Certificates. The only persons who shall be entitled to be present or
to speak at any meeting of Investor Certificateholders shall be the persons
entitled to vote at such meeting and
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their counsel and any representatives of the Originator, the Seller, the
Servicer, the Trustee and the Enhancement Provider and their respective counsel.
(b) At a meeting of Investor Certificateholders, persons entitled to
vote Investor Certificates evidencing a majority of the aggregate unpaid
principal amount of the applicable Certificate Series or all outstanding
Certificate Series, as the case may be, shall constitute a quorum. No business
shall be transacted in the absence of a quorum, unless a quorum is present when
the meeting is called to order. In the absence of a quorum at any such meeting,
the meeting may be adjourned for a period of not less than 10 days; in the
absence of a quorum at any such meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days; at the reconvening of any
meeting further adjourned for lack of a quorum, the persons entitled to vote
Investor Certificates evidencing at least 25% of the aggregate unpaid principal
amount of the applicable Certificate Series or all outstanding Certificate
Series, as the case may be, shall constitute a quorum for the taking of any
action set forth in the notice of the original meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided above except
that such notice must be given not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage of the aggregate
principal amount of the outstanding applicable Investor Certificates which shall
constitute a quorum.
(c) Any Investor Certificateholder who has executed an instrument in
writing appointing a person as proxy shall be deemed to be present for the
purposes of determining a quorum and be deemed to have voted; provided that such
Investor Certificateholder shall be considered as present or voting only with
respect to the matters covered by such instrument in writing. Subject to the
provisions of Section 13.1, any resolution passed or decision taken at any
meeting of Investor Certificateholders duly held in accordance with this Section
shall be binding on all Investor Certificateholders whether or not present or
represented at the meeting.
(d) The holding of Bearer Certificates shall be proved by the
production of such Bearer Certificates or by a certificate, satisfactory to the
Servicer, executed by any bank, trust company or recognized securities dealer,
wherever situated, satisfactory to the Servicer. Each such certificate shall be
dated and shall state that on the date thereof a Bearer Certificate bearing a
specified serial number was deposited with or exhibited to such bank, trust
company or recognized securities dealer by the Person named in such certificate.
Any such certificate may be issued in respect of one or more Bearer Certificates
specified therein. The holding by the Person named in any such certificate of
any Bearer Certificate specified therein shall be presumed to continue for a
period of one year from the date of such certificate unless at the time of any
determination of such holding (i) another certificate bearing a later date
issued in respect of the same Bearer Certificate shall be produced, (ii) the
Bearer Certificate specified in such certificate shall be produced by some other
Person or (iii) the Bearer Certificate specified in such certificate shall have
ceased to be outstanding. The appointment of any proxy shall be proved by having
the signature of the Person executing the proxy guaranteed by any bank, trust
company or recognized securities dealer satisfactory to the Trustee.
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(e) The Trustee shall appoint a temporary chairman of the meeting. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Holders of Investor Certificates evidencing a majority of the
aggregate unpaid principal amount of Investor Certificates of the applicable
Certificate Series or all outstanding Certificate Series, as the case may be,
represented at the meeting. No vote shall be cast or counted at any meeting in
respect of any Investor Certificate challenged as not outstanding and ruled by
the chairman of the meeting to be not outstanding. The chairman of the meeting
shall have no right to vote except as an Investor Certificateholder or proxy.
Any meeting of Investor Certificateholders duly called at which a quorum is
present may be adjourned from time to time, and the meeting may be held as so
adjourned without further notice.
(f) The vote upon any resolution submitted to any meeting of Investor
Certificateholders shall be by written ballot on which shall be subscribed the
signatures of Investor Certificateholders or proxies and on which shall be
inscribed the serial number or numbers of the Investor Certificates held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record in duplicate of the proceedings of each meeting of Investor
Certificateholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was published as provided above. The record shall be
signed and verified by the permanent chairman and secretary of the meeting and
one of the duplicates shall be delivered to the Servicer and the other to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
Section 6.15 Uncertificated Classes. Notwithstanding anything to the
contrary contained in this Article VI or in Article XII, unless otherwise
specified in any Supplement, any provisions contained in this Article VI and in
Article XII relating to the registration, form, execution, authentication,
delivery, presentation, cancellation and surrender of Certificates shall not be
applicable to any uncertificated Certificates.
Section 6.16 Conveyance of Receivables Purchase Interests by the Trust.
(a) Pursuant to the terms of a Receivables Purchase Agreement, the Trustee, on
behalf of the Trust, from time to time may sell Receivables Purchase Interests
to one or more Receivables Purchasers (or to a Purchaser Representative for the
account of such Receivables Purchaser or Purchasers). Pursuant to a Receivables
Purchase Agreement, Collections allocated to Receivables Purchase Interests may
be reinvested and such Receivables Purchase Interests may be recomputed, each
from time to time as provided therein. No owner of a Receivables Purchase
Interest shall have a claim to Collections allocated to another Series (unless
otherwise agreed to by such other Series) and each Receivables Purchase Interest
shall be equally and ratably entitled as provided herein to
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the benefits of this Agreement without preference, priority or distinction, all
in accordance with the terms and provisions of this Agreement and the applicable
Receivables Purchase Agreement.
(b) The Trustee shall pay to the Trust all amounts received from
Receivables Purchasers with respect to such Receivables Purchase Interests sold
from time to time.
Section 6.17 Notice of Receivables Purchase Series. The Trustee, on
behalf of the Trust, at the direction of the Servicer, may enter into a
Receivables Purchase Agreement if the Servicer notifies the Trustee in writing
at least five days in advance (a "Receivables Purchase Notice") of the date upon
which the initial Conveyance of Receivables Purchase Interests pursuant to the
applicable Receivables Purchase Agreement shall occur (a "Receivables Purchase
Date"). Any Receivables Purchase Notice shall state the designation of any
Receivables Purchase Series to be issued on the Receivables Purchase Date and,
with respect to each such Receivables Purchase Series: (a) its initial
Receivables Purchase Interest (or the method for calculating such initial
Receivables Purchase Interest), (b) the applicable interest rate (or the method
for allocating interest payments or other cash flows to such Receivables
Purchase Series), if any, and (c) the Enhancement Provider, if any, with respect
to such Receivables Purchase Series. The Servicer shall also notify each
Purchaser Representative of such Conveyance in writing at least five days in
advance of the date upon which such Conveyance is to occur specifying the
designation of any Receivables Purchase Series to be created on the Receivables
Purchase Date and the initial Receivables Purchase Interest (or the method for
calculating such initial Receivables Purchase Interest) of such Receivables
Purchase Series. On the Receivables Purchase Date, the Trustee shall execute and
deliver any such Receivables Purchase Agreement only upon delivery to it of the
following: (a) a Receivables Purchase Agreement satisfying the criteria set
forth in subsection 6.18 executed by the Seller and specifying the Principal
Terms of such Receivables Purchase Series, (b) the applicable Enhancement, if
any, (c) the agreement, if any, pursuant to which the Enhancement Provider
agrees to provide the Enhancement, if any, (d) written confirmation that the
Rating Agency Condition shall have been satisfied with respect to such
Conveyance of Receivables Purchase Interests, (e) an Officer's Certificate of
the Seller, a copy of which shall be delivered to the Trustee and each Purchaser
Representative, that on the Receivables Purchase Date, after giving effect to
the Conveyance of Receivables Purchase Interests, the Seller Interest would be
at least equal to the Aggregate Minimum Seller Interest and the aggregate amount
of Principal Receivables will be at least equal to the Minimum Aggregate
Principal Receivables, and (f) if any Certificate Series are outstanding, a Tax
Opinion addressed to the Trustee and each Rating Agency, dated the Exchange
Date, with respect to such Conveyance of Receivables Purchase Interests. If any
Certificate Series or Receivables Purchase Series is outstanding, it is a
condition to the creation of any Receivables Purchase Series that the Trustee
and (if any such outstanding Series is rated) each Rating Agency shall have
received an Opinion of Counsel that (i) the issuance of such Receivables
Purchase Series will not cause the Trust to be treated as an association (or
publicly traded partnership) taxable as a corporation and (ii) the creation of
such Receivables Purchase Series will not adversely affect the federal income
tax characterization of any outstanding Investor Certificates or Receivables
Purchase Interests.
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Section 6.18 Principal Terms of Receivables Purchase Series. In
conjunction with a sale of Receivables Purchase Interests, the parties thereto
shall execute a Receivables Purchase Agreement, which shall specify the relevant
terms with respect to any newly created Receivables Purchase Series, which may
include without limitation: (i) its name or designation, (ii) an initial
Receivables Purchase Interest or the method of calculating the initial
Receivables Purchase Interest, (iii) the applicable interest rate (or formula
for the determination thereof), (iv) the Closing Date, (v) the interest payment
date or dates and the date or dates from which interest shall accrue, (vi) the
method of allocating Collections with respect to Principal Receivables and
Finance Charge Receivables for such Receivables Purchase Series, (vii) the
method by which the principal amount of the Receivables Purchase Interest shall
amortize or accrete, (viii) the names of any accounts to be used by such
Receivables Purchase Series and the terms governing the operation of any such
accounts, (ix) the Minimum Seller Interest (if any), (x) the Series Termination
Date, (xi) the terms of any Enhancement with respect to such Receivables
Purchase Series, (xii) the Enhancement Provider, if applicable, (xiii) the terms
on which the Receivables Purchase Interests may be repurchased, and (xiv) any
other relevant terms of such Receivables Purchase Series (all such terms, the
"Principal Terms" of such Receivables Purchase Series). The terms of such
Receivables Purchase Agreement may modify or amend the terms of this Agreement
solely as applied to such new Receivables Purchase Series.
ARTICLE VII
OTHER MATTERS RELATING
TO THE SELLER
Section 7.1 Liability of the Seller. The Seller shall be liable
hereunder only to the extent of the obligations specifically undertaken by it in
its capacity as the Seller.
Section 7.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller.
(a) The Seller shall not consolidate with or merge into any other
Person or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the Person formed by such consolidation or into which
Seller is merged or the Person that acquires by conveyance or transfer
the properties and assets of Seller substantially as an entirety shall
be, if Seller is not the surviving entity, organized and existing under
the laws of the United States of America or any state thereof or the
District of Columbia, shall satisfy the requirements set forth in
Section 2.5(l) and shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, the performance of every covenant and obligation of the
Seller, as applicable hereunder and shall benefit from all the rights
granted to the Seller, as applicable hereunder. To the extent that any
right, covenant or obligation of the Seller, as applicable hereunder,
is inapplicable to the successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit from such right, as
would apply, to the extent practicable, to such successor entity;
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(ii) the Seller shall have delivered to the Trustee an
Officer's Certificate signed by a Vice President (or any more senior
officer) of the Seller stating that such consolidation, merger,
conveyance or transfer and such supplemental agreement comply with this
Section 7.2 and that all conditions precedent herein provided for
relating to such transaction have been complied with and an Opinion of
Counsel that such supplemental agreement is legal, valid and binding;
and
(iii) the Rating Agency Condition is satisfied with respect to
such consolidation, merger, conveyance or transfer.
(b) The obligations of the Seller hereunder shall not be assignable
nor shall any Person succeed to the obligations of the Seller hereunder except
for mergers, consolidations, assumptions, conveyances or transfers in accordance
with the provisions of the foregoing paragraph.
Section 7.3 Limitation on Liability. The directors, officers, employees
or agents of the Seller shall not be under any liability to the Trust, the
Trustee, the Certificateholders, the Certificate Owners, the Receivables
Purchasers, any Purchaser Representative, any Enhancement Provider or any other
Person hereunder or pursuant to any document delivered hereunder, it being
expressly understood that all such liability is expressly waived and released as
a condition of, and as consideration for, the execution of this Agreement, any
Supplement and any Receivables Purchase Agreement and the issuance of the
Certificates; provided, however, that this provision shall not protect the
officers, directors, employees, or agents of the Seller against any liability
which would otherwise be imposed by reason of willful misconduct, bad faith or
gross negligence in the performance of their duties. The Seller and any
director, officer, employee or agent may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder.
Section 7.4 Indemnification. The Seller shall indemnify and hold
harmless the Trust and the Trustee, its officers, directors, employees and
agents from and against any loss, liability, expense, damage or injury suffered
or sustained by reason of any acts, omissions or alleged acts or omissions
arising out of or based upon the arrangement created by this Agreement, any
Supplement or any Receivables Purchase Agreement arising out of any third-party
action, claim, suit or proceeding, including, but not limited to, any judgment,
award, settlement, reasonable attorneys' fees and other costs or expenses
incurred in connection with the defense of any actual or threatened action,
proceeding or claim, as though this Agreement, such Supplement or such
Receivables Purchase Agreement created a partnership under the New York Uniform
Partnership Act in which the Seller is a general partner; provided, however,
that the Seller shall not indemnify the Trustee if such acts, omissions or
alleged acts or omissions constitute or are caused by fraud, gross negligence,
or willful misconduct by the Trustee; provided, further, that the Seller shall
not indemnify the Trust or the Trustee for any liabilities, costs or expenses
with respect to any action taken by the Trustee at the request of the Investor
Certificateholders or Receivables Purchasers; and provided, further, that the
Seller shall not indemnify the Trust or the Trustee for any liabilities, costs
or expenses of the Trust or the Trustee arising under any tax law,
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including without limitation any federal, state, local or foreign income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Trust in connection herewith to any taxing
authority. Any such indemnification shall not be payable from the assets of the
Trust. The provisions of this indemnity shall run directly to and be enforceable
by an injured party subject to the limitations hereof.
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer. The Servicer shall be liable
hereunder only to the extent of the obligations specifically undertaken by the
Servicer in such capacity herein.
Section 8.2 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into which
the Servicer is merged or which acquires by conveyance or transfer the
properties and assets of the Servicer substantially as an entirety
shall be a state or national banking or savings association or other
entity which is not subject to the bankruptcy laws of the United States
of America and, if the Servicer is not the surviving entity, shall
expressly assume, by an agreement supplemental hereto, executed and
delivered to the Trustee and each Purchaser Representative in form
satisfactory to the Trustee and each Purchaser Representative, the
performance of every covenant and obligation of the Servicer hereunder
(to the extent that any right, covenant or obligation of the Servicer,
as applicable hereunder, is inapplicable to the successor entity, such
successor entity shall be subject to such covenant or obligation, or
benefit from such right, as would apply, to the extent practicable, to
such successor entity);
(ii) the Servicer shall have delivered to the Trustee and
each Purchaser Representative an Officer's Certificate of the Servicer,
upon which the Trustee may conclusively rely, that such consolidation,
merger, conveyance or transfer and such supplemental agreement comply
with this Section 8.2 and that all conditions precedent herein provided
for relating to such transaction have been complied with and an Opinion
of Counsel, upon which the Trustee may conclusively rely, that such
supplemental agreement is legal, valid and binding with respect to the
Servicer;
(iii) the Servicer shall have given at least 10 Business
Days' prior notice to the Rating Agencies, the Trustee and each
Purchaser Representative of such consolidation, merger, conveyance or
transfer;
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(iv) the Rating Agency Condition shall have been satisfied
with respect to such assignment and succession; and
(v) if the Person described in clause (i) is not an
Affiliate of the Servicer, the Trustee and each Purchaser
Representative shall have consented in writing to such consolidation,
merger, conveyance or transfer.
Section 8.3 Limitation on Liability. The directors, officers, employees
or agents of the Servicer shall not be under any liability to the Trust, the
Trustee, the Certificateholders, the Receivables Purchasers, any Enhancement
Provider or any other Person hereunder or pursuant to any document delivered
hereunder, it being expressly understood that all such liability is expressly
waived and released as a condition of, and as consideration for, the execution
of this Agreement, any Supplement and any Receivables Purchase Agreement, and
the issuance of the Certificates; provided, however, that this provision shall
not protect the directors, officers, employees and agents of the Servicer
against any liability that would otherwise be imposed by reason of willful
misconduct, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. Except as
provided in Section 8.4 with respect to the Trust and the Trustee, its officers,
directors, employees and agents, and except as provided in any Supplement or
Receivables Purchase Agreement with respect to the related Series, the Servicer
shall not be under any liability to the Trust, the Trustee, its officers,
directors, employees and agents, the Certificateholders, the Receivables
Purchasers, any Enhancement Provider, or any other Person for any action taken
or for refraining from the taking of any action in its capacity as Servicer
pursuant to this Agreement, any Supplement or any Receivables Purchase
Agreement; provided, however, that this provision shall not protect the Servicer
against any liability which would otherwise be imposed by reason of willful
misconduct, bad faith or gross negligence in the performance of duties or by
reason of its reckless disregard of its obligations and duties hereunder, or
under any Supplement or Receivables Purchase Agreement. The Servicer may rely in
good faith on any document of any kind properly executed and submitted by any
Person respecting any matters arising hereunder. The Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Receivables in accordance with this
Agreement which in its reasonable opinion may involve it in any expense or
liability.
Section 8.4 Servicer Indemnification of the Trust and the Trustee. The
Servicer shall indemnify and hold harmless the Trust and the Trustee, its
officers, directors, employees and agents, from and against any loss, liability,
expense, damage or injury suffered or sustained by reason of any acts or
omissions or alleged acts or omissions of the Servicer with respect to
activities of the Trust or the Trustee pursuant to this Agreement, any
Supplement or any Receivables Purchase Agreement, including, but not limited to,
any judgment, award, settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any actual or threatened
action, proceeding or claim; provided, however, that the Servicer shall not
indemnify the Trustee if such acts, omissions or alleged acts or omissions
constitute or are caused by fraud, gross negligence, or willful misconduct by
the Trustee; provided, further, that with respect to any action taken by the
Trustee at the request of the Investor Certificateholders,
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Receivables Purchasers or any Purchaser Representative such costs, expenses or
other liabilities shall be at the expense of the requesting party and such party
shall not be entitled to reimbursement from the Trust; and provided, further,
that the Servicer shall not indemnify the Trust or the Trustee for any
liabilities, costs or expenses of the Trust arising under any tax law, including
without limitation any federal, state, local or foreign income or franchise
taxes or any other tax imposed on or measured by income (or any interest or
penalties with respect thereto or arising from a failure to comply therewith)
required to be paid by the Trust in connection herewith to any taxing authority.
Any such indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof.
Section 8.5 The Servicer Not to Resign. The Servicer shall not resign
from the obligations and duties hereby imposed on it except upon a determination
by the Servicer that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel to such effect delivered to the Trustee and each Purchaser
Representative. No such resignation shall become effective until the Trustee or
a Successor Servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 10.2 hereof. The Trustee shall give
prompt notice to each Rating Agency, Purchaser Representative and Enhancement
Provider upon the appointment of a Successor Servicer. If the Trustee is unable
within 120 days of the date of such determination to appoint a Successor
Servicer, the Trustee shall serve as Successor Servicer hereunder.
Section 8.6 Access to Certain Documentation and Information Regarding
the Receivables. Subject to the terms of any Supplement or Receivables Purchase
Agreement, the Servicer shall provide to the Trustee, each Purchaser
Representative and each Enhancement Provider access to the documentation
regarding the Accounts and the Receivables in such cases where the Trustee, any
Purchaser Representative, or any Enhancement Provider is required in connection
with the enforcement of the rights of the Investor Certificateholders, the
Receivables Purchasers, or any Enhancement Provider, or by applicable statutes
or regulations, to review such documentation, such access being afforded without
charge but only (i) upon reasonable request, (ii) during the Servicer's and
Administrative Servicer's normal business hours (but, with respect to the
Administrative Servicer, only to the extent of the Servicer's access to such
documentation pursuant to the Administrative Servicer Agreement), (iii) subject
to the Servicer's normal security and confidentiality procedures and (iv) at
offices designated by the Servicer. Nothing in this Section 8.6 shall derogate
from the obligation of the Originator, the Seller, the Trustee, the Servicer,
any Purchaser Representative or any Enhancement Provider to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Servicer to provide access as provided in this Section 8.6 as
a result of such obligations shall not constitute a breach of this Section 8.6.
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Section 8.7 Delegation of Duties. In the ordinary course of business,
the Servicer may at any time delegate any duties hereunder to any Person who
agrees to conduct such duties in accordance with the Cardholder Guidelines,
including the delegation of duties pursuant to the Administrative Servicer
Agreement. Any such delegations shall not relieve the Servicer of its liability
and responsibility with respect to such duties, and shall not constitute a
resignation within the meaning of Section 8.5 hereof. The Seller, the Trustee
and the Purchaser Representatives hereby acknowledge and consent to the
continuation of Alliance Data as the Administrative Servicer pursuant to the
terms and conditions set forth in the Administrative Servicer Agreement. The
Seller may at any time appoint any other Person, including the Originator or an
Affiliate of the Originator, as a successor Administrative Servicer to perform
the responsibilities and obligations previously performed by Alliance Data on
behalf of the Seller, subject to any requirement in any Supplement or
Receivables Purchase Agreement. The Seller shall give at least five Business
Days' prior notice to the Rating Agencies and each Enhancement Provider of any
such appointment.
Section 8.8 Examination of Records. The Servicer shall clearly and
unambiguously identify each Account (including any Additional Account designated
pursuant to Section 2.6) in its computer or other records to reflect that the
Receivables arising in such Account have been Conveyed to the Trust pursuant to
this Agreement. The Servicer shall, prior to the sale or transfer to a third
party of any receivable held in its custody, examine its computer and other
records to determine that such receivable is not a Receivable.
ARTICLE IX
EARLY AMORTIZATION EVENTS
Section 9.1 Early Amortization Events. If any one of the following
events (each, a "Trust Early Amortization Event") shall occur:
(a) the Seller, the Originator, the Servicer (if an Affiliate of the
Originator) or Charming Shoppes, Inc. shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
all or substantially all of its property, or a decree or order of a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Seller, the Originator, the Servicer (if an Affiliate
of the Originator) or Charming Shoppes, Inc.; or the Seller, the Originator, the
Servicer (if an Affiliate of the Originator) or Charming Shoppes, Inc. shall
admit in writing its inability to pay its debts generally as they become due,
commence or have commenced against it (unless dismissed within thirty days) as a
debtor a proceeding under any applicable insolvency or reorganization statute,
make an assignment for the benefit of its creditors or voluntarily suspend
payment of its obligations;
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(b) the Originator shall become unable for any reason to Convey
Receivables to the Seller pursuant to the Purchase Agreement; or the Seller
shall become unable for any reason to Convey Receivables to the Trust in
accordance with the provisions of this Agreement; or
(c) the Seller or the Trust shall become subject to regulation by the
Securities and Exchange Commission as an "investment company" within the meaning
of the Investment Company Act;
then an Early Amortization Event with respect to all Series shall occur without
any notice or other action on the part of the Trustee, the Investor
Certificateholders or the Receivables Purchasers immediately upon the occurrence
of such event.
Section 9.2 Additional Rights Upon the Occurrence of Certain Events.
(a) Upon the occurrence of any event described in Section 9.1(a) with
respect to the Originator or the Seller (an "Insolvency Event"), the Seller
shall on the day of such Insolvency Event (the "Appointment Day") immediately
cease to transfer Principal Receivables to the Trust and shall promptly give
notice to the Trustee, the Rating Agencies, each Enhancement Provider and each
Purchaser Representative of such Insolvency Event. Notwithstanding any cessation
of the Conveyance to the Trust of additional Principal Receivables, Finance
Charge Receivables, whenever created, accrued in respect of Principal
Receivables which have been Conveyed to the Trust shall continue to be a part of
the Trust, and Collections with respect thereto shall continue to be allocated
and paid in accordance with Article IV, any Supplement and any Receivables
Purchase Agreement. Within 15 days of the Appointment Day, the Trustee shall (i)
publish a notice in an Authorized Newspaper that an Insolvency Event has
occurred and that the Trustee intends to sell, dispose of or otherwise liquidate
the Receivables in a commercially reasonable manner and (ii) send written notice
to each Investor Certificateholder, each Purchaser Representative and
Enhancement Provider, if applicable, describing the provisions of this Section
9.2 and requesting instructions from such Investor Certificateholders,
Enhancement Providers and Purchaser Representatives. Unless within 90 days from
the day notice pursuant to clause (i) above is first published, the Trustee
shall have received written instructions from (A) Holders of Investor
Certificates evidencing more than 50% of the Investor Interest of each
Certificate Series, (B) in the case of any Certificate Series with respect to
which there is an Enhancement Invested Amount, the applicable Enhancement
Provider, and (C) each Purchaser Representative to the effect that such Investor
Certificateholders, Enhancement Provider, if applicable, and such Purchaser
Representatives disapprove of the liquidation of the Receivables and wish to
continue having Principal Receivables Conveyed to the Trust as before such
Insolvency Event, the Trustee shall use its best efforts to sell, dispose of or
otherwise liquidate the Receivables in a commercially reasonable manner and on
commercially reasonable terms and to maximize the proceeds of such disposition
or other liquidation of the Receivables, which shall include the solicitation of
competitive bids. The Trustee may obtain a prior determination from any such
conservator, receiver or liquidator that the terms and manner of any proposed
sale, disposition or liquidation are commercially reasonable. The provisions of
Sections 9.1 and 9.2 shall not be deemed to be mutually exclusive.
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(b) The proceeds from the sale, disposition or liquidation of the
Receivables pursuant to subsection (a) above shall be treated as Collections on
the Receivables and shall be allocated and deposited in accordance with the
provisions of Article IV, any Supplement and any Receivables Purchase Agreement;
provided that the Trustee shall determine conclusively in its sole discretion
the amount of such proceeds which are allocable to Finance Charge Receivables
and the amount of such proceeds which are allocable to Principal Receivables.
Unless the Trustee receives written instructions from Investor
Certificateholders, Enhancement Providers and Purchaser Representatives as
provided in subsection 9.2(a) above, on the day following the last Distribution
Date in the Due Period during which such proceeds are distributed to the
Investor Certificateholders of each Certificate Series and the Receivables
Purchasers of each Receivables Purchase Series, the Trust shall terminate.
(c) The Trustee may appoint an agent or agents to assist with its
responsibilities pursuant to this Article IX with respect to competitive bids.
ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Trustee pursuant to Article IV
or to instruct the Trustee to make any required drawing, withdrawal, or payment
under any Enhancement, in each case, within one Business Day after the date of
the receipt by the Servicer of written notice from the Trustee or any Purchaser
Representative that such payment, transfer, deposit, withdrawal or drawing or
such instruction or notice is required to be made or given, as the case may be,
under the terms of this Agreement, any Supplement or any Receivables Purchase
Agreement;
(b) failure on the part of the Servicer duly to observe or perform in
any respect any other covenants or agreements of the Servicer set forth in this
Agreement, any Supplement or any Receivables Purchase Agreement, which has a
material adverse effect on (i) the Servicer's ability to collect the Receivables
or otherwise perform its obligations under the Agreement, any Supplement or any
Receivables Purchase Agreement or (ii) the collectibility or value of the
Receivables, and which continues unremedied for a period of 45 days after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Trustee, a Purchaser Representative
or an Enhancement Provider, or to the Servicer and the Trustee by Holders of
Investor Certificates evidencing not less than 25% of the Investor Interest of
any Certificate Series, or an Enhancement Provider and such material adverse
effect continues for such period; or the Servicer shall delegate its duties
under this Agreement, except as permitted by Section 8.7;
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(c) any representation, warranty or certification made by the Servicer
in this Agreement, any Supplement or any Receivables Purchase Agreement or in
any certificate delivered pursuant to this Agreement, any Supplement or any
Receivables Purchase Agreement shall prove to have been incorrect when made,
which has a material adverse effect on (i) the Servicer's ability to collect the
Receivables or otherwise perform its obligations under the Agreement, any
Supplement or any Receivables Purchase Agreement or (ii) the collectibility or
value of the Receivables, and which continues to be incorrect in any material
respect for a period of 45 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee, a Purchaser Representative, or an Enhancement Provider
or to the Servicer and the Trustee by the Holders of Investor Certificates
evidencing not less than 25% of the Investor Interest of any Certificate Series
or an Enhancement Provider and such material adverse effect continues for such
period; or
(d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to all or substantially all of its property, or a decree or order
of a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Servicer, and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or the
Servicer shall admit in writing its inability to pay its debts generally as they
become due, commence or have commenced against it (unless dismissed within
thirty days) as debtor a proceeding under any applicable insolvency or
reorganization statute, make any assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations;
then, so long as such Servicer Default shall not have been remedied, either the
Trustee, or the Holders of Investor Certificates evidencing Undivided Trust
Interests and Purchaser Representatives of Receivables Purchase Series
aggregating more than 66-2/3% of the Aggregate Investor/Purchaser Interest, by
notice then given in writing to the Servicer, and each Purchaser Representative
(and to the Trustee if given by the Investor Certificateholders or the Purchaser
Representatives) (a "Servicer Termination Notice"), may terminate all of the
rights and obligations of the Servicer as Servicer under this Agreement. The
Trustee shall promptly notify any Enhancement Provider of any such Servicer
Default.
After receipt by the Servicer of such Servicer Termination Notice, and
on the date that a Successor Servicer shall have been appointed by the Trustee
pursuant to Section 10.2, all authority and power of the Servicer under this
Agreement shall pass to and be vested in a Successor Servicer; and, without
limitation, the Trustee is hereby authorized and empowered (upon the failure of
the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such transfer of servicing rights and obligations. The Servicer
agrees to cooperate with the Trustee and such Successor Servicer
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in effecting the termination of the responsibilities and rights of the Servicer
to conduct servicing hereunder including, without limitation, the transfer to
such Successor Servicer of all authority of the Servicer to service the
Receivables provided for under this Agreement, including, without limitation,
all authority over all Collections which shall on the date of transfer be held
by the Servicer for deposit, or which have been deposited by the Servicer, in
the Collection Account or any Series Account, or which shall thereafter be
received with respect to the Receivables, and in assisting the Successor
Servicer in enforcing all rights to Insurance Proceeds applicable to the Trust.
The Servicer shall promptly transfer its electronic records or electronic copies
thereof relating to the Receivables to the Successor Servicer in such electronic
form as the Successor Servicer may reasonably request and shall promptly
transfer to the Successor Servicer all other records, correspondence and
documents necessary for the continued servicing of the Receivables in the manner
and at such times as the Successor Servicer shall reasonably request. To the
extent that compliance with this Section 10.1 shall require the Servicer to
disclose to the Successor Servicer information of any kind which the Servicer
reasonably deems to be confidential, the Successor Servicer shall be required to
enter into such customary licensing and confidentiality agreements as the
Servicer shall deem necessary to protect its interests. The Servicer shall, on
the date of any servicing transfer, transfer all of its rights and obligations
under any Enhancement with respect to any Series to the Successor Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in subsection 10.1(a), for a cumulative period of ten Business Days,
or under subsection 10.1(b) or (c), for a cumulative period of sixty Business
Days, shall not constitute a Servicer Default if such delay or failure could not
be prevented by the exercise of reasonable diligence by the Servicer and such
delay or failure was caused by an act of God or the public enemy, acts of
declared or undeclared war, public disorder, rebellion, riot or sabotage,
epidemics, landslides, lightning, fire, hurricanes, tornadoes, earthquakes,
nuclear disasters or meltdowns, floods, power outages or similar causes. The
preceding sentence shall not relieve the Servicer from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of this
Agreement and the Servicer shall provide the Trustee, any Enhancement Provider,
the Seller, and each Purchaser Representative with an Officer's Certificate
giving prompt notice of such failure or delay by it, together with a description
of the cause of such failure or delay and its efforts so to perform its
obligations.
Section 10.2 Trustee to Act; Appointment of Successor.
(a) On and after the occurrence of a Servicer Default pursuant to
Section 10.1 or a resignation of the Servicer pursuant to Section 8.5, the
Servicer shall continue to perform all servicing functions under this Agreement
until the date of the appointment of a Successor Servicer hereunder. The Trustee
shall notify each Rating Agency of such removal of the Servicer. The Trustee
shall, as promptly as possible after the giving of a Servicer Termination Notice
appoint a successor servicer (the "Successor Servicer"), and such Successor
Servicer shall accept its appointment by a written assumption in a form
acceptable to the Trustee. Purchaser Representatives for each Receivables
Purchase Series and each Enhancement Provider, if any, must consent in writing
to any Successor Servicer. The Trustee may obtain bids
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from any potential successor servicer. Any Successor Servicer shall not be an
Affiliate of any Purchaser Representative so long as any Certificate Series is
outstanding. If (i) the Trustee is unable to obtain any bids from any potential
successor servicer, or if no such bid is acceptable to Purchaser Representatives
representing each Receivable Purchase Series, and (ii) the Servicer delivers to
the Trustee an Officer's Certificate to the effect that it cannot in good faith
cure the Servicer Default which gave rise to a transfer of servicing, and if the
Trustee is legally unable to act as Successor Servicer, then the Trustee shall
notify each Investor Certificateholder, each Purchaser Representative and any
Enhancement Provider of the proposed sale of the Receivables and shall provide
each Receivables Purchaser and Enhancement Provider an opportunity to bid on the
Receivables and shall offer the Seller the right of first refusal to purchase
the Receivables on terms equivalent to the best purchase offer as determined by
the Trustee, but in no event less than an amount equal to the Aggregate
Investor/Purchaser Interest an the date of such purchase (including, with
respect to any Series, any unreimbursed Loss Amounts allocated to such Series to
the extent such amounts are required to be reimbursed pursuant to the related
Supplement or Receivables Purchase Agreement) plus all interest accrued but
unpaid on all of the outstanding Investor Certificates at the applicable
Certificate Rate, all interest accrued but unpaid with respect to all
outstanding Receivables Purchase Interests at the applicable rate, and all fees
and expenses under any Supplement or any Receivables Purchase Agreement due but
unpaid through the date of such purchase; provided, however, that if the
short-term deposits or long-term unsecured debt obligations of the Seller (or if
neither such deposits nor such obligations of the Seller are rated by Moody's,
if Moody's is a Rating Agency with respect to any Certificate Series
outstanding, then of the holding company of the Seller so long as such holding
company shall be Charming Shoppes, Inc.) are not rated at the time of such
purchase at least P-3 or Baa-3, respectively, by Moody's, if Moody's is a Rating
Agency with respect to any Certificate Series outstanding, no such purchase by
the Seller shall occur unless the Seller shall deliver an Opinion of Counsel
reasonably acceptable to the Trustee that such purchase would not constitute a
fraudulent conveyance of the Seller. The proceeds of such sale shall be
deposited in the Collection Account or any Series Account, as provided in the
related Supplement or Receivables Purchase Agreement, for distribution to the
Investor Certificateholders of each outstanding Certificate Series and the
Receivables Purchasers of each outstanding Receivables Purchase Series, pursuant
to Section 12.3 of this Agreement. Notwithstanding the above, the Trustee may
petition a court of competent jurisdiction to appoint as the Successor Servicer
hereunder any established financial institution having, in the case of an entity
that is subject to risk-based capital adequacy requirements, risk-based capital
of at least $50,000,000 or, in the case of an entity that is not subject to
risk-based capital requirements, a net worth of not less than $50,000,000, and
whose regular business includes the servicing of credit card receivables.
(b) Upon its appointment, the Successor Servicer shall be the successor
in all respects to the Servicer with respect to servicing functions under this
Agreement and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the Servicer shall be deemed to
refer to the Successor Servicer. Any Successor Servicer, by its acceptance of
its appointment, will automatically agree to be bound by the terms and
provisions of each Supplement, Receivables Purchase Agreement and Enhancement.
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(c) In connection with such appointment and assumption, the Trustee
shall be entitled to such compensation, or may make such arrangements for the
compensation of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such compensation
shall be in excess of the Monthly Servicing Fee permitted to the Servicer
pursuant to Section 3.2. The Holder of the Exchangeable Seller Certificate
agrees that if the Servicer is terminated hereunder, it will agree to deposit a
portion of the Collections in respect of Finance Charge Receivables that it is
entitled to receive pursuant to Article IV to pay its share of the compensation
of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer under
this Agreement shall automatically cease and terminate upon termination of the
Trust pursuant to Section 12.1 and shall pass to and be vested in the Seller
and, without limitation, the Seller is hereby authorized and empowered to
execute and deliver, on behalf of the Successor Servicer, as attorney-in-fact or
otherwise, all documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the purposes of such
transfer of servicing rights. The Successor Servicer agrees to cooperate with
the Seller in effecting the termination of the responsibilities and rights of
the Successor Servicer to conduct servicing on the Receivables. The Successor
Servicer shall transfer its electronic records relating to the Receivables to
the Seller in such electronic form as the Seller may reasonably request and
shall transfer all other records, correspondence and documents to the Seller in
the manner and at such times as the Seller shall reasonably request. To the
extent that compliance with this Section 10.2 shall require the Successor
Servicer to disclose to the Seller information of any kind which the Successor
Servicer deems to be confidential, the Seller shall be required to enter into
such customary licensing and confidentiality agreements as the Successor
Servicer shall deem necessary to protect its interests.
Section 10.3 Notification of Servicer Default and Successor Servicer.
Within two Business Days after the Servicer becomes aware of any Servicer
Default, the Servicer shall give prompt written notice thereof to the Trustee,
each Purchaser Representative, each Rating Agency and each Enhancement Provider.
Upon any termination or appointment of a Successor Servicer pursuant to this
Article X, the Trustee shall give prompt written notice thereof to each
Purchaser Representative, each Rating Agency and each Enhancement Provider.
Section 10.4 Waiver of Past Defaults. The Holders of Investor
Certificates evidencing Undivided Trust Interests aggregating not less than
66-2/3% of the Investor Interest of any Certificate Series outstanding, or any
Purchaser Representative for any Receivables Purchase Series, adversely affected
by a default by the Servicer or the Seller in the performance of its obligations
hereunder may waive such default and its consequences on behalf of such Series,
except a default in the failure to make any required deposits or payment of
interest or principal relating to such Series pursuant to Article IV which
default does not result from the failure of the Paying Agent to perform its
obligations to make any required deposits or payments of interest and principal
in accordance with Article IV. Upon any such waiver of a past default, such
default shall cease to exist, and any default arising therefrom shall be deemed
to have been
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remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.
ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee.
(a) The Trustee, prior to the occurrence of any Servicer Default of
which it has actual knowledge and after the curing of all Servicer Defaults
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement, each Supplement and each
Receivables Purchase Agreement. If a Responsible Officer has received written
notice that a Servicer Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in its exercise, as
a prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Subject to subsection 11.1(a), no provision of this Agreement shall
be construed to relieve the Trustee from liability for its own grossly negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
(i) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of Investor
Certificates evidencing Undivided Trust Interests aggregating more than
50% of the Investor Interest of any Certificate Series or any Purchaser
Representative, relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee in relation to the
related Series, under this Agreement, any Supplement or any Receivables
Purchase Agreement; and
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer referred to in Section 10.1 unless a
Responsible Officer of the Trustee obtains actual knowledge of such
failure or the Trustee receives written notice of such failure from the
Servicer or any Holders of Investor Certificates evidencing Undivided
Trust Interests aggregating not less than 10% of the Investor Interest
of any Certificate Series adversely affected thereby, any Purchaser
Representative or any Enhancement Provider.
(c) The Trustee shall not be required to expend or risk its own funds
or otherwise incur financial liability in the performance of any of its duties
under this Agreement, any
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Supplement or any Receivables Purchase Agreement, or in the exercise of any of
its rights or powers, unless adequate indemnity against such risk or liability
is reasonably assured and provided to it, and none of the provisions contained
in this Agreement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of the
Servicer under this Agreement, any Supplement or any Receivables Purchase
Agreement except during such time, if any, as the Trustee shall be the successor
to, and be vested with the rights, duties, powers and privileges of, the
Servicer in accordance with the terms of this Agreement, any Supplement or any
Receivables Purchase Agreement.
(d) Except for actions expressly authorized by this Agreement and not
prohibited by any Supplement or any Receivables Purchase Agreement, the Trustee
shall take no action reasonably likely to impair the interests of the Trust in
any Receivable now existing or hereafter created or to impair the value of any
Receivable now existing or hereafter created.
(e) Except as expressly provided in this Agreement and each Supplement
and Receivables Purchase Agreement, the Trustee shall have no power to vary the
corpus of the Trust including, without limitation, the power to (i) accept any
substitute obligation for a Receivable initially assigned to the Trust under
Section 2.1 or 2.6 hereof, (ii) add any other investment, obligation or security
to the Trust, except for an addition permitted under Section 2.6, (iii) withdraw
from the Trust any Receivables, except for a withdrawal permitted under Section
2.7, 9.2, 10.2, 12.1 or 12.2 or Article IV or subsections 2.4(d) or 2.4(e), or
(iv) Convey any interest in Receivables, except pursuant to a Receivables
Purchase Agreement.
(f) In the event that the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or agreement in the manner
or on the day required to be performed by the Paying Agent or the Transfer Agent
and Registrar, as the case may be, under this Agreement, the Trustee shall be
obligated promptly to perform such obligation, duty or agreement in the manner
so required.
(g) If the Seller has agreed to transfer any of its credit card
receivables (other than the Receivables) to another Person, upon the written
request of the Seller, and 10 Business Days' notice to each Purchaser
Representative, the Trustee shall enter into such intercreditor agreements with
the transferee of such receivables as are customary and necessary to identify
separately the rights, if any, of the Trust and such other Person in the
Seller's credit card receivables, and shall provide to each Purchaser
Representative a copy of each such intercreditor agreement; provided, that the
Trustee shall not be required to enter into any intercreditor agreement which
could adversely affect the interests of the Certificateholders, the Receivables
Purchasers, or any Enhancement Provider, and, upon the request of the Trustee,
any Purchaser Representative or any Enhancement Provider, the Seller shall
deliver to it an Opinion of Counsel (with a copy to each Purchaser
Representative) on any matters relating to such intercreditor agreement,
reasonably requested by the Trustee, any Purchaser Representative or any
Enhancement Provider.
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(h) The Trustee shall notify each Purchaser Representative and
Enhancement Provider of any Early Amortization Event of which a Responsible
Officer has actual knowledge, promptly upon obtaining such knowledge.
Section 11.2 Certain Matters Affecting the Trustee. Except as otherwise
provided in Section 11.1 or in any Supplement or Receivables Purchase Agreement:
(a) the Trustee may conclusively rely on and shall be protected in
acting, or in refraining from acting, in accord with any written assignment of
Receivables in Additional Accounts, the initial report, the Monthly Servicer
Report, the annual Servicer's certificate, the monthly payment instructions, the
monthly Certificateholder's statement, any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented to
it pursuant to this Agreement by the proper party or parties; provided, that if
Spirit Inc. is not the Servicer at the time the Trustee receives any such paper
or document, the Trustee shall provide a copy of such document to the Seller;
(b) the Trustee may consult with counsel, and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in accordance
with such Opinion of Counsel;
(c) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, any Supplement, any Receivables
Purchase Agreement or any Enhancement, or to institute, conduct or defend any
litigation hereunder or in relation hereto, at the request, order or direction
of any of the Investor Certificateholders or any Purchaser Representative unless
such Investor Certificateholders or Purchaser Representative shall have offered
and provided to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the obligations, upon
the occurrence of any Servicer Default (which has not been cured), to exercise
such of the rights and powers vested in it by this Agreement, any Supplement or
any Receivables Purchase Agreement, and to use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of its own affairs;
(d) the Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Agreement,
any Supplement or any Receivables Purchase Agreement;
(e) the Trustee shall not be bound to make any investigation into the
facts of matters stated in any written assignment of Receivables in Additional
Accounts, the initial report, the Monthly Servicer Report, the annual Servicer's
certificate, the monthly payment instructions and notification to the Trustee,
the monthly Certificateholder's statement, any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other
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paper or document, unless requested in writing so to do by Holders of Investor
Certificates evidencing Undivided Trust Interests aggregating more than 50% of
the Investor Interest, any Purchaser Representative or Enhancement Provider for
any Series, in each case that could be adversely affected thereby if the Trustee
does not perform such acts;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or a custodian to the extent not otherwise prohibited by any
Supplement or Receivables Purchase Agreement, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent,
attorney or custodian appointed with reasonable care by it hereunder; and
(g) except as may be required by subsection 11.1(a), the Trustee shall
not be required to make any initial or periodic examination of any documents or
records related to the Receivables or the Accounts for the purpose of
establishing the presence or absence of defects or the compliance by the Seller
with its representations and warranties or for any other purpose.
Section 11.3 Trustee Not Liable for Recitals in Certificates. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the Certificates (other than the certificate of authentication on
the Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates)
or of any Receivable or related document. The Trustee in its individual capacity
shall not be accountable for the use or application by the Seller of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Seller in respect of the Receivables or
deposited in or withdrawn from the Collection Account, the Excess Funding
Account or any Series Account (or any other account hereafter established to
effectuate the transactions contemplated by the terms of this Agreement) by the
Servicer.
Section 11.4 Trustee May Own Certificates and Purchase Receivables. The
Trustee in its individual or any other capacity may become the owner or pledgee
of Investor Certificates, or may purchase Receivables Purchase Interests, with
the same rights as it would have if it were not the Trustee.
Section 11.5 The Servicer to Pay Trustee's Fees and Expenses. The
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution of the Trust
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and the Servicer shall pay or reimburse the
Trustee (without reimbursement from the Collection Account, the Excess Funding
Account, any Series Account or otherwise) upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement except any such expense,
disbursement or advance as may arise from its own gross negligence or willful
misconduct and except as provided in the following sentence. If the Trustee is
appointed
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Successor Servicer pursuant to Section 10.2, the provisions of this Section 11.5
shall not apply to expenses, disbursements and advances made or incurred by the
Trustee in its capacity as Successor Servicer.
The obligations of the Servicer under this Section 11.5 shall survive
the termination of the Trust and the resignation or removal of the Trustee.
Section 11.6 Eligibility Requirements for Trustee. The Trustee
hereunder (or, alternatively, a Person which is the direct or indirect parent
corporation of the Trustee) shall at all times be a corporation organized and
doing business under the laws of the United States of America or any state
thereof, authorized under such laws to exercise corporate trust powers, having a
long-term unsecured debt rating of at least Baa3 by Moody's and BBB- by Standard
& Poor's, having, in the case of an entity that is subject to risk-based capital
adequacy requirements, risk-based capital of at least $50,000,000 or, in the
case of an entity that is not subject to risk-based capital adequacy
requirements, a combined capital and surplus of at least $50,000,000 and subject
to supervision or examination by federal or state authority and, prior to its
appointment hereunder, must be acceptable to each Purchaser Representative. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section 11.6, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 11.6, the Trustee shall resign immediately in the manner and with the
effect specified in Section 11.7.
Section 11.7 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the Trust
hereby created by giving written notice thereof to the Seller, the Servicer,
each Enhancement Provider, the Rating Agencies and each Purchaser
Representative. Upon receiving such notice of resignation, the Servicer shall
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. Any successor Trustee shall not be an Affiliate
of any Purchaser Representative so long as any Certificate Series is
outstanding. The Servicer shall deliver a copy of such instrument to each
Purchaser Representative. Any such appointment shall be subject to the prior
written consent of each Purchaser Representative. If no successor trustee shall
have been so appointed and have accepted within 30 days after the giving of such
notice of resignation, the resigning Trustee, upon notice to the Seller, the
Servicer and each Purchaser Representative, may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 11.6 hereof and shall fail to resign after
written request therefor by the Seller, the Servicer or any Purchaser
Representative, or if at any time the Trustee shall be legally
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unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Seller, the
Servicer or any Purchaser Representative may, but shall not be required to, upon
10 days' prior written notice to the others, remove the Trustee and then the
Servicer shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee. Any successor Trustee shall not
be an Affiliate of any Purchaser Representative so long as any Certificate
Series is outstanding. The Servicer shall deliver a copy of such instrument to
each Purchaser Representative. Any such appointment shall be subject to the
prior written consent of the Servicer, each Purchaser Representative and each
Enhancement Provider.
(c) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 11.7 shall
not become effective until acceptance of appointment by the successor trustee as
provided in Section 11.8 hereof and any liability of the Trustee arising
hereunder shall survive such appointment of a successor trustee.
Section 11.8 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.7 hereof
shall execute, acknowledge and deliver to the Seller, the Servicer, each
Purchaser Representative and its predecessor Trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. The predecessor Trustee
shall deliver to the successor trustee all documents and statements held by it
hereunder, and the Seller and the predecessor Trustee shall execute and deliver
such instruments requested by any Purchaser Representative or otherwise required
or contemplated hereunder or under any Supplement or Receivables Purchase
Agreement and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties and obligations. Thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee, without
any further act, shall become fully vested with all the rights, powers, duties
and obligations of its predecessor hereunder and under each Supplement and
Receivables Purchase Agreement, with like effect as if originally named as
Trustee herein and therein.
(b) No successor trustee shall accept appointment as provided in this
Section 11.8 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section 11.8, such successor trustee shall mail notice of such
succession hereunder to each Purchaser Representative, Rating Agency and
Enhancement Provider and to all Investor Certificateholders at their addresses
as shown in the Certificate Register.
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Section 11.9 Merger or Consolidation of Trustee. Any Person into which
the Trustee may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Person succeeding to the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under the provisions of Section 11.6
hereof without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 11.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, any
Supplement or any Receivables Purchase Agreement, at any time, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of the
Trust may at the time be located, the Trustee shall have the power and may
execute and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Investor Certificateholders, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section 11.10,
such powers, duties, obligations, rights and trusts as the Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
11.6 and no notice to Certificateholders, Receivables Purchasers or any
Purchaser Representatives of the appointment of any co-trustee or separate
trustee shall be required under Section 11.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
(whether as Trustee hereunder or as successor to the Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
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(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article XI. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer and each Purchaser Representative.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 11.11 Tax Return. In the event the Trust shall be required to
file tax returns, the Trustee, as soon as practicable after it is made aware of
such requirement, shall prepare or cause to be prepared any tax returns required
to be filed by the Trust and, to the extent possible, shall file such returns at
least five days before such returns are due to be filed. The Trustee is hereby
authorized to sign any such return on behalf of the Trust. The Servicer shall
also prepare or cause to be prepared all tax information required by law to be
distributed to Certificateholders or Receivables Purchasers and shall deliver
such information to the Trustee and each Purchaser Representative at least five
days prior to the date it is required by law to be distributed to
Certificateholders or Receivables Purchasers. The Servicer, upon request, shall
furnish the Trustee with all such information known to the Servicer as may be
reasonably required in connection with the preparation of all tax returns of the
Trust. In no event shall the Trustee or the Servicer be liable for any
liabilities, costs or expenses of the Trust, the Investor Certificateholders,
the Certificate Owners or the Receivables Purchasers arising under any tax law,
including without limitation federal, state, local or foreign income or excise
taxes or any other tax imposed on or measured by income (or any interest or
penalty with respect thereto or arising from a failure to comply therewith).
Section 11.12 Trustee May Enforce Claims without Possession of
Certificates. All rights of action and claims under this Agreement or any Series
may be prosecuted and enforced by the Trustee without the possession of any of
the Certificates or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee or agent. Any recovery of judgment shall, after provision for
the payment of the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, be for the ratable benefit of any Series
in respect of which such judgment has been obtained.
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Section 11.13 Suits for Enforcement. (a) If a Servicer Default shall
occur and be continuing, the Trustee, in its discretion may, for the equal and
ratable benefit of the Investor Certificateholders (in accordance with their
Investor Interests) and the Receivables Purchasers (to the extent of their
undivided interest in the Receivables), subject to the provisions of Sections
10.1 and 11.14, proceed to protect and enforce its rights and the rights of the
Investor Certificateholders and Certificate Owners of any Certificate Series and
the Receivables Purchasers of any Receivables Purchase Series under this
Agreement or any Supplement or Receivables Purchase Agreement by a suit, action
or proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or any
Supplement or Receivables Purchase Agreement, or in aid of the execution of any
power granted in this Agreement or any Supplement or Receivables Purchase
Agreement, or for the enforcement of any other legal, equitable or other remedy
as the Trustee, being advised by counsel, shall deem most effectual to protect
and enforce any of the rights of the Trustee, the Investor Certificateholders or
Certificate Owners of any Certificate Series or the Receivables Purchasers of
any Receivables Purchase Series.
(b) If the FDIC, the RTC or any equivalent governmental agency or
instrumentality or any designee of any of them shall have been appointed as
receiver, conservator, assignee, trustee in bankruptcy or reorganization,
liquidator, sequestrator or custodian with respect to the Originator or any
other Person shall have been appointed as receiver, conservator, assignee,
trustee in bankruptcy or reorganization, liquidator, sequestrator or custodian
with respect to the Seller (either with respect to the Originator or the Seller,
a "Receiver"), the Trustee shall, irrespective of whether the principal of any
Series of Certificates or Receivables Purchase Interests shall then be due and
payable:
(i) unless prohibited by applicable law or regulation or
unless under FIRREA or other applicable law, the Receiver is required
to participate in the process as a defendant or otherwise, promptly
take or cause to be taken any and all necessary or advisable
commercially reasonable action as a secured creditor on behalf of the
Certificateholders, any Receivables Purchasers or any Enhancement
Provider to recover, repossess, collect or liquidate the Receivables or
any other assets of the Trust on a "self-help" basis or otherwise and
exercise any rights or remedies of a secured party under the applicable
UCC and take any other appropriate action to protect and enforce the
rights and remedies of the Trustee and the Certificateholders, the
Receivables Purchasers and any Enhancement Provider;
(ii) promptly, and in any case within any applicable claims
bar period specified under FIRREA or other applicable law, file and
prove a claim or claims under FIRREA or otherwise, by filing proofs of
claim, protective proofs of claim or otherwise, for the whole amount of
unpaid principal and interest in respect of the Certificates and the
Receivables Purchase Interests and/or the whole amount due any
Enhancement Provider and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
and the Certificateholders, the Receivables Purchasers and any
Enhancement Providers allowed in any judicial, administrative,
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corporate or other proceedings relating to the Originator, the Seller
or either of their creditors or property, including any actions
relating to the preservation of deficiency claims or for the protection
against loss of any claim in the event the Trustee's or the
Certificateholders', the Receivables Purchasers', or any Enhancement
Provider's status as secured creditors are successfully challenged; and
(iii) collect and receive any moneys or other property
payable or deliverable on any such claims and distribute all amounts
with respect to the claims of the Certificateholders, the Receivables
Purchasers and any Enhancement Provider to the Certificateholders, the
Receivables Purchasers and any Enhancement Provider, as applicable.
(c) Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any
Certificateholder, Certificate Owner or Receivables Purchaser any plan of
reorganization, arrangement, adjustment or composition affecting any interests
in the Receivables or the rights of any owner thereof, or to authorize the
Trustee to vote in respect of the claim of any Certificateholder, Certificate
Owner or Receivables Purchaser in any such proceeding.
Section 11.14 Rights of Purchaser Representatives and Investor
Certificateholders to Direct Trustee. (a) The Purchaser Representatives (or,
with respect to any remedy, trust or power that does not relate to all
Receivables Purchase Series, the Purchaser Representatives for all Receivables
Purchase Series to which such remedy, trust or power relates) and Holders of
Investor Certificates evidencing Undivided Trust Interests aggregating more than
50% of the aggregate Investor Interests (or with respect to any remedy, trust or
power that does not relate to all Series, 50% of the aggregate Investor Interest
of the Investor Certificates of all Certificate Series to which such remedy,
trust or power relates) shall have the right to direct the Trustee (i) with
respect to the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee, and (ii) to exercise any right, remedy or power provided to
Investor Certificateholders of a Certificate Series pursuant to the related
Supplement or Receivables Purchasers of a Receivables Purchase Series (or their
Purchaser Representative) pursuant to the related Receivables Purchase
Agreement, and the Trustee shall so act; provided, however, that, subject to
Section 11.1, the Trustee shall have the right to decline to follow any such
direction if the Trustee being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee, determine that the
proceedings so directed would be illegal or involve it in personal liability or
be unduly prejudicial to the rights of Investor Certificateholders or
Receivables Purchasers not parties to such direction; and provided, further,
that nothing in this Agreement shall impair the right of the Trustee to take any
action deemed proper by the Trustee and which is not inconsistent with such
direction of the Purchaser Representatives or such Holders of Investor
Certificates.
(b) In connection with any action taken by the Trustee pursuant to
instructions given in accordance with paragraph (a) above, any legal counsel
retained by the Trustee shall be
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acceptable to each Series and the Trustee shall notify promptly each Purchaser
Representative of such action. In addition, any Purchaser Representative may, at
its own cost, elect to participate in such action along with the Trustee, which
participation may include retaining separate counsel.
Section 11.15 Representations and Warranties of the Trustee. The
Trustee, in its individual capacity, represents and warrants that:
(i) the Trustee is a national banking association
authorized to engage in the business of banking under the laws of the
United States of America;
(ii) the Trustee has full power, authority and right to
execute, deliver and perform this Agreement, and has taken all
necessary action to authorize the execution, delivery and performance
by it of this Agreement; and
(iii) this Agreement has been duly executed and delivered
by the Trustee.
Section 11.16 Maintenance of Office or Agency. The Trustee shall
maintain at its expense in New York, New York or Philadelphia, Pennsylvania an
office or offices, or agency or agencies, where notices and demands to or upon
the Trustee in respect of the Certificates and this Agreement may be served. The
Trustee initially appoints First Union National Bank, 123 South Broad Street,
Philadelphia, Pennsylvania 19109, as its office for such purposes. The Trustee
shall give prompt written notice to the Servicer, Certificateholders, each
Purchaser Representative and each Enhancement Provider of any change in the
location of the Certificate Register or any such office or agency.
ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
(a) The Trust and the respective obligations and responsibilities of the
Seller, the Servicer and the Trustee created hereby (other than the obligation
of the Trustee to make payments to Receivables Purchasers and Certificateholders
as hereinafter set forth) shall terminate, except with respect to the duties
described in Sections 7.4, 8.4 and 11.5 and subsection 12.3(b), on the Trust
Termination Date; provided, however, that the Trust shall not terminate on the
date specified in clause (b)(i) of the definition of "Trust Termination Date" if
each of the Servicer and the Holder of the Exchangeable Seller Certificate
notify the Trustee in writing, not later than 5 Business Days preceding such
date, that they desire that the Trust not terminate on such date, which notice
(such notice, a "Trust Extension") shall specify the date on which the Trust
shall terminate (such date, the "Extended Trust Termination Date"); provided,
however, that the Extended Trust Termination Date shall be not later than
December 24, 2025. The Servicer and the Holder of the Exchangeable Seller
Certificate may, on any date following
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the Trust Extension, so long as no Certificate Series is outstanding and no
Receivables Purchase Interests are outstanding, deliver a notice in writing to
the Trustee changing the Extended Trust Termination Date.
(b) In the event that (i) the Trust has not terminated by the last
Distribution Date occurring in the second month preceding the Trust Termination
Date, and (ii) (A) the Investor Interest and, if applicable, the Enhancement
Invested Amount of any Certificate Series or the Receivables Purchase Interest
of any Receivables Purchase Series (after giving effect to all transfers,
withdrawals, deposits and drawings to occur on such date and the payment of
principal on any Series of Certificates or with respect to any Receivables
Purchase Interest to be made on the related Distribution Date during such month
pursuant to Article IV, any Supplement or any Receivables Purchase Agreement)
are greater than zero or (B) Loss Amounts allocated to any Series to the extent
such amounts can be reimbursed pursuant to the related Supplement or Receivables
Purchase Agreement remain unreimbursed, or (C) any party to a Supplement or
Receivables Purchase Agreement is owed accrued interest, fees or expenses, the
Servicer shall sell within 30 days after such Distribution Date all the
Receivables. The proceeds of any sale shall be treated as Collections on the
Receivables and shall be allocated and deposited in accordance with Article IV,
each Supplement and each Receivables Purchase Agreement; provided, however, that
the Trustee shall determine conclusively in its sole discretion the amount of
such proceeds which are allocable to Finance Charge Receivables and the amount
of such proceeds which are allocable to Principal Receivables. During such
thirty day period, the Servicer shall continue to collect payments on the
Receivables and allocate and deposit such payments in accordance with the
provisions of Article IV.
(c) All principal, interest, fees and expenses with respect to any
Series shall be due and payable no later than the applicable Series Termination
Date. Unless otherwise provided in a Supplement or Receivables Purchase
Agreement, in the event that the Investor Interest and, if applicable, the
Enhancement Invested Amount of any Certificate Series, or any Receivables
Purchase Interest is greater than zero on its Series Termination Date (after
giving effect to all transfers, withdrawals, deposits and drawings to occur on
such date and the payment of principal, interest and fees to be made on such
Series on such date), the Trustee will sell or cause to be sold, and pay the
proceeds to all Certificateholders of such Certificate Series or Receivables
Purchasers of such Receivables Purchase Interest all pro rata in final payment
of all principal of and accrued interest on such Series, and all accrued and
unpaid fees and expenses and unreimbursed Loss Amounts (to the extent such
amounts can be reimbursed pursuant to the related Supplement or Receivables
Purchase Agreement) under the related Supplement or Receivables Purchase
Agreement, an amount of Principal Receivables and the related Finance Charge
Receivables (or interests therein) up to 110% of the sum of the Investor
Interest and the Enhancement Invested Amount, if any, or the Receivables
Purchase Interest of such Series at the close of business on such date;
provided, that such amount shall include any unreimbursed Loss Amounts payable
to such Certificateholders or Receivables Purchasers to the extent such amounts
can be reimbursed pursuant to the related Supplement or Receivables Purchase
Agreement. The Seller shall be permitted to purchase such Receivables in such
case and shall have a right of first refusal with respect thereto. Any proceeds
of such sale in excess of such
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principal, interest, fees and expenses and unreimbursed Loss Amounts paid, shall
be paid to the Holder of the Exchangeable Seller Certificate. Upon such Series
Termination Date with respect to the applicable Series, final payment of all
amounts allocable to any Investor Certificates or, if applicable, Enhancement
Invested Amounts of such Certificate Series or Receivables Purchase Interests of
such Receivables Purchasers shall be made in the manner provided in Section
12.3.
Section 12.2 Optional Purchase.
(a) If so provided in any Supplement or any Receivables Purchase
Agreement, the Seller may, but shall not be obligated to, cause a final
distribution to be made in respect of the related Series on a Distribution Date
specified in such Supplement or Receivables Purchase Agreement by depositing
into the Collection Account or the applicable Series Account, not later than
such Distribution Date, for application in accordance with Section 12.3 (in the
case of a Certificate Series) or as provided in such Receivables Purchase
Agreement, the amount specified in such Supplement or Receivables Purchase
Agreement.
(b) The amount deposited pursuant to subsection 12.2(a) shall be paid
on the related Distribution Date to the Investor Certificateholders of the
related Certificate Series pursuant to Section 12.3 or Receivables Purchasers of
the related Receivables Purchase Series. All Certificates of a Certificate
Series which are to be redeemed by the Trust pursuant to subsection 12.2(a)
shall be canceled by the Transfer Agent and Registrar and be disposed of in a
manner satisfactory to the Trustee and the Seller. The Investor Interest of each
Certificate Series which is redeemed by the Trust pursuant to subsection
12.2(a), and the Receivables Purchase Interests which are repurchased by the
Trust pursuant to subsection 12.2(a), shall, for the purposes of the definition
of "Seller Interest," be deemed to be equal to zero on the Distribution Date
following the making of the deposit, and the Seller Interest shall thereupon be
deemed to have been increased by the Investor Interest of such Certificate
Series or the repurchased Receivables Purchase Interest.
Section 12.3 Final Payment with Respect to Any Certificate Series.
(a) Written notice of any termination, specifying the Distribution Date
upon which the Investor Certificateholders of any Certificate Series may
surrender their Certificates for payment of the final distribution with respect
to such Certificate Series and cancellation, shall be given (subject to at least
two Business Days' prior notice from the Servicer to the Trustee) by the Trustee
to Investor Certificateholders of such Certificate Series mailed not later than
the fifth day of the month of such final distribution (or in the manner provided
by the Supplement relating to such Certificate Series) specifying (i) the
Distribution Date (which shall be the Distribution Date in the month (x) in
which the deposit is made pursuant to subsection 2.4(e), 9.2(b), 10.2(a), or
12.2(a) of this Agreement or such other section as may be specified in the
related Supplement, or (y) in which the related Series Termination Date occurs)
upon which final payment of such Investor Certificates will be made upon
presentation and surrender of such Investor Certificates at the office or
offices therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being
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made only upon presentation and surrender of the Investor Certificates at the
office or offices therein specified. The Trustee shall give such notice to the
Transfer Agent and Registrar and the Paying Agent at the time such notice is
given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to subsection
12.1(a) or the occurrence of the Series Termination Date with respect to any
Certificate Series, all funds then on deposit in the Collection Account, the
Excess Funding Account or any Series Account applicable to the related
Certificate Series shall continue to be held in trust for the benefit of the
Investor Certificateholders of the related Certificate Series, and the Paying
Agent or the Trustee shall pay such funds to the Certificateholders of the
related Certificate Series upon surrender of their Certificates. In the event
that all of the Investor Certificateholders of any Certificate Series shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Trustee shall give a second
written notice to the remaining Investor Certificateholders of such Certificate
Series upon receipt of the appropriate records from the Transfer Agent and
Registrar to surrender their Certificates for cancellation and receive the final
distribution with respect thereto. The Trustee and the Paying Agent shall pay to
the Seller upon written request any funds held by them for the payment of
principal or interest which remains unclaimed for two years. After payment to
the Seller, Investor Certificateholders entitled to the such funds may seek
recovery only from the Seller as general creditors unless an applicable
abandoned property law designates another Person.
(c) All Certificates surrendered for payment of the final distribution
with respect to such Certificates and cancellation shall be canceled by the
Transfer Agent and Registrar and be disposed of in a manner satisfactory to the
Trustee and the Seller.
Section 12.4 Termination of Rights of Holder of Exchangeable Seller
Certificate. Upon the termination of the Trust pursuant to Section 12.1, and
after payment of all amounts due hereunder on or prior to such termination and
the surrender of the Exchangeable Seller Certificate, the Trustee shall execute
a written reconveyance substantially in the form of Exhibit J pursuant to which
it shall reconvey to the Holder of the Exchangeable Seller Certificate (without
recourse, representation or warranty) all right, title and interest of the Trust
in the Receivables, whether then existing or thereafter created, all monies due
or to become due with respect thereto, all Collections, all Recoveries, all
rights, remedies, powers and privileges of the Trust with respect to the
Receivables, all rights, remedies, powers and privileges of the Trust under the
Purchase Agreement and all proceeds of the foregoing, except for amounts held by
the Trustee pursuant to subsection 12.3(b). The Trustee shall execute and
deliver such instruments of transfer and assignment, in each case without
recourse, as shall be reasonably requested by the Holder of the Exchangeable
Seller Certificate to vest in such Holder all right, title and interest which
the Trust had in the Receivables.
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Section 12.5 Defeasance. Notwithstanding anything to the contrary in
this Agreement or any Supplement:
(a) The Seller and any Affiliate of Seller that is a Holder of the
Exchangeable Seller Certificate may at Seller's option be discharged from its
obligations hereunder with respect to any Certificate Series or all outstanding
Certificate Series (the "Defeased Series") on the date the applicable conditions
set forth in subsection 12.5(c) are satisfied (a "Defeasance"); provided,
however, that the following rights, obligations, powers, duties and immunities
shall survive with respect to the Defeased Series until otherwise terminated or
discharged hereunder: (i) the rights of the Holders of Investor Certificates of
the Defeased Series to receive, solely from the trust fund provided for in
subsection 12.5(c), payments in respect of principal of and interest on such
Investor Certificates when such payments are due; (ii) the right of any
Enhancement Provider to the repayment of any amount due to it under the
applicable Enhancement and Supplement, including interest thereon; (iii) the
Seller's obligations with respect to such Certificates under Sections 6.3 and
6.4; (iv) the rights, powers, trusts, duties, and immunities of the Trustee, the
Paying Agent and the Registrar hereunder; and (v) this Section 12.5.
(b) Subject to Section 12.5(c), the Seller at its option may cause
Collections allocated to the Defeased Series and available to purchase Principal
Receivables to be applied to purchase Permitted Investments rather than
Principal Receivables.
(c) The following shall be the conditions to Defeasance under
subsection 12.5(a):
(i) The Seller irrevocably shall have deposited or caused to be
deposited with the Trustee (such deposit to be made from other than the
Seller's or any Affiliate of the Seller's funds), under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds in trust for making the payments described
below, (A) Dollars in an amount, or (B) Permitted Investments which
through the scheduled payment of principal and interest in respect
thereof will provide, not later than the due date of payment thereon,
money in an amount, or (C) a combination thereof, in each case
sufficient to pay and discharge, and which shall be applied by the
Trustee to pay and discharge, all remaining scheduled interest and
principal payments on all outstanding Investor Certificates of the
Defeased Series on the dates scheduled for such payments in this
Agreement and the applicable Supplements and all amounts owing to the
Enhancement Providers with respect to the Defeased Series;
(ii) prior to its first exercise of its right pursuant to this
Section 12.5 with respect to a Defeased Series to substitute money or
Permitted Investments for Receivables, if any Series of Investor
Certificates are outstanding that were characterized as debt at the
time of their issuance, the Seller shall have delivered to the Trustee
a Tax Opinion with respect to such deposit and termination of
obligations and (in any case) an Opinion of Counsel to the effect that
such deposit and termination of obligations will not result in the
Trust being required to register as an "investment company" within the
meaning of the Investment Company Act;
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(iii) the Seller shall have delivered to the Trustee and any
Enhancement Provider an Officer's Certificate of the Seller stating the
Seller reasonably believes that such deposit and termination of
obligations will not, based on the facts known to such officer at the
time of such certification, then cause an Early Amortization Event with
respect to any Series or any event that, with the giving of notice or
the lapse of time, would result in the occurrence of an Early
Amortization Event with respect to any Series; and (iv) the Rating
Agency Condition shall have been satisfied and the Seller shall have
delivered copies of such written notice to the Servicer and the
Trustee.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
(a) This Agreement or any Supplement may be amended in writing from
time to time by the Servicer, the Seller, the Holder of the Exchangeable Seller
Certificate and the Trustee upon 10 Business Days' notice to each Purchaser
Representative (along with a copy of the form of the proposed amendment),
without the consent of any Purchaser Representative, Investor Certificateholder
or Receivables Purchaser; provided, that such action shall not, as evidenced by
an Opinion of Counsel for the Seller addressed and delivered to the Trustee and
each Purchaser Representative, adversely affect in any material respect the
interests of any Investor Certificateholder, any Receivables Purchaser or any
Enhancement Provider; provided, further, that the Rating Agency Condition shall
have been satisfied with respect to such amendment.
(b) This Agreement or any Supplement may also be amended in writing
from time to time by the Servicer, the Seller, the Holder of the Exchangeable
Seller Certificate and the Trustee upon 10 Business Days' notice to each
Purchaser Representative (along with a copy of the form of the proposed
amendment), with the consent of each Purchaser Representative, and the Holders
of Investor Certificates evidencing Undivided Trust Interests aggregating not
less than 66 2/3% of the Investor Interest, of each outstanding Series adversely
affected by such amendment for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
any Supplement or modifying in any manner the rights of Investor
Certificateholders or Receivables Purchasers of any outstanding Series;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, distributions that are required to be made on
any Investor Certificates of any such Certificate Series without the consent of
each Investor Certificateholder of such Certificate Series affected thereby,
(ii) change the definition of or the manner of calculating the Investor
Interest, the Loss Amount or the Investor/Purchaser Percentage without the
consent of each Investor Certificateholder of all Certificate Series adversely
affected thereby, or (iii) reduce the aforesaid percentage required to consent
to any such amendment, without the consent of each Investor Certificateholder of
each Certificate Series adversely affected thereby. Any amendment to be effected
pursuant to this Article XIII shall be deemed to affect adversely all
outstanding Series, other than any Series with respect to which such action
shall not, as evidenced by an
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Opinion of Counsel as described in Section 13.1(a), adversely affect in any
material respect the interests of such Series. The Trustee may, but shall not be
obligated to, enter into any such Amendment which affects the Trustee's rights,
duties or immunities under this Agreement or otherwise.
(c) Notwithstanding anything in this Section 13.1 to the contrary, the
Supplement with respect to any Certificate Series may be amended on the terms
and in accordance with the procedures provided in such Supplement and the
Receivables Purchase Agreement with respect to any Receivables Purchase Series
may be amended on the terms and in accordance with the procedures provided in
such Receivables Purchase Agreement.
(d) Promptly after the execution of any amendment to this Agreement or
any Supplement, the Servicer shall furnish notification of the substance of such
amendment to each Purchaser Representative, each Investor Certificateholder of
each Certificate Series adversely affected thereby, each Enhancement Provider,
and each Rating Agency and a copy of such amendment to each Purchaser
Representative.
(e) It shall not be necessary for the consent of Investor
Certificateholders or Receivables Purchasers under this Section 13.1 to approve
the particular form of any proposed amendment, but it shall be sufficient if
such consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof by
Investor Certificateholders or Receivables Purchasers shall be subject to such
reasonable requirements as the Trustee may prescribe.
(f) Any Supplement executed and delivered pursuant to Section 6.9, any
Receivables Purchase Agreement executed and delivered pursuant to Section 6.18,
and any amendment to Schedule 1 in connection the addition to or removal of
Receivables from the Trust as provided in Sections 2.6 and 2.7, executed in
accordance with the provisions hereof, shall not be considered amendments to
this Agreement for the purpose of subsections 13.1(a) and (b).
(g) In connection with any amendment, the Trustee may request an
Opinion of Counsel from the Seller or Servicer to the effect that the amendment
complies with all requirements of this Agreement.
Section 13.2 Protection of Right, Title and Interest to Trust.
(a) The Servicer shall cause this Agreement, each Supplement, each
Receivables Purchase Agreement, and all certificates of assignment, agreements
and documents, and all amendments hereto and thereto and/or all financing
statements and continuation statements and any other necessary documents
covering the Trust's and the Certificateholders' right, title and interest to
the property comprising the Trust and the Receivables Purchasers' right, title
and interest in the Receivables to be promptly recorded, registered and filed,
and at all times to be kept recorded, registered and filed, all in such manner
and in such places as may be required by law fully to preserve and protect the
right, title and interest of the Certificateholders or the Trust,
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as the case may be, hereunder to all property comprising the Trust, and the
right, title and interest of the Receivables Purchasers hereunder to the
Receivables. The Servicer shall deliver to the Trustee file-stamped copies of,
or filing receipts for, any document recorded, registered or filed as provided
above (with a copy thereof to each Purchaser Representative), as soon as
available following such recording, registration or filing. The Seller shall
cooperate fully with the Servicer in connection with the obligations set forth
above and shall execute any and all documents reasonably required to fulfill the
intent of this subsection 13.2(a).
(b) Within 30 days after the Seller or the Trustee makes any change in
its name, identity or corporate structure which would make any financing
statement or continuation statement filed in accordance with paragraph (a)
above, any Supplement or any Receivables Purchase Agreement materially
misleading within the meaning of Section 9-402(7) of the UCC, the Seller or the
Trustee, as applicable, shall give the Trustee or the Seller, as applicable, any
Enhancement Provider and the Purchaser Representatives notice of any such change
and shall file such financing statements or amendments as may be necessary to
continue the perfection of the Trust's interest in the property comprising the
Trust and the perfection of the Receivables Purchasers' interest in the
Receivables and the proceeds thereof as contemplated by Section 2.1 hereof.
(c) Each of the Seller and the Servicer shall give the Trustee and each
Purchaser Representative prompt written notice of any relocation of any office
from which it services Receivables or keeps records concerning the Receivables
or of its principal executive office and whether, as a result of such
relocation, the applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement or of any
new financing statement and shall file such financing statements or amendments
as may be necessary to continue the perfection of the interests in the
Receivables and the proceeds thereof. Each of the Seller and the Servicer shall
at all times maintain each office from which it services Receivables and its
principal executive office within the United States of America.
(d) The Servicer will deliver to the Trustee on or before March 31 of
each year, beginning with March 31, 1995 an Opinion of Counsel, substantially in
the form of Exhibit K addressed to the Trustee, each Enhancement Provider, and
each Purchaser Representative.
Section 13.3 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust, nor shall such death or incapacity
entitle such Certificateholders or heirs to claim an accounting or to take any
action or commence any proceeding in any court for a partition or winding up of
the Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) Except as set forth in this Agreement or any Supplement, no
Certificateholder shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or contained
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in the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association,
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement or any Supplement
pursuant to any provision hereof or thereof.
(c) No Investor Certificateholder shall have any right by virtue of any
provisions of this Agreement or any Supplement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Supplement, unless such Investor Certificateholder previously shall have
made, and unless the Holders of Investor Certificates evidencing more than 50%
of the aggregate unpaid principal amount of all Certificates (or, with respect
to any such action, suit or proceeding that does not relate to all Series, 50%
of the aggregate unpaid principal amount of all Series to which such action,
suit or proceeding relates), shall have made, a request in writing to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 30 days after such request and offer of
indemnity, shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted by
each Investor Certificateholder with every other Certificateholder, Receivables
Purchaser and the Trustee, that no one or more Investor Certificateholders shall
have the right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement or any Supplement to affect,
disturb or prejudice the rights of any other Investor Certificateholders or
Receivables Purchasers, or to obtain or seek to obtain priority over or
preference to any other such Investor Certificateholders or Receivables
Purchaser, or to enforce any right under this Agreement or any Supplement,
except in the manner herein provided and for the equal, ratable and common
benefit of all Investor Certificateholders and Receivables Purchasers except as
otherwise expressly provided in this Agreement or any Supplement with respect to
any Enhancement applicable to any Certificate Series or Receivables Purchase
Series. For the protection and enforcement of the provisions of this Section
13.3, each and every Certificateholder, Receivables Purchaser and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
Section 13.4 Limitation on Rights of Receivables Purchasers and
Purchaser Representatives. (a) Except as expressly provided in this Agreement,
neither any Receivables Purchaser nor any Purchaser Representative shall have
any right to vote, or in any manner otherwise control the operation and
management of the Trust.
(b) The Receivables Purchasers and any Purchaser Representative shall
not have the right to institute any suit, action or proceeding in equity or at
law against the Servicer or the Seller for the enforcement of this Agreement or
any Receivables Purchase Agreement, except to the extent that such Receivables
Purchase Agreement creates independent and nonduplicative rights against the
Seller or the Servicer, unless any Purchaser Representative previously shall
have (i) made a request in writing to the Trustee to institute such action, suit
or proceeding and (ii) offered and provided to the Trustee reasonable security
or indemnity against the costs, expenses and liabilities to be incurred by it in
compliance with such request, and the Trustee,
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shall either have refused to institute any such suit, action or proceeding or,
for 15 days after such request and offer of security or indemnity, shall have
neglected to institute any such action, suit or proceeding.
(c) It is understood and intended, and upon the purchase of each
Receivables Purchase Interest the related Purchaser Representative and the
related Receivables Purchaser shall be deemed to have expressly covenanted and
agreed with every other Receivables Purchaser and Investor Certificateholder and
the Trustee, that the Receivable Purchase Interests and the Investor Interests
shall rank pari passu among one another and amongst themselves (except for any
Enhancement that may apply to only the Receivables Purchasers or any Series of
Investor Certificates) and that neither such Purchaser Representative nor any
Receivables Purchaser shall have any right hereunder or under a Receivables
Purchase Agreement (i) to surrender, waive, impair, disturb or prejudice the
rights of the holders of any other of the Receivables Purchase Interests or the
Investor Certificates, (ii) to obtain or seek to obtain priority over or
preference to any other such Receivables Purchaser or Investor Certificateholder
or (iii) to enforce any right under this Agreement or any Receivables Purchase
Agreement against the Servicer or the Seller, except in the manner herein
provided and for the equal, ratable and common benefit of all Receivables
Purchasers and Investor Certificateholders, except as otherwise expressly
provided in this Agreement and except for any direct rights against the Seller
or Servicer that any Receivables Purchaser may have under the Receivables
Purchase Agreement. For the protection and enforcement of the provisions of this
section, each and every Receivables Purchaser and Investor Certificateholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 13.5 GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.6 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at, sent by facsimile to, sent by courier at or mailed by registered
mail, return receipt requested, (a) in the case of the Seller, to Charming
Shoppes Receivables Corp., c/o Charming Shoppes, Inc., 450 Winks Lane, Bensalem,
Pennsylvania 19020, Attention: General Counsel, (b) in the case of the Servicer,
to Spirit Inc., c/o Charming Shoppes, Inc., 450 Winks Lane, Bensalem,
Pennsylvania 19020, Attention: General Counsel, (c) in the case of the Trustee,
to the Corporate Trust Office, (d) in the case of the Enhancement Provider for a
particular Series, to the address, if any, specified in the related Supplement
or Receivables Purchase Agreement, (e) in the case of the Rating Agency for a
particular Series, to the address, if any, specified in the related Supplement
or Receivables Purchase Series or (f) in the case of the Purchaser
Representative for a particular Receivables Purchase Series, to the address, if
any, specified in the related Receivables Purchase Agreement. Unless otherwise
provided with respect to any Certificate Series in the related Supplement, any
notice required or permitted to be mailed to a Certificateholder shall be given
by first class mail,
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postage prepaid, at the address of such Certificateholder as shown in the
Certificate Register or, with respect to any notice required or permitted to be
provided to Holders of Bearer Certificates, by publication in the manner
provided in the related Supplement. If and so long as any Series is listed on
the Luxembourg Stock Exchange and such exchange shall so require, any notice to
Investor Certificateholders shall be published in an authorized newspaper of
general circulation in Luxembourg within the time period prescribed in this
Agreement. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 13.7 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or rights of the Certificateholders thereof or of the Receivables Purchasers
hereunder.
Section 13.8 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 8.2, this Agreement may not be
assigned by the Seller or the Servicer without the prior written consent of each
Purchaser Representative and the Holders of Investor Certificates evidencing
Undivided Trust Interests aggregating not less than 66 2/3% of the Investor
Interest of each Certificate Series on a Series by Series basis.
Section 13.9 Certificates Non-Assessable and Fully Paid. It is the
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the Undivided Trust
Interests represented by the Certificates shall be non-assessable for any losses
or expenses of the Trust or for any reason whatsoever, and that Certificates
upon authentication thereof by the Trustee pursuant to Sections 2.1 and 6.2 are
and shall be deemed fully paid.
Section 13.10 Further Assurances. The Seller and the Servicer agree to
do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Trustee and any
Purchaser Representative more fully to effect the purposes of this Agreement,
including, without limitation, the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
Section 13.11 Non-petition Covenant. Notwithstanding any prior
termination of this Agreement, the Servicer, the Enhancement Provider, any
Holder of the Exchangeable Seller Certificate, the Trustee, each Purchaser
Representative and (with respect to the Trust only) the Seller, shall not, prior
to the date which is one year and one day after the last day on which any
Investor Certificate shall have been outstanding, acquiesce, petition or
otherwise invoke or cause the Trust or the Seller to invoke the process of any
Governmental Authority for the purpose of commencing or sustaining a case
against the Trust or the Seller under any Federal or state
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bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Trust or the Seller or any substantial part of its property or ordering the
winding up or liquidation of the affairs of the Trust or the Seller.
Section 13.12 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Trustee, any Enhancement
Provider, any Purchaser Representative, the Investor Certificateholders or the
Receivables Purchasers, any right, remedy, power or privilege hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, and privileges provided by law.
Section 13.13 Counterparts. This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
Section 13.14 Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto, the Certificateholders,
the Receivables Purchasers, the Purchaser Representatives and, to the extent
provided in the related Supplement or Receivables Purchase Agreement, to any
Enhancement Provider named therein, and their respective successors and
permitted assigns. Except as otherwise provided in this Article XIII, no other
Person shall have any right or obligation hereunder.
Section 13.15 Actions by Certificateholders. (a) Whenever in this
Agreement a provision is made that an action may be taken or a notice, demand or
instructions given by Investor Certificateholders, such action, notice or
instruction may be taken or given by any Investor Certificateholder, unless such
provision requires a specific percentage of Investor Certificateholders. (b) Any
request, demand, authorization, direction, notice, consent, waiver or other act
by a Certificateholder shall bind such Certificateholder and every subsequent
holder of such Certificate issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done or omitted
to be done by the Trustee or the Servicer in reliance thereon, whether or not
notation of such action is made upon such Certificate.
Section 13.16 Rule 144A Information. For so long as any of the Investor
Certificates of any Certificate Series are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, each of the Seller, the
Servicer, the Trustee and the Enhancement Provider for such Certificate Series
agree to cooperate with each other to provide to any Investor Certificateholders
of such Certificate Series and to any prospective purchaser of Certificates
designated by such an Investor Certificateholder upon the request of such
Investor Certificateholder or prospective purchaser, any information required to
be provided to such holder or prospective purchaser to satisfy the condition set
forth in Rule 144A(d)(4) under the Securities Act.
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Section 13.17 Merger and Integration. Except as specifically stated
otherwise herein, this Agreement, together with each Supplement and Receivables
Purchase Agreement, sets forth the entire understanding of the parties relating
to the subject matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement. This Agreement may not be modified, amended,
waived or supplemented except as provided herein.
Section 13.18 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
Section 13.19 Inconsistent Provisions. To the extent that any provision
in any Supplement or any Receivables Purchase Agreement or in any certificate or
document delivered in connection with any Supplement or any Receivables Purchase
Agreement is inconsistent with any provision under this Agreement, or in any
circumstance in which it is unclear whether such Supplement or Receivables
Purchase Agreement or this Agreement shall control, the provisions contained in
such Supplement or Receivables Purchase Agreement (or such certificate or other
document) shall control with respect to the related Series.
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<PAGE> 114
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
CHARMING SHOPPES RECEIVABLES CORP., as Seller
By: /s/ Eric M. Specter
-------------------------------------------------
Name: Eric M. Specter
Title: President
Address: c/o Charming Shoppes
450 Winks Lane
Bensalem, PA 19020
Attention: Legal Department
Facsimile: (215) 638-6919
Confirmation: (215) 638-6954
SPIRIT OF AMERICA, INC.,
Servicer
By: /s/ Eric M. Specter
-------------------------------------------------
Name: Eric M. Specter
Title: President
Address: c/o Charming Shoppes
450 Winks Lane
Bensalem, PA 19020
Attention: Legal Department
Facsimile: (215) 638-6919
Confirmation: (215) 638-6954
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<PAGE> 115
FIRST UNION NATIONAL BANK, Trustee
By: /s/ George Rayzis
-------------------------------------------------
Name: George Rayzis
Title: Vice President
Address: 123 South Broad Street
Philadelphia, Pennsylvania 19109
Attention: Corporate Trust Department
Facsimile: (215) 985-7290
Confirmation: (215) 985-7321
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<PAGE> 116
EXHIBIT A
FORM OF EXCHANGEABLE SELLER CERTIFICATE
No. 1 One Unit
CHARMING SHOPPES MASTER TRUST
ASSET BACKED CERTIFICATE
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE ACT), AND MAY BE SOLD ONLY PURSUANT TO A
REGISTRATION STATEMENT EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND SERVICING AGREEMENT WILL
BE FURNISHED TO THE HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN
REQUEST.
This Certificate represents an
undivided interest in the
Charming Shoppes Master Trust
Evidencing an undivided interest in a Trust, the corpus of which consists of a
portfolio of receivables now existing or hereafter created under selected
revolving credit card accounts generated or acquired by Spirit of America
National Bank and conveyed to 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 an 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. is the
registered owner of an 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 selected credit card accounts (the "Accounts")
originated by Spirit of America National Bank (the "Originator"), a national
banking association, that have been conveyed to Charming Shoppes Receivables
Corp. (the "Seller"), a Delaware corporation, all monies due or to become due
with respect thereto, all Collections, all Recoveries, certain rights against
the Originator with respect thereto, such funds
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as from time to time are deposited in the Collection Account and any Series
Account and the rights to any Enhancement with respect to any Series and all
proceeds of the foregoing; provided, that the corpus of the Trust shall not
include any undivided percentage ownership interest in Receivables to the extent
Conveyed by the Trust pursuant to any Receivables Purchase Agreement; such
corpus more fully described pursuant to the Second Amended and Restated Pooling
and Servicing Agreement dated as of November 25, 1997 as amended as of
, 1999 (the "Pooling and Servicing Agreement") between Charming Shoppes
Receivables Corp., Seller, Spirit of America, Inc., Servicer, and First Union
National Bank, Trustee. A summary of certain of the pertinent provisions of the
Pooling and Servicing Agreement is set forth herein below. Such summary shall in
all cases be subject to the terms set forth in the Pooling and Servicing
Agreement.
To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Pooling and Servicing Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Pooling and Servicing Agreement, to which Pooling and
Servicing Agreement, as amended from time to time, the Holder by virtue of the
acceptance hereof assents and by which the Holder is bound.
This Certificate has not been registered or qualified under the
Securities Act of 1933, as amended, or any state securities law. No sale,
transfer or other disposition of this Certificate shall be permitted other than
in accordance with the provisions of Section 6.3 or 6.9 of the Pooling and
Servicing Agreement.
This Certificate is the Exchangeable Seller Certificate (the
"Certificate"), which represents an undivided interest in the Trust, including
the right to receive the Collections and other amounts at the times and in the
amounts specified in the Pooling and Servicing Agreement to be paid to the
Holder of the Exchangeable Seller Certificate. The aggregate interest
represented by this Certificate at any time in the Principal Receivables in the
Trust shall not exceed the Seller Interest at such time. In addition to this
Certificate, (i) Series of Investor Certificates may be issued to investors
pursuant to one or more Supplements to the Pooling and Servicing Agreement, each
of which will represent an undivided interest in the Trust, to the extent set
forth in the Pooling and Servicing Agreement and the related Supplement and (ii)
Receivables Purchase Interests may be sold by the Trust to one or more
Receivables Purchasers pursuant to one or more Receivables Purchase Agreements,
each of which interests shall represent an undivided interest in the
Receivables, Collections with respect thereto and other items, to the extent set
forth in the Pooling and Servicing Agreement and the related Receivables
Purchase Agreement. This Certificate shall not represent any interest in any
Series Accounts or any Enhancement, except to the extent provided in the Pooling
and Servicing Agreement or the related Supplement or Receivables Purchase
Agreement. The Seller Interest shall be the amount defined as such in the
Pooling and Servicing Agreement.
This Certificate does not represent an obligation of, or any interest
in, the Originator, the Seller or the Servicer, and neither the Certificates nor
the Accounts or Receivables are insured or guaranteed by the Federal Deposit
Insurance Corporation or any other governmental agency.
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This Certificate is limited in right of payment to certain Collections
respecting the Receivables, all as more specifically set forth hereinabove and
in the Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Pooling and Servicing Agreement, or be valid
for any purpose.
IN WITNESS WHEREOF, the Seller has caused this Certificate to be duly
executed under its official seal.
By:
---------------------------------
[SEAL]
Attested to:
By:
-------------------------
Date: , 1997
-----------------
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<PAGE> 119
Form of Trustee's Certificate of Authentication
CERTIFICATE OF AUTHENTICATION
This is the Exchangeable Seller Certificate referred to in the
within-mentioned Pooling and Servicing Agreement.
FIRST UNION NATIONAL BANK,
Trustee
By:
--------------------------------
Authorized Officer
<PAGE> 120
EXHIBIT B
FORM OF ASSIGNMENT OF RECEIVABLES IN ADDITIONAL ACCOUNTS
ASSIGNMENT No. OF RECEIVABLES IN ADDITIONAL ACCOUNTS, dated as of
, (this "Assignment") by and between CHARMING SHOPPES
RECEIVABLES CORP., a Delaware corporation (the "Seller"), SPIRIT OF AMERICA,
INC., a Delaware Corporation (the "Servicer"), and First Union National Bank, as
trustee (the "Trustee") of the CHARMING SHOPPES MASTER TRUST (the "Trust"),
pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Seller, the Servicer and the Trustee are parties to the
Second Amended and Restated Pooling and Servicing Agreement, dated as of
November 25, 1997 and amended as of , 1999 (hereinafter as such
agreement may have been, or may from time to time be, amended, supplemented or
otherwise modified, the "Pooling and Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Seller
wishes to designate Additional Accounts to be included as Accounts and to Convey
the Receivables of such Additional Accounts, whether now existing or hereafter
created, to the Trust as part of the corpus of the Trust (as each such term is
defined in the Pooling and Servicing Agreement); and
WHEREAS, the Trustee is willing to accept such designation and
Conveyance subject to the terms and conditions hereof;
NOW, THEREFORE, the Seller and the Trust hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein.
"Addition Cut Off Date" shall mean, with respect to the Additional
Accounts designated hereby, , .
"Addition Date" shall mean, with respect to the Additional Accounts
designated hereby, , .
"Addition Notice Date" shall mean, with respect to the Additional
Accounts designated hereby, , .
"Additional Accounts" shall mean the Additional Accounts designated
hereby.
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<PAGE> 121
2. Designation of Additional Accounts. The Servicer (on behalf
of the Seller) shall deliver to the Trustee not later than five Business Days
after the Addition Date, a computer file, microfiche or written list containing
a true and complete list of Accounts which as of the Addition Date shall be
deemed to be Additional Accounts, such accounts being identified by account
number, Obligor name, Obligor address, and by the aggregate amount of
Receivables in such accounts as of the close of business on the Addition Cut Off
Date. Such file or list shall be delivered to the Trustee as confidential and
proprietary, shall be marked as Schedule 1 to this Assignment and, as of the
Addition Date, shall be incorporated into and made a part of this Assignment.
3. Conveyance of Receivables in Additional Accounts. The
Seller does hereby Convey to the Trust without recourse (except as expressly
provided herein and in the Pooling and Servicing Agreement), all of its right,
title and interest in and to the Receivables now existing and hereafter created
and arising from time to time in connection with the Additional Accounts until
the termination of the Trust, all monies due or to become due with respect
thereto, all Collections, all Recoveries, all rights, remedies, powers and
privileges with respect to the Receivables in Additional Accounts, and all
proceeds of the foregoing.
In connection with such Conveyance, the Seller agrees to
record and file, at its own expense, a financing statement or financing
statements (or an amendment to such financing statement or financing statements)
(including any continuation statements with respect to each such financing
statements when applicable) with respect to the Receivables now existing and
hereafter created in the Additional Accounts meeting the requirements of
applicable state law in such manner and in such jurisdictions as are necessary
to perfect the Conveyance of the Receivables in Additional Accounts to the Trust
and the first priority nature of the Trust's interest in the Receivables in
Additional Accounts, and to deliver a file-stamped copy of such financing
statement or continuation statement (or an amendment to such financing statement
or financing statements) or other evidence of such filing (which may, for
purposes of this Section 3, consist of telephone confirmation of such filing
followed by delivery of a file-stamped copy as soon as practicable) to the
Trustee on or prior to the Addition Date, and in the case of any continuation
statements filed pursuant to this Section 3, as soon as practicable after
receipt thereof by the Seller. The foregoing Conveyance shall be made to the
Trust for the benefit of the Certificateholders, any Receivables Purchasers and
any Enhancement Providers (to the extent set forth in the Pooling and Servicing
Agreement and any Supplement or Receivables Purchase Agreement) and each
reference in this Assignment to such Conveyance shall be construed accordingly.
In connection with such Conveyance, the Servicer agrees, on
behalf of the Seller, as an expense of the Servicer paid out of the Seller's
Monthly Servicing Fee, on or prior to the Addition Date, to indicate in the Pool
Index File maintained in its computer files that Receivables created in
connection with the Additional Accounts have been Conveyed to the Trust pursuant
to this Assignment. The Servicer further agrees not to alter the file
designation referenced in this paragraph with respect to any Additional Account
during the term of this Assignment unless and until such Additional Account
becomes a Removed Account.
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The parties intend that if, and to the extent that, such
Conveyance is not deemed to be a sale, the Seller shall be deemed hereunder to
have granted to the Trust a first priority perfected security interest in all of
the Seller's right, title and interest in, to and under the Receivables now
existing and hereafter created and arising from time to time in connection with
the Additional Accounts until the termination of the Trust, all monies due or to
become due with respect thereto, all Collections, all Recoveries, all rights,
remedies, powers and privileges with respect to the Receivables in Additional
Accounts, and all proceeds of the foregoing, and that this Assignment shall
constitute a security agreement under applicable law.
4. Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance, on behalf
of the Trust, of all right, title and interest previously held by the Seller in
and to the Receivables now existing and hereafter created from time to time and
arising in connection with the Additional Accounts until the termination of the
Trust, all monies due or to become due with respect thereto, all Collections,
all Recoveries, all rights, remedies, powers and privileges with respect to the
Receivables in Additional Accounts, and all proceeds of the foregoing, and
declares that it shall maintain such right, title and interest, upon the Trust
herein set forth, for the benefit of all Certificateholders, any Receivables
Purchasers and any Enhancement Providers (to the extent set forth in the Pooling
and Servicing Agreement and the related Supplement or Receivables Purchase
Agreement).
(b) The Trustee hereby agrees not to disclose to any Person
any of the account numbers or other information contained in the computer files
or microfiche or written lists delivered to the Trustee by the Servicer (on
behalf of the Seller) pursuant to this Assignment ("Account Information") except
as is required in connection with the performance of its duties hereunder or in
enforcing the rights of the Certificateholders and Receivables Purchasers or to
a Successor Servicer appointed pursuant to Section 10.2 of the Pooling and
Servicing Agreement or as mandated pursuant to any Requirement of Law applicable
to the Trustee. The Trustee agrees to take such measures as shall be reasonably
requested by the Seller to protect and maintain the security and confidentiality
of such information, and, in connection therewith, shall allow the Seller to
inspect the Trustee's security and confidentiality arrangements from time to
time during normal business hours. In the event that the Trustee is required by
law to disclose any Account Information, the Trustee shall provide the Seller
with prompt written notice, unless such notice is prohibited by law, of any such
request or requirement so that the Seller may request a protective order or
other appropriate remedy. The Trustee shall use its best efforts to provide the
Seller with written notice no later than five days prior to any disclosure
pursuant to this subsection 4(b).
5. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Trust as of the Addition Date:
(a) Organization and Good Standing. The Seller is a Delaware
corporation duly organized and validly existing under the laws of the State of
Delaware and has full corporate power, authority and legal right to own its
properties and conduct its business as such properties are
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<PAGE> 123
presently owned and such business is presently conducted, and to execute,
deliver and perform its obligations under this Assignment.
(b) Due Qualification. The Seller is duly qualified to do
business and is in good standing (or is exempt from such requirement) in any
state required in order to conduct its business, and has obtained all necessary
licenses and approvals with respect to the Seller required under applicable law.
(c) Due Authorization. The execution and delivery of this
Assignment by the Seller and the consummation of the transactions provided for
in this Assignment have been duly authorized by the Seller by all necessary
corporate action on its part.
(d) Enforceability. This Assignment constitutes a legal, valid
and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as such enforceability may be limited by
Debtor Relief Laws.
(e) No Conflict. The execution and delivery of this
Assignment, the performance of the transactions contemplated by this Assignment
and the fulfillment of the terms hereof will not conflict with, result in any
breach of any of the material terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, any indenture,
contract, agreement, mortgage, deed of trust, or other instrument to which the
Seller is a party or by which it or any of its properties are bound.
(f) No Violation. The execution and delivery of this
Assignment, the performance of the transactions contemplated by this Assignment
and the fulfillment of the terms hereof will not conflict with or violate in any
material respect any Requirements of Law applicable to the Seller.
(g) No Proceedings. There are no proceedings pending or, to
the best knowledge of the Seller, threatened against the Seller before any
court, regulatory body, administrative agency, or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Assignment, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Assignment, (iii) seeking any determination or ruling that, in the reasonable
judgment of the Seller, would materially and adversely affect the performance by
the Seller of its obligations under this Assignment, (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Assignment, or (v) seeking to affect adversely the
income tax attributes of the Trust.
(h) All Consents Required. All appraisals, authorizations,
consents, orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery of this
Assignment, the performance of the transactions contemplated by this Assignment
and the fulfillment of the terms hereof, have been obtained.
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<PAGE> 124
(i) Solvency. No Insolvency Event with respect to the Seller
has occurred and the Conveyance by the Seller to the Trust of the Receivables in
the Additional Accounts has not been made in contemplation of the occurrence
thereof.
The representations and warranties set forth in this Section 5
shall survive the transfer and assignment of the respective Receivables in
Additional Accounts to the Trust and the termination of the rights and
obligations of the Servicer pursuant to Section 10.1 of the Pooling and
Servicing Agreement.
6. Representations and Warranties of the Seller Relating to
the Receivables.
(a) The Seller hereby represents and warrants to the Trust as
of the date hereof:
(i) This Assignment constitutes either (A) a valid sale to
the Trust of all right, title and interest of the Seller in and to the
Receivables now existing and hereafter created and arising from time to
time in connection with the Additional Accounts until the termination
of the Trust, all monies due or to become due with respect thereto, all
Collections, all Recoveries, all rights, remedies, powers and
privileges with respect to the Receivables, and all proceeds of the
foregoing, and such property will be held by the Trust free and clear
of any Lien of any Person claiming through or under the Seller or any
of its Affiliates or (B) a grant of a security interest (as defined in
the UCC as in effect in any applicable jurisdiction) in such property
to the Trust, which is enforceable with respect to the Receivables now
existing and hereafter created and arising from time to time in
connection with the Additional Accounts until the termination of the
Trust, all monies due or to become due with respect thereto, all
Collections, all Recoveries, all rights, remedies, powers and
privileges with respect to the Receivables, and all proceeds of the
foregoing, upon such creation. To the extent that this Assignment
constitutes the grant of a security interest to the Trust in such
property, upon the filing of the financing statements described in
Section 3 and in the case the Receivables hereafter created, all monies
due or to become due with respect thereto, all Collections, all
Recoveries, and the proceeds of the foregoing, upon such creation, the
Trust shall have a first priority perfected security interest in such
property (subject to Section 9-306 of the UCC as in effect in any
applicable jurisdiction). Neither the Seller nor any Person claiming
through or under the Seller shall have any claim to or interest in the
Collection Account or any Series Account, except for the Seller's
rights to receive interest accruing on, and investment earnings in
respect of, the Collection Account, as provided in the Pooling and
Servicing Agreement (and, if applicable, any Series Account as provided
in any Supplement or any Receivables Purchase Agreement) and, to the
extent that this Assignment constitutes the grant of a security
interest in such property, except for the interest of the Seller in
such property as a debtor for purposes of the UCC as in effect in any
applicable jurisdiction.
(ii) Each Additional Account is an Eligible Account and each
Receivable in each such Additional Account is an Eligible Receivable.
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<PAGE> 125
(iii) Each Receivable in the Additional Accounts has been
Conveyed to the Trust in compliance, in all material respects, with all
Requirements of Law applicable to the Seller.
(iv) With respect to each Receivable in the Additional
Accounts, all consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required
to be obtained, effected or given by the Seller in connection with the
Conveyance of such Receivable to the Trust have been duly obtained,
effected or given and are in full force and effect.
(v) As of the Addition Date, Schedule 1 to this Assignment and
the related computer file or microfiche or written list referred to in
Section 3 of this Assignment is an accurate and complete listing in all
material respects of all the Additional Accounts, and the information
contained therein with respect to the identity of such Additional
Accounts and the Receivables existing thereunder is true and correct in
all material respects as of the Addition Date, and as of the Addition
Date, the aggregate amount of Receivables in all the Additional
Accounts was $ .
(vi) No selection procedures believed by the Seller to be
materially adverse to the interests of the Investor Certificateholders
or any Receivables Purchasers were utilized in selecting the Additional
Accounts from the available Eligible Accounts from the Bank Portfolio.
(b) The representations and warranties set forth in this
Section 6 shall survive the Conveyance of any of the respective Receivables to
the Trust.
7. Conditions Precedent. The acceptance by the Trustee set
forth in Section 4 and the amendment of the Pooling and Servicing Agreement set
forth in Section 8 are subject to the satisfaction, on or prior to the Addition
Date, of each of the conditions precedent set forth in the Pooling and Servicing
Agreement, any Supplement or any Receivables Purchase Agreement.
8. Amendment of the Pooling and Servicing Agreement. The
Pooling and Servicing Agreement is hereby amended to provide that all references
therein to the "Pooling and Servicing Agreement," to "this Agreement" and
"herein" shall be deemed from and after the Addition Date to be a dual reference
to the Pooling and Servicing Agreement as supplemented by this Assignment.
Except as expressly amended hereby, all of the representations, warranties,
terms, covenants and conditions of the Pooling and Servicing Agreement shall
remain unamended and shall continue to be, and shall remain, in full force and
effect in accordance with its terms and except as expressly provided herein
shall not constitute or be deemed to constitute a waiver of compliance with or a
consent to noncompliance with any term or provision of the Pooling and Servicing
Agreement.
9. Counterparts. This Assignment may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
B-6
<PAGE> 126
10. Governing Law. This Assignment shall be governed by and
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.
IN WITNESS WHEREOF, the undersigned have caused this
Assignment of Receivables in Additional Accounts to be duly executed and
delivered by their respective duly authorized officers on the day and year first
above written.
CHARMING SHOPPES RECEIVABLES CORP.
By:
---------------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK, Trustee on
behalf of the CHARMING SHOPPES MASTER
TRUST
By:
---------------------------------------
Name:
Title:
B-7
<PAGE> 127
Schedule 1
to Assignment of
Receivables in
Additional Accounts
ADDITIONAL ACCOUNTS
<PAGE> 128
Schedule 2
to Assignment of
Receivables in
Additional Accounts
Charming Shoppes Master Trust
Officer's Certificate of an Officer
of Charming Shoppes Receivables Corp.
, a duly authorized officer of Charming
Shoppes Receivables Corp. (the "Seller"), hereby certifies and acknowledges on
behalf of the Seller that to the best of such officer's knowledge, the following
statements are true on , (the "Addition Date"):
(a) The Seller has delivered to the Trustee a written
assignment in substantially the form of Exhibit B to the Second Amended and
Restated Pooling and Servicing Agreement dated as of November 25, 1997 and as
amended as of , 1999 (the "Pooling and Servicing Agreement"; any
capitalized term used but not otherwise defined herein shall have the meaning
specified in the Pooling and Servicing Agreement) between Charming Shoppes
Receivables Corp., Seller, Spirit of America, Inc., Servicer, and First Union
National Bank, Trustee, with a copy to each Purchaser Representative, and has
indicated in its computer files that the Receivables created in connection with
the Additional Accounts have been Conveyed to the Trust.
(b) Each Additional Account is an Eligible Account and each
Receivable in each such Additional Account is an Eligible Receivable.
(c) No selection procedures believed by the Seller to be
materially adverse to the interests of the Investor Certificateholders or any
Receivables Purchasers were utilized in selecting the Additional Accounts from
the available Eligible Accounts from the Bank Portfolio.
IN WITNESS WHEREOF, I have hereunto set my hand this day of
, .
CHARMING SHOPPES RECEIVABLES CORP.
By:
------------------------
Name:
Title:
<PAGE> 129
EXHIBIT C
[Monthly Servicer's Report]
<PAGE> 130
EXHIBIT D
FORM OF OPINION OF COUNSEL REGARDING ADDITIONAL ACCOUNTS
[Insert form of Opinion]
D-1
<PAGE> 131
EXHIBIT E-1
FORM OF REASSIGNMENT OF RECEIVABLES IN REMOVED ACCOUNTS
REASSIGNMENT NO. OF RECEIVABLES IN REMOVED ACCOUNTS, dated as of
(this "Reassignment") by and among FIRST UNION NATIONAL BANK, as trustee
(the "Trustee") of the CHARMING SHOPPES MASTER TRUST (the"Trust") and CHARMING
SHOPPES RECEIVABLES CORP., a Delaware corporation (the "Seller"), pursuant to
the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Seller and the Trustee are parties to the Second Amended
and Restated Pooling and Servicing Agreement, dated as of November 25, 1997 and
as amended as of , 1999 (hereinafter as such agreement may have
been, or may from time to time be, amended, supplemented or otherwise modified,
the "Pooling and Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the Seller
wishes to remove all Receivables from certain designated Accounts of the
Originator (the "Removed Accounts") and to cause the Trust to reconvey the
Receivables of such Removed Accounts, whether now existing or hereafter created,
from the Trust to the Seller; and
WHEREAS, the Trustee is willing to accept such designation and to
reconvey the Receivables in the Removed Accounts, and the Assignee is willing to
accept the reconveyance of such Receivables, subject to the terms and conditions
hereof.
NOW, THEREFORE, the Trustee and the Seller hereby agree as follows:
1. Defined Terms. All terms defined in the Pooling and Servicing Agreement
and used herein shall have such defined meanings when used herein, unless
otherwise defined herein.
"Removal Cut Off Date" shall mean, with respect to the Removed
Accounts designated hereby, , .
"Removal Date" shall mean, with respect to the Removed
Accounts designated hereby, , .
"Removal Notice Date" shall mean, with respect to the removed
Accounts designated hereby, , .
"Removed Accounts" shall mean the Removed Accounts designated
hereby.
E-1-1
<PAGE> 132
2. Designation of Removed Accounts. The Servicer (on behalf
of the Seller) shall have delivered to the Trustee on or prior to the Removal
Date, a computer file, microfiche list, or written list containing a true and
complete list of Accounts which as of the Removal Date shall be deemed to be
Removed Accounts, such accounts being identified by account number and by the
aggregate amount of Receivables in such accounts as of the close of business on
the Removal Cut Off Date. Such list shall be marked as Schedule 1 to this
Reassignment and, as of the Removal Date, shall be incorporated into and made a
part of this Reassignment.
3. Conveyance of Receivables in Removed Accounts.
(a) The Trustee does hereby Convey to the Seller without
recourse, all of its right, title and interest in and to the Receivables now
existing and hereafter created and arising from time to time in connection with
the Removed Accounts until the termination of the Trust, all monies due or to
become due with respect thereto, all Collections, all Recoveries, all rights,
remedies, powers and privileges with respect to the Receivables in Removed
Accounts, and all proceeds of the foregoing.
(b) In connection with such transfer, the Trustee agrees to
execute and deliver to the Seller on or prior to the date of this Reassignment,
a termination statement with respect to the Receivables now existing and
hereafter created in the Removed Accounts designated hereby (which may be a
single termination statement with respect to all such Receivables) evidencing
the release by the Trustee of its Lien on the Receivables in the Removed
Accounts, and meeting the requirements of applicable state law, in such manner
and such jurisdictions as are necessary to remove such Lien.
4. Representations and Warranties of the Seller and the
Assignee. The Seller hereby represents and warrants to the Trust as of the
Removal Date:
(a) Enforceability. This Reassignment constitutes a legal,
valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as such enforceability may be limited by
Debtor Relief Laws.
(b) Selection Procedures. No selection procedures believed by
the Seller to be materially adverse to the interests of the Investor
Certificateholders, the Receivables Purchasers or any Enhancement Provider were
utilized in selecting the Removed Accounts designated hereby.
(c) Schedule 1 Information. Schedule 1 to this Reassignment is
an accurate and complete listing in all material respects of all the Removed
Accounts as of the Removal Cut Off Date, and the information contained therein
with respect to the identity of such Removed Accounts and the Receivables
existing thereunder is true and correct in all material respects as of the
Removal Cut Off Date, and as of the Removal Cut Off Date, the aggregate amount
of Receivables in all the Removed Accounts was $ .
E-1-2
<PAGE> 133
5. Conditions Precedent. The Conveyance of Receivables set
forth in Section 3 and the amendment of the Pooling and Servicing Agreement set
forth in Section 6 are subject to the satisfaction, on or prior to the Removal
Date, of each of the conditions precedent to such removal set forth in the
Pooling and Servicing Agreement, any Supplement or any Receivables Purchase
Agreement.
6. Amendment of the Pooling and Servicing Agreement. The
Pooling and Servicing Agreement is hereby amended to provide that all references
therein to the "Pooling and Servicing Agreement," to "this Agreement" and
"herein" shall be deemed from and after the Removal Date to be a dual reference
to the Pooling and Servicing Agreement as supplemented by this Reassignment.
Except as expressly amended hereby, all of the representations, warranties,
terms, covenants and conditions of the Pooling and Servicing Agreement shall
remain unamended and shall continue to be, and shall remain, in full force and
effect in accordance with its terms and except as expressly provided herein
shall not constitute or be deemed to constitute a waiver of compliance with or a
consent to noncompliance with any term or provision of the Pooling and Servicing
Agreement.
7. Counterparts. This Reassignment may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
8. Governing Law. This Reassignment shall be governed by and
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.
E-1-3
<PAGE> 134
IN WITNESS WHEREOF, the undersigned have caused this
Reassignment of Receivables in Removed Accounts to be duly executed and
delivered by their respective duly authorized officers on the day and year first
above written.
CHARMING SHOPPES RECEIVABLES CORP.
By:
------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK, Trustee of the
CHARMING SHOPPES MASTER TRUST
By:
-----------------------------
Name:
Title:
E-1-4
<PAGE> 135
Schedule 1
to Assignment of
Receivables in
Removed Accounts
REMOVED ACCOUNTS
<PAGE> 136
EXHIBIT E-2
FORM OF REASSIGNMENT OF INELIGIBLE RECEIVABLES
REASSIGNMENT NO. OF INELIGIBLE RECEIVABLES, dated as of
, (this "Reassignment") by and among FIRST UNION NATIONAL
BANK, as trustee of the CHARMING SHOPPES MASTER TRUST (the "Trust"), and
CHARMING SHOPPESRECEIVABLES CORP., a Delaware corporation (the "Seller"),
pursuant to the Pooling and Servicing Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Seller and the Trustee are parties to the Second
Amended and Restated Pooling and Servicing Agreement, dated as of November 25,
1997 as amended as of , 1999 (hereinafter as such agreement may have
been, or may from time to time be, amended, supplemented or otherwise modified,
the "Pooling and Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Seller wishes to remove from the Trust certain Receivables (the "Ineligible
Receivables") and to cause the Trustee to reconvey such Ineligible Receivables,
whether now existing or hereafter created, from the Trust to the Seller; and
WHEREAS, the Trust is willing to accept such designation and
to reconvey the Ineligible Receivables, and the Assignee is willing to accept
such reconveyance of Ineligible Receivables, subject to the terms and conditions
hereof.
NOW, THEREFORE, the Trustee and the Seller hereby agree as
follows:
1. Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein.
"Removal Cut Off Date" shall mean, with respect to the
Ineligible Receivables designated hereby, , .
"Removal Date" shall mean, with respect to the Ineligible
Receivables designated hereby, , .
E-2-1
<PAGE> 137
"Removal Notice Date" shall mean, with respect to the
Ineligible Receivables designated hereby, , .
"Ineligible Receivables" shall mean the Ineligible Receivables
designated hereby.
2. Designation of Ineligible Receivables. The Servicer (on
behalf of the Seller) shall have delivered to the Trustee on or prior to the
Removal Date, a computer file, microfiche list or written list containing a true
and complete list of Receivables which as of the Removal Date shall be deemed to
be Ineligible Receivables, such Ineligible Receivables being identified by the
related account number and by the aggregate amount of Ineligible Receivables in
each such Account as of the close of business on the Removal Cut Off Date, and,
if less than all of the Receivables in an Account are to be Conveyed by the
Trust hereunder, such other means of identification which shall be adequate to
distinguish the Ineligible Receivables from the other Receivables in such
Account. Such list shall be marked as Schedule 1 to this Reassignment and, as of
the Removal Date, shall be incorporated into and made a part of this
Reassignment.
3. Conveyance of Ineligible Receivables.
(a) The Trustee does hereby Convey to the Seller without
recourse, all of its right, title and interest in and to the Ineligible
Receivables (and, in the event that all the Receivables of an account are
Ineligible Receivables, all Receivables now existing and hereafter created and
arising from time to time in connection with such account until the termination
of the Trust), all monies due or to become due with respect thereto, all
Collections, all Recoveries, all rights, remedies, powers and privileges with
respect to such Ineligible Receivables, and all proceeds of the foregoing.
(b) In connection with such transfer, the Trustee agrees to
execute and deliver to the Seller on or prior to the date of this Reassignment,
a termination statement with respect to the Ineligible Receivables (and, in the
event that all the Receivables of an account are Ineligible Receivables, all
Receivables now existing and hereafter created in such accounts) designated
hereby (which may be a single termination statement with respect to all such
Ineligible Receivables) evidencing the release by the Trust of its Lien on the
Ineligible Receivables, and meeting the requirements of applicable state law, in
such manner and such jurisdictions as are necessary to remove such Lien.
4. Representations and Warranties of the Seller. The Seller
hereby represents and warrants to the Trustee as of the Removal Date:
(a) Enforceability. This Reassignment constitutes a legal,
valid and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as such enforceability may be limited by
Debtor Relief Laws.
E-2-2
<PAGE> 138
(b) Selection Procedures. No selection procedures believed by
the Seller to be materially adverse to the interests of the Investor
Certificateholders, the Receivables Purchasers or any Enhancement Provider were
utilized in selecting the Ineligible Receivables designated hereby.
(c) Schedule 1 Information. Schedule 1 to this Reassignment is
an accurate and complete listing in all material respects of all the Ineligible
Receivables as of the Removal Cut Off Date, and the information contained
therein with respect to the identity of such Ineligible Receivables and, if
applicable, the related accounts, is true and correct in all material respects
as of the Removal Cut Off Date, and as of the Removal Cut Off Date, the
aggregate amount of Ineligible Receivables was $ .
5. Conditions Precedent. The Conveyance of Ineligible
Receivables set forth in Section 3 and the amendment of the Pooling and
Servicing Agreement set forth in Section 6 are subject to the satisfaction, on
or prior to the Removal Date, of each of the conditions precedent to such
removal set forth in the Pooling and Servicing Agreement, any Supplement or any
Receivables Purchase Agreement.
6. Amendment of the Pooling and Servicing Agreement. The
Pooling and Servicing Agreement is hereby amended to provide that all references
therein to the "Pooling and Servicing Agreement," to "this Agreement" and
"herein" shall be deemed from and after the Removal Date to be a dual reference
to the Pooling and Servicing Agreement as supplemented by this Reassignment.
Except as expressly amended hereby, all of the representations, warranties,
terms, covenants and conditions of the Pooling and Servicing Agreement shall
remain unamended and shall continue to be, and shall remain, in full force and
effect in accordance with its terms and except as expressly provided herein
shall not constitute or be deemed to constitute a waiver of compliance with or a
consent to noncompliance with any term or provision of the Pooling and Servicing
Agreement.
7. Counterparts. This Reassignment may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
8. Governing Law. This Reassignment shall be governed by and
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.
E-2-3
<PAGE> 139
IN WITNESS WHEREOF, the undersigned have caused this
Reassignment of Ineligible Receivables to be duly executed and delivered by
their respective duly authorized officers on the day and year first above
written.
CHARMING SHOPPES RECEIVABLES CORP.
By:
-------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK, Trustee
of the CHARMING SHOPPES MASTER
TRUST
By:
-------------------------------
Name:
Title:
E-2-4
<PAGE> 140
Schedule 1
to Reassignment of
Ineligible Receivables
INELIGIBLE RECEIVABLES
<PAGE> 141
EXHIBIT F
FORM OF ANNUAL SERVICER'S CERTIFICATE
-------------------
Charming Shoppes Master Trust
------------------
The undersigned, a duly authorized representative of
(the "Servicer"), as Servicer pursuant to the Second
Amended and Restated Pooling and Servicing Agreement dated as of
November 25, 1997 as amended as of , 1999 (the "Pooling and
Servicing Agreement") by and between Charming Shoppes Receivables Corp., as
Seller, Spirit of America, Inc., Servicer, and First Union National Bank, as
trustee (the "Trustee"), does hereby certify that:
1. is the Servicer under the
Pooling and Servicing Agreement.
2. The undersigned is duly authorized pursuant to the
Pooling and Servicing Agreement to execute and deliver this
Certificate to the Trustee.
3. This Certificate is delivered pursuant to Section
3.5 of the Pooling and Servicing Agreement.
4. A review of the activities of the Servicer during
the prior calendar year was conducted under our supervision.
5. Based on such review, the Servicer has, to the
best of our knowledge, fully performed all its obligations
under the Pooling and Servicing Agreement throughout such
period and no default in the performance of such obligations
has occurred or is continuing except as set forth in paragraph
6 below.
6. The following in a description of each default in
the performance of the Servicer's obligations under the
provisions of the Pooling and Servicing Agreement, including
any Supplement, known to us to have been made during such
period which sets forth in detail (i) the nature of each such
default, (ii) the action taken by the Servicer, if any, to
remedy each such default and (iii) the current status of each
such default:
[If applicable, insert "None."]
F-1
<PAGE> 142
IN WITNESS WHEREOF, the undersigned has duly executed
this Certificate this day of , .
-------------------------------
Name:
Title:
F-2
<PAGE> 143
Exhibit G
Procedures of Independent Accountants
1. Select a sample of applications for testing of proper approval or
denial of credit, applying the criteria specified in the Operating
Policies and Procedures.
2. Determine that the operators responsible for approving credit are
evaluated using a standard scoring system on a monthly basis.
3. Select a sample of transactions representing both credit authorizations
and line changes and will review them for compliance with Operating
Policies and Procedures.
4. Determine that the operators responsible for authorizing credit and
approving line changes are being evaluated using a standard scoring
system on a monthly basis.
5. Perform observation tests for individual credit card accounts to
determine if the collections procedures are being performed in
accordance with the operating policies and procedures agreement.
6. For the accounts observed in the step above, review prior account
statements to determine if the system is properly aging the minimum
balances.
7. Select a sample of accounts from the Dylakor reports which are in
excess of 180 days delinquent and determine that the account has been
written off in accordance with operating policies and procedures.
8. Compare the monthly totals of new bad debt less recoveries from the
daily write-off and recovery reports maintained at Alliance Data
Services, Inc. ("Alliance Data") to the amounts indicated in the
Fashion Service Corporation's Accounts Receivable Reconciliation
Reports for each of the months in a period of 12 months.
9. Select ten days within the tested period and compare the total payments
per the Fashion Service Corporation's Accounts Receivable
Reconciliation Report to the daily Charming Shoppes Accounts Receivable
Report prepared by Alliance Data.
10. Using the same ten days selected above, compare the gross sales, polled
payments, returns and the net transmission amounts per Fashion Service
Corporation's Monthly Transmission Report to the applicable daily
Charming Shoppes Tapes Transmission Report prepared at Alliance Data.
11. Using the same ten days selected in the second preceding step, compare
the amounts of the lockbox deposits per the daily Charming Shoppes
Accounts Receivable Report
G-1
<PAGE> 144
prepared by Alliance Data and the Monthly Cash Report prepared by
Fashion Service Corporation to the applicable bank statement.
12. Using the same ten days selected in the third preceding step above,
reconcile the total payments posted per the daily Charming Shoppes
Accounts Receivable Report prepared by Alliance Data to the sum of the
lockbox deposit and the prior day's polled payments per the Charming
Shoppes Monthly Cash Report prepared by Fashion Service Corporation.
13. Select one day within the tested period and compare the credit sales,
sales credits, and credit payments per the Daily Sales Register to the
Daily Transaction Register for one store. In addition, compare the
total cash receipts per the Daily Sales Register to the bank statement.
G-2
<PAGE> 145
EXHIBIT H-1
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF
MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF
THE 1933 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.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF
A BENEFIT PLAN (AS DEFINED BELOW) UNLESS IT IS AN INSURANCE COMPANY USING THE
ASSETS OF ITS GENERAL ACCOUNT TO PURCHASE THE CERTIFICATE, AND (i) MEETS ALL OF
THE REQUIREMENTS OF, AND IS ELIGIBLE FOR, RELIEF UNDER PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 AND (ii) LESS THAN 25% OF THE ASSETS OF SUCH ACCOUNT ARE
BENEFIT PLAN ASSETS.(1)
- ----------------------------
(1) The following text should be included in any Certificate in which the above
legend appears:
The Certificates may not be acquired by or for the account of
any employee benefit plan, trust or account, including an individual retirement
account, that is an "employee benefit plan" within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
whether or not subject to ERISA, or that is a "plan" described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, or an entity whose
underlying assets include plan assets by reason of a plan's investment in such
entity (each, a "Benefit Plan"). By accepting and holding this Certificate, the
Holder hereof shall be deemed to have represented and warranted that either (i)
it is not a Benefit Plan or (ii) it is an insurance company purchasing the
Investor Certificates with assets of its general account, and at the time of
acquisition and throughout the period of holding (a) it meets all of the
requirements of and is eligible for exemptive relief under Prohibited
Transaction Class Exemption 95-60 and (b) less than 25% of the assets of such
account are Benefit Plan assets. By acquiring any interest in this Certificate,
the applicable Certificate Owner or Owners shall be deemed to have made the
representations in the preceding sentence.
H-1-1
<PAGE> 146
EXHIBIT H-2
[FORM OF REPRESENTATION LETTER]
[Date]
First Union National Bank
123 South Broad Street, M.B.O., l8th Floor
Philadelphia, PA 19109
Attn: Corporate Trust Administration
Charming Shoppes Receivables Corp.
[Address]
Re: Purchase of $ principal amount of
Charming Shoppes Master Trust
Series [ ] [ %] [Floating Rate]
Asset Backed Certificates
Ladies and Gentlemen:
In connection with our purchase of the above Asset Backed
Certificates (the "Certificates") we confirm that:
(i) we understand that the Certificates are not being
registered under the Securities Act of 1933 (the "1933 Act"), and are
being sold to us in a transaction that is exempt from the registration
requirements of the 1933 Act;
(ii) any information we desire concerning the Certificates or
any other matter relevant to our decision to purchase the Certificates
is or has been made available to us;
(iii) we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
an investment in the Certificates, and we (and any account for which we
are purchasing under paragraph (iv) below) are able to bear the
economic risk of an investment in the Certificates; we (and any account
for which we are purchasing under paragraph (iv) below) are an
"accredited investor" (as such term is defined in Rule 501(a)(1), (2)
or (3) of Regulation D under the 1933 Act); and either (i) we are not,
and none of such accounts is, a Benefit Plan (as defined below) or (ii)
we are (and any account for which we are purchasing under paragraph
(iv) below is) an insurance company purchasing the Certificates with
assets of its general account,
H-2-1
<PAGE> 147
and at the time of acquisition and throughout the period of holding (a)
we (and any such accounts) meet all of the requirements of and are
eligible for exemptive relief under Prohibited Transaction Class
Exemption 95-60 and (B) less than 25% of the assets of each such
account are Benefit Plan assets;
(iv) we are acquiring the Certificates for our own account or
for accounts as to which we exercise sole investment discretion and not
with a view to any distribution of the Certificates, subject,
nevertheless, to the understanding that the disposition of our property
shall at all times be and remain within our control;
(v) we agree that the Certificates must be held indefinitely
by us unless subsequently registered under the 1933 Act or an exemption
from any registration requirements of that Act and any applicable state
securities law is available;
(vi) we agree that in the event that at some future time we
wish to dispose of or exchange any of the Certificates (such
disposition or exchange not being currently foreseen or contemplated),
we will not transfer or exchange any of the Certificates unless:
(A) (1) the sale is of at least U.S. $ principal
amount of Certificates to an Eligible Purchaser (as defined
below), (2) a letter to substantially the same effect as
paragraphs (i), (ii), (iii), (iv), (v) and (vi) of this letter
is executed promptly by the purchaser and (3) all offers or
solicitations in connection with the sale, whether directly or
through any agent acting on our behalf, are limited only to
Eligible Purchasers and are not made by means of any form of
general solicitation or general advertising whatsoever; or
(B) the Certificates are transferred pursuant to Rule
144 under the 1933 Act by us after we have held them for more
than three years; or
(C) the Certificates are sold in any other
transaction that does not require registration under the 1933
Act and, if the Seller, the Servicer, the Trustee or the
Transfer Agent and Registrar so requests, we theretofore have
furnished to such party an opinion of counsel satisfactory to
such party, in form and substance satisfactory to such party,
to such effect; or
(D) the Certificates are transferred pursuant to an
exception from the registration requirements of the 1933 Act
under Rule 144A under the 1933 Act; and
(vii) we understand that the Certificates will bear a legend
to substantially the following effect:
H-2-2
<PAGE> 148
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "1933 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 1933 ACT AND ANY APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR
SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH
PROVISIONS. THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
HEREIN."
"THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF
A BENEFIT PLAN (AS DEFINED BELOW) UNLESS IT IS AN INSURANCE COMPANY
USING THE ASSETS OF ITS GENERAL ACCOUNT TO PURCHASE THE CERTIFICATE,
AND (i) MEETS ALL OF THE REQUIREMENTS OF, AND IS ELIGIBLE FOR, RELIEF
UNDER PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 AND (ii) LESS THAN
25% OF THE ASSETS OF SUCH ACCOUNT ARE BENEFIT PLAN ASSETS."
The first paragraph of this legend may be removed if the Sellers, the Servicer,
the Trustee and the Transfer Agent and Registrar have received an opinion of
counsel satisfactory to them, in form and substance satisfactory to them, to the
effect that such paragraph may be removed.
"Eligible Purchaser" means either an Eligible Dealer or a
corporation, partnership or other entity which we have reasonable grounds to
believe and do believe can make representations with respect to itself to
substantially the same effect as the representations set forth herein. "Eligible
Dealer" means any corporation or other entity the principal business of which is
acting as a broker and/or dealer in securities. "Benefit Plan" means any
employee benefit plan, trust or account, including an individual retirement
account, that is an "employee benefit plan" within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
whether or not subject to ERISA, or a "plan" that is described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, or an entity whose
underlying assets include plan assets by reason of a plan's investment in such
entity. Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Second Amended and Restated Pooling and Servicing
Agreement dated as of November 25, 1997, as amended as of , 1999
between Spirit of America, Inc., as Servicer, Charming Shoppes Receivables
Corp., as Seller and First Union National Bank, as trustee.
Very truly yours,
------------------------------------
(Name of Purchaser)
H-2-3
<PAGE> 149
By:
---------------------------
(Authorized Officer)
H-2-4
<PAGE> 150
EXHIBIT H-3
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF
A BENEFIT PLAN (AS DEFINED BELOW) UNLESS IT IS AN INSURANCE COMPANY USING THE
ASSETS OF ITS GENERAL ACCOUNT TO PURCHASE THE CERTIFICATE, AND (i) MEETS ALL OF
THE REQUIREMENTS OF, AND IS ELIGIBLE FOR, RELIEF UNDER PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 AND (ii) LESS THAN 25% OF THE ASSETS OF SUCH ACCOUNT ARE
BENEFIT PLAN ASSETS.(2)
- --------------------------
(2) The following text should be included in any Certificate in which the above
legend appears:
The Certificates may not be acquired by or for the account of
any employee benefit plan, trust or account, including an individual retirement
account, that is an "employee benefit plan" within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
whether or not subject to ERISA, or that is a "plan" described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended, or an entity whose
underlying assets include plan assets by reason of a plan's investment in such
entity (each, a "Benefit Plan"). By accepting and holding this Certificate, the
Holder hereof shall be deemed to have represented and warranted that either (i)
it is not a Benefit Plan or (ii) it is an insurance company purchasing the
Investor Certificates with assets of its general account, and at the time of
acquisition and throughout the period of holding (a) it meets all of the
requirements of and is eligible for exemptive relief under Prohibited
Transaction Class Exemption 95-60 and (b) less than 25% of the assets of such
account are Benefit Plan assets. By acquiring any interest in this Certificate,
the applicable Certificate Owner or Owners shall be deemed to have made the
representations in the preceding sentence.
H-3-1
<PAGE> 151
EXHIBIT I-1
[FORM OF CLEARANCE SYSTEM CERTIFICATE
TO BE GIVEN TO THE TRUSTEE BY
EUROCLEAR OR CEDEL FOR
DELIVERY OF DEFINITIVE CERTIFICATES
IN EXCHANGE FOR A PORTION OF A
TEMPORARY GLOBAL SECURITY]
CHARMING SHOPPES MASTER TRUST,
Series [ ] [ %] [Floating Rate]
Asset Backed Certificates
[Insert title or sufficient description
of Certificates to be delivered]
We refer to that portion of the temporary Global Certificate
in respect of the above-captioned issue which is herewith submitted to be
exchanged for definitive Certificates (the "Submitted Portion") as provided in
the Second Amended and Restated Pooling and Servicing Agreement dated as of
November 25, 1997 as amended as of , 1999 (as amended and
supplemented, the "Agreement") in respect of such issue. This is to certify that
(i) we have received a certificate or certificates, in writing or by tested
telex, with respect to each of the persons appearing in our records as being
entitled to a beneficial interest in the Submitted Portion and with respect to
such persons' beneficial interest either (a) from such person, substantially in
the form of Exhibit I-2 to the Agreement, or (b) from [ ], substantially in the
form of Exhibit I-3 to the Agreement, and (ii) the Submitted Portion includes no
part of the temporary Global Certificate excepted in such certificates.
We further certify that as of the date hereof we have not
received any notification from any of the persons giving such certificates to
the effect that the statements made by them with respect to any part of the
Submitted Portion are no longer true and cannot be relied on as of the date
hereof.
We understand that this certificate is required in connection
with certain securities and tax laws in the United States of America. If
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate or a copy thereof to any interested party in
such proceedings.
I-1-1
<PAGE> 152
Dated: (3) [Morgan Guaranty Trust
Company of New York,
Brussels office, as
operator of the
Euroclear System ] 3
[Cedel S.A.) (4)
By:
----------------------
- -------------------------------
(3) To be dated on the Exchange Date.
(4) Delete the inappropriate reference.
I-1-2
<PAGE> 153
EXHIBIT I-2
[FORM OF CERTIFICATE TO BE DELIVERED
TO EUROCLEAR OR CEDEL
BY [INSERT NAME OF MANAGER]
WITH RESPECT TO REGISTERED CERTIFICATES SOLD TO
QUALIFIED INSTITUTIONAL BUYERS]
CHARMING SHOPPES MASTER TRUST,
Series [ ] [ %] [Floating Rate]
Asset Backed Certificates
In connection with the initial issuance and placement of the
above referenced Asset Backed Certificates (the "Certificates"), an
institutional investor in the United States ("institutional investor") is
purchasing U.S. $ aggregate principal amount of the Certificates held
in our account at [Morgan Guaranty Trust Company of New York, Brussels office,
as operator of the Euroclear System) [Cedel S.A.] on behalf of such investor.
We reasonably believe that such institutional investor is a
qualified institutional buyer as such term is defined under Rule 144A of the
Securities Act of 1933.
[We understand that this certificate is required in connection
with United States laws. We irrevocably authorize you to produce this
certificate or a copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters covered by
this certificate.]
The Definitive Certificates in respect of this certificate are to be
issued in registered form in the minimum denomination of U.S. $ and such
Definitive Certificates (and, unless the Pooling and Servicing Agreement or
Supplement relating to the Certificates otherwise provides, any Certificates
issued in exchange or substitution for or on registration of transfer of
Certificates) shall bear the following legend:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933. NEITHER THIS CERTIFICATE NOR ANY
PORTION HEREOF MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY,
IN THE UNITED STATES OR TO U.S. PERSONS (EACH AS DEFINED HEREIN),
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH
ACT 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
I-2-1
<PAGE> 154
SERVICING AGREEMENT REFERRED TO HEREIN. THIS CERTIFICATE
CANNOT BE EXCHANGED FOR A BEARER CERTIFICATE."
Dated:
[ ],
By:
------------------------
Authorized Officer
I-2-2
<PAGE> 155
EXHIBIT I-3
[FORM OF CERTIFICATE TO BE DELIVERED
TO EUROCLEAR OR CEDEL BY A BENEFICIAL OWNER
OF CERTIFICATES, OTHER THAN A QUALIFIED INSTITUTIONAL BUYER]
CHARMING SHOPPES MASTER TRUST,
Series [ ] [ %] [Floating Rate]
Asset Backed Certificates
This is to certify that as of the date hereof and except as
provided in the third paragraph hereof, the above-captioned Certificates held by
you for our account (i) are owned by a person that is a United States person, or
(ii) are owned by a United States person that is (A) the foreign branch of a
United States financial institution (as defined in U.S. Treasury Regulations
Section 1.165-12(c)(1)(v)) (a "financial institution") purchasing for its own
account or for resale, or (B) a United States person who acquired the
Certificates through the foreign branch of a financial institution and who holds
the Certificates through the financial institution on the date hereof (and in
either case (A) or (B), the financial institution hereby agrees to comply with
the requirements of Section 165(i)(3)(A), (B) or (C) of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by
a financial institution for purposes of resale during the Restricted Period (as
defined in U.S. Treasury Regulations Section 1.1635(c)(2)(i)(D)(7)). In
addition, financial institutions described in clause (iii) of the preceding
sentence (whether or not also described in clause (i) or (ii)) certify that they
have not acquired the Certificates for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.
We undertake to advise you by tested telex if the above
statement as to beneficial ownership is not correct on the date of delivery of
the above-captioned Certificates in bearer form with respect to such of said
Certificates as then appear in your books as being held for our account.
This certificate excepts and does not relate to U.S.
$ principal amount of Certificates held by you for our account, as to
which we are not yet able to certify beneficial ownership. We understand that
delivery of Definitive Certificates in such principal amount cannot be made
until we are able to so certify.
We understand that this certificate is required in connection
with certain securities and tax laws in the United States of America. If
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we
I-3-1
<PAGE> 156
irrevocably authorize you to produce this certificate or a copy thereof to any
interested party in such proceedings. As used herein, "United States" means the
United States of America (including the States and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction;
and "United States person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States, or any political subdivision thereof, or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
Dated: (1)
By:
-----------------------------------
As, or as agent for, the beneficial
owner(s) of the interest in the
Certificates to which this
certificate relates.
- -------------------------
(1) This Certificate must be dated on the earlier of the date of the first
actual payment of interest in respect of the Certificates and the date of the
delivery of the Certificates in definitive form.
I-3-2
<PAGE> 157
EXHIBIT J
FORM OF CONVEYANCE OF RECEIVABLES
CONVEYANCE of RECEIVABLES, dated as of , (this
"Conveyance") by and between First Union National Bank, as Trustee (the
"Trustee") of the Charming Shoppes Master Trust (the "Trust") and the Holder of
the Exchangeable Seller Certificate pursuant to the Pooling and Servicing
Agreement referred to below (the "Transferee").
W I T N E S S E T H:
WHEREAS, Charming Shoppes Receivables Corp., a Delaware
corporation, as Seller, Spirit of America, Inc., as Servicer, and First Union
National Bank, as Trustee, are parties to the Second Amended and Restated
Pooling and Servicing Agreement dated as of November 25, 1997 as amended as of
, 1999 (hereinafter as such agreement may have been, or may from
time to time be, amended, supplemented or otherwise modified, the "Pooling and
Servicing Agreement");
WHEREAS, pursuant to the Pooling and Servicing Agreement, the
Transferee wishes to cause the Trustee to Convey all of the Receivables and
proceeds thereof, whether now existing or hereafter created, from the Trustee to
the Transferee pursuant to the terms of Section 12.4 of the Pooling and
Servicing Agreement upon termination of the Trust pursuant to Article XII of the
Pooling and Servicing Agreement (as each such term is defined in the Pooling and
Servicing Agreement);
WHEREAS, the Trustee is willing to Convey the Receivables
subject to the terms and conditions hereof;
NOW THEREFORE, the Transferee and the Trustee hereby agree as
follows:
1. Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined meanings when used
herein, unless otherwise defined herein.
"Conveyance Date" shall mean , 19 .
2. Return of Lists of Accounts. The Trustee shall deliver to
the Transferee, not later than three Business Days after the Conveyance Date,
each and every computer file or microfiche or written list of Accounts delivered
to the Trustee pursuant to the terms of the Pooling and Servicing Agreement.
J-1
<PAGE> 158
3. Conveyance of Receivables.
(a) The Trustee does hereby convey to the Transferee (without
recourse, representation or warranty) all right, title and interest of the
Trustee in the Receivables, whether then existing or thereafter created, all
monies due or to become due with respect thereto, all Collections, all
Recoveries, all rights, remedies, powers and privileges of the Trustee with
respect to the Receivables and all proceeds of the foregoing, except for amounts
held by the Trustee pursuant to subsection 12.3(b) of the Pooling and Servicing
Agreement.
(b) The Trustee shall execute and deliver such instruments of
transfer and assignment, in each case without recourse, as shall be reasonably
requested by the Transferee to vest in such Transferee all right, title and
interest which the Trustee had in the Receivables.
4. Counterparts. This Conveyance may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
5. Governing Law. This Conveyance shall be governed by and
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.
J-2
<PAGE> 159
IN WITNESS WHEREOF, the undersigned have caused this
Conveyance to be duly executed and delivered by their respective duly authorized
officers on the day and year first above written.
FIRST UNION NATIONAL BANK,
Trustee of the
CHARMING SHOPPES MASTER TRUST
By:
------------------
Name:
Title:
[HOLDER OF THE EXCHANGEABLE SELLER
CERTIFICATE]
By:
------------------
Name:
Title:
J-3
<PAGE> 160
EXHIBIT K
FORM OF ANNUAL OPINION OF COUNSEL
[INSERT FORM OF OPINION]
K-1
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
CHARMING SHOPPES RECEIVABLES CORP
Seller
SPIRIT OF AMERICA, INC.
Servicer
and
FIRST UNION NATIONAL BANK
Trustee
on behalf of the Series 1999-1 Certificateholders
-----------------------------
SERIES 1999-1 SUPPLEMENT
Dated as of July 22, 1999
to
SECOND AMENDED AND RESTATED POOLING AND
SERVICING AGREEMENT
Dated as of November 25, 1997
(as amended on July 22, 1999)
-----------------------------
$150,000,000
CHARMING SHOPPES MASTER TRUST
SERIES 1999-1
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 1. Designation ................................................................... 1
SECTION 2. Definitions ................................................................... 1
SECTION 3. Servicing Compensation ........................................................ 21
SECTION 4. Reassignment and Transfer Terms ............................................... 22
SECTION 5. Delivery and Payment for the Series 1999-1 Certificates ....................... 22
SECTION 6. Depository; Form of Delivery of Series 1999-1 Certificates .................... 22
SECTION 7. Article IV of Agreement ....................................................... 22
SECTION 8. Article V of the Agreement .................................................... 41
SECTION 9. Series 1999-1 Early Amortization Events ....................................... 44
SECTION 10. Series 1999-1 Termination .................................................... 46
SECTION 11. Limitations on Addition of Accounts .......................................... 46
SECTION 12. Ratification of Agreement .................................................... 46
SECTION 13. Counterparts ................................................................. 46
SECTION 14. Governing Law ................................................................ 46
SECTION 15. No Petition .................................................................. 46
SECTION 16. Restrictions on Transfer of Class C Certificates and Class D Certificates .... 46
SECTION 17. Certain Amendments ........................................................... 47
</TABLE>
i
<PAGE> 3
EXHIBITS
- --------
EXHIBIT A-1 Form of Class A Certificate
EXHIBIT A-2 Form of Class B Certificate
EXHIBIT A-3 Form of Class C Certificate
EXHIBIT A-4 Form of Class D Certificate
EXHIBIT B Form of Monthly Payment Instructions and Notification to the Trustee
EXHIBIT C Form of Monthly Certificateholders' Statement
ii
<PAGE> 4
This SERIES 1999-1 SUPPLEMENT, dated as of July 22, 1999 (this
"Supplement"), is among CHARMING SHOPPES RECEIVABLES CORP., a Delaware
corporation, as Seller (the "Seller"), SPIRIT OF AMERICA, INC., a Delaware
corporation, 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 on July 22, 1999 (as further amended or otherwise
modified 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.
SECTION 1. Designation.
a) There is hereby created a Series of Investor Certificates
to be issued in four classes pursuant to the Agreement and this Series
Supplement and to be known together as the "Series 1999-1 Certificates." The
four classes shall be designated the Class A Floating Rate Asset Backed
Certificates, Series 1999-1 (the "Class A Certificates"), the Class B Floating
Rate Asset Backed Certificates, Series 1999-1 (the "Class B Certificates"), the
Class C Floating Rate Asset Backed Certificates, Series 1999-1 (the "Class C
Certificates"), the Class D-1 Floating Rate Asset Backed Certificates, Series
1999-1 (the "Class D-1 Certificates") and the Class D-2 Floating Rate Asset
Backed Certificates, Series 1999-1 (the "Class-D-2 Certificates"; and together
with the Class D-1 Certificates, the "Class D Certificates"). The Class A
Certificates, the Class B Certificates, the Class C Certificates and the Class D
Certificates shall be substantially in the form of Exhibits A-1, A-2, A-3 and
A-4 hereto, respectively.
b) Series 1999-1 shall be included in Group One. Series 1999-1
shall not be subordinated to any other Series.
SECTION 2. Definitions. In the event that any term or
provision contained herein shall conflict with or be inconsistent with any
provision contained in the Agreement, the terms and provisions of this
Supplement shall govern with respect to this Series. All Article, Section or
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 1999-1 Certificates and no other
Series of Certificates or Receivables Purchase Series issued by the Trust.
"Amortization Period" shall mean, with respect to Series
1999-1, the Controlled Amortization Period or the Early Amortization Period.
1
<PAGE> 5
"Available Funds" shall mean, with respect to any Distribution
Date, the sum of Class A Available Funds, Class B Available Funds, Class C
Available Funds and Class D Available Funds, in each case for such Distribution
Date.
"Available Principal Collections" shall mean, with respect to
any Distribution Date, the sum of (a) the Principal Allocation Percentage of all
Collections of Principal Receivables received during the related Due Period,
minus the amount of Reallocated Class D Principal Collections, Reallocated Class
C Principal Collections and 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, the Class B Required Amount and the Class C
Required Amount, (b) any Shared Principal Collections with respect to other
Series in Group One that are allocated to Series 1999-1 in accordance with
Section 4.15 for such Distribution Date and (c) any other amounts which pursuant
to Section 4.9(a) and 4.11(a) (to the extent allocable to the Class A Investor
Loss Amount or the Class A Investor Dilution Amount), (b), (c) (to the extent
allocable to the Class B Investor Loss Amount or the Class B Investor Dilution
Amount), (d), (g), (h), (i), (l), (m) and (n) for such Due Period (other than
such amounts paid from Reallocated Principal Collections) are to be treated as
Available Principal Collections for such Distribution Date.
"Average Principal Balance" shall mean, for any Due Period in
which one or more Reset Dates occur, the weighted average of the Principal
Receivables on the first day of each Subperiod in such Due Period, it being
understood that such average will be weighted according to a fraction, the
numerator of which is the number of days during the relevant Subperiod and the
denominator of which is the number of days in such Due Period.
"Base Rate" shall mean, for any Due Period, (a) the sum of
Monthly Interest for the related Distribution Date and the Series 1999-1
Investor Monthly Servicing Fee for such Due Period, divided by (b) the Series
Investor Interest as of the last day of the prior Due Period, times (c) 12.
"Class" shall mean any of the Class A Investor Interest, the
Class B Investor Interest, the Class C Investor Interest or the Class D Investor
Interest.
"Class A Additional Interest" shall have the meaning specified
in subsection 4.6(a).
"Class A Available Funds" shall mean, with respect to any
Distribution Date, an amount equal to the Class A Floating Allocation of the
Collections of Finance Charge Receivables allocated to the Series 1999-1
Certificates and deposited in the Collection Account for the related Due Period
(including certain other amounts that are to be treated as Collections of
Finance Charge Receivables in accordance with the Agreement).
"Class A Certificate Rate" shall mean from the Closing Date
through August 15, 1999 from August 16, 1999, through September 14, 1999 and
with respect to each Interest Period thereafter, a per annum rate equal to 0.45%
per annum in excess of LIBOR as determined on the related LIBOR Determination
Date.
2
<PAGE> 6
"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 each of the certificates
executed by the Seller and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-1 hereto.
"Class A Controlled Amortization Amount" for any Due Period
related to the Controlled Amortization Period shall mean $12,281,250; provided,
however, that such amount shall be adjusted downward to reflect any reduction to
the Class A Investor Interest as a result of any cancellation of Class A
Certificates pursuant to Section 4.16 so that such amount shall be equal to
1/8th of the Class A Investor Interest as of the last day of the Due Period
prior to the commencement of the Controlled Amortization Period.
"Class A Controlled Amortization Shortfall" shall mean (i)
with respect to the first Due Period related to the Controlled Amortization
Period, zero, and (ii) with respect to each other Due Period during the
Controlled Amortization Period occurring on or prior to the Class A Expected
Final Payment Date, means the excess, if any, of the Class A Controlled Payment
Amount for the previous Due Period over the amount of Available Principal
Collections distributed as payment of such Class A Controlled Payment Amount on
the Distribution Date related to such previous Due Period.
"Class A Controlled Payment Amount" for any Due Period, shall
mean, the sum of (a) the Class A Controlled Amortization Amount and (b) any
existing Class A Controlled Amortization Shortfall.
"Class A Deficiency Amount" shall have the meaning specified
in subsection 4.6(a).
"Class A Expected Final Payment Date" shall mean the October,
2004 Distribution Date.
"Class A Fixed Allocation" shall mean, with respect to any Due
Period other than a Due Period relating to the Revolving Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, 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 the denominator of which is equal to
the Series Investor Interest as of the end of the day on the last day of the Due
Period occurring immediately prior to the Fixed Principal Allocation Date.
"Class A Floating Allocation" shall mean, with respect to any
Due Period (including any day within such 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
(or with respect to the first Due Period ending after the Closing Date,
the Class A Initial Investor Interest); and
3
<PAGE> 7
(b) the denominator of which is equal to the Series Investor
Interest as of the close of business on the last day of the preceding
Due Period (or with respect to the first Due Period ending after the
Closing Date, the Initial Investor Interest).
"Class A Initial Investor Interest" shall mean the aggregate
initial principal amount of the Class A Certificates, which is $98,250,000.
"Class A Investor Allocation" shall mean, with respect to any
Due Period, (a) with respect to Series 1999-1 Investor Loss Amounts, Series
1999-1 Investor Dilution Amount and Collections of Finance Charge Receivables at
any time and Collections of Principal Receivables during the Revolving Period,
the Class A Floating Allocation and (b) with respect to Collections of Principal
Receivables during the Controlled Amortization Period or Early Amortization
Period, the Class A Fixed Allocation.
"Class A Investor Charge-Offs" shall have the meaning
specified in sub- section 4.10(a).
"Class A Investor Dilution Amount" shall mean, for any
Distribution Date, an amount equal to the product of (a) the Series 1999-1
Investor Dilution Amount for such Distribution Date and (b) the Class A Floating
Allocation for the related Due Period.
"Class A Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class A Initial Investor Interest,
minus (b) the aggregate amount of principal payments made to Class A
Certificateholders prior to such date minus (c) the excess, if any, of the
aggregate amount of Class A Investor Charge-Offs pursuant to subsection 4.10(a)
over Class A Investor Charge-Offs reimbursed pursuant to subsection 4.11(b)
prior to such date of determination minus (d) the amount of any reduction to the
Class A Investor Interest as a result of the purchase by the Seller and
subsequent cancellation of the Class A Certificates pursuant to Section 4.16;
provided, however, 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 Class A Floating Allocation
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 Required Amount" shall have the meaning specified in
subsection 4.8(a).
"Class A Servicing Fee" shall have the meaning specified in
Section 3.
4
<PAGE> 8
"Class B Additional Interest" shall have the meaning specified
in subsection 4.6(b).
"Class B Available Funds" shall mean, with respect to any
Distribution Date, an amount equal to the Class B Floating Allocation of the
Collections of Finance Charge Receivables allocated to the Series 1999-1
Certificates and deposited in the Collection Account for the related Due Period
(including certain other amounts that are to be treated as Collections of
Finance Charge Receivables in accordance with the Agreement).
"Class B Certificate Rate" shall mean from the Closing Date
through August 15, 1999, from August 16, 1999 through September 14, 1999 and
with respect to each Interest Period thereafter, a per annum rate equal to 0.70%
per annum in excess of LIBOR as determined on the related LIBOR Determination
Date.
"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 each of the certificates
executed by the Seller and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-2 hereto.
"Class B Controlled Amortization Amount" for any Due Period
related to the Controlled Amortization Period shall mean $13,500,000; provided,
however, that such amount shall be adjusted downward to reflect any reduction to
the Class B Investor Interest as a result of any cancellation of Class B
Certificates pursuant to Section 4.16 so that such amount shall be equal to 1/2
of the Class B Investor Interest as of the last day of the Due Period prior to
the commencement of the Controlled Amortization Period.
"Class B Controlled Amortization Shortfall" shall mean (i)
with respect to the first Due Period related to the Controlled Amortization
Period occurring after the Class A Expected Final Payment Date, zero, and (ii)
with respect to each other Due Period thereafter during the Controlled
Amortization Period occurring on or prior to the Class B Expected Final Payment
Date, means the excess, if any, of the Class B Controlled Payment Amount for the
previous Due Period over the amount of Available Principal Collections
distributed as payment of such Class B Controlled Payment Amount on the
Distribution Date related to such previous Due Period.
"Class B Controlled Payment Amount" for any Due Period, shall
mean, the sum of (a) the Class B Controlled Amortization Amount and (b) any
existing Class B Controlled Amortization Shortfall.
"Class B Deficiency Amount" shall have the meaning specified
in subsection 4.6(b).
"Class B Expected Final Payment Date" shall mean the December,
2004 Distribution Date.
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<PAGE> 9
"Class B Fixed Allocation" shall mean, with respect to any Due
Period other than a Due Period relating to the Revolving Period, the percentage
equivalent (which percentage shall never exceed 100%) of a fraction, the
numerator of which is the Class B Investor Interest as of the close of business
on the last day of the Revolving Period, and the denominator of which is equal
to the Series Investor Interest as of the end of the day on the last day of the
Due Period occurring immediately prior to the Fixed Principal Allocation Date.
"Class B Floating Allocation" shall mean, with respect to any
Due Period (including any day within such Due Period), the percentage equivalent
(which percentage shall never exceed 100%) of a fraction:
(a) the numerator of which is the Class B Investor Interest as
of the close of business on the last day of the preceding Due Period
(or with respect to the first Due Period ending after the Closing Date,
the Class B Initial Investor Interest); and
(b) the denominator of which is equal to the Series Investor
Interest as of the close of business on the last day of the preceding
Due Period (or with respect to the first Due Period ending after the
Closing Date, the Initial Investor Interest).
"Class B Initial Investor Interest" shall mean the aggregate
initial principal amount of the Class B Certificates, which is $27,000,000.
"Class B Investor Allocation" shall mean, with respect to any
Due Period (a) with respect to Series 1999-1 Investor Loss Amounts, Series
1999-1 Investor Dilution Amounts and Collections of Finance Charge Receivables
at any time and Collections of Principal Receivables during the Revolving
Period, the Class B Floating Allocation and (b) with respect to Collections of
Principal Receivables during the Controlled Amortization Period or Early
Amortization Period, the Class B Fixed Allocation.
"Class B Investor Charge-Offs" shall have the meaning
specified in subsection 4.10(b).
"Class B Investor Dilution Amount" shall mean, for any
Distribution Date, an amount equal to the product of (a) the Series 1999-1
Investor Dilution Amount for such Distribution Date and (b) the Class B Floating
Allocation for the related Due Period.
"Class B Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class B Initial Investor Interest,
minus (b) the aggregate amount of principal payments made to Class B
Certificateholders prior to such date, minus (c) the aggregate amount of Class B
Investor Charge-Offs for all prior Distribution Dates pursuant to subsections
4.10(a) and (b), minus (d) the aggregate amount of Reallocated Class B Principal
Collections allocated pursuant to subsection 4.12(b)(iv) on all prior
Distribution Dates, minus (e) the amount of any reduction to the Class B
Investor Interest as a result of the purchase by the Seller and subsequent
cancellation of the Class B Certificates pursuant to Section 4.16, and plus (f)
the aggregate amount of Excess Spread and Shared Excess Finance Charge
Collections allocated and available on all prior Distribution Dates pursuant to
subsection 4.11(d) for the purpose of reimbursing
6
<PAGE> 10
amounts deducted pursuant to the foregoing clauses (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 Class B Floating Allocation
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(b).
"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 Principal Commencement Date" shall have the meaning
specified in subsection 4.7(b).
"Class B Required Amount" shall have the meaning specified in
subsection 4.8(b).
"Class B Servicing Fee" shall have the meaning specified in
Section 3.
"Class C Available Funds" shall mean, with respect to any
Distribution Date, an amount equal to the Class C Floating Allocation of
Collections of Finance Charge Receivables allocated to the Series 1999-1
Certificates and deposited in the Collection Account for the related Due Period
(including certain other amounts that are to be treated as Collections of
Finance Charge Receivables in accordance with the Agreement).
"Class C Certificate Rate" shall mean, from the Closing Date
through August 15, 1999, from August 16, 1999, through September 14, 1999, and
with respect to each Interest Period thereafter, the rate specified in the Class
C Purchase Agreement, such rate not to exceed LIBOR plus 2.00% per annum.
"Class C Certificateholder" shall mean each Person in whose
name a Class C Certificate is registered in the Certificate Register.
"Class C Certificates" shall mean each of the certificates
executed by the Seller and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A-3 hereto.
"Class C Deficiency Amount" shall have the meaning specified
in subsection 4.6(c).
"Class C Expected Final Payment Date" shall have the meaning
set forth in the Class C Purchase Agreement.
"Class C Fixed Allocation" shall mean, with respect to any Due
Period other than a Due Period relating to the Revolving Period, the percentage
equivalent (which percentage shall
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<PAGE> 11
never exceed 100%) of a fraction, the numerator of which is the Class C Investor
Interest as of the close of business on the last day of the Revolving Period,
and the denominator of which is equal to the Series Investor Interest as of the
end of the day on the last day of the Due Period occurring immediately prior to
the Fixed Principal Allocation Date.
"Class C Floating Allocation" shall mean, with respect to any
Due Period (including any day within such Due Period), the percentage equivalent
(which percentage shall never exceed 100%) of a fraction:
(a) the numerator of which is the Class C Investor Interest as
of the close of business on the last day of the preceding Due Period
(or with respect to the first Due Period ending after the Closing Date,
the Class C Initial Investor Interest); and
(b) the denominator of which is equal to the Series Investor
Interest as of the close of business on the last day of the preceding
Due Period (or with respect to the first Due Period ending after the
Closing Date, the Initial Investor Interest).
"Class C Initial Investor Interest" shall mean the aggregate
initial principal amount of the Class C Certificates, which is $9,000,000.
"Class C Investor Allocation" shall mean, with respect to any
Due Period (a) with respect to Series 1999-1 Investor Loss Amounts, Series
1999-1 Investor Dilution Amounts and Collections of Finance Charge Receivables
at any time and Collections of Principal Receivables during the Revolving
Period, the Class C Floating Allocation and (b) with respect to Collections of
Principal Receivables during the Controlled Amortization Period or Early
Amortization Period, the Class C Fixed Allocation.
"Class C Investor Charge-Offs" shall have the meaning
specified in subsection 4.10(c).
"Class C Investor Dilution Amount" shall mean, for any
Distribution Date, an amount equal to the product of (a) the Series 1999-1
Investor Dilution Amount for such Distribution Date and (b) the Class C Floating
Allocation for the related Due Period.
"Class C Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class C Initial Investor Interest,
minus (b) the aggregate amount of principal payments made to the Class C
Certificateholders prior to such date, minus (c) the aggregate amount of Class C
Investor Charge-Offs for all prior Distribution Dates pursuant to subsections
4.10(a), (b) and (c), minus (d) the aggregate amount of Reallocated Class C
Principal Collections allocated pursuant to subsection 4.12(b)(iii) on all prior
Distribution Dates, minus (e) the amount of any reduction to the Class C
Investor Interest as a result of the purchase by the Seller and subsequent
cancellation of the Class C Certificates pursuant to Section 4.16, and plus (f)
the aggregate amount of Excess Spread and Shared Excess Finance Charge
Collections allocated and available on all prior Distribution Dates pursuant to
subsection 4.11(i) for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c) and (d); provided, however, that the Class C Investor
Interest may not be reduced below zero.
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<PAGE> 12
"Class C Investor Loss Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the Investor Loss
Amount for the related Due Period and (b) the Class C Floating Allocation
applicable for the related Due Period.
"Class C Monthly Interest" shall mean the monthly interest
distributable in respect of the Class C Certificates as calculated in accordance
with subsection 4.6(c).
"Class C Monthly Principal" shall mean the monthly principal
distributable in respect of the Class C Certificates as calculated in accordance
with subsection 4.7(c).
"Class C Purchase Agreement" shall mean the agreement among
the Seller, the Servicer, the Trustee and the Class C Certificateholders, dated
as of the Closing Date, as amended or modified from time to time.
"Class C Required Amount" shall mean the amount, if any, equal
to the sum of (a) the amount, if any, by which the sum of (i) the Class C
Monthly Interest for such Distribution Date, plus (ii) the Class C Deficiency
Amount, if any, for such Distribution Date, plus (iii) the Class C Investor Loss
Amount, if any, for the prior Due Period, plus (iv) the Class C Investor
Dilution Amount, if any, for such Distribution Date exceeds the amount of Excess
Spread available to be applied to such amounts pursuant to subsections 4.11(f),
(g) and (h), plus (b) the amount, if any, by which the sum of (i) the Class C
Servicing Fee for the prior Due Period, plus (ii) the Class C Servicing Fee, if
any, due but not paid on any prior Distribution Date, exceeds the Class C
Available Funds for the related Due Period and the amount of any Excess Spread
available to be applied to such amount pursuant to subsection 4.11(e).
"Class C Servicing Fee" shall have the meaning specified in
Section 3.
"Class D Available Funds" shall mean, with respect to any
Distribution Date, an amount equal the Class D Floating Allocation of
Collections of Finance Charge Receivables allocated to the Series 1999-1
Certificates and deposited in the Collection Account for the related Due Period
(including certain other amounts that are to be treated as Collections of
Finance Charge Receivables in accordance with the Agreement).
"Class D Certificateholders" shall mean any Person in whose
name a Class D Certificate is registered in the Certificate Register.
"Class D Certificates" shall mean each of the Class D-1
Certificates and the Class D-2 Certificates.
"Class D Deficiency Amount" shall mean, with respect to any
Distribution Date, the sum of the Class D-1 Deficiency Amount plus the Class D-2
Deficiency Amount.
"Class D Expected Final Payment Date" shall have the meaning
set forth in the Class D Purchase Agreement.
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<PAGE> 13
"Class D Fixed Allocation" shall mean, with respect to any Due
Period other than a Due Period relating to the Revolving Period, the sum of the
Class D-1 Fixed Allocation and the Class D-2 Fixed Allocation.
"Class D Floating Allocation" shall mean, with respect to any
Due Period (including any day within such Due Period), the sum of the Class D-1
Floating Allocation and the Class D-2 Floating Allocation.
"Class D Initial Investor Interest" shall mean the sum of the
Class D-1 Initial Investor Interest plus the Class D-2 Initial Investor
Interest.
"Class D Investor Allocation" shall mean, with respect to any
Due Period, (a) with respect to Series 1999-1 Investor Loss Amounts, Series
1999-1 Investor Dilution Amounts and Collections of Finance Charge Receivables
at any time and Principal Receivables during the Revolving Period, the Class D
Floating Allocation and (b) with respect to Collections of Principal Receivables
during the Controlled Amortization Period or Early Amortization Period, the
Class D Fixed Allocation.
"Class D Investor Charge-Offs" shall mean the sum of Class D-1
Investor Charge-Offs plus Class D-2 Investor Charge-Offs.
"Class D Investor Dilution Amount" shall mean, for any
Distribution Date, an amount equal to the product of (a) the Series 1999-1
Investor Dilution Amount for such Distribution Date and (b) the Class D Floating
Allocation for the related Due Period.
"Class D Investor Interest" shall mean, on any date of
determination, the sum of the Class D-1 Investor Interest plus the Class D-2
Investor Interest.
"Class D Investor Loss Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the Investor Loss
Amount for the related Due Period and (b) the Class D Floating Allocation
applicable for the related Due Period.
"Class D Monthly Interest" shall mean the sum of the Class D-1
Monthly Interest plus the Class D-2 Monthly Interest.
"Class D Monthly Principal" shall mean the sum of the Class
D-1 Monthly Principal plus the Class D-2 Monthly Principal.
"Class D Purchase Agreement" shall mean the agreement among
the Seller, the Servicer, the Trustee and the Class D Certificateholders, dated
as of the Closing Date, as amended or modified from time to time.
"Class D Servicing Fee" shall mean the sum of the Class D-1
Servicing Fee plus the Class D-2 Servicing Fee.
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<PAGE> 14
"Class D-1 Certificate Rate" shall mean, from the Closing Date
through August 15, 1999, from August 16, 1999 through September 14, 1999, and
with respect to each Interest Period thereafter, the rate specified in the Class
D Purchase Agreement, such rate not to exceed LIBOR plus 2.00% per annum.
"Class D-1 Certificates" shall mean each of the certificates
designated as "Class D-1 Certificates," executed by the Seller and authenticated
by or on behalf of the Trustee, substantially in the form of Exhibit A-4 hereto.
"Class D-1 Deficiency Amount" shall have the meaning specified
in subsection 4.6(d).
"Class D-1 Fixed Allocation" shall mean, with respect to any
Due Period other than a Due Period relating to the Revolving Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is the Class D-1 Investor Interest as of the close of
business on the last day of the Revolving Period, and the denominator of which
is equal to the Series Investor Interest as of the end of the day on the last
day of the Due Period occurring immediately prior to the Fixed Principal
Allocation Date.
"Class D-1 Floating Allocation" shall mean, with respect to
any Due Period (including any day within such Due Period), the percentage
equivalent (which percentage shall never exceed 100%) of a fraction:
(a) the numerator of which is the Class D-1 Investor Interest
as of the close of business on the last day of the preceding Due Period
(or with respect to the first Due Period ending after the Closing Date,
the Class D-1 Initial Investor Interest); and
(b) the denominator of which is equal to the Series Investor
Interest as of the close of business on the last day of the preceding
Due Period (or with respect to the first Due Period ending after the
Closing Date, the Initial Investor Interest).
"Class D-1 Initial Investor Interest" shall mean the aggregate
initial principal amount of the Class D-1 Investor Interest, which is
$7,875,000.
"Class D-1 Investor Allocation" shall mean, with respect to
any Due Period, (a) with respect to Series 1999-1 Investor Loss Amounts, Series
1999-1 Investor Dilution Amounts and Collections of Finance Charge Receivables
at any time and Principal Receivables during the Revolving Period, the Class D-1
Floating Allocation and (b) with respect to Collections of Principal Receivables
during the Controlled Amortization Period or Early Amortization Period, the
Class D-1 Fixed Allocation.
"Class D-1 Investor Charge-Offs" shall have the meaning
specified in subsection 4.10(d).
"Class D-1 Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class D-1 Initial Investor Interest,
minus (b) the aggregate amount of principal
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<PAGE> 15
payments made to the holders of the Class D-1 Certificates prior to such date,
minus (c) the aggregate amount of Class D-1 Investor Charge-Offs for all prior
Distribution Dates pursuant to subsections 4.10(a) through (d), minus (d) the
aggregate amount of Reallocated Class D-1 Principal Collections allocated
pursuant to subsection 4.12(b)(ii) on all prior Distribution Dates, minus (e)
the amount of any reduction to the Class D-1 Investor Interest as a result of
the purchase by the Seller and subsequent cancellation of the Class D-1
Certificates pursuant to Section 4.16, and plus (f) the aggregate amount of
Excess Spread and Shared Excess Finance Charge Collections allocated and
available on all prior Distribution Dates pursuant to subsection 4.11(n) for the
purpose of reimbursing amounts deducted pursuant to the foregoing clauses (c)
and (d); provided, however, that the Class D-1 Investor Interest may not be
reduced below zero.
"Class D-1 Monthly Interest" shall mean the monthly interest
distributable in respect of the Class D-1 Certificates as calculated in
accordance with subsection 4.6(d).
"Class D-1 Monthly Principal" shall mean the monthly principal
distributable in respect of the Class D-1 Certificates as calculated in
accordance with subsection 4.7(d).
"Class D-1 Servicing Fee" shall have the meaning specified in
Section 3.
"Class D-2 Certificate Rate" shall mean, from the Closing Date
through August 15, 1999, from August 16, 1999 through September 14, 1999, and
with respect to each Interest Period thereafter, the rate specified in the Class
D Purchase Agreement, such rate not to exceed LIBOR plus 2.00% per annum.
"Class D-2 Certificates" shall mean each of the Certificates
designated as "Class D-2 Certificates," executed by the Seller and authenticated
by or on behalf of the Trustee, substantially in the form of Exhibit A-4 hereto.
"Class D-2 Deficiency Amount" shall have the meaning specified
in subsection 4.6(e).
"Class D-2 Fixed Allocation" shall mean, with respect to any
Due Period other than a Due Period relating to the Revolving Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is the Class D-2 Investor Interest as of the close of
business on the last day of the Revolving Period, and the denominator of which
is equal to the Series Investor Interest as of the end of the day on the last
day of the Due Period occurring immediately prior to the Fixed Principal
Allocation Date.
"Class D-2 Floating Allocation" shall mean, with respect to
any Due Period (including any day within such Due Period), the percentage
equivalent (which percentage shall never exceed 100%) of a fraction:
(a) the numerator of which is the Class D-2 Investor Interest
as of the close of business on the last day of the preceding Due Period
(or with respect to the first Due Period ending after the Closing Date,
the Class D-2 Initial Investor Interest); and
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<PAGE> 16
(b) the denominator of which is equal to the Series Investor
Interest as of the close of business on the last day of the preceding
Due Period (or with respect to the first Due Period ending after the
Closing Date, the Initial Investor Interest).
"Class D-2 Initial Investor Interest" shall mean the aggregate
initial principal amount of the Class D-2 Investor Interest, which is
$7,875,000.
"Class D-2 Investor Allocation" shall mean, with respect to
any Due Period, (a) with respect to Series 1999-1 Investor Loss Amounts, Series
1999-1 Investor Dilution Amounts and Collections of Finance Charge Receivables
at any time and Principal Receivables during the Revolving Period, the Class D-2
Floating Allocation and (b) with respect to Collections of Principal Receivables
during the Controlled Amortization Period or Early Amortization Period, the
Class D-2 Fixed Allocation.
"Class D-2 Investor Charge-Offs" shall have the meaning
specified in subsection 4.10(d).
"Class D-2 Investor Interest" shall mean, on any date of
determination, an amount equal to (a) the Class D-2 Initial Investor Interest,
minus (b) the aggregate amount of principal payments made to the holders of the
Class D-2 Certificates prior to such date, minus (c) the aggregate amount of
Class D-2 Investor Charge-Offs for all prior Distribution Dates pursuant to
subsections 4.10(a) through (d), minus (d) the aggregate amount of Reallocated
Class D-2 Principal Collections allocated pursuant to subsection 4.12(b)(i) on
all prior Distribution Dates, minus (e) the amount of any reduction to the Class
D-2 Investor Interest as a result of the purchase by the Seller and subsequent
cancellation of the Class D-2 Certificates pursuant to Section 4.16, and plus
(f) the aggregate amount of Excess Spread and Shared Excess Finance Charge
Collections allocated and available on all prior Distribution Dates pursuant to
subsection 4.11(n) for the purpose of reimbursing amounts deducted pursuant to
the foregoing clauses (c) and (d); provided, however, that the Class D-2
Investor Interest may not be reduced below zero.
"Class D-2 Monthly Interest" shall mean the monthly interest
distributable in respect of the Class D-2 Certificates as calculated in
accordance with subsection 4.6(e).
"Class D-2 Monthly Principal" shall mean the monthly principal
distributable in respect of the Class D-2 Certificates as calculated in
accordance with subsection 4.7(e).
"Class D-2 Servicing Fee" shall have the meaning specified in
Section 3.
"Closing Date" shall mean July 22, 1999.
"Controlled Amortization Period" shall mean, unless an Early
Amortization Event shall have occurred prior thereto, the period commencing on
February 1, 2004 and ending upon the first to occur of (a) the payment in full
of the Series 1999-1 Certificates, (b) the commencement of the Early
Amortization Period and (c) the Series 1999-1 Termination Date.
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<PAGE> 17
"Controlling Certificateholders" shall mean (a) on any date of
determination on which the Class A Investor Interest or the Class B Investor
Interest is greater than zero, the Holders of Class A Certificates and Class B
Certificates evidencing more than 50% of the sum of the Class A Investor
Interest and the Class B Investor Interest, (b) on any date of determination
thereafter on which the Class C Investor Interest is greater than zero, the
Holders of Class C Certificates evidencing more than 50% of the Class C Investor
Interest and (c) thereafter, the Required Class D Holders (as defined in the
Class D Purchase Agreement).
"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.
"Distribution Date" shall mean September 15, 1999 and the
fifteenth day of each calendar month thereafter, or if such fifteenth day is not
a Business Day, the next succeeding Business Day.
"Early Amortization Period" shall mean 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 1999-1 is deemed to
have occurred, and ending on the Series 1999-1 Termination Date.
"Enhancement" shall mean (a) with respect to the Class A
Certificates, the subordination of the Class B Certificates, the Class C
Certificates and the Class D Certificates, (b) with respect to the Class B
Certificates, the subordination of the Class C Certificates and the Class D
Certificates, (c) with respect to the Class C Certificates, the subordination of
the Class D Certificates and (d) with respect to the Class D-1 Certificates, the
subordination of the Class D-2 Certificates.
"Enhancement Provider" shall mean, collectively, the Class C
Certificateholders and the Covered Class D-1 Holders (as defined in the Class D
Purchase Agreement).
"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)(v), 4.9(b)(iii), 4.9(c)(ii) and
4.9(d)(ii).
"Finance Charge Shortfall" shall have the meaning specified in
subsection 4.14(b).
"Fixed Allocation Percentage" shall mean, with respect to any
Due Period (including any day within such Due Period) occurring on or after the
Fixed Principal Allocation Date, the percentage equivalent of a fraction:
(a) the numerator of which is the Series Investor Interest as
of the end of the day on the last day of the Due Period occurring
immediately prior to the Fixed Principal Allocation Date; provided,
that if Series 1999-1 is paired with a Paired Series and an
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<PAGE> 18
Early Amortization Event occurs with respect to such Paired Series
during the Controlled Amortization Period, the Seller may, by written
notice delivered to the Trustee, the Servicer and the Rating Agencies,
designate a different numerator (provided that (x) such numerator is
not less than the Series 1999-1 Investor Interest as of the last day of
the revolving period for such Paired Series and (y) each of the Rating
Agencies confirms in writing that such change would not result in a
reduction or withdrawal by such Rating Agency of its rating for the
Series 1999-1 Certificates) and
(b) the denominator of which is the greater of (i) the sum of
(A) the aggregate amount of Principal Receivables in the Trust at the
end of the day on the last day of the prior Due Period and (B) the
Excess Funding Amount as of the close of business of the last day of
the prior Due Period, and (ii) the sum of the numerators used to
calculate the Investor/Purchaser Percentages for such Due Period with
respect to Principal Receivables for all Series of Certificates and
Receivable Purchase Series outstanding;
provided, that with respect to any Due Period in which one or more Reset Dates
occur, the denominator determined pursuant to subclause (b)(i)(A) 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); provided further
that with respect to any Due Period in which a Reset Date occurs, if the
Servicer need not make daily deposits of Collections into the Collection
Account, the amount in subclause (b)(i)(A) shall be the Average Principal
Balance.
"Fixed Principal Allocation Date" shall mean the earlier of
(a) the date on which an Early Amortization Period with respect to Series 1999-1
commences; and (b) the date of commencement of the Controlled Amortization
Period.
"Floating Allocation Percentage" shall mean, with respect to
any Due Period (including any day within such Due Period), the percentage
equivalent of a fraction:
(a) the numerator of which is the Investor Interest at the end
of the day on the last day of the prior Due Period (or with respect to
the first Due Period ending after the Closing Date, the Initial
Investor Interest), and
(b) the denominator of which is the greater of (1) the sum of
(A) the aggregate amount of Principal Receivables in the Trust at the
end of the day on the last day of the prior Due Period (or with respect
to the first Due Period ending after the Closing Date, at the end of
the day on the Closing Date) and (B) the Excess Funding Amount as of
the close of business of the last day of the prior Due Period, and (2)
the sum of the numerators used to calculate the Investor/Purchaser
Percentages for such Due Period
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<PAGE> 19
with respect to Finance Charge Receivables, Series Dilution Amounts or
Loss Amounts, as applicable, for all Series of Certificates and
Receivable Purchase Series outstanding;
provided that with respect to any Due Period in which one or more Reset Dates
occur:
(x) the denominator determined pursuant to subclause (b)(1)(A)
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); provided that with respect to any Due Period in which a Reset
Date occurs, if the Servicer need not make daily deposits of
Collections into the Collection Account, the amount in subclause
(b)(1)(A) shall be the Average Principal Balance; and
(y) the denominator determined pursuant to subclause (b)(2)
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, Series Dilution Amounts, 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).
"Group One" shall mean Series 1999-1 and each other Series
specified in the related Supplement or Receivables Purchase Agreement to be
included in Group One.
"Initial Investor Interest" shall mean the sum of the Class A
Initial Investor Interest, the Class B Initial Investor Interest, the Class C
Initial Investor Interest and the Class D 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.
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"Investor Charge-Offs" shall mean, on any date of
determination, an amount equal to the sum of (i) the Class A Investor
Charge-Offs, (ii) the Class B Investor Charge-Offs, (iii) the Class C Investor
Charge-Offs and (iv) the Class D Investor Charge-Offs.
"Investor Interest" for Series 1999-1 means the Series
Investor Interest.
"Investor Loss Amount" shall mean, with respect to any
Distribution Date, an amount equal to the product of (a) the aggregate of the
Loss Amounts for the related Due Period and (b) the Floating Allocation
Percentage for such Due Period.
"Investor/Purchaser Percentage" for Series 1999-1 shall mean,
with respect to Collections of Principal Receivables, the Principal Allocation
Percentage, and with respect to Collections of Finance Charge Receivables,
Series Dilution Amounts or Loss Amounts, the Floating Allocation Percentage.
"LIBOR" shall mean, for any Interest Period, the London
interbank offered rate for one-month United States dollar deposits determined by
the Trustee for each Interest Period in accordance with the provisions of
Section 4.17.
"LIBOR Determination Date" shall mean July 20, 1999 for the
period from the Closing Date through August 15, 1999, August 12, 1999 for the
period from August 16, 1999 through September 14, 1999, and the second London
Business Day prior to the commencement of the second and each subsequent
Interest Period.
"London Business Day" shall mean a day on which the Trustee
and commercial banks in the City of London are open for the transaction of
commercial banking business.
"Minimum Seller Interest" for Series 1999-1 shall mean zero.
"Monthly Interest" shall mean, with respect to any
Distribution Date, the sum of (a) the Class A Monthly Interest, the Class A
Additional Interest, if any, and the unpaid Class A Deficiency Amount, if any;
(b) the Class B Monthly Interest, the Class B Additional Interest, if any, and
the unpaid Class B Deficiency Amount, if any; (c) the Class C Monthly Interest
and the unpaid Class C Deficiency Amount, if any; and (d) the Class D Monthly
Interest, each with respect to such Distribution Date.
"Portfolio Yield" shall mean, with respect to any Due Period,
the annualized percentage equivalent of a fraction, the numerator of which is an
amount equal to the Floating Allocation Percentage of Collections of Finance
Charge Receivables allocated to the Series 1999-1 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), such amount to be
calculated on a cash basis after subtracting the Investor Loss Amount for such
Due Period, and the denominator of which is the Series Investor Interest as of
the last day of the preceding Due Period (or with respect to the initial Due
Period, the Initial Investor Interest); it being understood that such fraction
shall be annualized by dividing the fraction obtained in accordance
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with the definition set forth above by the number of days in such Due Period and
multiplying such amount by 365.
"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 Controlled
Amortization Period, (i) if such Distribution Date is on or prior to the Class A
Expected Final Payment Date, the amount by which the Class A 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 (ii) if such Distribution Date
occurs after the Class A Expected Final Payment Date but on or prior to the
Class B Expected Final Payment Date, the amount by which the Class B 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); (b) on the Class C Expected Final
Payment Date (if an Early Amortization Event with respect to Series 1999-1 has
not occurred), the amount by which the Class C Investor Interest exceeds the
amount of Available Principal Collections for such Distribution Date (excluding
any portion thereof attributable to Shared Principal Collections); (c) on the
Class D Expected Final Payment Date (if an Early Amortization Event with respect
to Series 1999-1 has not occurred), the amount by which the Class D Investor
Interest exceeds the amount of Available Principal Collections for such
Distribution Date (excluding any portion thereof attributable to Shared
Principal Collections); and (d) on any Distribution Date with respect to the
Early Amortization Period, the amount by which the Investor Interest exceeds the
Available Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Shared Principal Collections).
"Rating Agency" shall mean Moody's and Standard & Poor's.
"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(b)(iv) in an amount not to exceed the amount described in subsection
4.5(a)(v) during the Revolving Period, subsection 4.5(b)(v) during the
Controlled Amortization Period and subsection 4.5(c)(v) during the Early
Amortization 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.
"Reallocated Class C Principal Collections" shall mean, with
respect to any Distribution Date, Collections of Principal Receivables allocated
to the Class C Investor Interest applied in accordance with subsection
4.12(b)(iii) in an amount not to exceed the amount described in subsection
4.5(a)(iv) during the Revolving Period, subsection 4.5(b)(iv) during the
Controlled Amortization Period and subsection 4(c)(iv) during the Early
Amortization Period;
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provided, however, that such amount shall not exceed the Class C Investor
Interest after giving effect to any Class C Investor Charge-Offs for such
Distribution Date.
"Reallocated Class D Principal Collections" shall mean, with
respect to any Distribution Date, the sum of Reallocated Class D-1 Principal
Collections plus Reallocated Class D-2 Principal Collections.
"Reallocated Class D-1 Principal Collections" shall mean, with
respect to any Distribution Date, Collections of Principal Receivables allocated
to the Class D-1 Investor Interest applied in accordance with subsections
4.12(b)(ii) in an amount not to exceed the amount described in subsection
4.5(a)(iii) during the Revolving Period, subsection 4.5(b)(iii) during the
Controlled Amortization Period and subsection 4.5(c)(iii) during the Early
Amortization Period; provided, however, that such amount shall not exceed the
Class D-1 Investor Interest after giving effect to any Class D-1 Investor
Charge-Offs for such Distribution Date.
"Reallocated Class D-2 Principal Collections" shall mean, with
respect to any Distribution Date, Collections of Principal Receivables allocated
to the Class D-2 Investor Interest applied in accordance with subsections
4.12(b)(i) in an amount not to exceed the amount described in subsection
4.5(a)(ii) during the Revolving Period, subsection 4.5(b)(ii) during the
Controlled Amortization Period and subsection 4.5(c)(ii) during the Early
Amortization Period; provided, however, that such amount shall not exceed the
Class D-2 Investor Interest after giving effect to any Class D-2 Investor
Charge-Offs for such Distribution Date.
"Reallocated Principal Collections" shall mean the sum of (a)
Reallocated Class B Principal Collections, (b) Reallocated Class C Principal
Collections and (c) Reallocated Class D Principal Collections.
"Reference Banks" shall mean four major banks in the London
interbank market selected by the Servicer.
"Reset Date" shall mean the occurrence of any Addition Date or
any Removal Date.
"Revolving Period" shall mean the period from and including
the Closing Date to, but not including, the Fixed Principal Allocation Date.
"Series Investor Interest" shall mean, on any date of
determination, an amount equal to the sum of (i) the Class A Investor Interest,
(ii) the Class B Investor Interest, (iii) the Class C Investor Interest and (iv)
the Class D Investor Interest, each as of such date.
"Series 1999-1" shall mean the Series of the Charming Shoppes
Master Trust represented by the Investor Certificates.
"Series 1999-1 Certificateholder" shall mean the Holder of
record of any Series 1999-1 Certificate.
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"Series 1999-1 Certificates" shall mean the Class A
Certificates, the Class B Certificates, the Class C Certificates and the Class D
Certificates.
"Series 1999-1 Early Amortization Event" shall have the
meaning specified in Section 9 of this Supplement.
"Series 1999-1 Investor Dilution Amount" shall mean, with
respect to any Distribution Date, an amount equal to the product of (a) the
Series Percentage for the related Due Period and (b) any Series Dilution Amount
remaining after giving effect to any addition of Accounts and other actions
taken pursuant to Sections 4.3(d) and 2.6.
"Series 1999-1 Investor Monthly Servicing Fee" shall have the
meaning specified in Section 3.
"Series 1999-1 Termination Date" shall mean the earliest to
occur of (a) the Distribution Date on which the Series 1999-1 Certificates are
paid in full, (b) the August, 2008 Distribution Date or (c) the date of
termination of the Trust pursuant to Section 12.1.
"Series 1999-1 Unfunded Dilution Amount" shall mean, on any
Distribution Date, an amount equal to any unfunded Series 1999-1 Investor
Dilution Amount remaining after application of Class A Available Funds pursuant
to subsection 4.9(a)(iv) and Excess Spread and Shared Excess Finance Charge
Collections in accordance with Section 4.11.
"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 1999-1 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 1999-1 Certificates as described in Section 4.14.
"Shared Principal Collections" shall mean, as the context
requires, either (a) the amount allocated to the Series 1999-1 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
1999-1 Certificates pursuant to Section 4.15.
"Subperiod" means, with respect to a Due Period in which one
or more Reset Dates occur (the "Subject Due Period"), any of the following:
(i) the period from and including the last day of the prior Due
Period to but excluding the first Reset Date in the Subject
Due Period,
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(ii) the period from and including the last Reset Date in the
Subject Due Period to and including the last day of the
Subject Due Period, and
(iii) the period, if any, from and including one Reset Date in the
Subject Due Period to but excluding the next Reset Date.
"Telerate Page 3750" shall mean the display page currently so
designated on the Dow Jones Telerate Service (or such other page as may replace
that page on that service for displaying comparable rates or prices).
SECTION 3. Servicing Compensation. The share of the Monthly
Servicing Fee allocable to Series 1999-1 (the "Series 1999-1 Investor Monthly
Servicing Fee") with respect to any Due Period shall be equal to one-twelfth of
the product of (i) the Series Servicing Fee Percentage and (ii) (a) the Investor
Interest as of the last day of such Due Period minus (b) the product of the
amount, if any, on deposit in the Excess Funding Account as of the last day of
such Due Period and the Principal Allocation Percentage for such Due Period (the
amount calculated pursuant to this clause (ii) is referred to as the "Servicing
Base Amount"); provided, however, that with respect to the first Due Period
ending after the Closing Date, the Series 1999-1 Investor Monthly Servicing Fee
shall be equal to $451,613.00. The share of the Series 1999-1 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 one-twelfth of the
product of (i) the Class A Floating Allocation, (ii) the Series Servicing Fee
Percentage, and (iii) the Servicing Base Amount for such Due Period; provided,
however, that with respect to the first Due Period ending after the Closing
Date, the Class A Servicing Fee shall be equal to $295,806.00. The share of the
Series 1999-1 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 one-twelfth of the product of (i) the Class B Floating Allocation, (ii)
the Series Servicing Fee Percentage and (iii) the Servicing Base Amount for such
Due Period; provided, however, that with respect to the first Due Period ending
after the Closing Date, the Class B Servicing Fee shall be equal to $81,290.00.
The share of the Series 1999-1 Investor Monthly Servicing Fee allocable to the
Class C Investor Interest with respect to any Due Period (the "Class C Servicing
Fee") shall be equal to one-twelfth of the product of (i) the Class C Floating
Allocation, (ii) the Series Servicing Fee Percentage and (iii) the Servicing
Base Amount for such Due Period; provided, however, that with respect to the
first Due Period ending after the Closing Date, the Class C Servicing Fee shall
be equal to $27,097.00. The share of the Series 1999-1 Investor Monthly
Servicing Fee allocable to the Class D-1 Investor Interest with respect to any
Due Period (the "Class D-1 Servicing Fee") shall be equal to one-twelfth of the
product of (i) the Class D-1 Floating Allocation, (ii) the Series Servicing Fee
Percentage and (iii) the Servicing Base Amount for such Due Period; provided,
however, that with respect to the first Due Period ending after the Closing
Date, the Class D-1 Servicing Fee shall be equal to $23,710.00. The share of the
Series 1999-1 Investor Monthly Servicing Fee allocable to the Class D-2 Investor
Interest with respect to any Due Period (the "Class D-2 Servicing Fee") shall be
equal to one-twelfth of the product of (i) the Class D-2 Floating Allocation,
(ii) the Series Servicing Fee Percentage and (iii) the Servicing Base Amount for
such Due Period; provided, however, that with respect to the first Due Period
ending after the Closing Date, the Class D-2 Servicing Fee shall be equal to
$23,710.00. Except as specifically provided above, the Monthly Servicing Fee
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shall be paid by the cash flows from the Trust allocated to the Seller or the
Certificateholders of other Series (as provided in the related Supplements or
Receivables Purchase Agreements) and in no event shall the Trust, the Trustee or
the Series 1999-1 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)(ii) 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)(ii) and 4.11(c). The Class C Servicing Fee shall be payable solely to the
extent amounts are available for distribution in respect thereof pursuant to
subsections 4.9(c)(i) and 4.11(e). The Class D Servicing Fee shall be payable
solely to the extent amounts are available for distribution in respect thereof
pursuant to subsections 4.9(d)(i) and 4.11(j).
SECTION 4. Reassignment and Transfer Terms. The Series 1999-1
Certificates shall be subject to retransfer to the Seller at its option, in
accordance with the terms specified in subsection 12.2(a), on any Distribution
Date on or after the Distribution Date on which the Series Investor Interest is
less than or equal to 10% of the Initial Investor Interest. The deposit required
in connection with any such repurchase shall be equal to the Series Investor
Interest plus accrued and unpaid interest on the Series 1999-1 Certificates
through the day preceding the Distribution Date on which the repurchase occurs.
SECTION 5. Delivery and Payment for the Series 1999-1
Certificates. The Seller shall execute and deliver the Series 1999-1
Certificates to the Trustee for authentication in accordance with Section 6.1.
The Trustee shall deliver the Series 1999-1 Certificates when authenticated in
accordance with Section 6.2.
SECTION 6. Depository; Form of Delivery of Series 1999-1
Certificates.
(a) The Class A Certificates and the Class B Certificates
shall be delivered as Book-Entry Certificates as provided in Sections 6.2 and
6.10. The Class C Certificates and the Class D Certificates shall be delivered
as Definitive Certificates as provided in Sections 6.2 and 6.12.
(b) The Depository for Series 1999-1 shall be The Depository
Trust Company, and the Class A Certificates and Class B Certificates shall be
initially registered in the name of Cede & Co., its nominee.
SECTION 7. 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
1999-1 Certificates.
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ARTICLE IV.
RIGHTS OF CERTIFICATEHOLDERS AND RECEIVABLES
PURCHASERS AND ALLOCATION AND APPLICATION OF COLLECTIONS
SECTION 4.4 Rights of Series 1999-1 Certificateholders. The
Series 1999-1 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 1999-1 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 (including certain other amounts that
are to be treated as collections of Receivables in accordance with the terms of
this Agreement), (b) any other funds on deposit (or to be deposited) in the
Collection Account or the Excess Funding Account allocated to Series 1999-1 and
(c) any other amounts that pursuant to this Agreement or any Supplement are
allocable to Series 1999-1. The Class D-2 Certificates shall be subordinate to
the Class D-1 Certificates as described herein and in the Class D Purchase
Agreement. The Class D Certificates shall be subordinate to the Class A
Certificates, the Class B Certificates and the Class C Certificates. The Class C
Certificates shall be subordinate to the Class A Certificates and the Class B
Certificates. The Class B Certificates shall be subordinate to the Class A
Certificates. The Exchangeable Seller Certificate shall not represent any
interest in the Collection Account or the Excess Funding Account except as
specifically provided in this Article IV.
SECTION 4.5. Allocations.
(a) Allocations During the Revolving Period. During the
Revolving Period, the Servicer shall, prior to the close of business on the day
any Collections are deposited in the Collection Account, allocate to the Series
1999-1 Certificateholders, the following amounts as set forth below:
(i) Allocate to the Series 1999-1 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 Sections 4.9 and 4.11.
(ii) An amount equal to the product of (A) the Class D-2
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(b)(i) and then in accordance with
subsection 4.9(e).
(iii) An amount equal to the product of (A) the Class D-1
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(b)(ii) and then in accordance with
subsection 4.9(e).
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(iv) An amount equal to the product of (A) the Class C
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(b)(iii) and then in accordance with
subsection 4.9(e).
(v) 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(b)(iv) and then in accordance with
subsection 4.9(e).
(vi) 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 subsection 4.9(e);
provided, however, that (A) the aggregate amount of Collections processed in
respect of Principal Receivables allocated to the Series 1999-1
Certificateholders pursuant to this subsection 4.5(a)(ii) through (vi) during
any Due Period shall not exceed the amounts required to be distributed on the
Distribution Date related to such Due Period pursuant to subsection 4.9(e)(i) or
4.12(b) and (B) any amounts not so allocated as a result of clause (A) of this
proviso shall be treated as Shared Principal Collections.
(b) Allocations During the Controlled Amortization Period.
During the Controlled Amortization Period, the Servicer shall, prior to the
close of business on the day any Collections are deposited in the Collection
Account, allocate to the Series 1999-1 Certificateholders, the following amounts
as set forth below:
(i) Allocate to the Series 1999-1 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 Sections 4.9 and 4.11.
(ii) An amount equal to the product of (A) the Class D-2
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(b)(i) and then in accordance with
subsection 4.9(f).
(iii) An amount equal to the product of (A) the Class D-1
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(b)(ii) and then in accordance with
subsection 4.9(f).
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(iv) An amount equal to the product of (A) the Class C
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(b)(iii) and then in accordance with
subsection 4.9(f).
(v) 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(b)(iv) and then in accordance with
subsection 4.9(f).
(vi) 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 subsection 4.9(f);
provided, however, that (A) the aggregate amount allocated to the Series 1999-1
Certificateholders pursuant to this subsection 4.5(b)(ii) through (vi) during
any Due Period shall not exceed the amounts required to be distributed on the
Distribution Date related to such Due Period pursuant to subsection 4.9(e)(i) or
subsection 4.9(f)(i) through (v) or subsection 4.12(b) and (B) any amounts not
so allocated as a result of clause (A) of this proviso shall be treated as
Shared Principal Collections.
(c) Allocations During the Early Amortization Period. During
the Early Amortization Period, the Servicer shall, prior to the close of
business on the day any Collections are deposited in the Collection Account,
allocate to the Series 1999-1 Certificateholders, the following amounts as set
forth below:
(i) Allocate to the Series 1999-1 Certificateholders an amount
equal to the product of (A) the Floating Allocation Percentage on such
date and (B) the aggregate amount of such Collections processed in
respect of Finance Charge Receivables on such date, to be applied in
accordance with Sections 4.9 and 4.11.
(ii) An amount equal to the product of (A) the Class D-2
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(b)(i) and then in accordance with
subsection 4.9(f).
(iii) An amount equal to the product of (A) the Class D-1
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(b)(ii) and then in accordance with
subsection 4.9(f).
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(iv) An amount equal to the product of (A) the Class C
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(b)(iii) and then in accordance with
subsection 4.9(f).
(v) 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(b)(iv) and then in accordance with
subsection 4.9(f).
(vi) 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 subsection 4.9(f).
SECTION 4.6. Determination of Monthly Interest.
(a) The amount of monthly interest distributable in respect of
the Class A Certificates on each Distribution Date shall be an amount equal to
the product of (i) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, (ii)
the Class A Certificate Rate, and (iii) the outstanding principal balance of the
Class A Certificates determined as of the Record Date preceding such
Distribution Date (the "Class A Monthly Interest"); provided, however, that with
respect to the first Distribution Date, Class A Monthly Interest will be equal
to interest accrued on the initial outstanding principal balance of the Class A
Certificates at the Class A Certificate Rate from the Closing Date through
September 14, 1999; provided further, however, that in addition to Class A
Monthly Interest an amount equal to the amount of any unpaid Class A Deficiency
Amounts, as defined below, plus an amount equal to the 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, (B) the sum of the Class A
Certificate Rate and 1.0% per annum, and (C) any Class A Deficiency Amounts from
the prior Distribution Date, as defined below, or the portion thereof which has
not theretofore been paid to Class A Certificateholders (the "Class A Additional
Interest"), shall also be distributable in respect of the Class A Certificates.
The "Class A Deficiency Amount" for any Distribution Date shall be equal to the
excess, if any, of the aggregate amount accrued pursuant to this subsection
4.6(a) for all Interest Periods prior to the immediately preceding Interest
Period, over the amount actually paid to Class A Certificateholders in respect
of such amounts on all prior Distribution Dates.
(b) The amount of monthly interest distributable in respect of
the Class B Certificates on each Distribution Date shall be an amount equal to
the product of (i) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, (ii)
the Class B Certificate Rate, and (iii) the outstanding principal balance of the
Class B Certificates determined as of the Record Date preceding such
Distribution Date (the "Class B Monthly Interest"); provided, however, that with
respect to the first
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Distribution Date, Class B Monthly Interest will be equal to interest accrued on
the initial outstanding principal balance of the Class B Certificates at the
Class B Certificate Rate from the Closing Date through September 14, 1999;
provided further, however, that in addition to the Class B Monthly Interest an
amount equal to the amount of any unpaid Class B Deficiency Amounts, as defined
below, plus an amount equal to the 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, (B) the sum of the Class B Certificate Rate and
1.0% per annum, and (C) any Class B Deficiency Amount from the prior
Distribution Date, as defined below, or the portion thereof which has not
theretofore been paid to Class B Certificateholders (the "Class B Additional
Interest"), shall also be distributable in respect of the Class B Certificates.
The "Class B Deficiency Amount" for any Distribution Date shall be equal to the
excess, if any, of the aggregate amount accrued pursuant to this subsection
4.6(b) for all Interest Periods prior to the immediately preceding Interest
Period, over the amount actually paid to the Class B Certificateholders in
respect of such amounts on all prior Distribution Dates.
(c) The amount of monthly interest distributable in respect of
the Class C Certificates on each Distribution Date shall be an amount equal to
the product of (i) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, (ii)
the Class C Certificate Rate in effect with respect to the related Interest
Period, and (iii) the Class C Investor Interest determined as of the Record Date
preceding such Distribution Date (the "Class C Monthly Interest"); provided,
however, that in addition to the Class C Monthly Interest an amount equal to any
unpaid Class C Deficiency Amounts, as defined below, shall also be distributed
to the Class C Certificateholders. The "Class C Deficiency Amount" for any
Distribution Date shall be equal to the excess, if any, of the aggregate amount
accrued pursuant to this subsection 4.6(c) for all Interest Periods prior to the
immediately preceding Interest Period, over the amount actually paid to the
Class C Certificateholders in respect of such amounts on all prior Distribution
Dates.
(d) The amount of monthly interest distributable in respect of
the Class D-1 Certificates on each Distribution Date shall be an amount equal to
the product of (i) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, (ii)
the Class D-1 Certificate Rate in effect with respect to the related Interest
Period, and (iii) the Class D-1 Investor Interest determined as of the Record
Date preceding such Distribution Date (the "Class D-1 Monthly Interest");
provided, however, that in addition to the Class D-1 Monthly Interest an amount
equal to any unpaid Class D-1 Deficiency Amounts, as defined below, shall also
be distributed to the Class D-1 Certificateholders. The "Class D-1 Deficiency
Amount" for any Distribution Date shall be equal to the excess, if any, of the
aggregate amount accrued pursuant to this subsection 4.6(d) for all Interest
Periods prior to the immediately preceding Interest Period, over the amount
actually paid to the Class D-1 Certificateholders in respect of such amounts on
all prior Distribution Dates.
(e) The amount of monthly interest distributable in respect of
the Class D-2 Certificates on each Distribution Date shall be an amount equal to
the product of (i) a fraction, the numerator of which is the actual number of
days in the related Interest Period and the denominator of which is 360, (ii)
the Class D-2 Certificate Rate in effect with respect to the related Interest
Period, and (iii) the Class D-2 Investor Interest determined as of the Record
Date
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<PAGE> 31
preceding such Distribution Date (the "Class D-2 Monthly Interest"); provided,
however, that in addition to the Class D-2 Monthly Interest an amount equal to
any unpaid Class D-2 Deficiency Amounts, as defined below, shall also be
distributed to the Class D-2 Certificateholders. The "Class D-2 Deficiency
Amount" for any Distribution Date shall be equal to the excess, if any, of the
aggregate amount accrued pursuant to this subsection 4.6(e) for all Interest
Periods prior to the immediately preceding Interest Period, over the amount
actually paid to the Class D-2 Certificateholders in respect of such amounts on
all prior Distribution Dates.
SECTION 4.7. Determination of Monthly Principal.
(a) The amount of monthly principal distributable 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 Controlled Amortization Period or, if earlier, the Early
Amortization Period, begins, shall be equal to the least of (i) the Available
Principal Collections with respect to such Distribution Date, (ii) for each
Distribution Date with respect to the Controlled Amortization Period prior to
the Class A Expected Final Payment Date, the Class A Controlled Payment Amount
for the Due Period related to such Distribution Date and (iii) 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).
(b) The amount of monthly principal distributable with respect
to the Class B Certificates on each Distribution Date (the "Class B Monthly
Principal") beginning with the Distribution Date immediately following the
Distribution Date on which the Class A Investor Interest has been paid in full,
and during the Early Amortization Period, beginning with the Distribution Date
on which the Class A Investor Interest has been paid in full (in either case,
the "Class B Principal Commencement Date"), shall be an amount equal to the
least of (i) the Available Principal Collections with respect to such
Distribution Date (minus the portion of such Available Principal Collections
applied to Class A Monthly Principal on such Distribution Date), (ii) for each
Distribution Date with respect to the Controlled Amortization Period beginning
on the Class B Principal Commencement Date but prior to the Class B Expected
Final Payment Date, the Class B Controlled Payment Amount for the Due Period
related to such Distribution Date and (iii) the Class B Investor Interest (after
taking into account any adjustments to be made on such Distribution Date
pursuant to Sections 4.10 and 4.12) on such Distribution Date.
(c) The amount of monthly principal distributable with respect
to the Class C Certificates on each Distribution Date (the "Class C Monthly
Principal") shall be, beginning with the Distribution Date on which the Class B
Investor Interest has been paid in full, an amount equal to the lesser of (i)
the Available Principal Collections with respect to such Distribution Date
(minus the portion of such Available Principal Collections applied to Class A
Monthly Principal and Class B Monthly Principal on such Distribution Date) and
(ii) the Class C Investor Interest (after taking into account any adjustments to
be made on such Distribution Date pursuant to Sections 4.10 and 4.12) on such
Distribution Date.
(d) The amount of monthly principal distributable with respect
to the Class D-1 Certificates on each Distribution Date (the "Class D-1 Monthly
Principal") shall be, beginning with the Distribution Date on which the Class C
Investor Interest has been paid in full, an
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<PAGE> 32
amount equal to the lesser of (i) the Available Principal Collections with
respect to such Distribution Date (minus the portion of such Available Principal
Collections applied to Class A Monthly Principal, Class B Monthly Principal and
Class C Monthly Principal on such Distribution Date) and (ii) the Class D-1
Investor Interest (after taking into account any adjustments to be made on such
Distribution Date pursuant to Sections 4.10 and 4.12) on such Distribution Date.
(e) The amount of monthly principal distributable with respect
to the Class D-2 Certificates on each Distribution Date (the "Class D-2 Monthly
Principal") shall be, beginning with the Distribution Date on which the Class
D-1 Investor Interest has been paid in full, an amount equal to the lesser of
(i) the Available Principal Collections with respect to such Distribution Date
(minus the portion of such Available Principal Collections applied to Class A
Monthly Principal, Class B Monthly Principal, Class C Monthly Principal and
Class D-1 Monthly Principal on such Distribution Date) and (ii) the Class D-2
Investor Interest (after taking into account any adjustments to be made on such
Distribution Date pursuant to Sections 4.10 and 4.12) on such Distribution Date.
SECTION 4.8 Coverage of Class A and Class B Required Amounts.
(a) On or before each Distribution Date, the 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
Class A Deficiency Amount, if any, for such Distribution Date, plus (iii) the
Class A Additional Interest, if any, for such Distribution Date, plus (iv) the
Class A Servicing Fee for the related Due Period, plus (v) the Class A Servicing
Fee, if any, due but not paid on any prior Distribution Date, plus (vi) the
Class A Investor Loss Amount, if any, for the related Due Period, plus (vii) the
Class A Investor Dilution Amount, if any, for such Distribution Date exceeds the
Class A Available Funds for such Distribution Date.
(b) On or before each Distribution Date, the Servicer shall
also determine the amount (the "Class B Required Amount"), equal to the sum of
(i) the amount, if any, by which (A) the sum of (1) the Class B Monthly Interest
for such Distribution Date, plus (2) the Class B Deficiency Amount, if any, for
such Distribution Date, plus (3) the Class B Additional Interest, if any, for
such Distribution Date, plus (4) the Class B Servicing Fee for the related Due
Period, plus (5) the Class B Servicing Fee, if any, due but not paid on any
prior Distribution Date, exceeds (B) the Class B Available Funds for the related
Due Period plus (ii) the sum of the Class B Investor Loss Amount, if any, for
such Distribution Date, plus the Class B Investor Dilution Amount, if any, for
such Distribution Date.
(c) In the event that the Class A Required Amount or the Class
B Required Amount for such Distribution Date is greater than zero, the Servicer
shall give written notice to the Trustee of such positive Class A Required
Amount or Class B Required Amount on or before such Distribution Date. For any
Distribution Date, in the event that the Class A Required Amount for such
Distribution Date is greater than zero, all or a portion of the Excess Spread
and Shared Excess Finance Charge Collections 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 on such Distribution Date
pursuant to subsection 4.11(a). In the event that the
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<PAGE> 33
Class A Required Amount for such Distribution Date exceeds the amount of Excess
Spread and Shared Excess Finance Charge Collections with respect to such
Distribution Date, the Collections of Principal Receivables allocable to the
Class D Certificates, the Collections of Principal Receivables allocable to the
Class C Certificates and the Collections of Principal Receivables allocable to
the Class B Certificates with respect to the related Due Period shall be applied
as specified in Section 4.12(b). In the event that the Class B Required Amount
for such Distribution Date exceeds the amount of Excess Spread and Shared Excess
Finance Charge Collections available to fund the Class B Required Amount
pursuant to subsection 4.11(c), the Collections of Principal Receivables
allocable to the Class D Certificates and the Collections of Principal
Receivables allocable to the Class C Certificates (after application, in each
case, to the Class A Required Amount) with respect to the related Due Period
shall be applied as specified in Section 4.12(b); provided, however, that the
sum of any payments pursuant to this paragraph shall not exceed the sum of the
Class A Required Amount and the Class B Required Amount.
SECTION 4.9 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 B 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 shall be distributed on each Distribution Date in the
following priority:
(i) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Deficiency Amount for
such Distribution Date, plus the amount of any Class A Additional
Interest for such Distribution Date, shall be distributed to the Class
A Certificateholders;
(ii) an amount equal to the Class A Servicing Fee for such
Distribution Date plus the amount of any Class A Servicing Fee due but
not paid to the Servicer on any prior Distribution Date shall be
distributed to the Servicer;
(iii) 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 for such Distribution Date;
(iv) an amount equal to the Class A Investor Dilution Amount,
if any, for the related Due Period shall be treated as a portion of
Available Principal Collections for such Distribution Date; and
(v) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.11.
(b) An amount equal to the Class B Available Funds for the
related Due Period shall be distributed on each Distribution Date in the
following priority:
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<PAGE> 34
(i) an amount equal to the Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Deficiency Amount for
such Distribution Date, plus the amount of any Class B Additional
Interest for such Distribution Date, shall be distributed to the Class
B Certificateholders;
(ii) an amount equal to the Class B Servicing Fee for such
Distribution Date, plus the amount of any Class B Servicing Fee due but
not paid to the Servicer on any prior Distribution Date shall be
distributed to the Servicer; and
(iii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.11.
(c) An amount equal to the Class C Available Funds for the
related Due Period shall be distributed on each Distribution Date in the
following priority:
(i) an amount equal to the Class C Servicing Fee for such
Distribution Date plus the amount of any Class C Servicing Fee due but
not paid to the Servicer on any prior Distribution Date shall be
distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.11.
(d) An amount equal to the Class D Available Funds for the
related Due Period shall be distributed on each Distribution Date in the
following priority:
(i) an amount equal to the Class D Servicing Fee for such
Distribution Date plus the amount of any Class D Servicing Fee due but
not paid to the Servicer on any prior Distribution Date shall be
distributed to the Servicer; and
(ii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed as set forth in Section 4.11.
(e) During the Revolving Period, an amount equal to the
Available Principal Collections for the related Due Period shall be distributed
on each Distribution Date in the following priority:
(i) first an amount equal to any amounts required to be
applied on such date from Available Principal Collections pursuant to
the Class D Purchase Agreement shall be so applied; and
(ii) an amount equal to Available Principal Collections
remaining after giving effect to the applications specified in
subsection 4.9(e)(i) above shall be treated as Shared Principal
Collections and applied to Series in Group One that are Principal
Sharing Series other than this Series 1999-1 and as provided in Section
4.3(f).
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(f) During the Controlled Amortization Period (beginning with
the Distribution Date in the month following the month in which the
Controlled Amortization Period begins) or the Early Amortization
Period, an amount equal to the Available Principal Collections for the
related Due Period shall be distributed on each Distribution Date in
the following priority:
(i) an amount equal to the Class A Monthly Principal for such
Distribution Date shall be distributed to the Class A
Certificateholders;
(ii) after giving effect to the distribution referred to in
clause (i) above, beginning on the Class B Principal Commencement Date,
an amount equal to the Class B Monthly Principal shall be distributed
to the Class B Certificateholders;
(iii) after giving effect to the distribution referred to in
clauses (i) and (ii) above, beginning with the Distribution Date on
which the Class B Investor Interest has been paid in full, an amount
equal to the Class C Monthly Principal shall be distributed to the
Class C Certificateholders in accordance with the Class C Purchase
Agreement;
(iv) after giving effect to the distributions referred to in
clauses (i), (ii) and (iii) above, beginning with the Distribution Date
on which the Class C Investor Interest has been paid in full, an amount
equal to the Class D Monthly Principal shall be distributed to the
Class D Certificateholders in accordance with the Class D Purchase
Agreement;
(v) after giving effect to the distributions referred to in
clauses (i), (ii), (iii) and (iv) above, an amount equal to any amounts
required to be applied from Available Principal Collections on such
date pursuant to the Class D Purchase Agreement shall be so applied;
and
(vi) an amount equal to Available Principal Collections
remaining after the applications specified in clauses (i), (ii), (iii),
(iv) and (v) above shall be treated as Shared Principal Collections and
applied to Series in Group One which are Principal Sharing Series other
than this Series 1999-1 and as provided in Section 4.3(f).
SECTION 4.10. 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)(iii),
subsection 4.11(a) and Section 4.12 with respect to such Due Period, the Class
D-2 Investor Interest (after giving effect to reductions for any Class D-2
Investor Charge-Offs described in the second and fourth sentences of paragraph
(d) and any Reallocated Class D-2 Principal Collections on such Distribution
Date) will be reduced by the amount of such excess. If such reduction would
cause the Class D-2 Investor Interest to be a negative number (but for the
proviso in the definition thereof), the Class D-2 Investor Interest will be
reduced to zero, and the Class D-1 Investor Interest (after giving effect to
reductions for any Class D-1 Investor Charge-Offs described in the third and
fifth sentences of paragraph (d) and
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<PAGE> 36
any Reallocated Class D-1 Principal Collections on such Distribution Date) will
be reduced by the amount by which the Class D-2 Investor Interest would have
been reduced below zero. If such reduction would cause the Class D-1 Investor
Interest to be a negative number (but for the proviso in the definition
thereof), the Class D-1 Investor Interest will be reduced to zero, and the Class
C Investor Interest (after giving effect to reductions for any Class C Investor
Charge-Offs described in the fourth and fifth sentences of paragraph (c) and any
Reallocated Class C Principal Collections on such Distribution Date) will be
reduced by the amount by which the Class D-1 Investor Interest would have been
reduced below zero. If such reduction would cause the Class C Investor Interest
to be a negative number (but for the proviso in the definition thereof), the
Class C Investor Interest will be reduced to zero, and the Class B Investor
Interest (after giving effect to reductions for any Class B Investor Charge-Offs
described in the fifth and sixth sentences of paragraph (b) and any Reallocated
Class B Principal Collections on such Distribution Date) will be reduced by the
amount by which the Class C Investor Interest would have been reduced below
zero. If such reduction would cause the Class B Investor Interest to be a
negative number (but for the proviso in the definition thereof), the Class B
Investor Interest will be reduced to zero, and the Class A Investor Interest
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. Additionally, the Class A Investor Interest shall be
reduced by the amount of any Series 1999-1 Unfunded Dilution Amount remaining
after giving effect to any related Class B Investor Charge-Off, Class C Investor
Charge-Off and Class D Investor Charge-Off (collectively, 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 and Shared Excess Finance Charge Collections
allocated and available for such purpose pursuant to subsection 4.11(b).
(b) 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 4.9(b)(iii), subsection
4.11(c) and Section 4.12 with respect to such Due Period, the Class D-2 Investor
Interest (after giving effect to reductions for any Class D-2 Investor
Charge-Offs described in paragraph (a) and the second and fourth sentences of
paragraph (d) and any Reallocated Class D-2 Principal Collections on such
Distribution Date) will be reduced by the amount of such excess. If such
reduction would cause the Class D-2 Investor Interest to be a negative number
(but for the proviso in the definition thereof), the Class D-2 Investor Interest
will be reduced to zero, and the Class D-1 Investor Interest (after giving
effect to reductions for any Class D-1 Investor Charge-Offs described in
paragraph (a) and the third and fifth sentences of paragraph (d) and any
Reallocated Class D-1 Principal Collections on such Distribution Date) will be
reduced by the amount by which the Class D-2 Investor Interest would have been
reduced below zero. If such reduction would cause the Class D-1 Investor
Interest to be a negative number (but for the proviso in the definition
thereof), the Class D-1 Investor Interest will be reduced to zero, and the Class
C Investor Interest (after giving effect to reductions for any Class C Investor
Charge-Offs described in paragraph (a) and the fourth and fifth sentences of
paragraph (c) and any Reallocated Class C Principal Collections on such
Distribution Date) will be reduced by the amount by which the Class D-1 Investor
Interest would have been reduced
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<PAGE> 37
below zero. If such reduction would cause the Class C Investor Interest to be a
negative number (but for the proviso in the definition thereof), the Class C
Investor Interest shall be reduced to zero and the Class B Investor Interest
shall be reduced by the amount by which the Class C Investor Interest would have
been reduced below zero, but not by more than the Class B Investor Loss Amount
for such Distribution Date. Additionally, the Class B Investor Interest shall be
reduced by the amount of any Series 1999-1 Unfunded Dilution Amount remaining
after giving effect to any related Class C Investor Charge-Off and Class D
Investor Charge-Off (collectively, together with all reductions to the Class B
Investor Interest under subsection 4.10(a), 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. The Class B Investor
Interest will thereafter be reimbursed (but not to an amount in excess of the
unpaid principal balance of the Class B Certificates) on any Distribution Date
by the amount of Excess Spread and Shared Excess Finance Charge Collections
allocated and available for that purpose as described under subsection 4.11(d).
(c) On or before each Distribution Date, the Servicer shall
calculate the Class C Investor Loss Amount. If on any Distribution Date, the
Class C Investor Loss Amount for the prior Due Period exceeds the amount of
Excess Spread, Shared Excess Finance Charge Collections and Reallocated Class D
Principal Collections which are allocated and available to fund such amount
pursuant to subsection 4.11(g) and Section 4.12, the Class D-2 Investor Interest
(after giving effect to reductions for any Class D-2 Investor Charge-Offs
described in paragraphs (a) and (b) and the second and fourth sentences of
paragraph (d) and any Reallocated Class D-2 Principal Collections on such
Distribution Date) will be reduced by the amount of such excess. If such
reduction would cause the Class D-2 Investor Interest to be a negative number
(but for the proviso in the definition thereof), the Class D-2 Investor Interest
will be reduced to zero, and the Class D-1 Investor Interest (after giving
effect to reductions for any Class D-1 Investor Charge-Offs described in
paragraphs (a) and (b) and the third and fifth sentences of paragraph (d) and
any Reallocated Class D-1 Principal Collections on such Distribution Date) will
be reduced by the amount by which the Class D-2 Investor Interest would have
been reduced below zero. If such reduction would cause the Class D-1 Investor
Interest to be a negative number (but for the proviso in the definition
thereof), the Class D-1 Investor Interest will be reduced to zero, and the Class
C Investor Interest (after giving effect to any Reallocated Class C Principal
Collections on such Distribution Date) will be reduced by the amount by which
the Class D-1 Investor Interest would have been reduced below zero, but not by
more than the Class C Investor Loss Amount for such Distribution Date.
Additionally, the Class C Investor Interest shall be reduced by the amount of
any Series 1999-1 Unfunded Dilution Amount remaining after giving effect to any
related Class D Investor Charge-Off (collectively, together with all reductions
to the Class C Investor Interest under subsections 4.10(a) and (b), a "Class C
Investor Charge-Off"). The Class C Investor Interest will also be reduced by the
amount of Reallocated Class C Principal Collections pursuant to Section 4.12.
The Class C Investor Interest will thereafter be reimbursed (but not in excess
of the unreimbursed amount of such reductions) on any Distribution Date by the
amount of the Excess Spread and Shared Excess Finance Charge Collections
allocated and available under subsection 4.11(i).
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<PAGE> 38
(d) On or before each Distribution Date, the Servicer shall
calculate the Class D Investor Loss Amount. If on any Distribution Date, the
Class D Investor Loss Amount for the prior Due Period exceeds the amount of
Excess Spread which is allocated and available to fund such amount pursuant to
subsection 4.11(l), the Class D-2 Investor Interest will be reduced by the
amount of such excess. If such reduction would cause the Class D-2 Investor
Interest to be a negative number (but for the proviso in the definition
thereof), the Class D-2 Investor Interest will be reduced to zero, and the Class
D-1 Investor Interest will be reduced by the amount by which the Class D-2
Investor Interest would have been reduced below zero but not by more than the
lesser of any remaining Class D Investor Loss Amount for such Distribution Date
and the Class D-1 Investor Interest. Additionally, the Class D-2 Investor
Interest shall be reduced by the amount of any Series 1999-1 Unfunded Dilution
Amount. If such reduction would cause the Class D-2 Investor Interest to be a
negative number (but for the proviso in the definition thereof), the Class D-2
Investor Interest will be reduced to zero, and the Class D-1 Investor Interest
will be reduced by the amount by which the Class D-2 Investor Interest would
have been reduced below zero but not by more than the lesser of any remaining
Series 1999-1 Unfunded Dilution Amount for such Distribution Date and the Class
D-1 Investor Interest. The reductions to the Class D-2 Investor Interest under
this clause (d), together with all reductions to the Class D-2 Investor Interest
under subsections 4.10(a), (b) and (c) are referred to collectively as a "Class
D-2 Charge-Off"). The reductions to the Class D-1 Investor Interest under this
clause (d), together with all reductions to the Class D-1 Investor Interest
under subsections 4.10(a), (b) and (c) are referred to collectively as a "Class
D-1 Investor Charge-Off"). The Class D-2 Investor Interest will also be reduced
by the amount of Reallocated Class D-2 Principal Collections pursuant to Section
4.12. The Class D-1 Investor Interest will also be reduced by the amount of
Reallocated Class D-1 Principal Collections pursuant to Section 4.12. Each of
the Class D-1 Investor Interest and the Class D-2 Investor Interest will
thereafter be reimbursed (but not in excess of the unreimbursed amount of such
reductions) on any Distribution Date by the amount of the Excess Spread and
Shared Excess Finance Charge Collections allocated and available for that
purpose as described under subsection 4.11(n).
SECTION 4.11. 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 1999-1 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 shall 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);
(b) an amount equal to the aggregate amount of Class A
Investor Charge-Offs which have not been previously reimbursed shall be treated
as a portion of Available Principal Collections for such Distribution Date;
(c) an amount equal to the Class B Required Amount, if any,
with respect to such Distribution Date (I) shall be used to fund any deficiency
pursuant to subsections 4.9(b)(i) and (ii) in the order of priority specified
therein and (II) any remaining amount up to the sum of
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the Class B Investor Loss Amount and Class B Investor Dilution Amount for the
related Due Period shall be treated as a portion of Available Principal
Collections for such Distribution Date;
(d) an amount equal to the aggregate amount by which the Class
B Investor Interest has been reduced below the Class B Initial Investor Interest
for reasons other than the payment of principal to the Class B
Certificateholders or the cancellation of Class B Certificates (but not in
excess of the unreimbursed amount of such reductions) shall be treated as a
portion of Available Principal Collections for such Distribution Date;
(e) an amount equal to the excess, if any, of the Class C
Servicing Fee for such Distribution Date plus the amount of any Class C
Servicing Fee due but not paid to the Servicer on any prior Distribution Date
over the Class C Available Funds for such Distribution Date shall be paid to the
Servicer;
(f) an amount equal to the Class C Monthly Interest plus the
Class C Deficiency Amount for such Distribution Date shall be distributed to the
Class C Certificateholders in accordance with the Class C Purchase Agreement;
(g) an amount equal to the Class C Investor Loss Amount, if
any, for the related Due Period shall be treated as a portion of Available
Principal Collections for such Distribution Date;
(h) an amount equal to the Class C Investor Dilution Amount,
if any, for the related Due Period shall be treated as a portion of Available
Principal Collections for such Distribution Date;
(i) an amount equal to the aggregate amount by which the Class
C Investor Interest has been reduced below the Class C Initial Investor Interest
for reasons other than the payment of principal to the Class C
Certificateholders or the cancellation of Class C Certificates (but not in
excess of the unreimbursed amount of such reductions) shall be treated as a
portion of Available Principal Collections for such Distribution Date;
(j) an amount equal to the excess, if any, of the Class D
Servicing Fee for such Distribution Date plus the amount of any Class D
Servicing Fee due but not paid to the Servicer on any prior Distribution Date
over the Class D Available Funds for such Distribution Date shall be paid to the
Servicer;
(k) an amount equal to the Class D Monthly Interest plus the
amount of any Class D Deficiency Amount for such Distribution Date shall be
distributed to the Class D Certificateholders in accordance with the Class D
Purchase Agreement;
(l) an amount equal to the Class D Investor Loss Amount, if
any, for the related Due Period shall be treated as a portion of Available
Principal Collections for such Distribution Date;
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(m) an amount equal to the Class D Investor Dilution Amount,
if any, for the related Due Period shall be treated as a portion of Available
Principal Collections for such Distribution Date;
(n) first an amount equal to the aggregate amount by which the
Class D-1 Investor Interest has been reduced below the Class D-1 Initial
Investor Interest for reasons other than the payment of principal to the Class
D-1 Certificateholders or the cancellation of Class D-1 Certificates (but not in
excess of the unreimbursed amount of such reductions) shall be treated as a
portion of Available Principal Collections for such Distribution Date and then
an amount equal to the aggregate amount by which the Class D-2 Investor Interest
has been reduced below the Class D-2 Initial Investor Interest for reasons other
than the payment of principal to the Class D-2 Certificateholders or the
cancellation of Class D-2 Certificates (but not in excess of the unreimbursed
amount of such reductions) shall be treated as a portion of Available Principal
Collections for such Distribution Date;
(o) first an amount equal to the aggregate of any other
amounts then due to the Class C Certificateholders or required to be applied
pursuant to the Class C Purchase Agreement out of Excess Spread and Shared
Excess Finance Charge Collections allocated to Series 1999-1 shall be
distributed for application in accordance with the Class C Purchase Agreement,
and then an amount equal to the aggregate of any other amounts then due to the
Class D Certificateholders or required to be applied pursuant to the Class D
Purchase Agreement out of Excess Spread and Shared Excess Finance Charge
Collections allocated to Series 1999-1 shall be distributed for application in
accordance with the Class D Purchase Agreement; and
(p) the balance, if any, will constitute a portion of Shared
Excess Finance Charge Collections for such Distribution Date and will be
available for allocation to other Series in Group One and, to the extent not
required to be applied as Shared Excess Finance Charge Collections with respect
to any Series in Group One, shall be distributed to the Holder of the
Exchangeable Seller Certificate or any other Person then entitled to such
amounts.
SECTION 4.12. Reallocated Principal Collections.
(a) 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 Principal Collections (applying
all Reallocated Principal Collections in accordance with subsection 4.12(b))
with respect to such Distribution Date, to make the following distributions on
each Distribution Date in the following priority:
(i) an amount equal to the excess, if any, of (x) the Class A
Required Amount, if any, with respect to such Distribution Date over
(y) the amount of Excess Spread and Shared Excess Finance Charge
Collections allocated to Series 1999-1 with respect to the related Due
Period, shall be applied in accordance with, and in the priority set
forth in, subsections 4.9(a)(i), (ii), (iii) and (iv);
(ii) an amount equal to the excess, if any, of (x) the Class B
Required Amount, if any, with respect to such Distribution Date over
(y) the amount of Excess Spread and
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Shared Excess Finance Charge Collections allocated and available to the
Class B Certificates pursuant to subsection 4.11(c) on such
Distribution Date shall be applied first in accordance with, and in the
priority set forth in subsections 4.9(b)(i) and (ii) and then pursuant
to and in the priority set forth in subsection 4.11(c)(II); and
(iii) an amount equal to the excess, if any, of (x) the Class
C Required Amount, if any, with respect to such Distribution Date over
(y) the amount of Excess Spread and Shared Excess Finance Charge
Collections allocated and available to the Class C Investor Interest
pursuant to subsections 4.11(e), 4.11(f), 4.11(g) and 4.11(h) on such
Distribution Date shall be applied first pursuant to subsection
4.9(c)(i), and then pursuant to and in the priority set forth in
subsections 4.11(f), 4.11(g) and 4.11(h).
(b) On each Distribution Date on which the Servicer shall
instruct the Trustee to apply Reallocated Principal Collections pursuant to
paragraph (a) above, the Trustee shall apply such Reallocated Principal
Collections in the following order of priority and only to the extent provided
below:
(i) applying Reallocated Class D-2 Principal Collections in
accordance with subsections 4.12 (a)(i) through (a)(iii);
(ii) if any amounts remain outstanding under subsections 4.12
(a)(i) through (a)(iii) after giving effect to Reallocated Class D-2
Principal Collections, then applying Reallocated Class D-1 Principal
Collections in accordance with subsections 4.12 (a)(i) through
(a)(iii);
(iii) if any amounts remain outstanding under subsections
4.12(a)(i) or (a)(ii) above after giving effect to Reallocated Class D
Principal Collections, then applying Reallocated Class C Principal
Collections in accordance with subsections 4.12(a)(i) and (a)(ii); and
(iv) if any amounts remain outstanding under subsection 4.12
(a)(i) above after giving effect to Reallocated Class D Principal
Collections and Reallocated Class C Principal Collections, then
applying Reallocated Class B Principal Collections in accordance with
subsection 4.12(a)(i).
(c) On each Distribution Date, the Class D-2 Investor Interest
shall be reduced by the amount of Reallocated Class D-2 Principal
Collections for such Distribution Date, the Class D-1 Investor Interest
shall be reduced by the amount of Reallocated Class D-1 Principal
Collections for such Distribution Date, the Class C Investor Interest
shall be reduced by the amount of Reallocated Class C Principal
Collections for such Distribution Date, and the Class B Investor
Interest shall be reduced by the amount of Reallocated Class B
Principal Collections for such Distribution Date.
SECTION 4.13. 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
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Agreement (including applicable grace periods), the Trustee shall make such
payment or deposit from the applicable account without instruction from the
Servicer or Seller. 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; provided,
however, that the Trustee shall in all cases be deemed to have sufficient
information to determine the amount of interest payable to the Series 1999-1
Certificateholders on each Distribution Date. The Servicer shall, upon request
of the Trustee, promptly provide the Trustee with all information necessary to
allow the Trustee to make such payment, deposit or withdrawal. Such funds or the
proceeds of such withdrawal shall be applied by the Trustee in the manner in
which such payment or deposit should have been made by the Seller or the
Servicer, as the case may be.
SECTION 4.14. 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 (o) 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).
(b) Series 1999-1 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 1999-1 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 1999-1 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 1999-1 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 (o) on such Distribution
Date over (b) the Excess Spread for such Distribution Date.
SECTION 4.15. Shared Principal Collections. Subject to
subsection 4.3(f) of the Agreement, Shared Principal Collections for any
Distribution Date will be allocated to Series 1999-1 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 1999-1 for such Distribution Date and the denominator of
which is the Cumulative Principal Shortfall for such Distribution Date.
SECTION 4.16. Purchase and Cancellation of Certificates. The
Seller may on any Distribution Date, upon five Business Days' prior written
notice to the Trustee, purchase Series 1999-1 Certificates on the secondary
market and request the Trustee to cancel such Series 1999-1 Certificates
purchased by the Seller on such Distribution Date and reduce the Class A, Class
B, Class C and/or Class D Investor Interest, as applicable, by a corresponding
amount; provided that after giving effect to any cancellation of Class B
Certificates, Class C Certificates and/or Class D Certificates resulting in a
reduction of the Class B, Class C and/or Class D
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Investor Interest, the Investor Interest of such Class shall not be lower than
(x) 18.00% of the Series 1999-1 Investor Interest (calculated after giving
effect to such cancellation), in the case of Class B, (y) 6.00% of the Series
1999-1 Investor Interest (calculated after giving affect to such cancellation),
in the case of Class C, and (z) 10.50% of the Series 1999-1 Investor Interest
(calculated after giving effect to such cancellations), in the case of Class D;
provided, further that after giving effect to any cancellation of Class D
Certificates, the Class D-2 Investor Interest shall not be lower than 5.25% of
the Series 1999-1 Investor Interest (calculated after giving effect to such
cancellation). No Certificateholder shall be required to sell its Certificates
to the Seller pursuant to this Section 4.16.
SECTION 4.17. Determination of LIBOR.
(a) On each LIBOR Determination Date, the Trustee will
determine LIBOR on the basis of the rate for deposits in United States dollars
for a one-month period which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on such date. If such rate does not appear on Telerate Page 3750,
the rate for that LIBOR Determination Date will be determined on the basis of
the rates at which deposits in United States dollars are offered by the
Reference Banks at approximately 11:00 a.m., London time, on that day to prime
banks in the London interbank market for a one-month period. The Trustee will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that LIBOR Determination Date will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for that LIBOR
Determination Date will be the arithmetic mean of the rates quoted by major
banks in New York City, selected by the Servicer, at approximately 11:00 a.m.,
New York City time, on that day for loans in United States dollars to leading
European banks for a one-month period.
(b) The Class A Certificate Rate, Class B Certificate Rate,
Class C Certificate Rate, Class D-1 Certificate Rate and Class D-2 Certificate
Rate applicable to the then current and the immediately preceding Interest
Periods may be obtained by any Series 1999-1 Certificateholder by telephoning
the Trustee at its Corporate Trust Office at (215) 985-7321.
(c) On each LIBOR Determination Date prior to 12:00 noon New
York City time, the Trustee shall send to the Servicer by facsimile,
notification of LIBOR for the following Interest Period.
SECTION 4.18. [Reserved].
SECTION 4.19. Paired Series. Any other Series in Group One may
be designated (but only with the consent of the Class C Certificateholders and
the Covered Class D-1 Certificateholders) as a Paired Series for Series 1999-1.
Such Paired Series either shall be prefunded with an initial deposit to a
prefunding account in an amount up to the initial principal balance of such
Paired Series and primarily from the sale of such Paired Series or shall have a
variable principal amount. Any such prefunding account shall be held for the
benefit of such Paired Series and not for the benefit of the Series 1999-1
Certificateholders. As funds in the Collection Account are allocated for
distribution as Available Principal Collections during the Early Amortization
Period or Controlled Amortization Period, either (i) in the case of a
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prefunded Paired Series, an equal amount of funds in any prefunding account for
such Paired Series shall be released and distributed pursuant to the terms of
such Paired Series or (ii) in the case of a Paired Series having a variable
principal amount, an interest in such variable Paired Series in an equal or
lesser amount may be sold by the Trust and the proceeds thereof will be
distributed pursuant to the terms of such Paired Series, and, in either case,
the Series Investor Interest of such Paired Series will increase by up to a
corresponding amount. Upon payment in full of the Investor Interest, assuming
that there have been no unreimbursed Loss Amounts with respect to any related
Paired Series, the aggregate amount of such Paired Series shall have been
increased by an amount up to an aggregate amount equal to the Series Investor
Interest paid to the Series 1999-1 Certificateholders (or such other amount as
the holders of such Paired Series shall agree).
SECTION 8. 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 1999-1 Certificates:
ARTICLE V.
DISTRIBUTIONS AND REPORTS TO INVESTOR
CERTIFICATEHOLDERS
SECTION 5.1 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 by
check mailed to each Class A Certificateholder (at such Certificateholder's
address as it appears in the Certificate Register), except that with respect to
Class A Certificates registered in the name of the nominee of a Clearing Agency,
such distribution shall be made in immediately available funds.
(b) 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 by
check mailed to each Class B Certificateholder (at such Certificateholder's
address as it appears in the Certificate Register), except that with respect to
Class B Certificates registered in the name of the nominee of a Clearing Agency,
such distribution shall be made in immediately available funds.
(c) On each Distribution Date, the Trustee shall distribute
(in accordance with the Class C Purchase Agreement) to each Class C
Certificateholder of record on the immediately preceding
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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 C Certificates held by such
Certificateholder) of amounts on deposit in the Collection Account as are
payable to the Class C Certificateholders pursuant to the Class C Purchase
Agreement by check mailed to each Class C Certificateholder (at such
Certificateholder's address as it appears in the Certificate Register) or by
wire transfer of immediately available funds to such account designated in
writing by such Certificateholder to the Trustee not later than the
Determination Date preceding such Distribution Date.
(d) On each Distribution Date, the Trustee shall distribute
(in accordance with the Class D Purchase Agreement) to each Class D-1
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 D Certificates held by such Certificateholder) of
amounts on deposit in the Collection Account as are payable to the Class D-1
Certificateholders pursuant to the Class D Purchase Agreement by check mailed to
each Class D-1 Certificateholder (at such Certificateholder's address as it
appears in the Certificate Register) or by wire transfer of immediately
available funds to such account designated in writing by such Certificateholder
to the Trustee not later than the Determination Date preceding such Distribution
Date.
(e) On each Distribution Date, the Trustee shall distribute
(in accordance with the Class D Purchase Agreement) to each Class D-2
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 D-2 Certificates held by such Certificateholder)
of amounts on deposit in the Collection Account as are payable to the Class D-2
Certificateholders pursuant to the Class D Purchase Agreement by check mailed to
each Class D-2 Certificateholder (at such Certificateholder's address as it
appears in the Certificate Register) or by wire transfer of immediately
available funds to such account designated in writing by such Certificateholder
to the Trustee not later than the Determination Date preceding such Distribution
Date.
SECTION 5.2. Monthly Certificateholders' Statement.
(a) On or before each Distribution Date, the Paying Agent
shall forward to each Series 1999-1 Certificateholder and each Rating Agency a
statement substantially in the form of Exhibit C 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 1999-1 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
1999-1 Certificate):
(i) the amount of the current distribution allocable to Class
A Monthly Principal, Class B Monthly Principal, Class C Monthly
Principal, Class D-1 Monthly Principal and Class D-2 Monthly Principal,
respectively;
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(ii) the amount of the current distribution allocable to Class
A Monthly Interest, Class A Deficiency Amounts, Class A Additional
Interest, Class B Monthly Interest, Class B Deficiency Amounts, Class B
Additional Interest, Class C Monthly Interest, Class C Deficiency
Amounts, Class D-1 Monthly Interest, Class D-1 Deficiency Amounts,
Class D-2 Monthly Interest and Class D-2 Deficiency Amounts,
respectively;
(iii) the amount of Collections of Principal Receivables
processed during the related Due Period and allocated in respect of the
Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D Certificates, respectively;
(iv) the amount of Collections of Finance Charge Receivables
processed during the related Due Period and allocated in respect of the
Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D Certificates, respectively;
(v) the aggregate amount of Principal Receivables, the Series
Investor Interest, the Class A Investor Interest, the Class B Investor
Interest, the Class C Investor Interest, the Class D-1 Investor
Interest, the Class D-2 Investor Interest, the Floating Allocation
Percentage, the Class A Floating Allocation, the Class B Floating
Allocation, the Class C Floating Allocation, the Class D Floating
Allocation and the Class D-1 and Class D-2 Floating Allocations and the
Principal Allocation Percentage, the Class A Fixed Allocation, the
Class B Fixed Allocation, the Class C Fixed Allocation, the Class D
Fixed Allocation and the Class D-1 and Class D-2 Fixed Allocations with
respect to the Principal Receivables in the Trust as of the end of the
day on the Record Date;
(vi) 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;
(vii) the Loss Amount, the Investor Loss Amount, the Class A
Investor Loss Amount, the Class B Investor Loss Amount, the Class C
Investor Loss Amount and the Class D Investor Loss Amount for the
related Due Period;
(viii) Dilution Amount, the Investor Dilution Amount, the
Class A Investor Dilution Amount, the Class B Investor Dilution Amount,
the Class C Investor Dilution Amount and the Class D Investor Dilution
Amount;
(ix) the aggregate amount of Class A Investor Charge-Offs,
Class B Investor Charge-Offs, Class C Investor Charge-Offs, Class D
Investor Charge-Offs and Class D-1 and Class D-2 Investor Charge-Offs
for the related Due Period;
(x) the aggregate amount of Class A Investor Charge-Offs,
Class B Investor Charge-Offs, Class C Investor Charge-Offs, Class D
Investor Charge-Offs and Class D-1 and Class D-2 Investor Charge-Offs
reimbursed on the Distribution Date immediately preceding such
Distribution Date;
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(xi) the amount of the Class A Servicing Fee, the Class B
Servicing Fee, the Class C Servicing Fee and the Class D Servicing Fee
for the related Due Period;
(xii) the Portfolio Yield and Base Rate for the preceding Due
Period;
(xiii) the amount of Reallocated Class D-2 Principal
Collections, Reallocated D-1 Principal Collections, Reallocated Class C
Principal Collections and Reallocated Class B Principal Collections
with respect to such Distribution Date;
(xiv) the Class A Investor Interest, the Class B Investor
Interest, the Class C Investor Interest, the Class D-1 Investor
Interest and the Class D-2 Investor Interest as of the close of
business on such Distribution Date;
(xv) LIBOR on such Distribution Date;
(xvi) the Principal Shortfall and Finance Charge Shortfall;
(xvii) the amount of Class A Available Funds, Class B
Available Funds, Class C Available Funds and Class D Available Funds on
deposit in the Collection Account on the related Distribution Date;
(xviii) the Excess Spread, Shared Excess Finance Charge
Collections, Shared Principal Collections, in each case allocated to
allocated to Series 1999-1, and the amount on deposit in the Excess
Funding Account;
(xix) such other items as are set forth in Exhibit C to this
Supplement.
(b) 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 1999-1 Certificateholder, a statement prepared by the Servicer
containing the information required to be contained in the regular monthly
report to Series 1999-1 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 1999-1 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 1999-1 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.
SECTION 9. Series 1999-1 Early Amortization Events. If any one
of the following events shall occur with respect to the Series 1999-1
Certificates:
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(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 (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 of its covenants or
agreements set forth in the Agreement, this Supplement (including, without
limitation, the covenant of the Seller contained in Section 11 of this
Supplement) or the Purchase Agreement, which failure has a material adverse
effect on the Series 1999-1 Certificateholders (which determination shall be
made without reference to the amount of the Class C Investor Interest or the
Class D Investor Interest for such period) and which continues unremedied for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Seller by the
Trustee, or to the Seller and the Trustee by the Controlling Certificateholders,
and continues to affect materially and adversely the interests of the Series
1999-1 Certificateholders for such period (which determination shall be made
without reference to the amount of the Class C Investor Interest or the Class D
Investor Interest for such period);
(b) any representation or warranty made by the Seller or the
Originator in the Agreement, this Supplement 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 60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Seller by the Trustee, or to
the Seller and the Trustee by the Controlling Certificateholders, and (ii) as a
result of which the interests of the Series 1999-1 Certificateholders are
materially and adversely affected (which determination shall be made without
reference to the amount of the Class C Investor Interest or the Class D Investor
Interest) and continue to be materially and adversely affected for such period;
provided, however, that a Series 1999-1 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;
(c) 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;
(d) the Seller shall fail to convey Receivables arising under
Additional Accounts to the Trust, as required by subsection 2.6(a);
(e) any Servicer Default shall occur which would have a
material adverse effect on the Series 1999-1 Certificateholders; or
(f) the Class A Investor Interest shall not be paid in full on
the Class A Expected Final Payment Date or the Class B Investor Interest shall
not be paid in full on the Class B Expected Final Payment Date;
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then, in the case of any event described in subparagraph (a), (b) or (e) after
the applicable grace period set forth in such subparagraphs, either the Trustee
or the 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 1999-1 Early
Amortization Event") has occurred as of the date of such notice, and in the case
of any event described in subparagraphs (c), (d) or (f), a Series 1999-1 Early
Amortization Event shall occur without any notice or other action on the part of
the Trustee or the Series 1999-1 Certificateholders immediately upon the
occurrence of such event.
SECTION 10. Series 1999-1 Termination. The right of the Series
1999-1 Certificateholders to receive payments from the Trust will terminate on
the first Business Day following the Series 1999-1 Termination Date.
SECTION 11. 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 C and Class D Certificateholders with an Officer's
Certificate certifying that such designation of such Additional Accounts will
not, as of the related Addition Date, (x) be reasonably expected by the Seller
to result in a reduction or withdrawal by either Rating Agency of its rating for
the Series 1999-1 Certificates, (y) cause a Series 1999-1 Early Amortization
Event, or (z) be reasonably expected by the Seller to materially adversely
affect in any manner the timing or amount of payments to the Class C
Certificateholders or the Class D Certificateholders.
SECTION 12. 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.
SECTION 13. Counterparts. This Supplement may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all of such counterparts shall together constitute but one and the
same instrument.
SECTION 14. Governing Law. THIS SUPPLEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 15. No Petition. Each of the Trustee, the Servicer and
the Seller (with respect to the Trust only), by entering into this Supplement
and each Series 1999-1 Certificateholder, by accepting a Series 1999-1
Certificate, shall not, prior to the date which is one year and one day after
the last day on which any Investor Certificate shall have been outstanding,
acquiesce, petition or otherwise invoke or cause the Trust or the Seller to
invoke the process of any Governmental Authority for the purpose of commencing
or sustaining a case against the Trust or the Seller under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar
46
<PAGE> 50
official of the Trust or the Seller or any substantial part of its property or
ordering the winding up or liquidation of the affairs of the Trust or the
Seller.
SECTION 16. Restrictions on Transfer of Class C Certificates
and Class D Certificates. (a) No initial or subsequent sale or other transfer of
a Class C Certificate or a Class D Certificate may be made unless such sale or
transfer (i) is accompanied by delivery of a tax statement in the form attached
hereto as Exhibit E, (ii) is in compliance with the other restrictions to
transfer set forth in Section 6.3 of the Agreement and (iii) is made to a
"United States Person" as defined in Section 7701(a)(30) of the Code. Any
attempted transfer, assignment, conveyance, participation or subdivision in
contravention of the preceding restrictions, as reasonably determined by the
Trustee, shall be void ab initio and the purported transferor, seller or
subdivider of such Certificate shall continue to be treated as the
Certificateholder of such Certificate for all purposes of the Agreement. Under
the tax statement, each holder of a Class C Certificate or a Class D Certificate
must represent that: (1) (a) such person is purchasing the Class C Certificate
or Class D Certificate for its own account and such person is the sole
beneficial owner of such Class C Certificate or Class D Certificate, (b) either
(i) such person is not and will not become, for federal income tax purposes, a
partnership, trust, estate or "S Corporation" (as defined in the Code) (each a
"Pass-Through Entity") or (ii) such person is, for federal income tax purposes,
a Pass-through Entity, but after giving effect to such purchase of such Class C
Certificates or Class D Certificates by such person less than 50 percent of the
aggregate value of such person's assets would consist of Class C Certificates or
Class D Certificates or any other Subject Instrument issued by the Trust, and
(c) such Class C Certificates or Class D Certificates have not been transferred
through an "established securities market" within the meaning of Section 7704(b)
of the Code; (2) if such person is a Pass-through Entity, such person covenants
that the portion of its assets consisting of Certificates will remain below 50
percent at all times; (3) such person is a "United States Person" as defined in
Section 7701(a)(30) of the code; and (4) if such person resells or transfers any
of the Class C Certificates or Class D Certificates, such person will obtain
from each purchaser or transferee a letter containing the same representations
and agreements as set forth herein.
(b) Each of the Class C Certificates and the Class D
Certificates are Subject Instruments subject to the transfer restrictions set
forth in Section 6.3(e) of the Agreement. Notwithstanding Section 6.3 of the
Agreement, Seller shall not execute, and the Transfer Agent and Registrar shall
not register the transfer of, (i) any Class C Certificate, if after giving
effect to the execution or transfer of such Class C Certificate, there would be
more than 5 Private Holders of Class C Certificates or (ii) any Class D
Certificate, if after giving effect to the execution or transfer of such Class D
Certificate, there would be more than 5 Private Holders of Class D Certificates.
For purposes of this Supplement and the Agreement, each Holder of a Class C
Certificate or a Class D Certificate shall be a "Private Holder."
SECTION 17. Certain Amendments. In addition to any other
provisions relating to amendments in either the Agreement or this Supplement,
this Supplement may be amended by the Seller without the consent of the
Servicer, Trustee or any Series 1999-1 Certificateholder if such amendment is to
the Series 1999-1 Supplement and is made to conform the terms of this
47
<PAGE> 51
Supplement to the terms described in the Prospectus Supplement dated July 16,
1999, relating to the offer and sale of the Class A Certificates and the Class B
Certificates; provided, however, that no such amendment shall be deemed
effective without the Trustee's consent, if the Trustee's rights, duties and
obligations hereunder are thereby modified.
48
<PAGE> 52
IN WITNESS WHEREOF, the Seller, the Servicer and the Trustee
have caused this Series 1999-1 Supplement to be duly executed by their
respective officers as of the day and year first above written.
CHARMING SHOPPES RECEIVABLES CORP.,
Seller
By: /s/ Eric M. Specter
--------------------------------
Name: Eric M. Specter
Title: President
SPIRIT OF AMERICA, INC.
Servicer
By: /s/ Kirk R. Simme
--------------------------------
Name: Kirk R. Simme
Title: Vice President
FIRST UNION NATIONAL BANK,
Trustee
By: /s/ George Rayzis
--------------------------------
Name: George Rayzis
Title: Vice President
S-1
<PAGE> 53
EXHIBIT A-1
FORM OF CLASS A CERTIFICATE
THIS CERTIFICATE, OR AN INTEREST HEREIN, MAY NOT BE ACQUIRED
BY OR FOR THE ACCOUNT OF ANY EMPLOYEE BENEFIT PLAN WITHIN THE MEANING
OF SECTION 3(3) OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), WHETHER OR NOT SUBJECT TO ERISA, OR A PLAN THAT IS
DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT (EACH, A "BENEFIT PLAN"), OR
BY OR FOR THE ACCOUNT OF ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE ANY
BENEFIT PLAN ASSETS BY REASON OF A BENEFIT PLAN'S INVESTMENT IN SUCH
ENTITY. BY ACQUIRING THIS CERTIFICATE OR AN INTEREST HEREIN, THE
PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT
EITHER (I) IT IS NOT A BENEFIT PLAN, AND THAT ITS ACQUISITION OF THIS
CERTIFICATE OR AN INTEREST HEREIN IS IN COMPLIANCE WITH THE FOREGOING
RESTRICTIONS ON BENEFIT PLAN ASSETS OR (II) IT IS AN INSURANCE COMPANY
PURCHASING THIS CERTIFICATE OR INTEREST HEREIN WITH ASSETS OF ITS
GENERAL ACCOUNT, AND AT THE TIME OF ACQUISITION AND THROUGHOUT THE
PERIOD OF HOLDING, (A) IT MEETS ALL OF THE REQUIREMENTS OF AND IS
ELIGIBLE FOR EXEMPTIVE RELIEF UNDER PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60, (B) LESS THAN 25% OF THE ASSETS OF SUCH ACCOUNT ARE
BENEFIT PLAN ASSETS AND (C) IT IS NOT A SERVICER TO THE TRUST OR AN
AFFILIATE OF SUCH SERVICER, AND WOULD NOT OTHERWISE BE EXCLUDED UNDER
29 CFR 2510.3-101(f)(1).
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to Charming Shoppes Receivables Corp. or its agent for
registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
No. __ $__________
<PAGE> 54
CUSIP No.
[ISIN No. _]
CHARMING SHOPPES MASTER TRUST
FLOATING RATE ASSET BACKED CERTIFICATE, SERIES 1999-1, CLASS A
Each $1,000 minimum denomination represents
a [ ] Undivided Interest in the
Charming Shoppes Master Trust Series 1999-1
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 CEDE & CO. (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), the
benefits of the subordination of the Class B Certificates, the Class C
Certificates and Class D Certificates 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"), 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.
The Series 1999-1 Certificates are issued in four classes, the
Class A Certificates (of which this certificate is one), the Class B
Certificates, which are subordinated to the Class A Certificates in certain
rights of payment as described herein and in the Pooling and Servicing
Agreement, the Class C Certificates, which are subordinated to the Class A
Certificates and the Class B Certificates in certain rights of payment as
described herein and in the Pooling and Servicing Agreement, and the Class D
Certificates, which are subordinated to the Class A Certificates, the Class B
Certificates and the Class C Certificates in certain rights of payments as
described herein and in the Pooling and Servicing Agreement.
The Seller has structured the Pooling and Servicing 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
A-1-2
<PAGE> 55
"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 Pooling and Servicing 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 Pooling and Servicing Agreement, to
which Pooling and Servicing 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.
The Receivables consist of Principal Receivables which arise
from the purchase of goods and services and of Finance Charge Receivables which
arise generally from periodic rate finance charges and other fees and charges,
as more fully specified in the Pooling and Servicing Agreement. The Trust corpus
consists of the Receivables now existing in the Accounts or hereafter created in
the Accounts, all monies due or to become due with respect thereto (including
all Finance Charge Receivables), all proceeds of the Receivables and Recoveries
and Insurance Proceeds relating thereto, and such funds as from time to time are
deposited in the Collection Account. This Certificate is one of a series of
Certificates entitled "Charming Shoppes Master Trust, Floating Rate Asset Backed
Certificates, Series 1999-1, Class A" (the "Class A Certificates"), each of
which represents an Undivided Interest in the Trust, including the right to
receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement to be deposited in the
Collection Account or paid to the Class A Certificateholders. The aggregate
interest represented by the Class A Certificates at any time in the Principal
Receivables in the Trust shall not exceed an amount equal to the Class A
Investor Interest at such time. In addition to the Series 1999-1 Certificates,
an Exchangeable Seller Certificate will be reissued to the Seller pursuant to
the Pooling and Servicing Agreement, which will represent an undivided interest
in the Trust. The Exchangeable Seller Certificate will represent the interest in
the Principal Receivables not represented by all of the Series of Investor
Certificates issued by the Trust or Series of Receivables Purchase Interests
sold by the Trust. The Exchangeable Seller Certificate may be exchanged by the
Seller pursuant to the Pooling and Servicing Agreement for a newly issued Series
of Investor Certificates and a reissued Exchangeable Seller Certificate upon the
conditions set forth in the Pooling and Servicing Agreement.
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 Pooling
and Servicing Agreement.
A-1-3
<PAGE> 56
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 Pooling and Servicing 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 Pooling and Servicing 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 Pooling and Servicing
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: _____ __, 1999
A-1-4
<PAGE> 57
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
FIRST UNION NATIONAL BANK,
Trustee
By:
--------------------------------
Authorized Officer
A-1-5
<PAGE> 58
EXHIBIT A-2
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE, OR AN INTEREST HEREIN, MAY NOT BE ACQUIRED
BY OR FOR THE ACCOUNT OF ANY EMPLOYEE BENEFIT PLAN WITHIN THE MEANING
OF SECTION 3(3) OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), WHETHER OR NOT SUBJECT TO ERISA, OR A PLAN THAT IS
DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT (EACH, A "BENEFIT PLAN"), OR
BY OR FOR THE ACCOUNT OF ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE ANY
BENEFIT PLAN ASSETS BY REASON OF A BENEFIT PLAN'S INVESTMENT IN SUCH
ENTITY. BY ACQUIRING THIS CERTIFICATE OR AN INTEREST HEREIN, THE
PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT
EITHER (I) IT IS NOT A BENEFIT PLAN, AND THAT ITS ACQUISITION OF THIS
CERTIFICATE OR AN INTEREST HEREIN IS IN COMPLIANCE WITH THE FOREGOING
RESTRICTIONS ON BENEFIT PLAN ASSETS OR (II) IT IS AN INSURANCE COMPANY
PURCHASING THIS CERTIFICATE OR INTEREST HEREIN WITH ASSETS OF ITS
GENERAL ACCOUNT, AND AT THE TIME OF ACQUISITION AND THROUGHOUT THE
PERIOD OF HOLDING, (A) IT MEETS ALL OF THE REQUIREMENTS OF AND IS
ELIGIBLE FOR EXEMPTIVE RELIEF UNDER PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60, (B) LESS THAN 25% OF THE ASSETS OF SUCH ACCOUNT ARE
BENEFIT PLAN ASSETS AND (C) IT IS NOT A SERVICER TO THE TRUST OR AN
AFFILIATE OF SUCH SERVICER, AND WOULD NOT OTHERWISE BE EXCLUDED UNDER
29 CFR 2510.3-101(f)(1).
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to Charming Shoppes Receivables Corp. or its agent for
registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch
as the registered owner hereof, Cede & Co., has an interest herein.
No. __ $__________
<PAGE> 59
CUSIP No.
[ISIN No. __]
CHARMING SHOPPES MASTER TRUST
FLOATING RATE ASSET BACKED CERTIFICATE, SERIES 1999-1, CLASS B
Each $1,000 minimum denomination represents
a [ ] Undivided Interest in the
Charming Shoppes Master Trust Series 1999-1
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 CEDE & CO. (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), the
benefits of the subordination of the Class C Certificates and the Class D
Certificate 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"), 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.
The Series 1999-1 Certificates are issued in four classes, the
Class A Certificates , the Class B Certificates (of which this certificate is
one), which are subordinated to the Class A Certificates in certain rights of
payment as described herein and in the Pooling and Servicing Agreement, the
Class C Certificates, which are subordinated to the Class A Certificates and the
Class B Certificates in certain rights of payment as described herein and in the
Pooling and Servicing Agreement, and the Class D Certificates, which are
subordinated to the Class A Certificates, the Class B Certificates and the Class
C Certificates in certain rights of payments as described herein and in the
Pooling and Servicing Agreement.
The Seller has structured the Pooling and Servicing Agreement
and the Class B Certificates with the intention that the Class B Certificates
will qualify under applicable tax law as indebtedness, and the Seller, the
Holder of the Exchangeable Seller Certificate, the Servicer and each Class B
Certificateholder (or Certificate Owner with respect to a Class B Certificate (a
A-2-2
<PAGE> 60
"Class B Certificate Owner")) by acceptance of its Class B Certificate (or in
the case of a Class B Certificate Owner, by virtue of such Class B Certificate
Owner's acquisition of a beneficial interest therein), agrees to treat and to
take no action inconsistent with the treatment of the Class B 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 B Certificateholder agrees that it will cause any Class
B Certificate Owner acquiring an interest in a Class B Certificate through it to
comply with the Pooling and Servicing Agreement as to treatment as indebtedness
for certain tax purposes.
This Class B Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing 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.
The Receivables consist of Principal Receivables which arise
from the purchase of goods and services and of Finance Charge Receivables which
arise generally from periodic rate finance charges and other fees and charges,
as more fully specified in the Pooling and Servicing Agreement. The Trust corpus
consists of the Receivables now existing in the Accounts or hereafter created in
the Accounts, all monies due or to become due with respect thereto (including
all Finance Charge Receivables), all proceeds of the Receivables and Recoveries
and Insurance Proceeds relating thereto, and such funds as from time to time are
deposited in the Collection Account. This Certificate is one of a series of
Certificates entitled "Charming Shoppes Master Trust, Floating Rate Asset Backed
Certificates, Series 1999-1, Class B" (the "Class B Certificates"), each of
which represents an Undivided Interest in the Trust, including the right to
receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement to be deposited in the
Collection Account or paid to the Class B Certificateholders. The aggregate
interest represented by the Class B Certificates at any time in the Principal
Receivables in the Trust shall not exceed an amount equal to the Class B
Investor Interest at such time. In addition to the Series 1999-1 Certificates,
an Exchangeable Seller Certificate will be reissued to the Seller pursuant to
the Pooling and Servicing Agreement, which will represent an undivided interest
in the Trust. The Exchangeable Seller Certificate will represent the interest in
the Principal Receivables not represented by all of the Series of Investor
Certificates issued by the Trust or Series of Receivables Purchase Interests
sold by the Trust. The Exchangeable Seller Certificate may be exchanged by the
Seller pursuant to the Pooling and Servicing Agreement for a newly issued Series
of Investor Certificates and a reissued Exchangeable Seller Certificate upon the
conditions set forth in the Pooling and Servicing Agreement.
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 Pooling
and Servicing Agreement.
A-2-3
<PAGE> 61
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 Pooling and Servicing 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 Pooling and Servicing 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 Pooling and Servicing
Agreement, or be valid for any purpose.
A-2-4
<PAGE> 62
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: _______ __, 1999
CERTIFICATE OF AUTHENTICATION
This is one of the Class B Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
FIRST UNION NATIONAL BANK,
Trustee
By:
--------------------------------
Authorized Officer
A-2-5
<PAGE> 63
EXHIBIT A-3
FORM OF CLASS C CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF THE 1933 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.
THIS CERTIFICATE, OR AN INTEREST HEREIN, MAY NOT BE ACQUIRED
BY OR FOR THE ACCOUNT OF ANY EMPLOYEE BENEFIT PLAN WITHIN THE MEANING
OF SECTION 3(3) OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), WHETHER OR NOT SUBJECT TO ERISA, OR A PLAN THAT IS
DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT (EACH, A "BENEFIT PLAN"), OR
BY OR FOR THE ACCOUNT OF ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE ANY
BENEFIT PLAN ASSETS BY REASON OF A BENEFIT PLAN'S INVESTMENT IN SUCH
ENTITY. BY ACQUIRING THIS CERTIFICATE OR AN INTEREST HEREIN, THE
PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT
EITHER (I) IT IS NOT A BENEFIT PLAN, AND THAT ITS ACQUISITION OF THIS
CERTIFICATE OR AN INTEREST HEREIN IS IN COMPLIANCE WITH THE FOREGOING
RESTRICTIONS ON BENEFIT PLAN ASSETS OR (II) IT IS AN INSURANCE COMPANY
PURCHASING THIS CERTIFICATE OR INTEREST HEREIN WITH ASSETS OF ITS
GENERAL ACCOUNT, AND AT THE TIME OF ACQUISITION AND THROUGHOUT THE
PERIOD OF HOLDING, (A) IT MEETS ALL OF THE REQUIREMENTS OF AND IS
ELIGIBLE FOR EXEMPTIVE RELIEF UNDER PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60, (B) LESS THAN 25% OF THE ASSETS OF SUCH ACCOUNT ARE
BENEFIT PLAN ASSETS AND (C) IT IS NOT A SERVICER TO THE TRUST OR AN
AFFILIATE OF SUCH SERVICER, AND WOULD NOT OTHERWISE BE EXCLUDED UNDER
29 CFR 2510.3-101(f)(1).
NEITHER THIS CERTIFICATE, NOR ANY PORTION OF THIS CERTIFICATE,
MAY BE TRANSFERRED (X) IF AFTER GIVING EFFECT TO THE EXECUTION OR
TRANSFER OF SUCH CERTIFICATE, THERE WOULD BE MORE THAN (I) 5 PRIVATE
HOLDERS OF CLASS C CERTIFICATES OR (II) 100 PRIVATE HOLDERS, OR (Y) ON
OR THROUGH (I) AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF
SECTION 7704(b)(1) OF THE
<PAGE> 64
INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND ANY PROPOSED, TEMPORARY
OR FINAL TREASURY REGULATION THEREUNDER, INCLUDING, WITHOUT LIMITATION,
AN OVER-THE-COUNTER-MARKET OR AN INTERDEALER QUOTATIONS SYSTEM THAT
REGULARLY DISSEMINATES FIRM BUY OR SELL QUOTATIONS OR (II) "SECONDARY
MARKET" OR "SUBSTANTIAL EQUIVALENT THEREOF" WITHIN THE MEANING OF
SECTION 7704(b)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
AND ANY PROPOSED, TEMPORARY OR FINAL TREASURY REGULATIONS THEREUNDER,
INCLUDING A MARKET WHEREIN INTERESTS IN THE TRUST ARE REGULARLY QUOTED
BY ANY PERSON MAKING A MARKET IN SUCH INTERESTS AND A MARKET WHEREIN
ANY PERSON REGULARLY MAKES AVAILABLE BID OR OFFER QUOTES WITH RESPECT
TO INTERESTS IN THE TRUST AND STANDS READY TO EFFECT BUY OR SELL
TRANSACTIONS AT THE QUOTED PRICES FOR ITSELF OR ON BEHALF OF OTHERS.
ANY ATTEMPTED TRANSFER, ASSIGNMENT, CONVEYANCE, PARTICIPATION OR
SUBDIVISION IN CONTRAVENTION OF THE PRECEDING RESTRICTIONS, AS
REASONABLY DETERMINED BY THE SELLER, SHALL BE VOID AB INITIO AND THE
PURPORTED TRANSFEROR, SELLER OR SUBDIVIDER OF SUCH CERTIFICATE SHALL BE
CONSTRUED TO BE TREATED AS THE CERTIFICATEHOLDER OF ANY SUCH
CERTIFICATE FOR ALL PURPOSES OF THE POOLING AND SERVICING AGREEMENT
(DEFINED BELOW).
A-3-2
<PAGE> 65
CUSIP No.
CHARMING SHOPPES MASTER TRUST
FLOATING RATE ASSET BACKED CERTIFICATE, SERIES 1999-1, CLASS C
Each $1,000 minimum denomination represents
a [ ] Undivided Interest in the
Charming Shoppes Master Trust Series 1999-1
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 ______________ (the "Class C
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), the
subordination of the Class D Certificate 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"), 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.
The Series 1999-1 Certificates are issued in four classes, the
Class A Certificates, the Class B Certificates, which are subordinated to the
Class A Certificates in certain rights of payment as described herein and in the
Pooling and Servicing Agreement, the Class C Certificates (of which this
certificate is one), which are subordinated to the Class A Certificates and the
Class B Certificates in certain rights of payment as described herein and in the
Pooling and Servicing Agreement, and the Class D Certificates, which are
subordinated to the Class A Certificates, the Class B Certificates and the Class
C Certificates in certain rights of payments as described herein and in the
Pooling and Servicing Agreement.
This Class C Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the Class C
Certificateholder by virtue of the acceptance hereof assents and by which the
Class C Certificateholder is bound.
A-3-3
<PAGE> 66
The Receivables consist of Principal Receivables which arise
from the purchase of goods and services and of Finance Charge Receivables which
arise generally from periodic rate finance charges and other fees and charges,
as more fully specified in the Pooling and Servicing Agreement. The Trust corpus
consists of the Receivables now existing in the Accounts or hereafter created in
the Accounts, all monies due or to become due with respect thereto (including
all Finance Charge Receivables), all proceeds of the Receivables and Recoveries
and Insurance Proceeds relating thereto, and such funds as from time to time are
deposited in the Collection Account. This Certificate is one of a series of
Certificates entitled "Charming Shoppes Master Trust, Floating Rate Asset Backed
Certificates, Series 1999-1, Class C" (the "Class C Certificates"), each of
which represents an Undivided Interest in the Trust, including the right to
receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement to be deposited in the
Collection Account or paid to the Class C Certificateholders. The aggregate
interest represented by the Class C Certificates at any time in the Principal
Receivables in the Trust shall not exceed an amount equal to the Class C
Investor Interest at such time. In addition to the Series 1999-1 Certificates,
an Exchangeable Seller Certificate will be reissued to the Seller pursuant to
the Pooling and Servicing Agreement, which will represent an undivided interest
in the Trust. The Exchangeable Seller Certificate will represent the interest in
the Principal Receivables not represented by all of the Series of Investor
Certificates issued by the Trust or Series of Receivables Purchase Interests
sold by the Trust. The Exchangeable Seller Certificate may be exchanged by the
Seller pursuant to the Pooling and Servicing Agreement for a newly issued Series
of Investor Certificates and a reissued Exchangeable Seller Certificate upon the
conditions set forth in the Pooling and Servicing Agreement.
This Class C Certificate does not represent an obligation of,
or an interest in, the Seller, the Originator or the Servicer, and neither the
Class C Certificates nor the Accounts or Receivables are insured or guaranteed
by the Federal Deposit Insurance Corporation or any other governmental agency.
This Class C Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth in the Pooling
and Servicing Agreement.
The transfer of this Class C Certificate shall be registered
in the Certificate Register upon surrender of this Class C 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 C Certificateholder or such Class C Certificateholder's
attorney-in-fact duly authorized in writing, and thereupon one or more new Class
C Certificates of authorized denominations and for the same aggregate Undivided
Interests will be issued to the designated transferee or transferees.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth and in the Class C Purchase Agreement,
Class C Certificates are exchangeable for new Class C Certificates evidencing
like aggregate Undivided Interests, as requested by the Class C
Certificateholder surrendering such Class C Certificates. No service charge may
be imposed for any such exchange but the Servicer or Transfer Agent and
Registrar
A-3-4
<PAGE> 67
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 C 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 Pooling and Servicing Agreement.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Class C
Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, Charming Shoppes Receivables Corp. has
caused this Class C Certificate to be duly executed under its official seal.
CHARMING SHOPPES RECEIVABLES CORP.
By:
--------------------------------
Authorized Officer
Attested to:
By:
------------------------------------
Assistant Secretary
Date: _______ __, 1999
A-3-5
<PAGE> 68
CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
FIRST UNION NATIONAL BANK,
Trustee
By:
--------------------------------
Authorized Officer
A-3-6
<PAGE> 69
EXHIBIT A-4
FORM OF CLASS D CERTIFICATE
No. __ $__________
CHARMING SHOPPES MASTER TRUST
FLOATING RATE ASSET BACKED CERTIFICATE, SERIES 1999-1,
CLASS D CERTIFICATE
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND MAY BE SOLD ONLY PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE
UNDER THE ACT OR AN EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
ACT. IN ADDITION, THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT REFERRED
TO HEREIN. A COPY OF THE POOLING AND SERVICING AGREEMENT WILL BE
FURNISHED TO THE HOLDER OF THIS CERTIFICATE BY THE TRUSTEE UPON WRITTEN
REQUEST.
THIS CERTIFICATE, OR AN INTEREST HEREIN, MAY NOT BE ACQUIRED
BY OR FOR THE ACCOUNT OF ANY EMPLOYEE BENEFIT PLAN WITHIN THE MEANING
OF SECTION 3(3) OF EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), WHETHER OR NOT SUBJECT TO ERISA, OR A PLAN THAT IS
DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986,
INCLUDING AN INDIVIDUAL RETIREMENT ACCOUNT (EACH, A "BENEFIT PLAN"), OR
BY OR FOR THE ACCOUNT OF ANY ENTITY WHOSE UNDERLYING ASSETS INCLUDE ANY
BENEFIT PLAN ASSETS BY REASON OF A BENEFIT PLAN'S INVESTMENT IN SUCH
ENTITY. BY ACQUIRING THIS CERTIFICATE OR AN INTEREST HEREIN, THE
PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT
EITHER (I) IT IS NOT A BENEFIT PLAN, AND THAT ITS ACQUISITION OF THIS
CERTIFICATE OR AN INTEREST HEREIN IS IN COMPLIANCE WITH THE FOREGOING
RESTRICTIONS ON BENEFIT PLAN ASSETS OR (II) IT IS AN INSURANCE COMPANY
PURCHASING THIS CERTIFICATE OR INTEREST HEREIN WITH ASSETS OF ITS
GENERAL ACCOUNT, AND AT THE TIME OF ACQUISITION AND THROUGHOUT THE
PERIOD OF HOLDING, (A) IT MEETS ALL OF THE REQUIREMENTS OF AND IS
ELIGIBLE FOR EXEMPTIVE RELIEF UNDER PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60, (B) LESS THAN 25% OF THE ASSETS OF SUCH ACCOUNT ARE
BENEFIT PLAN ASSETS AND (C) IT IS NOT A SERVICER TO THE TRUST OR AN
AFFILIATE OF SUCH SERVICER, AND WOULD NOT OTHERWISE BE EXCLUDED UNDER
29 CFR 2510.3-101(f)(1).
<PAGE> 70
NEITHER THIS CERTIFICATE, NOR ANY PORTION OF THIS CERTIFICATE,
MAY BE TRANSFERRED (X) IF AFTER GIVING EFFECT TO THE EXECUTOR OR
TRANSFER OF SUCH CERTIFICATE, THERE WOULD BE MORE THAN (I) 5 PRIVATE
HOLDERS OF CLASS D CERTIFICATES OR (II) 100 PRIVATE HOLDERS, OR (Y) ON
OR THROUGH (I) AN "ESTABLISHED SECURITIES MARKET" WITHIN THE MEANING OF
SECTION 7704(b)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
AND ANY PROPOSED, TEMPORARY OR FINAL TREASURY REGULATION THEREUNDER,
INCLUDING, WITHOUT LIMITATION, AN OVER-THE-COUNTER-MARKET OR AN
INTERDEALER QUOTATIONS SYSTEM THAT REGULARLY DISSEMINATES FIRM BUY OR
SELL QUOTATIONS OR (II) "SECONDARY MARKET" OR "SUBSTANTIAL EQUIVALENT
THEREOF" WITHIN THE MEANING OF SECTION 7704(b)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, AND ANY PROPOSED, TEMPORARY OR FINAL
TREASURY REGULATION THEREUNDER, INCLUDING A MARKET WHEREIN INTERESTS IN
THE TRUST ARE REGULARLY QUOTED BY ANY PERSON MAKING A MARKET IN SUCH
INTERESTS AND A MARKET WHEREIN ANY PERSON REGULARLY MAKES AVAILABLE BID
OR OFFER QUOTES WITH RESPECT TO INTEREST IN THE TRUST AND STANDS READY
TO EFFECT BUY OR SELL TRANSACTIONS AT THE QUOTED PRICES FOR ITSELF OR
ON BEHALF OF OTHERS. ANY ATTEMPTED TRANSFER, ASSIGNMENT, CONVEYANCE,
PARTICIPATION OR SUBDIVISION IN CONTRAVENTION OF THE PRECEDING
RESTRICTIONS, AS REASONABLY DETERMINED BY THE SELLER, SHALL BE VOID AB
INITIO AND THE PURPORTED TRANSFEROR, SELLER, OR SUBDIVIDER OF SUCH
CERTIFICATE SHALL BE CONSTRUED TO BE TREATED AS THE CERTIFICATEHOLDER
OF ANY SUCH CERTIFICATE FOR ALL PURPOSES OF THE POOLING AND SERVICING
AGREEMENT (DEFINED BELOW).
Each $1,000 minimum denomination represents
a [ ] Undivided Interest in the
Charming Shoppes Master Trust Series 1999-1
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 ____________ (the "Class D
Certificateholder") is the registered owner of the Undivided Interest in a trust
(the "Trust"), the corpus of which consists of a portfolio of credit card
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
A-4-2
<PAGE> 71
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"), 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.
The Series 1999-1 Certificates are issued in four classes, the
Class A Certificates, the Class B Certificates, which are subordinated to the
Class A Certificates in certain rights of payment as described herein and in the
Pooling and Servicing Agreement, the Class C Certificates, which are
subordinated to the Class A Certificates and the Class B Certificates in certain
rights of payment as described herein, and in the Pooling and Servicing
Agreement, and the Class D Certificates (of which this certificate is one),
which are subordinated to the Class A Certificates, the Class B Certificates and
the Class C Certificates in certain rights of payments as described herein, and
in the Pooling and Servicing Agreement.
This Class D Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing Agreement, to
which Pooling and Servicing Agreement, as amended from time to time, the Class D
Certificateholder by virtue of the acceptance hereof assents and by which the
Class D Certificateholder is bound.
The Receivables consist of Principal Receivables which arise
from the purchase of goods and services and of Finance Charge Receivables which
arise generally from periodic rate finance charges and other fees and charges,
as more fully specified in the Pooling and Servicing Agreement. The Trust corpus
consists of the Receivables now existing in the Accounts or hereafter created in
the Accounts, all monies due or to become due with respect thereto (including
all Finance Charge Receivables), all proceeds of the Receivables and Recoveries
and Insurance Proceeds relating thereto, and such funds as from time to time are
deposited in the Collection Account. This Certificate is one of a series of
Certificates entitled "Charming Shoppes Master Trust, Floating Rate Asset Backed
Certificates, Series 1999-1, Class D Certificates" (the "Class D Certificates"),
each of which represents an Undivided Interest in the Trust, including the right
to receive the Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement to be deposited in the
Collection Account or paid to the Class D Certificateholders. The aggregate
interest represented by the Class D Certificates at any time in the Principal
Receivables in the Trust shall not exceed an amount equal to the Class D
Investor Interest at such time. In addition to the Series 1999-1 Certificates,
an Exchangeable Seller Certificate will be reissued to the Seller pursuant to
the Pooling and Servicing Agreement, which will represent an undivided interest
in the Trust. The Exchangeable Seller Certificate will represent the interest in
the Principal Receivables not represented by all of the Series of Investor
Certificates issued by the Trust or Series of Receivables Purchase Interests
sold by the Trust. The Exchangeable Seller Certificate may be exchanged by the
Seller pursuant to the Pooling and Servicing Agreement for a newly issued Series
of Investor Certificates and a reissued Exchangeable Seller Certificate upon the
conditions set forth in the Pooling and Servicing Agreement.
A-4-3
<PAGE> 72
This Class D Certificate does not represent an obligation of,
or an interest in, the Seller, the Originator or the Servicer, and neither the
Class D Certificates nor the Accounts or Receivables are insured or guaranteed
by the Federal Deposit Insurance Corporation or any other governmental agency.
This Class D Certificate is limited in right of payment to certain collections
respecting the Receivables, all as more specifically set forth in the Pooling
and Servicing Agreement.
The transfer of this Class D Certificate shall be registered
in the Certificate Register upon surrender of this Class D 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 D Certificateholder or such Class D Certificateholder's
attorney-in-fact duly authorized in writing, and thereupon one or more new Class
D Certificates of authorized denominations and for the same aggregate Undivided
Interests will be issued to the designated transferee or transferees.
As provided in the Pooling and Servicing Agreement and subject
to certain limitations therein set forth, Class D Certificates are exchangeable
for new Class D Certificates evidencing like aggregate Undivided Interests, as
requested by the Class D Certificateholder surrendering such Class D
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 D 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 Pooling and Servicing Agreement.
A-4-4
<PAGE> 73
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this Class D
Certificate shall not be entitled to any benefit under the Pooling and Servicing
Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, Charming Shoppes Receivables Corp. has
caused this Class D Certificate to be duly executed under its official seal.
CHARMING SHOPPES RECEIVABLES CORP.
By:
--------------------------------
Authorized Officer
Attested to:
By:
---------------------------------
Assistant Secretary
Date: _______ __, 1999
CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the
within-mentioned Pooling and Servicing Agreement.
FIRST UNION NATIONAL BANK,
Trustee
By:
--------------------------------
Authorized Officer
A-4-5
<PAGE> 74
EXHIBIT B
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO THE TRUSTEE
SPIRIT OF AMERICA, INC.
-----------------------
CHARMING SHOPPES MASTER TRUST
SERIES 1999-1
-----------------------
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:
A) 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.
B) Spirit is the Servicer under the Pooling and Servicing
Agreement.
C) The undersigned is a Servicing Officer.
D) The date of this notice is a Determination Date under the
Pooling and Servicing Agreement.
I. 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
<PAGE> 75
Section 3 of the Series 1999-1 Supplement, as applicable and Section 4.9 of the
Pooling and Servicing Agreement, as applicable; provided, however, that amounts
deposited in the Collection Account representing payments made pursuant to a
Hedge Agreement (as defined in the Class C Purchase Agreement) shall be
withdrawn and the proceeds applied in accordance with the terms of the Class C
Purchase Agreement:
<TABLE>
<S> <C>
A) Pursuant to subsection 4.9(a)(i):
(1) Class A Monthly Interest at the Class A Certificate
Rate on the Class A Investor Interest $________
(2) Class A Deficiency Amount $________
(3) Class A Additional Interest $________
B) Pursuant to subsection 4.9(a)(ii):
(1) Class A Servicing Fee $________
(2) Accrued and unpaid Class A Servicing Fee $________
C) Pursuant to subsection 4.9(a)(iii):
(1) Class A Investor Loss Amount $________
D) Pursuant to subsection 4.9(a)(iv):
(1) Class A Investor Dilution Amount $________
E) Pursuant to subsection 4.9(a)(v):
(1) Portion of Excess Spread from Class A Available Funds to be
allocated and distributed as provided in Section 4.11 $________
F) Pursuant to subsection 4.9(b)(i):
(1) Class B Monthly Interest at the Class B Certificate Rate on the
Class B Investor Interest $________
(2) Class B Deficiency Amount $________
</TABLE>
B-2
<PAGE> 76
<TABLE>
<S> <C>
(3) Class B Additional Interest $________
G) Pursuant to subsection 4.9(b)(ii):
(1) Class B Servicing Fee $________
(2) Accrued and unpaid Class B Servicing Fee $________
(H) Pursuant to subsection 4.9(b)(iii):
(1) Portion of Excess Spread from Class B Available Funds to be
allocated and distributed as provided in Section 4.11 $________
(I) Pursuant to subsection 4.9(c)(i):
(1) Class C Servicing Fee $________
(2) Accrued and unpaid Class C Servicing Fee, if applicable $________
(J) Pursuant to subsection 4.9(c)(ii):
(1) Portion of Excess Spread from Class C Available Funds to be
allocated and distributed as provided in Section 4.11 $________
(K) Pursuant to subsection 4.9(d)(i):
(1) Class D Servicing Fee $________
(2) Accrued and unpaid Class D Servicing Fee, if applicable $________
(L) Pursuant to subsection 4.9(d)(ii):
(1) Portion of Excess Spread from Class D Available Funds to be
allocated and distributed as provided in Section 4.11 $________
</TABLE>
B-3
<PAGE> 77
<TABLE>
<S> <C>
Total $
========
M) Pursuant to subsection 4.9(e)(i):
(1) Amount to be applied pursuant to Class D Purchase Agreement $________
N) Pursuant to subsection 4.9(e)(ii):
(1) Amount to be treated as Shared Excess Principal Collections $________
O) Pursuant to subsection 4.9(e)(iii):
(1) Amount to be paid to the Holder of the Exchangeable Seller's
Certificate $________
P) Pursuant to subsection 4.9(f)(i):
(1) Class A Monthly Principal $________
Q) Pursuant to subsection 4.9(f)(ii):
(1) Class B Monthly Principal $________
R) Pursuant to subsection 4.9(f)(iii):
(1) Class C Monthly Principal to be applied in accordance with the
Class C Purchase Agreement $________
S) Pursuant to subsection 4.9(f)(iv):
(1) Class D-1 Monthly Principal $________
(2) Class D-2 Monthly Principal $________
T) Pursuant to subsection 4.9(f)(v):
(1) Amount to be applied pursuant to Class D Purchase Agreement $_______
U) Pursuant to subsection 4.9(f)(vi):
</TABLE>
B-4
<PAGE> 78
<TABLE>
<S> <C>
(1) Amount to be treated as Shared Excess Principal Collections
$_______
V) Pursuant to subsection 4.9(f)(vii):
1) Amount to be paid to the Holder of the Exchangeable Seller's
Certificate $_______
Total $
=======
W) Pursuant to Section 4.14:
(1) Amount of Shared Excess Finance Charge Collections to be
withdrawn from the Collection Account to be allocated to Series
1999-1 and distributed as provided in Section 4.11. $________
</TABLE>
II. 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:
<TABLE>
<S> <C>
1. Amount to be distributed to Class A Certificateholders $________
2. Amount to be distributed to Class B Certificateholders $________
3. Amount to be distributed to the Class C Certificateholders $________
4. Amount to be distributed to the Class D Certificateholders $________
</TABLE>
III. 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:
B-5
<PAGE> 79
<TABLE>
<S> <C>
A. 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) $_________
B. 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 Collection $_________
C. The amount equal to the Class B Required Amount, if
any, which will be used to fund the Class B
Required Amount and be applied first in accordance
with, and in the priority set forth in, sub-
section 4.9(b) and then in accordance with, and in
the priority set forth in, subsection 4.11(c)(II) $_________
D. The amount equal to the aggregate amount by which
the Class B Investor Interest has been reduced
below the initial Class B Series Investor Interest
for reasons other than the payment of principal to
the Class B Certificateholders (but not in excess
of the unreimbursed amount of such reductions)
which will be treated as a portion of Available
Principal Collection $_________
</TABLE>
B-6
<PAGE> 80
<TABLE>
<S> <C>
E. The amount equal to the aggregate amount of accrued
but unpaid Class C Servicing Fee (after giving
affect to the application of Class C Available
Funds thereto pursuant to Section 4.9) $_________
F. The amount equal to the Class C Monthly Interest
plus the amount of any past due Class C Monthly
Interest which will be paid to the Class C Holder
for application in accordance with the Class C
Purchase Agreement $_________
G. The amount equal to the Class C Investor Loss
Amount, if any, for the prior Due Period which will
be treated as a portion of Available Principal
Collections $_________
H. The amount equal to the Class C Investor Dilution
Amount, if any for the prior Due Period which will
be treated as a portion of Available Principal
Collections $_________
I. The amount equal to the aggregate amount by which
the Class C Investor Interest has been reduced
below the initial Class C Investor Interest for
reasons other than the payment of principal to the
Class C Investor Holder (but not in excess of the
unreimbursed amount of such reductions) which will
be treated as a portion of Available Principal
Collections $________
J. The amount equal to the aggregate amount of any
other amounts then due to the Class C
Certificateholders out of Excess Spread and Shared
Excess Finance Charge Collections allocated
</TABLE>
B-7
<PAGE> 81
<TABLE>
<S> <C>
to Series 1999-1 to be distributed to the Class C
Certificateholders for application in accordance
with the Class C Purchase Agreement $_________
K. The amount equal to the aggregate amount of accrued
but unpaid Class D Servicing Fees which will be
paid to the Servicer (after giving effect to the
application of Class D Available Funds thereto
pursuant to Section 4.9) $_________
L. The amount equal to the Class D-1 Monthly Interest
plus the amount of any Class D-1 Deficiency Amount
which will be paid to the Class D-1 Holder for
application in accordance with the Class D Purchase
Agreement $_________
M. The amount equal to the Class D-2 Monthly Interest
plus the amount of any Class D-2 Deficiency Amount
which will be paid to the Class D-2 Holder for
application in accordance with the Class D Purchase
Agreement $_________
M. The amount equal to the Class D Investor Loss
Amount, if any, for the prior Due Period which will
be treated as a portion of Available Principal
Collections $_________
N. The amount equal to the Class D Investor Dilution
Amount, if any for the prior Due Period which will
be treated as a portion of Available Principal
Collections $_________
</TABLE>
B-8
<PAGE> 82
<TABLE>
<S> <C>
O. The amount equal to the aggregate amount by which
the Class D Investor Interest has been reduced
below the initial Class D Investor Interest for
reasons other than the payment of principal to the
Class D Certificateholders (but not in excess of
the unreimbursed amount of such reductions) which
will be treated as a portion of Available Principal
Collections $_________
Q. The balance, if any, after giving effect to the
payments made pursuant to subparagraphs (A) through
(O) above to be applied as Shared Excess Finance
Charge Collections for such Distribution Date $_________
</TABLE>
IV. REALLOCATED PRINCIPAL COLLECTIONS
Pursuant to Section 4.12, the Servicer does hereby instruct the Trustee
to withdraw from the Collection Account and apply Reallocated Principal
Collections pursuant to Section 4.12 with respect to the related Due Period in
the following amounts:
<TABLE>
<S> <C>
A. Reallocated Class D
Principal Collections $__________
B. Reallocated Class C
Principal Collections $__________
C. Reallocated Class B
Principal Collections $__________
</TABLE>
V. 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
B-9
<PAGE> 83
<TABLE>
<S> <C>
A. Subsections 4.9(a)(i) and (b)(i):
(1) The aggregate amount of the
Class A Deficiency Amount $_________
(2) The aggregate amount of
Class B Deficiency Amount $_________
B. Subsections 4.9(a)(ii) and (b)(ii):
(1) The aggregate amount of all
accrued and unpaid Class A
Servicing Fee $_________
(2) The aggregate amount of all
accrued and unpaid Class B
Servicing Fee $_________
C. Section 4.10:
(1) The aggregate amount of all
unreimbursed Class A Investor
Charge-Offs $_________
(2) The aggregate amount of all
unreimbursed Class B Investor
Charge-Offs $_________
(3) The aggregate amount of all
unreimbursed Class C Investor
Charge-Offs $_________
(4) The aggregate amount of all
unreimbursed Class D-1 Investor
Charge-Offs $_________
(5) The aggregate amount of all
unreimbursed Class D-2 Investor
Charge-Offs $_________
</TABLE>
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate this __ day of _______, ____.
SPIRIT OF AMERICA, INC.
Servicer
By:
--------------------------------
Name:
Title:
B-10
<PAGE> 84
EXHIBIT C
FORM OF MONTHLY CERTIFICATEHOLDERS' STATEMENT
Series 1999-1
SPIRIT OF AMERICA, INC.
CHARMING SHOPPES MASTER TRUST
Under Section 5.2 of the Series 1999-1 Supplement dated as of
__________ __, 1999 (the "Series 1999-1 Supplement", and together with the
Second Amended and Restated Pooling and Servicing Agreement dated as of November
25, 1997, as amended or otherwise modified from time to time, the "Pooling and
Servicing Agreement") by and among Charming Shoppes Receivables Corp., as
Seller, Spirit of America, Inc., (Spirit"), as Servicer, and First Union
National Bank, as Trustee, Spirit, as Servicer, is required to prepare certain
information each month regarding current distributions to Series 1999-1
Certificateholders and the performance of the Charming Shoppes Master Trust (the
"Trust") during the previous month. The information which is required to be
prepared with respect to the Distribution Date of _______, ______ and with
respect to the performance of the Trust during the month of _________, ______ is
set forth below. Certain of the information is presented on the basis of an
original principal amount of $1,000 per Series 1999-1 Certificate (a
"Certificate"). Certain other information is presented based on the aggregate
amounts for the Trust as a whole. Capitalized terms used in this Statement have
their respective meanings set forth in the Pooling and Servicing Agreement.
A. Information Regarding the Current Monthly Distribution (Stated on the
Basis of $1,000 Original Certificate Principal Amount)
<TABLE>
<S> <C>
1. The amount of the current monthly distribution in respect of
Class A Monthly Principal..........................................$________
2. The amount of the current monthly distribution in respect of
Class B Monthly Principal..........................................$________
3. The amount of the current monthly distribution in respect of
Class C Monthly Principal....................................... $________
</TABLE>
<PAGE> 85
<TABLE>
<S> <C>
4. The amount of the current monthly distribution in respect of
Class D-1 Monthly Principal..................................... $________
5. The amount of the current monthly distribution in respect of
Class D-2 Monthly Principal..................................... $________
6. The amount of the current monthly distribution in respect of
Class A Monthly Interest........................................ $________
7. The amount of the current monthly distribution in respect of
Class A Deficiency Amounts...................................... $________
8. The amount of the current monthly distribution in respect of
Class A Additional Interest..................................... $________
9. The amount of the current monthly distribution in respect of
Class B Monthly Interest........................................ $________
10. The amount of the current monthly distribution in respect of
Class B Deficiency Amounts...................................... $________
11. The amount of the current monthly distribution in respect of
Class B Additional Interest..................................... $________
12. The amount of the current monthly distribution in respect of
Class C Monthly Interest........................................ $________
13. The amount of the current monthly distribution in respect of
any accrued and unpaid Class C Deficiency Amounts............... $________
14. The amount of the current monthly distribution in respect of
Class D-1 Monthly Interest...................................... $________
</TABLE>
C-2
<PAGE> 86
<TABLE>
<S> <C>
15. The amount of the current monthly distribution in respect of
any accrued and unpaid Class D-1 Deficiency Amounts............. $________
16. The amount of the current monthly distribution in respect of
Class D-2 Monthly Interest...................................... $________
17. The amount of the current monthly distribution in respect of
any accrued and unpaid Class D-2 Deficiency Amounts............. $________
B. Information Regarding the Performance of the Trust
1. Collection of Principal Receivables
(a) The aggregate amount of Collections of Principal
Receivables processed during the related Due Period
which were allocated in respect of the Class A
Certificates............................................ $________
(b) The aggregate amount of Collections of Principal
Receivables processed during the related Due Period
which were allocated in respect of the Class B
Certificates.......................... ................. $________
(c) The aggregate amount of Collections of Principal
Receivables processed during the related Due Period
which were allocated in respect of the Class C
Certificates............................................ $________
</TABLE>
C-3
<PAGE> 87
<TABLE>
<S> <C>
(d) The aggregate amount of Collections of Principal
Receivables during the related Due Period which were
allocated in respect of the Class D
Certificates............................................ $________
2. Principal Receivables in the Trust
(a) The aggregate amount of Principal Receivables in the
Trust as of the end of the day on the last day of the
preceding Due
Period.................................................. $________
(b) The Excess Funding Amount (the aggregate amount on
deposit in the Excess Funding Account) as of the end
of the day on the last day of the preceding Due
Period.................................................. $________
(c) The Series Investor Interest as of the last day of the
preceding Due Period.................................... $________
(d) The Floating Allocation Percentage with respect to the
related Due Period...................................... ________%
(e) The Class A Floating Allocation with respect to the
related Due Period...................................... ________%
(f) The Class B Floating Allocation with respect to the
related Due Period...................................... ________%
(g) The Class C Floating Allocation with respect to the
related Due Period...................................... ________%
</TABLE>
C-4
<PAGE> 88
<TABLE>
<S> <C>
(h) The Class D Floating Allocation with respect to the
related Due Period............................................ ______%
(i) The Class D-1 Floating Allocation with respect to the
related Due Period............................................ ______%
(j) The Class D-2 Floating Allocation with respect to the
related Due Period............................................ ______%
(k) The Principal Allocation Percentage with respect to
the related Due Period........................................ ______%
(l) The Class A Fixed Allocation with respect to the
related Due Period............................................ ______%
(m) The Class B Fixed Allocation with respect to the
related Due Period............................................ ______%
(n) The Class C Fixed Allocation with respect to the
related Due Period............................................ ______%
(o) The Class D Fixed Allocation with respect to the
related Due Period............................................ ______%
(p) The Class D-1 Fixed Allocation with respect to the
related Due Period......................... .................. ______%
(q) The Class D-2 Fixed Allocation with respect to the
related Due Period............................................ ______%
</TABLE>
C-4
<PAGE> 89
3. Delinquent Balances
The aggregate amount of outstanding balances in the Accounts
which were delinquent as of the day on the last day of the
preceding Due Period:
<TABLE>
<CAPTION>
Aggregate
Account
Balance
---------
<S> <C>
(a) 30-59 days ........................................... $_______
(b) 60-89 days ........................................... $_______
(c) 90-119 days ........................................... $_______
(d) 120 or more days ........................................... $_______
Total: $_______
</TABLE>
<TABLE>
<S> <C>
4. Investor Loss Amount
(a) The Investor Loss Amount for the related Due
Period................................................... $______
(b) The Class A Investor Loss Amount for the related Due
Period................................................... $______
(c) The Class B Investor Loss Amount for the related Due
Period................................................... $______
(d) The Class C Investor Loss Amount for the related Due
Period................................................... $______
(e) The Class D-1 Investor Loss Amount for the related Due
Period................................................... $______
(f) The Class D-2 Investor Loss Amount for the related Due
Period................................................... $______
</TABLE>
C-6
<PAGE> 90
<TABLE>
<S> <C>
5. Series 1999-1 Dilution Amount
(a) The Series 1999-1 Dilution Amount for the related Due
Period.................................................. $________
(b) The Class A Investor Dilution Amount for the related
Due Period.............................................. $________
(c) The Class B Investor Dilution Amount for the related
Due Period.............................................. $________
(d) The Class C Investor Dilution Amount for the related
Due Period.............................................. $________
(e) The Class D-1 Investor Dilution Amount for the related
Due Period.............................................. $________
(f) The Class D-2 Investor Dilution Amount for the related
Due Period.............................................. $________
(g) The Series Unfunded Dilution Amount for the related
Due Period.............................................. $________
6. Investor Charge Offs
(a) The aggregate amount of Class A Investor Charge Offs
for the related Due Period.............................. $________
(b) The aggregate amount of Class A Investor Charge Offs
set forth in 6(a) above per $1,000 of original
certificate principal amount............................ $________
(c) The aggregate amount of Class B Investor Charge Offs
for the related Due Period.............................. $________
</TABLE>
C-7
<PAGE> 91
<TABLE>
<S> <C>
(d) The aggregate amount of Class B Investor Charge Offs
set forth in 6(c) above per $1,000 of original
certificate principal amount............................ $________
(e) The aggregate amount of Class C Investor Charge Offs
for the related Due Period.............................. $________
(f)) The aggregate amount of Class C Investor Charge Offs
set forth in 6(e) above per $1,000 of original
certificate principal amount............................ $________
(g) The aggregate amount of Class D-1 Investor Charge Offs
for the related Due Period.............................. $________
(h) The aggregate amount of Class D-1 Investor Charge Offs
set forth in 6(g) above per $1,000 of original
certificate principal amount............................ $________
(i) The aggregate amount of Class D-2 Investor Charge Offs
for the related Due Period.............................. $________
(j) The aggregate amount of Class D-2 Investor Charge Offs
set forth in 6(i) above per $1,000 of original
certificate principal amount............................ $________
</TABLE>
C-8
<PAGE> 92
<TABLE>
<S> <C>
(k) The aggregate amount of Class A Investor Charge Offs
reimbursed on this Distribution Date.................... $_________
(l) The aggregate amount of Class A Investor Charge Offs
set forth in 6(k) above per $1,000 original
certificate principal amount reimbursed on this
Distribution Date....................................... $_________
(m) The aggregate amount of Class B Investor Charge Offs
reimbursed on this Distribution Date.................... $_________
(n) The aggregate amount of Class B Investor Charge Offs
set forth in 6(m) above per $1,000 original
certificate principal amount reimbursed on this
Distribution Date....................................... $_________
(o) The aggregate amount of Class C Investor Charge Offs
reimbursed on this Distribution Date.................... $_________
(p) The aggregate amount of Class C Investor Charge Offs
set forth in 6(o) above per $1,000 original
certificate principal amount reimbursed on this
Distribution Date....................................... $_________
(q) The aggregate amount of Class D-1 Investor Charge Offs
reimbursed on this Distribution Date.................... $_________
(r) The aggregate amount of Class D-1 Investor Charge Offs
set forth in 6(q) above per $1,000 original
certificate principal amount reimbursed on this
Distribution Date........................................ $_________
</TABLE>
C-9
<PAGE> 93
<TABLE>
<S> <C>
(s) The aggregate amount of Class D-2 Investor Charge Offs
reimbursed on this Distribution Date..................... $_______
(t) The aggregate amount of Class D-2 Investor Charge Offs
set forth in 6(s) above per $1,000 original
certificate principal amount reimbursed on this
Distribution Date........................................ $_______
7. Series 1999-1 Investor Monthly Servicing Fee
(a) The amount of the Class A Servicing Fee payable by the
Trust to the Servicer for the related Due Period......... $_______
(b) The amount of the Class B Servicing Fee payable by the
Trust to the Servicer for the related Due Period......... $_______
(c) The amount of the Class C Servicing Fee payable by the
Trust to the Servicer for the related Due Period......... $_______
(d) The amount of the Class D Servicing Fee payable by the
Trust to the Servicer for the related Due Period......... $_______
8. Reallocations
(a) The amount of Reallocated Class D-2 Principal
Collections with respect to this Distribution Date....... $_______
</TABLE>
C-10
<PAGE> 94
<TABLE>
<S> <C>
(b) The amount of Reallocated Class D-1 Principal
Collections with respect to this Distribution Date....... $________
(c) The amount of Reallocated Class C Principal
Collections with respect to this Distribution Date....... $________
(d) The amount of Reallocated Class B Principal
Collections with respect to this Distribution Date....... $________
(e) The Class D-2 Investor Interest as of the close of
business on this Distribution Date....................... $________
(f) The Class D-1 Investor Interest as of the close of
business on this Distribution Date....................... $________
(g) The Class C Investor Interest as of the close of
business on this Distribution Date....................... $________
(h) The Class B Investor Interest as of the close of
business on this Distribution Date....................... $________
(i) The Class A Investor Interest as of the close of
business on this Distribution Date....................... $________
9. Collection of Finance Charge Receivables
(a) The aggregate amount of Collections of Finance Charge
Receivables received during the related Due Period
which were allocated in respect of Class A
Certificates............................................. $________
</TABLE>
C-11
<PAGE> 95
<TABLE>
<S> <C>
(b) The aggregate amount of Collections of Finance Charge
Receivables received during the related Due Period
which were allocated in respect of the Class B
Certificates............................................. $________
(c) The aggregate amount of Collections of Finance Charge
Receivables received during the related Due Period
which were allocated in respect of the Class C
Certificates............................................. $________
(d) The aggregate amount of Collections of Finance Charge
Receivables received during the related Due Period
which were allocated in respect of the Class D
Certificates............................................. $________
10. Available Funds
(a) The amount of Class A Available Funds on deposit in
the Collection Account on this Distribution Date......... $________
(b) The amount of Class B Available Funds on deposit in
the Collection Account on this Distribution Date......... $________
(c) The amount of Class C Available Funds on deposit in
the Collection Account on this Distribution Date......... $________
(d) The amount of Class D Available Funds on deposit in
the Collection Account on this Distribution Date......... $________
</TABLE>
C-12
<PAGE> 96
<TABLE>
<S> <C>
11. Portfolio Yield
The Portfolio Yield for the related Due
Period......................................................... $________
12. Shared Principal Collections
(a) The Cumulative Principal
Shortfall with respect to such
Distribution Date..................................... $________
(b) The Shared Principal
Collections allocable to
the Certificates on such
Distribution Date..................................... $________
13. Shared Excess Finance Charge Collections
(a) The Finance Charge Shortfall
with respect to such
Distribution Date..................................... $________
(b) The Shared Excess Finance
Charge Collections allocable
to the Certificates on such
Distribution Date..................................... $________
C. Floating-Rate Determinations
1. LIBOR for the Interest Period ending on this Distribution
Date........................................................... ________%
</TABLE>
SPIRIT OF AMERICA, INC.
Servicer
By:
---------------------------
Name:
Title:
C-13
<PAGE> 97
EXHIBIT E
FORM OF TAX STATEMENT
(for transfer of Class C Certificates or Class D Certificates)
First Union National Bank,
as Trustee
[address]
Ladies and Gentlemen:
[ ] (the "Purchaser") has today purchased in a private resale from
[insert name of seller] a $[ ] [Class C] [Class D] Certificate (the "Subject
Certificate") issued pursuant to the Series 1999-1 Supplement dated as of July
22, 1999 (the "Supplement") between Charming Shoppes Receivable Corp., as seller
(the "Seller"), Spirit of America, Inc., as servicer (the "Servicer") and First
Union National Bank, as trustee (the "Trustee") to 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 on July 22, 1999 (the
"Pooling and Servicing Agreement," and, together with the Supplement, the
"Agreement"). Capitalized terms used herein and not defined have the respective
meanings assigned to them in the Agreement.
The undersigned hereby irrevocably agrees, represents and warrants on
behalf of the Purchaser that:
1. (a) The Purchaser is purchasing the Subject Certificate for
its own account where the Purchaser is sole beneficial owner,
(b) either (1) the Purchaser is not and will not become, for
federal income tax purposes, a partnership, trust, estate or
"S Corporation" (as defined in the Internal Revenue Code of
1986 (the "Code")) (each a "Pass-through Entity") or (2) the
Purchaser is, for federal income tax purposes, a Pass-through
Entity, but after giving effect to such purchase of such
Subject Certificate by the Purchaser less than 50 percent of
the aggregate value of the Purchaser's assets would consist of
Subject Certificates or other Subject Instruments issued by
the Trust, and (c) the Subject Certificate has not been
transferred through an "established securities market" within
the meaning of section 7704(b) of the Code.
2. If the Purchaser is a Pass-through Entity, the Purchaser
covenants that the portion of its assets consisting of Subject
Certificates will remain below 50 percent at all times.
3. The Purchaser is a "United States Person" as defined in
Section 7701(a)(30) of the Code.
D-2-1
<PAGE> 98
4. If the Purchaser resells or transfers the Subject Certificate,
the Purchaser will obtain from each purchaser or transferee a
letter containing the same representations and agreements as
set forth herein.
Very truly yours,
[Name of Purchaser]
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
D-2-2
<PAGE> 1
EXHIBIT 10.1
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT (this "Amendment") dated as of July 22, 1999, is
to the Purchase and Sale Agreement, dated as of November 25, 1997 (the "Purchase
Agreement") between SPIRIT OF AMERICA NATIONAL BANK., a national banking
association ("Spirit"), as Seller, and CHARMING SHOPPES RECEIVABLES CORP.
("CSRC"), as Purchaser. Unless otherwise defined herein, capitalized terms used
herein shall have the meanings assigned in the Purchase Agreement.
W I T N E S S E T H:
WHEREAS, Spirit and CSRC have entered into the Purchase Agreement
pursuant to which Spirit transfers Receivables to CSRC from time to time;
WHEREAS, CSRC is a party to the Pooling and Servicing Agreement
pursuant to which CSRC transfers Receivables to the Trust from time to time and
Spirit acts as Servicer; and
WHEREAS, Spirit and CSRC desire to amend the Purchase Agreement to
modify the calculation of the purchase price paid by CSRC for the Receivables
transferred thereunder and to make certain other changes to reflect the
assignment of the servicing duties under the Pooling and Servicing Agreement by
Spirit to Spirit of America, Inc. ("Spirit, Inc.").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. Amendments. (a) Section 3.1(b) of the Purchase Agreement is
hereby amended and restated in its entirety to read as follows::
"(b) The purchase price (the "the Purchase Price") for each
Receivable (and the Related Assets with respect thereto) Conveyed to
the Purchaser after the Effective Date shall equal a specified
percentage (the "Specified Percentage") of the Outstanding Balance of
such Receivable. Initially, the Specified Percentage will equal 102%.
Periodically, the Purchaser and the Seller may change the Specified
Percentage to any percentage upon which they agree in writing; provided
that (i) any such change to the Specified Percentage shall be based
upon changes in historical losses on the Receivables and the
Purchaser's costs of funds, and (ii) the Specified Percentage shall
never be less than 100%. The Purchaser shall remit the Purchase Price
for Receivables (and their Related Assets) Conveyed on each day, plus
any deferred Purchase Price for Receivables (other than Existing
Assets) Conveyed on any prior day and their Related Assets, to the
Seller on a daily basis, to the extent the Purchaser has cash available
therefor. The Purchaser will draw on all resources available to it,
including Collections allocable to it and amounts available to be drawn
under any liquidity facilities, to remit the Purchase Price in full on
each day. On each Distribution Date after the Effective Date, the
Purchaser and the Seller shall settle as to any remaining Purchase
Price or adjustments
<PAGE> 2
thereto for Receivables and Related Assets (other than Existing Assets)
Conveyed during the related Due Period. Prior to each Distribution
Date, the Purchaser and the Seller shall determine (x) the aggregate
amount of conveyances made during the related Due Period, (y) the
aggregate Purchase Price for Receivables and Related Assets Conveyed
during that Due Period, and (z) the aggregate amount of payments in
respect of such Purchase Price that have been previously made by the
Purchaser.
(c) Any portion of the Purchase Price for Receivables and
Related Assets Conveyed during any Due Period that is not paid under
subsection (b) above on the day on which such Receivables are Conveyed
shall be treated as deferred Purchase Price and shall be payable from
time to time as provided in subsection (b). The Purchaser shall pay
interest on the deferred Purchase Price outstanding from time to time
under this Agreement at a variable rate per annum equal to the rate of
interest published in the Wall Street Journal as the "prime rate" as of
the last Business Day of the most recent Due Period. Such interest
shall be computed on the basis of the actual number of days elapsed and
a 365-day year and shall be paid as provided in subsection (b).
For administrative convenience, interest on such deferred
Purchase Price and on any loans described in Section 3.3 shall be
calculated on the following basis. On each Distribution Date, the
Purchaser and the Seller shall determine whether, after giving effect
to subsection (b), any deferred Purchase Price is outstanding with
respect to Receivables Conveyed during the related (or any earlier) Due
Period and their Related Assets and whether there is any loan
outstanding from the Purchaser to the Seller. Any such outstanding
deferred Purchase Price or outstanding loan is referred to below as an
"Intercompany Balance". The Purchaser and Seller will then determine
the arithmetic mean of the Intercompany Balances on that and the
immediately preceding Distribution Date (or on such Distribution Date
and the Effective Date, in the case of the first Distribution Date),
treating any deferred Purchase Price as a positive number and any loan
as a negative number for purposes of this calculation. If such
arithmetic mean is a positive number, then the amount of deferred
Purchase Price outstanding on each day during the related Due Period
shall be deemed (solely for purposes of calculating interest) to have
equaled such positive number (and the amount of loans outstanding on
each day during such Due Period shall be deemed to have been zero).
Conversely, if such arithmetic mean is a negative number, then the
principal amount of the loan outstanding on each day during the related
Due Period shall be deemed (solely for purposes of calculating
interest) to have equaled the absolute value of such negative number
(and the amount of deferred Purchase Price outstanding on each day
during such Due Period shall be deemed to have been zero)."
(d) Section 3.2 of the Purchase Agreement is hereby amended by deleting
each reference to the phrase "and Deferred Originator Payments" from paragraphs
(a) and (b) thereof.
(e) Section 7.14 of the Purchase Agreement is hereby amended by
deleting the last sentence thereof in its entirety and substituting the
following therefor:
2
<PAGE> 3
"The Seller hereby acknowledges and agrees that it has no claim to or
interest in either of the Collection Account or any Series Account."
SECTION 2. Acknowledgment. Each of Spirit and CSRC hereby acknowledge
and agree that from and after the Amendment Date (defined below) (x) Spirit Inc.
shall be the Servicer under the Pooling and Servicing Agreement and (y)
notwithstanding anything to the contrary set forth in Section 7.4 of the
Purchase Agreement, all notices required to be given to the Servicer under the
Purchase Agreement shall be sent to Spirit of America, Inc., c/o Charming
Shoppes, Inc., 450 Winks Lane, Bensalem, Pennsylvania 19020, Attention: General
Counsel.
SECTION 3. Amendment Date. This Amendment shall become effective upon
the date (the "Amendment Date") on which (x) Spirit shall have received executed
counterpart signatures pages of this Amendment from each of the parties hereto,
(y) all conditions to the effectiveness of this Amendment pursuant to Section
7.1 of the Purchase Agreement shall have been satisfied and (z) the First
Amendment dated as of the date hereof to the Pooling and Servicing Agreement
shall have become effective.
SECTION 4. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 5. Severability. Each provision of this Amendment shall be
severable from every other provision of this Amendment for the purpose of
determining the legal enforceability of any provision hereof, and the
unenforceability of any provision hereof, and the unenforceability of one or
more provisions of this Amendment in one jurisdiction shall not have the effect
of rendering such provision or provisions unenforceable in any other
jurisdiction.
SECTION 6. Ratification of the Purchase Agreement and Security
Agreement. (a) Each reference in the Purchase Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import, and references to the
Purchase Agreement in any other document, instrument or agreement executed
and/or delivered in connection therewith, shall, in each case, mean and be a
reference to the Purchase Agreement as amended hereby. Except as otherwise
amended by this Amendment, the Purchase Agreement shall continue in full force
and effect and is hereby ratified and confirmed.
(b) Spirit hereby confirms that the Security Agreement is and shall
continue to be in full force and effect after giving effect to this Amendment,
and the issuance of any new Series (including the Certificate Series being
issued contemporaneously with the execution hereof) shall not impair or
otherwise affect the Security Agreement. The Security Agreement is hereby
ratified and confirmed.
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SECTION 7. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.
SPIRIT OF AMERICA NATIONAL BANK
By: /s/ Kirk R. Simme
-----------------------------------
Name: Kirk R. Simme
Title: President
CHARMING SHOPPES RECEIVABLES CORP.
By: /s/ Eric M. Specter
-----------------------------------
Name: Eric M. Specter
Title: Vice President
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