EXHIBIT 10.13
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AMENDED AND RESTATED
CERTIFICATE PURCHASE AGREEMENT
among
WACHOVIA BANK, NATIONAL ASSOCIATION
as Trustee
CHARMING SHOPPES RECEIVABLES CORP.,
as Seller
SPIRIT OF AMERICA, INC.,
as Servicer
and
THE CLASS D-2 CERTIFICATEHOLDERS DESCRIBED HEREIN
dated as of November 22, 2002
and amended and restated as of November 18, 2004
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TABLE OF CONTENTS
Page
ARTICLE I Definitions.............................................................................. 1
SECTION 1.1 Defined Terms................................................................... 1
SECTION 1.2 Other Definitional Provisions................................................... 5
ARTICLE II Amount and Terms of Class D-2 Certificates............................................... 5
SECTION 2.1 Purchase and Sale............................................................... 5
SECTION 2.2 Distributions................................................................... 5
SECTION 2.3 Interest Rate; Payment Dates.................................................... 6
SECTION 2.4 Payments........................................................................ 6
SECTION 2.5 Nonrecourse and Recourse Obligations; Obligations Absolute...................... 6
SECTION 2.6 No Increase to Class D-1 Investor Interest...................................... 6
ARTICLE III Cash Collateral Account.................................................................. 7
SECTION 3.1 Class D-2 Cash Collateral Account............................................... 7
SECTION 3.2 Calculations.................................................................... 8
ARTICLE IV Conditions Precedent..................................................................... 8
SECTION 4.1 Representations and Warranties.................................................. 8
SECTION 4.2 Related Agreements.............................................................. 8
SECTION 4.3 Certificate Issuance............................................................ 8
SECTION 4.4 Reliance Letters and Opinions................................................... 8
ARTICLE V Representations, Warranties and Covenants of the Seller, Servicer and Trustee............ 9
SECTION 5.1 Representations of the Seller................................................... 9
SECTION 5.2 Representations of the Servicer................................................. 9
SECTION 5.3 Representations of the Trustee.................................................. 10
SECTION 5.4 Covenants of the Seller and Services............................................ 10
ARTICLE VI Representations, Warranties and Covenants of the Initial Class D-2 Certificateholders
and the Trustee................................................................. 11
SECTION 6.1 Representations, Warranties and Covenants of the Class D-2 Certificateholder.... 11
ARTICLE VII Miscellaneous............................................................................ 12
SECTION 7.1 Amendments and Waivers.......................................................... 12
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TABLE OF CONTENTS
(Continued)
Page
SECTION 7.2 Governing Law................................................................... 12
SECTION 7.3 No Waiver....................................................................... 12
SECTION 7.4 Severability.................................................................... 12
SECTION 7.5 Termination..................................................................... 13
SECTION 7.6 Transfer Restrictions........................................................... 13
SECTION 7.7 Notices......................................................................... 13
SECTION 7.8 Survival of Representations and Warranties...................................... 14
SECTION 7.9 Exclusive Benefit............................................................... 14
SECTION 7.10 Limitation of Remedies.......................................................... 14
SECTION 7.11 Counterparts.................................................................... 14
SECTION 7.12 Entire Agreement................................................................ 14
SECTION 7.13 Headings........................................................................ 14
SECTION 7.14 Nonpetition Agreement........................................................... 15
SECTION 7.15 Waiver of Jury Trial............................................................ 15
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AMENDED AND RESTATED CERTIFICATE PURCHASE AGREEMENT, dated as of November
22, 2002 and amended and restated as of November 18, 2004 (as amended, modified
or supplemented from time to time, the "Agreement"), among WACHOVIA BANK,
NATIONAL ASSOCIATION, as trustee (together with its successors and assigns, the
"Trustee") for the Charming Shoppes Master Trust (the "Trust"), SPIRIT OF
AMERICA, INC., a Delaware corporation ("Spirit, Inc."), as Servicer, CHARMING
SHOPPES RECEIVABLES CORP., a Delaware corporation ("CSRC"), as Seller and as the
initial Holder of the Class D-2 Certificates (the "Initial Class D-2
Certificateholder"), and NewStar CP Funding LLC, a Delaware limited liability
company, (the "Class D-2 Purchaser").
WHEREAS the Seller, the Servicer and the Trustee have entered into a Second
Amended and Restated Pooling and Servicing Agreement, dated as of November 25,
1997 (as amended on July 22, 1999, May 8, 2001 and August 5, 2004 and as the
same may from time to time be further amended, modified or otherwise
supplemented, the "Pooling and Servicing Agreement"), for the Trust and the
Series 2002-1 Supplement, dated as of November 20, 2002 to the Pooling and
Servicing Agreement (as the same may from time to time be amended, modified or
otherwise supplemented, the "Supplement");
WHEREAS the Trust has issued and sold certain Investor Certificates,
designated as the Class A Certificates, the Class B Certificates, the Class C
Certificates and the Class D-2 Certificates, pursuant to the Pooling and
Servicing Agreement and the Supplement; and
WHEREAS in order to fulfill a condition to the issuance of the Class A
Certificates, the Class B Certificates and the Class C Certificates, the Initial
Class D-2 Certificateholder entered into the Class D Certificate Purchase
Agreement and purchased the Class D-2 Certificates provided for herein on
November 22, 2002 (the "Original Certificate Purchase Agreement"); and
WHEREAS, the Servicer, Trustee, Seller and the Initial Class D-2
Certificateholder desire to amend and restate the Original Certificate Purchase
Agreement in connection with the purchase of the Class D-2 Certificates by the
Class D-2 Purchaser from the Initial Class D-2 Certificateholder;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and other good and valuable consideration, the receipt and adequacy of which are
hereby expressly acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.1 Defined Terms. Unless otherwise defined herein, all terms used
herein which are defined in the Supplement or the Pooling and Servicing
Agreement shall have the meanings assigned thereto in the Supplement, or if not
defined therein, in the Pooling and Servicing Agreement, and the following terms
shall have the following meanings:
"Additional Collection Amount" shall mean, with respect to each
Distribution Date, the sum of (i) the amount distributed by the Servicer or the
Trustee (acting in accordance with the instructions of the Servicer) for
application under this Agreement pursuant to Section 4.11(q) of
Article IV under Section 7 of the Supplement, plus (ii) the amount distributed
by the Servicer or the Trustee (acting in accordance with instructions of the
Servicer) for application under this Agreement pursuant to Section 4.9(e)(i) or
4.9(f)(v), as applicable, of Article IV under Section 7 of the Supplement.
"Agreement" shall mean this Certificate Purchase Agreement, as amended,
supplemented, restated or otherwise modified from time to time.
"Base Rate" shall mean, (a) for any Due Period during the Revolving Period,
the Base Rate calculated for such Due Period pursuant to the Supplement and (b)
for any Due Period during an Amortization Period, the Base Rate calculated
pursuant to the Supplement for the last Due Period ending on or prior to the
last day of the Revolving Period.
"Charming" shall mean Charming Shoppes, Inc., a Pennsylvania corporation.
"Class D Expected Final Payment Date" shall mean the May, 2008 Distribution
Date.
"Class D-2 Certificate Rate" shall mean, with respect to any Interest
Period, the lesser of (a) 9.0% per annum and (b) a rate per annum equal to LIBOR
as of the related LIBOR Determination Date for such Interest Period plus 4.75%.
"Class D-2 Purchaser" shall have the meaning assigned thereto in the
preamble to this Agreement.
"Closing Date" shall mean November 18, 2004
"Collateral Deposit Event" means the occurrence of any of the following
(subject, in the case of clauses (b) through (f), to the further conditions
described in the first proviso below): (a) an Excess Yield Shortfall Event, (b)
during any fiscal year, the number of Participating Retail Stores is reduced (on
a net basis, after taking into account the opening of any new Participating
Retail Stores) to an amount equal to or less than 90% of the number of
Participating Retail Stores as of the first day of such fiscal year, (c) at any
time after the Closing Date, the number of Participating Retail Stores is
reduced (on a net basis, after taking into account the opening of any new
Participating Retail Stores) to an amount equal to or less than 75% of the
number of Participating Retail Stores as of the Closing Date, (d) as of the date
of filing of Charming's financial statements pursuant to Form 10-Q or Form 10-K,
Charming's Tangible Net Worth shall be less than $228 million, (e) Charming
transfers control of a majority of the economic interest and/or voting control
in the Fashion Bug retail chain and/or any other retail chain for which related
Accounts have been designated to the Trust in an amount equal to more than 10%
of the total number of Accounts designated to the Trust, (f) on any Distribution
Date, both (i) the Three Month Net Loss Rate shall be greater than 18% and (ii)
the Three Month Excess Yield Percentage shall be less than 7.0%; provided that,
in the case of any event described in the preceding clauses (b) through (f), if
the Seller shall have notified the Class D-2 Certificateholders of the
occurrence of such event within 10 Business Days of the occurrence thereof and
shall have requested a waiver of such event, the occurrence of any such event
shall not give rise to a Collateral Deposit Event unless the Required Class D-2
Certificateholders shall have notified the Seller in writing within 20 Business
Days of receipt of such request that they are unwilling to waive such event, in
which case the related Collateral Deposit Event shall be
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deemed to have occurred on the date such notice is received by the Seller;
provided, further that, in the case of any event described in the preceding
clauses (b) through (f), the occurrence of any such event shall not give rise to
a Collateral Deposit Event if (x) the Required Class D-2 Certificateholders
shall have notified the Seller in writing that they are willing to waive such
event or (y) such event is deemed to have been waived by the Required Class D-2
Certificateholders pursuant to Section 6.1(c) hereof; provided, further, that a
Collateral Deposit Event described in clause (a) or a Collateral Deposit Event
described in clause (f) shall be deemed "Cured" if: (x) in the case of a
Collateral Deposit Event described in clause (a), the Three Month Excess Yield
Percentage shall be equal to or greater than 5.0% on any Distribution Date
following the occurrence of such Collateral Deposit Event and (y) in the case of
a Collateral Deposit Event described in clause (f), on any Distribution Date
following the occurrence of such Collateral Deposit Event, both (i) the Three
Month Net Loss Rate shall be equal to or less than 18% and (ii) the Three Month
Excess Yield Percentage shall be equal to or greater than 7.0%.
"Collateral Period" shall mean a period (x) from and including the first
day of the first Due Period commencing after the occurrence of a Collateral
Deposit Event, and (y) to and including the last day of the Due Period ending
immediately prior to a Collateral Release Date.
"Collateral Release Date" means the earlier to occur of (x) the
Distribution Date following the first Due Period in a Collateral Period on which
no Collateral Deposit Event exists, provided that the Early Amortization Period
has not commenced, and (y) the Distribution Date on which all Class D-2
Certificates have been paid in full.
"CSRC" has the meaning assigned thereto in the preamble.
"Cured" is defined in the provisos to the definition of "Collateral Deposit
Event".
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Excess Class D-2 Monthly Interest" shall mean, with respect to any
Distribution Date, the excess, if any, of (a) the amount of Class D-2 Monthly
Interest, calculated without giving effect to the limitation imposed by clause
(a) of the definition of Class D-2 Certificate Rate over (b) the Class D-2
Monthly Interest for such Distribution Date calculated in accordance with the
Supplement.
"Excess Yield Percentage" shall mean, with respect to any Distribution
Date, the excess of the Portfolio Yield for the immediately prior Due Period
over the Base Rate for such Due Period.
"Excess Yield Shortfall Event" shall mean, on any Distribution Date, that
the Three Month Excess Yield Percentage shall be less than 5.0%.
"GAAP" shall mean United States generally accepted accounting principles.
"Initial Class D-2 Certificateholder" shall have the meaning assigned
thereto in the preamble to this Agreement.
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"Net Loss Rate" shall mean, with respect to any Distribution Date, the
annualized percentage equivalent of a fraction, the numerator of which is an
amount equal to the Investor Loss Amount for such Distribution Date and the
denominator of which is the outstanding principal amount of the Series 2002-1
Certificates as of the last day of the preceding Due Period.
"Participating Retail Store" means a retail store participating in
Charming's retail card program, for which related Accounts have been designated
to the Trust; provided that, if Charming shall have announced the proposed
closure of any such retail store, such retail store shall be deemed to have been
closed for purposes of calculating the number of Participating Retail Stores at
any time.
"Pooling and Servicing Agreement" shall have the meaning assigned thereto
in the recitals to this Agreement.
"Portfolio Yield" shall mean, for any Due Period, the Portfolio Yield
calculated pursuant to the Supplement, except that such calculation shall be
made without giving effect to any recharacterization of Discount Option
Receivables as Finance Charge Receivables.
"Repayment Amount" shall mean, as of any date, amounts owed to the Class
D-2 Certificateholders hereunder or under the Supplement.
"Required Cash Collateral Amount" shall mean (a) at any time after a
Collateral Deposit Event shall have occurred (unless all applicable Collateral
Deposit Events shall have been Cured in accordance with the definition of
"Collateral Deposit Event"), the outstanding principal amount of the Class D-2
Certificates and (b) at all other times, zero.
"Required Class D-2 Certificateholders" shall mean holders of Class D-2
Certificates representing more than 50% of the Class D-2 Investor Interest.
"Shareholders Equity" shall mean, as of the end of any fiscal quarter of
Charming, the amount which, in conformity with GAAP, would be set forth opposite
the caption "Shareholders Equity" (or any like caption) on a consolidated
balance sheet of Charming and its consolidated subsidiaries at such date.
"Spirit, Inc." has the meaning assigned thereto in the preamble.
"Supplement" shall have the meaning assigned thereto in the recitals to
this Agreement.
"Tangible Net Worth" shall mean as of the end of any fiscal quarter of
Charming, an amount equal to (x) Shareholder's Equity at such date minus (y) all
licenses, franchises, patents, patent applications, trademarks, program rights,
good will, research and development expense and other like intangible assets
shown on the consolidated balance sheet of Charming and its consolidated
subsidiaries.
"Three Month Excess Yield Percentage" shall mean, with respect to any
Distribution Date, the average of the Excess Yield Percentages for the most
recent three Distribution Dates (including such Distribution Date).
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"Three Month Net Loss Rate" shall mean, with respect to any Distribution
Date, the average of the Net Loss Rates for the most recent three Distribution
Dates (including such Distribution Date).
"Trust" has the meaning assigned thereto in the preamble.
"Trustee" has the meaning assigned thereto in the preamble.
SECTION 1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto.
(b) As used herein and in any certificate or other document made or
delivered pursuant hereto, accounting terms not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and Section, subsection,
Schedule, Attachment and Exhibit references are to this Agreement, unless
otherwise specified. The words "including" and "include" shall be deemed to be
followed by the words "without limitation."
ARTICLE II
Amount and Terms of Class D-2 Certificates
SECTION 2.1 Purchase and Sale. (a) Subject to terms and conditions hereof,
the Class D-2 Purchaser hereby agrees to purchase from CSRC on the Closing Date
the Class D-2 Certificates in a principal amount equal to $10,500,000 for a
purchase price equal to 96% of such principal amount, plus 100% of the accrued
interest on the Class D-2 Certificates through (but excluding) the Closing Date.
Upon delivery of the purchase price by the Class D-2 Purchaser, CSRC hereby
transfers, assigns and conveys all of its right, title and interest in and to
the Class D-2 Certificates to the Class D-2 Purchaser.
(b) Except as otherwise set forth herein, all rights of any Class D-2
Certificateholder with respect to any Class D-2 Certificate shall be governed by
the Pooling and Servicing Agreement and the Supplement.
SECTION 2.2 Distributions. (a) On each Distribution Date, after giving
effect to any payments to the Class D-2 Certificateholders pursuant to Sections
4.9(f)(iv) and 4.11(m) of Article IV under Section 7 of the Supplement, the
Trustee (at the written direction of the Servicer) shall distribute the
Additional Collection Amount in the order of priority listed below:
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(i) an amount equal to any Class D-2 Monthly Interest for such
Distribution Date and any Class D-2 Deficiency Amount that remains unpaid
shall be distributed to the Class D-2 Certificateholders;
(ii) an amount equal to any Excess Class D-2 Monthly Interest for such
Distribution Date (and any Excess Class D-2 Monthly Interest for a prior
Distribution Date that remains unpaid) shall be distributed to the Class
D-2 Certificateholders; (iii) on any Distribution Date during a Collateral
Period, the amount, if any, by which the Required Cash Collateral Amount
exceeds the amount on deposit in the Class D-2 Cash Collateral Account
shall be deposited into the Class D-2 Cash Collateral Account; and
(iv) during the Amortization Period, beginning with the first
Distribution Date on which the Class C Certificates have been paid in full,
any remaining Additional Collection Amount shall be distributed as a
principal payment to the Class D-2 Certificateholders until the outstanding
principal amount of the Class D-2 Certificates has been reduced to zero.
(b) In order to effect the distributions required to be made under this
Section 2.2, this Agreement hereby requires that amounts be paid pursuant to
Sections 4.9(e)(i), 4.9(f)(v) and 4.11(q) of Article IV under Section 7 of the
Supplement, in each case to the extent funds are available for such payment
under the terms of the Supplement, to fund amounts described in Sections 2.2(a).
SECTION 2.3 Interest Rate; Payment Dates.
(a) The Class D-2 Investor Interest shall bear interest at the Class D-2
Certificate Rate.
(b) Class D-2 Monthly Interest, Class D-2 Deficiency Amount, Excess Class
D-2 Monthly Interest and Class D-2 Monthly Principal shall be payable on each
Distribution Date as provided in Section 2.2 hereof and the Supplement.
SECTION 2.4 Payments. On or prior to 10:00 a.m., New York City time, on
each Distribution Date, the Servicer shall deliver instructions to the Trustee
regarding all payments to be made hereunder on such Distribution Date. All
payments to be made on behalf of the Trust hereunder, whether on account of
principal, interest, or otherwise, shall be made without setoff or counterclaim
and shall be made prior to 2:30 p.m., New York City time, on the due date
thereof, to each Class D-2 Certificateholder in accordance with the terms of the
Pooling and Servicing Agreement and the Supplement.
SECTION 2.5 Nonrecourse and Recourse Obligations; Obligations Absolute.
Notwithstanding any provision in any other Section of this Agreement to the
contrary, the obligation to pay the Repayment Amount shall be without recourse
to (i) the Seller, the Servicer, the Trustee, any Certificateholder, any
Certificate Owner, any Receivables Purchaser or any Purchaser Representative or
(ii) any affiliate, officer, director, employee or agent of any Person described
in clause (i), and the obligation to pay such amounts hereunder shall be limited
solely
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to the application of funds described in Sections 2.2 and 3.1 hereof, in the
Pooling and Servicing Agreement and the Supplement, which amounts shall be
subordinated to the rights of other Investor Certificateholders as provided
herein and in the Pooling and Servicing Agreement and the Supplement.
SECTION 2.6 No Increase to Class D-1 Investor Interest. The Class D-1
Certificate was issued to CSRC with a Class D-1 Initial Investor Interest of $0.
Each of the parties hereto acknowledges and agrees that the Class D-1
Certificate has a Class D-1 Investor Interest of $0 as of the Closing Date and
CSRC agrees that it will not cause the Trust to increase the Class D-1 Investor
Interest.
ARTICLE III
Cash Collateral Account
SECTION 3.1 Class D-2 Cash Collateral Account.
(a) The Servicer, for the benefit of the Class D-2 Certificateholders,
shall establish and maintain in the name of the Trustee, on behalf of the Class
D-2 Certificateholders, a segregated trust account with a Qualified Depository
Institution bearing a designation clearly indicating that the funds deposited
therein are held in the name of the Trustee for the benefit of the Class D-2
Certificateholders (the "Class D-2 Cash Collateral Account"). The Trustee shall
possess all right, title and interest in all funds on deposit from time to time
in the Class D-2 Cash Collateral Account and in all proceeds thereof. The Class
D-2 Cash Collateral Account shall be under the sole dominion and control of the
Trustee for the sole benefit of the Class D-2 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 Class D-2 Cash Collateral Account for any amount owed to
it by the Trustee, the Trust or any Class D-2 Certificateholder. Amounts on
deposit in the Class D-2 Cash Collateral Account shall not under any
circumstances be available to any Series 2002-1 Certificateholder other than a
Holder of a Class D-2 Certificate until the full amount of principal and
interest on the Class D-2 Certificates is paid in full. If, at any time, the
Trustee is advised in writing by the Servicer that the institution holding the
Class D-2 Cash Collateral Account ceases to be a Qualified Depository
Institution, the Trustee upon receiving such notice by the Servicer (or the
Servicer on its behalf) shall promptly (but in any event within 20 Business
Days) establish a new Class D-2 Cash Collateral Account with a Qualified
Depository Institution meeting the conditions specified above, transfer any cash
or any investments to such new Class D-2 Cash Collateral Account and from the
date such new Class D-2 Cash Collateral Account is established, it shall be the
"Class D-2 Cash Collateral Account."
(b) Funds on deposit in the Class D-2 Cash Collateral Account shall, at the
direction of the Servicer, be invested by the Trustee in Permitted Investments
selected by the Servicer. All such Permitted Investments shall be held by the
Trustee for the benefit of the Class D-2 Certificateholders. The Trustee shall
maintain for the benefit of the Class D-2 Certificateholders possession of the
negotiable instruments or securities, if any, evidencing such Permitted
Investments. Funds on deposit in the Class D-2 Cash Collateral Account on any
date (after giving effect to any withdrawals from the Class D-2 Cash Collateral
Account on such date) will
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be invested in Permitted Investments that will mature so that funds will be
available for withdrawal on the Distribution Date following such date. Interest
and earnings on funds on deposit in the Class D-2 Cash Collateral Account shall
remain on deposit in the Class D-2 Cash Collateral Account and be available for
distribution to the Class D-2 Certificateholders as set forth in this Section
3.1, provided, that such amounts may be withdrawn and paid to CSRC in its
capacity as holder of the Exchangeable Seller Certificate on any Distribution
Date on which (i) there is no accrued and unpaid Class D-2 Monthly Interest or
Excess Class D-2 Monthly Interest after giving effect to the distributions to be
made on such Distribution Date and (ii) if such Distribution Date occurs on or
after the occurrence of a Series 2002-1 Early Amortization Event, the amount on
deposit in the Class D-2 Cash Collateral Account equals or exceeds the
outstanding principal balance of the Class D-2 Certificates after giving effect
to the distributions and withdrawals to be made on such Distribution Date. On
each Determination Date, the Servicer shall instruct the Trustee to withdraw on
the related Distribution Date from the Class D-2 Cash Collateral Account and
distribute to CSRC in its capacity as holder of the Exchangeable Seller
Certificate all interest and earnings on funds on deposit in the Class D-2 Cash
Collateral Account to the extent such interest and earnings are available to be
paid to CSRC pursuant to the preceding sentence.
(c) On each Distribution Date, if, after giving effect to the payments
described in Section 4.11 of Article IV under Section 7 of the Supplement and
Section 2.2 of this Agreement, any Class D-2 Monthly Interest or Excess Class
D-2 Monthly Interest remains unpaid, the Trustee shall withdraw funds from the
Class D-2 Cash Collateral Account in an amount equal to the sum of the unpaid
Class D-2 Monthly Interest and Excess Class D-2 Monthly Interest and shall pay
such amount to the Class D-2 Certificateholders.
(d) On the earlier of (i) the first Distribution Date on which the Class A
Investor Interest, the Class B Investor Interest and Class C Investor Interest
shall have been paid in full and (ii) the Series 2002-1 Termination Date, the
Trustee shall withdraw funds from the Class D-2 Cash Collateral Account in an
amount equal to the sum of (A) the outstanding principal amount of the Class D-2
Certificates (after giving effect to all other payments to the Class D-2
Certificateholders on such date) and (B) the aggregate amount of Class D-2
Monthly Interest and Excess Class D-2 Monthly Interest which would have been
payable on any Distribution Date had such interest been calculated based on the
outstanding principal balance of the Class D-2 Certificates rather than the
Class D-2 Investor Interest, and shall pay such amount to the Class D-2
Certificateholders in payment of the principal amount of the Class D-2
Certificates and, if applicable, interest thereon.
(e) On each Collateral Release Date, the Trustee shall withdraw all funds
in the Class D-2 Cash Collateral Account and pay such funds to CSRC in its
capacity as holder of the Exchangeable Seller Certificate.
SECTION 3.2 Calculations. On each Determination Date, the Servicer shall
notify the Trustee in writing as to all funds to be withdrawn from the Class D-2
Cash Collateral Account and as to how such funds are to be applied.
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ARTICLE IV
Conditions Precedent
Sections 4.1 through 4.3 constitute conditions precedent to the obligation
of the Class D-2 Purchaser to purchase the Class D-2 Certificates on the Closing
Date.
SECTION 4.1 Representations and Warranties. On the Closing Date, after
giving effect to the sale of the Class D-2 Certificates to the Class D-2
Purchaser, all representations and warranties of the Seller and the Servicer
contained in the Purchase Agreement and the Pooling and Servicing Agreement
shall be true and correct in all material respects with the same force and
effect as though such representations and warranties had been made on and as of
such date (unless such representations and warranties specifically relate to an
earlier date).
SECTION 4.2 Related Agreements. The Class D-2 Purchaser shall have received
certified copies of each of the Purchase Agreement, the Pooling and Servicing
Agreement, and the Supplement.
SECTION 4.3 Certificate Issuance. A Class D-2 Certificate shall have been
delivered to the Class D-2 Purchaser in accordance with the terms hereof and
shall have been duly executed and authenticated and delivered in accordance with
Section 6.2 of the Pooling and Servicing Agreement.
SECTION 4.4 Reliance Letters and Opinions. The Class D-2 Purchaser shall
have received (a) reliance letters with respect to (i) the opinions of Mayer,
Brown, Xxxx & Maw LLP with respect to certain bankruptcy related matters and
certain matters under the Uniform Commercial Code delivered to the Rating
Agencies on the date of the issuance of the Series 2004-1 Certificates and (ii)
the corporate opinions of Mayer, Brown, Xxxx & Maw LLP and Xxxxx Xxxxx delivered
to the Rating Agencies on the date of the issuance of the Series 2002-1
Certificates and (b) an opinion of counsel as to the due authorization and
enforceability of this Agreement.
ARTICLE V
Representations, Warranties and Covenants
of the Seller, Servicer and Trustee
SECTION 5.1 Representations of the Seller. As of the date hereof, the
Seller represents and warrants to the Class D-2 Purchaser that:
(a) Authority. The Seller has full power and authority to execute and
deliver this Agreement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement.
(b) Existence. The Seller is a corporation duly and validly incorporated in
the State of Delaware.
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(c) Binding Obligation. This Agreement has been duly executed and delivered
by the Seller and constitutes the legal, valid and binding obligations of the
Seller enforceable in accordance with its terms.
(d) Ownership and No Liens. The Seller has marketable title to the Class
D-2 Certificates and the interests represented thereby, free and clear of all
liens, encumbrances and claims created by or through the Seller and the Seller
has not sold, transferred, conveyed, pledged or assigned to any person, any of
its rights, title or interests in the Class D-2 Certificates. The Seller has
been the only owner and holder of the Class D-2 Certificates since the date of
issuance of the Class D-2 Certificates.
(e) No Default; No Conflict. No event has occurred or is continuing that
constitutes an Early Amortization Event. The execution and delivery of this
Agreement by the Seller will not cause or result in (i) any violation, default
or breach of any provision of the Pooling and Servicing Agreement or the
Supplement or (ii) the occurrence of an Early Amortization Event under the
Pooling and Servicing Agreement or the Supplement.
(f) 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 (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Agreement, (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 (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Agreement.
SECTION 5.2 Representations of the Servicer. As of the date hereof, the
Servicer represents and warrants to the Class D-2 Purchaser that:
(a) Authority. The Servicer has full power and authority to execute and
deliver this Agreement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement.
(b) Existence. The Servicer is a corporation duly and validly incorporated
in the State of Delaware.
(c) Binding Obligation. This Agreement has been duly executed and delivered
by the Servicer and constitutes the legal, valid and binding obligations of the
Servicer enforceable in accordance with its terms.
(d) No Default; No Conflict. No event has occurred or is continuing that
constitutes a Servicer Default. The execution and delivery of this Agreement by
the Servicer will not cause or result in (i) any violation, default or breach of
any provision of the Pooling and Servicing Agreement or the Supplement or (ii)
the occurrence of a Servicer Default under the Pooling and Servicing Agreement
or the Supplement.
(e) 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
10
agency, or other tribunal or governmental instrumentality (i) asserting the
invalidity of this Agreement (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement, (iii) seeking any determination
or ruling that, in the reasonable judgment of the Servicer, would materially and
adversely affect the performance by the Servicer of its obligations under this
Agreement or (iv) seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Agreement.
SECTION 5.3 Representations of the Trustee. As of the date hereof, the
Trustee represents and warrants to the Class D-2 Purchaser that:
(a) Existence. The Trustee is a national banking association duly
authorized to engage in the business of banking under the laws of the United
States of America.
(b) Authority. The Trustee has full power and authority to deliver and
perform this Agreement, and has taken all necessary action to authorize the
execution, delivery and performance by it of this Agreement.
(c) Binding Obligation. This Agreement has been duly executed and delivered
by the Trustee and constitutes the legal, valid and binding obligations of the
Trustee enforceable in accordance with its terms.
SECTION 5.4 Covenants of the Seller and Services. Each of the Seller and
Servicer covenants and agrees that, until the Class D-2 Investor Interest is
reduced to zero, unless the Required Class D-2 Certificateholders shall
otherwise consent in writing:
(a) Monthly Status Reports. The Servicer will furnish to each Class D-2
Certificateholder (or cause to be furnished to each Class D-2
Certificateholder), two Business Days prior to each Distribution Date
information relating to distributions hereunder in a certificate substantially
in the form of Exhibit A hereto.
(b) Rule 144A Information. The Seller will promptly furnish or cause to be
furnished to any Class D-2 Certificateholder and upon request of any Class D-2
Certificateholder, to any prospective purchaser of any Class D-2 Certificate,
copies of the information required to be delivered to Class D-2
Certificateholders and any prospective purchasers pursuant to Rule 144A(d)(4)
under the Securities Act (or any successor provision thereto) in order to permit
compliance with Rule 144A in connection with resales by such holders of the
Class D-2 Certificates.
(c) Notice of Change in Finance Charge Rates. The Servicer will promptly
notify the Class D-2 Certificateholders if the periodic finance charge rates
applicable to 50% or more of the Accounts designated to the Trust are lowered to
less than 12% per annum.
(d) Notice of Collateral Deposit Event. The Servicer will promptly notify
the Class D-2 Certificateholders of the occurrence of a Collateral Deposit
Event.
(e) Amendments to Pooling and Servicing Agreement and Supplement. The
Servicer shall not amend, modify, supplement or otherwise change (i) the Series
2002-1 Early Amortization Event set forth in Section 9(c) of the Supplement or
(ii) any other provision of the
11
Pooling and Servicing Agreement or Supplement to include any covenant or Series
2002-1 Early Amortization Event which would have a material adverse effect on
the Class D-2 Certificateholders. The Servicer will promptly notify the Class
D-2 Certificateholders of any amendments to the Pooling and Servicing Agreement
and the Supplement.
ARTICLE VI
Representations, Warranties
and Covenants of the Initial Class D-2 Certificateholders
SECTION 6.1 Representations, Warranties and Covenants of the Class D-2
Certificateholder. (a) As of the Closing Date, the Class D-2 Purchaser shall be
deemed to represent and warrant as of the date that its acquisition of any Class
D-2 Certificate becomes effective that:
(i) (x) it is a "qualified institutional buyer" as that term is
defined under Rule 144A of the Securities Act and (y) it is not purchasing
its Certificate with a view to making a distribution thereof (within the
meaning of the Securities Act);
(ii) either (A) it is not (and is not purchasing a Class D-2
Certificate on behalf of) an "employee benefit plan" as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), whether or not subject to ERISA, any "plan" described in Section
4975(1) of the Code or an entity deemed to hold "plan assets" of any of the
foregoing (each, a "Benefit Plan Investor") or (B) it is an insurance
company purchasing a Class D-2 Certificate with assets of its general
account, and at the time of acquisition and throughout the period of
holding, (1) it meets all of the requirements of and is eligible for
exemptive relief under Prohibited Transaction Class Exemption 95-60, (2)
less than 25% of the assets of such general account are assets of a Benefit
Plan Investor and (3) it is not a servicer to the Trust or an affiliate of
a servicer to the Trust, and would not otherwise be excluded under Section
29 C.F.R. 2510.3-101(f)(1);
(iii) no registration with consent or approval of or other action by
any federal, state or other governmental authority or regulatory body
having jurisdiction over it is required in connection with the execution,
delivery or performance by it of this Agreement; and
(iv) such Class D-2 Certificateholder is one Private Holder.
(b) Each Class D-2 Certificateholder covenants and agrees to maintain as
confidential, not disclose to any Person (other than any officer, director,
member, employee, agent, counsel, advisor or representative of a party hereto)
and not use for any purpose other than in connection with this Agreement, all
information acquired by such Class D-2 Certificateholder that is not publicly
available relating to the Trust, the Originator, the Seller or the Servicer
which it obtained in connection with the transactions contemplated hereby,
except as the Trustee, the Seller, the Originator or the Servicer may have
consented to in writing prior to any proposed disclosure (such consent not to be
unreasonably withheld) or except as it may have been advised
12
by counsel is (i) required by law, including, without limitation, any securities
or banking laws, rules, orders or regulations or (ii) reasonably necessary or
desirable in connection with any lawsuit or governmental investigation or
proceeding; provided, however, that in any such instance such Class D-2
Certificateholder will notify the Seller and the Servicer of its intention to
make any such disclosure prior to making any such disclosure.
(c) Upon receipt of a request from the Seller to waive any Collateral
Deposit Event, each Class D-2 Certificateholder covenants and agrees to notify
the Seller in writing as soon as reasonably practicable, but in any event within
20 Business Days, whether such Class D-2 Certificateholder is willing to waive
such Collateral Deposit Event. Any waiver of the Collateral Deposit Event shall
be in the sole and absolute discretion of each Class D-2 Certificateholder;
provided that if the Seller shall have notified the Class D-2 Certificateholders
of the occurrence of any Collateral Deposit Event described in clauses (b)
through (f) of the definition of Collateral Deposit Event within 10 Business
Days of the occurrence thereof and shall have requested a waiver thereof, and
the Required Class D-2 Certificateholders shall not have notified the Seller in
writing within 20 Business Days of receipt of such request that they are
unwilling to waive such event, such event shall be deemed to be waived and shall
not give rise to a Collateral Deposit Event. Any waiver of a Collateral Deposit
Event shall only constitute a waiver of the Collateral Deposit Event to which
such waiver expressly relates and shall not constitute a waiver of any other
Collateral Deposit Event. Unless otherwise specified in any waiver delivered by
the Class D-2 Certificateholders, (i) any waiver of a Collateral Deposit Event
specified in clause (a) or clause (f) of the definition of Collateral Deposit
Event shall only constitute a waiver of the applicable Collateral Deposit Event
for the related Distribution Date and shall not extend to any subsequent or
other Collateral Deposit Event occurring on any other Distribution Date, and
(ii) any waiver of a Collateral Deposit Event specified in clause (b) of the
definition of Collateral Deposit Event shall only constitute a waiver of the
applicable Collateral Deposit Event for the related fiscal year and shall not
extend to any Collateral Deposit Event occurring under such clause (b) for any
subsequent fiscal year.
ARTICLE VII
Miscellaneous
SECTION 7.1 Amendments and Waivers. This Agreement shall not be amended or
modified without the written consent of the Seller, the Trustee, the Servicer
and the Required Class D-2 Certificateholders. No waiver of, or consent to the
departure from, any provision of this Agreement by any party hereto shall be
effective without the written consent of the Seller, the Servicer, the Trustee,
and the Required Class D-2 Certificateholders; provided, however, that no
amendment reducing the amount or delaying any payment to be made to the Class
D-2 Certificateholders hereunder or modifying the definition of Required Class
D-2 Certificateholders shall be effective without the written consent of all
Class D-2 Certificateholders. The Servicer shall give the Rating Agencies
written notice of any amendment to this Agreement.
SECTION 7.2 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF
13
NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PROVISIONS.
SECTION 7.3 No Waiver. Neither any failure nor any delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall a single or partial exercise thereof preclude any
other or further exercise or the exercise of any other right, power or
privilege.
SECTION 7.4 Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 7.5 Termination. This Agreement shall remain in full force and
effect until the earlier of (i) the payment in full of the Class D-2 Investor
Interest and all other amounts payable to the Class D-2 Certificateholders
hereunder (including pursuant to Section 3.1(c) hereof) and under the Supplement
and (ii) the Series 2002 -1 Termination Date provided that Sections 7.8, 7.9,
7.10 and 7.14 shall survive the termination of this Agreement.
SECTION 7.6 Transfer Restrictions. (a) No Class D-2 Certificate may be
offered, sold or otherwise transferred to any Person (other than the Seller)
unless the Seller shall have given its prior written approval to such offer,
sale or transfer (which approval shall not be unreasonably withheld); provided
that such approval shall not be required with respect to any such sale or
transfer to an Affiliate of a Class D-2 Certificateholder that otherwise
satisfies the requirements of this Section 7.6 and the Supplement.. Each Class
D-2 Certificateholder further agrees that it will not make any general
solicitation or general advertising for the offer or sale of its Class D-2
Certificate and will not transfer its Class D-2 Certificate (or any portion
thereof) to any Person except to a Person within the United States which such
Class D-2 Certificateholder reasonably believes is a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) that is purchasing (1)
for its own account or (2) for the account of a "qualified institutional buyer"
(as so defined) that is aware that such resale, pledge or transfer is being made
in reliance on an exemption from registration under the Securities Act.
Additionally, no such transfer shall be made to any Person unless such Person
shall have delivered to the Seller and the Trustee a purchaser representation
letter substantially in the form attached hereto as Exhibit B. Each Class D-2
Certificateholder further agrees to provide to any Person purchasing a Class D-2
Certificate (or any portion thereof) from it a notice advising such purchaser
that resales of the Class D-2 Certificates are restricted as stated above.
(b) Seller shall not execute, and (if given prior written notice by the
Servicer of the inability of the Seller to execute any Subject Instrument by
operation of this clause (b)) the Transfer Agent and Registrar shall not
register the transfer of, any Class D-2 Certificate unless (i) after giving
effect to the execution or transfer of such Class D-2 Certificate, there would
be no more than 5 Private Holders of Class D-2 Certificates and (ii) the other
conditions to transfer set forth in Section 6.3 of the Pooling Agreement and in
Section 17 of the Supplement have been satisfied.
14
SECTION 7.7 Notices.
(a) All notices and other communications provided for hereunder shall be in
writing (including telecopy) and, if to the Seller, the Servicer or the Trustee
either mailed, telecopied, couriered or delivered to it, addressed to it at its
address set forth in the Pooling and Servicing Agreement.
If such notice is to any Class D-2 Certificateholder, such notice shall be
given in accordance with the terms of the Pooling and Servicing Agreement at
such address as it shall have specified to the other parties hereto prior to its
execution hereof.
All notices and other communications shall, when mailed, be effective on
the first Business Day after the date of receipt, addressed as aforesaid. Any
party hereto may change the address or telecopier number to which notices to it
are to be sent by notice given to the other parties hereto.
(b) Any notice or written direction given by a Class D-2 Certificateholder
to the Trustee hereunder may conclusively be relied upon by the Trustee, absent
manifest error.
SECTION 7.8 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement.
SECTION 7.9 Exclusive Benefit. The rights and remedies of the Class D-2
Certificateholders specified herein are for the sole and exclusive benefit, use
and protection of the Class D-2 Certificateholders, and the Class D-2
Certificateholders are entitled, but shall have no duty or obligation to the
Seller, the Servicer, the Trustee, the other Certificateholders or otherwise, to
exercise or to refrain from exercising any right or remedy reserved to the Class
D-2 Certificateholders hereunder or cause the Trustee or any other party to
exercise or to refrain from exercising any right or remedy available to it.
SECTION 7.10 Limitation of Remedies. (a) No Class D-2 Certificateholder
shall have the right to cause the Class D-2 Investor Interest or any portion
thereof to become due and payable prior to any Distribution Date or other date
on which amounts are payable hereunder to such Class D-2 Certificateholder other
than as set forth in Section 2.2 hereof and shall not attempt to exercise any of
its rights hereunder with respect to any amounts prior to such due date or
Distribution Date.
(b) The obligations of each Class D-2 Certificateholder under this
Agreement, or any other agreement, instrument, document or certificate executed
and delivered by or issued by such Class D-2 Certificateholder or any officer
thereof are solely the corporate obligations of such Class D-2
Certificateholder. No recourse shall be had for payment of any fee or other
obligation or claim arising out of or relating to this Agreement or any other
agreement, instrument, document or certificate executed and delivered or issued
by such Class D-2 Certificateholder or any officer thereof in connection
therewith, against any stockholder, employee, officer, director or incorporator
of such Class D-2 Certificateholder.
15
SECTION 7.11 Counterparts. This Agreement may be executed in any number of
counterparts, and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument.
SECTION 7.12 Entire Agreement. This Agreement constitutes the entire
agreement between the parties relative to the subject matter hereof. Any
previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement. Nothing in this Agreement, expressed or
implied, is intended to confer upon any party other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 7.13 Headings. Article, Section and subsection headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 7.14 Nonpetition Agreement. Notwithstanding any prior termination
of this Agreement, no Class D-2 Certificateholder shall, prior to the date which
is one year and one day after the final payment of the Certificates, acquiesce,
petition or otherwise invoke or cause the Trust or the Seller to invoke the
process of any governmental authority for the purpose of commencing or
sustaining a case against the Trust or the Seller under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar 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 7.15 Waiver of Jury Trial. EACH OF, THE SELLER, THE SERVICER, THE
TRUSTEE, AND EACH CLASS D-2 HOLDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT, THE CLASS D-2 CERTIFICATES OR ANY OTHER DOCUMENTS AND
INSTRUMENTS EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE SELLER, THE
SERVICER, THE TRUSTEE, OR ANY CLASS D-2 HOLDER. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE CLASS D-2 HOLDERS PURCHASING THE CLASS D-2 CERTIFICATES
DESCRIBED HEREIN.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
SPIRIT OF AMERICA, INC., as Servicer
By:_______________________________________________
Name:
Title:
CHARMING SHOPPES RECEIVABLES CORP.,
as Seller and Initial Class D-2 Certificateholder
By:_______________________________________________
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION, as Trustee
By:_______________________________________________
Name:
Title:
NEWSTAR CP FUNDING LLC
as Class D-2 Purchaser
By: NewStar Financial, Inc., its designated Manager
By:________________________________________________
Name:
Title:
Exhibit B to Certificate Purchase Agreement
[FORM OF REPRESENTATION LETTER]
[Date]
Wachovia Bank, National Association
000 Xxxxx Xxxxx Street, M.B.O., 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Corporate Trust Administration
Charming Shoppes Receivables Corp.
c/o Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Re: Purchase of $________ principal amount of Charming Shoppes Master
Trust Series 2002-1 Asset Backed Certificates, Class D-2
Ladies and Gentlemen:
In connection with our purchase of the above Asset Backed Certificates (the
"Certificates") pursuant to that certain Amended and Restated Certificate
Purchase Agreement, dated as of November 18, 2004 (the "Class D CPA"), among
Wachovia Bank, National Association, as Trustee, Charming Shoppes Receivables
Corp., as Seller, Spirit of America, Inc., as Servicer and the Class D Holders
described therein), we (the "Purchaser") confirm that:
(i) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "1933 Act"), and are being
sold to us in a transaction that is exempt from the registration
requirements of the 1933 Act and of any applicable state securities
laws;
(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) are able to bear the economic risk of an investment in
the Certificates;
(iv) we are a qualified institutional buyer as defined in Rule 144A
promulgated under the 1933 Act (a "QIB") that is purchasing for its
own account or for the account of a QIB, in either case, and have
completed one of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2 (each, a "Certification Form");
(v) we will not make any general solicitation or general advertising for
the offer or sale of our Certificate and will not transfer our
Certificates (or any portion
B-1
thereof) to any Person except to a U.S. Person (as defined in Section
7701(a)(30) of the Code) within the United States which we reasonably
believes is a QIB that is purchasing (1) for its own account or (2)
for the account of a QIB, and, in such case, unless such Person shall
have delivered to us a purchaser representation letter substantially
in the form hereof;
(vi) we are either (i) not acquiring such Certificates with the assets of
an "employee benefit plan" as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), whether
or not subject to ERISA, any "plan" described in Section 4975(e)(1) of
the Code or any entity deemed to hold "plan assets" of any of the
foregoing by reason of an employee benefit plan's or other plan's
investment in such entity (each, a "Benefit Plan Investor") or (ii) an
insurance company purchasing the Certificates with assets of our
general account, and at the time of acquisition and throughout the
period of holding, (a) we meet all of the requirements of and are
eligible for exemptive relief under Prohibited Transaction Class
Exemption 95-60; (b) less than 25% of the assets of that general
account are assets of a Benefit Plan Investor; and (c) we are not a
servicer to the Trust or an affiliate of a servicer to the Trust, and
would not otherwise be excluded under 29 C.F.R. Section
2510.3-101(f)(1);
(vii) no registration with consent or approval of or other action by any
federal, state or other governmental authority or regulatory body
having jurisdiction over it is required in connection with the
execution, delivery or performance by it of the Class D CPA;
(viii) we are each 1 Private Holder;
(ix) we covenant and agree to maintain as confidential and not disclose to
any Person (other than any officer, director, member, employee, agent,
counsel, advisor or representative of a party hereto or the funding
sources of the Purchaser that have entered into similar agreements to
maintain such confidentiality) all information relating to the Trust,
the Seller or the Servicer which we obtained in connection with the
transactions contemplated hereby, except as the Trustee, the Seller or
the Servicer may have consented to in writing prior to any proposed
disclosure (such consent not to be unreasonably withheld) or except as
it may have been advised by counsel is (i) required by law, including,
without limitation, any securities or banking laws, rules, orders or
regulations or (ii) reasonably necessary or desirable in connection
with any lawsuit or governmental investigation or proceeding; and
(x) we understand that the Certificates will bear a legend to
substantially the following effect:
"THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND
MAY BE SOLD ONLY PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER THE
ACT OR AN EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE ACT. IN
ADDITION, THE TRANSFER OF
B-2
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 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,
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
(EACH, A "BENEFIT PLAN INVESTOR"). BY ACQUIRING THIS CERTIFICATE OR AN
INTEREST HEREIN, THE PURCHASER THEREOF WILL BE DEEMED TO HAVE REPRESENTED
AND WARRANTED THAT EITHER (I) IT IS NOT A BENEFIT PLAN INVESTOR, AND THAT
ITS ACQUISITION OF THIS CERTIFICATE OR AN INTEREST HEREIN IS IN COMPLIANCE
WITH THE FOREGOING RESTRICTIONS ON BENEFIT PLAN ASSETS OR (II) IT IS AN
INSURANCE COMPANY PURCHASING THIS CERTIFICATE OR INTEREST HEREIN WITH
ASSETS OF ITS GENERAL ACCOUNT, AND AT THE TIME OF ACQUISITION AND
THROUGHOUT THE PERIOD OF HOLDING, (A) IT MEETS ALL OF THE REQUIREMENTS OF
AND IS ELIGIBLE FOR EXEMPTIVE RELIEF UNDER PROHIBITED TRANSACTION CLASS
EXEMPTION 95-60, (B) LESS THAN 25% OF THE ASSETS OF SUCH ACCOUNT ARE
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
C.F.R. SECTION 2510.3-101(f)(1).
NEITHER THIS CERTIFICATE, NOR ANY PORTION OF THIS CERTIFICATE, MAY BE
TRANSFERRED (X) IF AFTER GIVING EFFECT TO THE EXECUTION OR TRANSFER OF SUCH
CERTIFICATE, THERE WOULD BE MORE THAN (I) 5 PRIVATE HOLDERS OF CLASS D
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
B-3
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 AS DEFINED IN THE CLASS D CPA"
The Seller and the Trustee are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
[Name of Purchaser]
By: ______________________________
(Authorized Officer)
B-4
Annex 1 to Exhibit B
Qualified Institutional Buyer Status Under SEC Rule 144A
--------------------------------------------------------
(Buyers other than investment companies)
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx, X.X.X., 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Corporate Trust Administration
Charming Shoppes Receivables Corp.
c/o Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
[Transferring Class D Holder]
Name of Buyer:______________________________("Buyer")
I hereby certify that as indicated below, I am the duly-authorized
President, Chief Financial Officer, Vice President or other executive officer of
Buyer.
In connection with purchases of securities by Buyer, I hereby certify to you
and, if you act as broker for one or more customers, to such customers, that
Buyer is a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) Buyer owned and/or
invested on a discretionary basis $_______(1) in securities (except for the
excluded securities referred to below) as of the end of Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
Buyer satisfies the criteria in the category marked below:
o Corporation, etc. Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in
Section 501(c)(3) of the Internal Revenue Code.
o Bank. Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia,
the business of which is substantially confined to banking and is
supervised by the State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and (b) has
an audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is attached
hereto.
-------------------
(1) Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities of issuers that are not affiliated with the Buyer,
unless Buyer is a dealer, and, in that case, Buyer must own and/or invest on a
discretionary basis at least $10,000,000 in securities of issuers that are not
affiliated with the Buyer.
o Savings and Loan. Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institution or is a
foreign savings and loan association or equivalent institution and (b)
has an audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is attached
hereto.
o Broker-dealer. Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
o Insurance Company. Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of Columbia.
o State or Local Plan. Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of
a State or its political subdivisions, for the benefit of its
employees.
o Investment Advisor. Buyer is an investment advisor registered under
the Investment Advisers Act of 1940.
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with Buyer, (ii) securities that are part of an
unsold allotment to or subscription by Buyer (if Buyer is a dealer), (iii)
securities issued or guaranteed by the U.S. or any instrumentality thereof, (iv)
bank deposit notes and certificates of deposit, (v) loan participations, (vi)
repurchase agreements, (vii) securities owned but subject to a repurchase
agreement, and (viii) currency, interest rate and commodity swaps.
For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis, Buyer used the cost of such securities to
Buyer and did not include any of the securities referred to in the preceding
paragraph.
Further, in determining such aggregate amount, Buyer may have included
securities owned by subsidiaries of Buyer, but only if such subsidiaries are
consolidated with Buyer in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under Buyer's direction. However, such securities were
not included if Buyer is a majority-owned, consolidated subsidiary of another
enterprise and Buyer is not itself a reporting company under the Securities
Exchange Act of 1934.
Buyer acknowledges that it is familiar with Rule 144A and understands that
you and your customers (if you act as a broker for one or more customers) are
and will continue to rely on the statements made herein because one or more
sales by you for your own account of your customer's account to Buyer may be in
reliance on Rule 144A.
2
Will Buyer be purchasing Rule 144A securities only for Buyer's own
account? ______ ______
Yes No
If the answer to this question is "no", Buyer agrees that, in connection with
any purchase of securities sold to Buyer for the account of a third party
(including any separate account) in reliance on Rule 144A, Buyer will only
purchase for the account of a third party that at the time is a "qualified
institutional buyer" within the meaning of Rule 144A. In addition, Buyer agrees
that Buyer will not purchase securities for a third party unless Buyer has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
Buyer agrees to notify you of any changes in the information and
conclusions herein. Until such notice is given to you, Buyer's purchase of
securities from you, or through you from your customers, will constitute a
reaffirmation of the foregoing certifications and acknowledgments as of the date
of such purchase.
Further, if Buyer is a bank or savings and loan as provided above, Buyer
agrees that it will furnish you with updated annual financial statements
promptly after they become available.
Date:______________________
Very truly yours,
[Print Name of Buyer]
By: _________________________________________
Name:
Title:
3
Annex 2 to Exhibit B
Wachovia Bank, National Association
000 Xxxxx Xxxxx Xxxxxx, X.X.X., 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Corporate Trust Administration
Charming Shoppes Receivables Corp.
c/o Charming Shoppes, Inc.
000 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Name of Buyer:______________________________ ("Buyer")
Name of Investment Adviser:_______________________________ ("Adviser")
I hereby certify that, as indicated below, I am the duly-authorized
President, Chief Financial Officer or Vice President of Buyer or, if Buyer is a
"qualified institutional buyer" as defined in Rule 144A under the Securities Act
of 1933, as amended ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), of Adviser.
In connection with purchases of securities by Buyer, I hereby certify to
you and, if you act as broker for one or more customers, to such customers, that
Buyer is a "qualified institutional buyer" as defined in Rule 144A under the
Securities Act of 1933 ( "Rule 144A") because (i) Buyer is an investment company
registered under the Investment Company Act of 1940 and (ii) as marked below,
Buyer alone, or Buyer's Family of Investment Companies, owned at least
$100,000,000 in securities (other than the excluded securities referred to
below) as of the end of Buyer's most recent fiscal year.
_____ Buyer owned $________ in securities (other than the excluded
securities referred to below) as of the end of Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
______ Buyer is part of a Family of Investment Companies which owned in
the aggregate $_____ in securities (other than the excluded
securities referred to below) as of the end of Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
For purposes of determining the amount of securities owned by Buyer or Buyer's
Family of Investment Companies, I used the cost of such securities.
The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with Buyer or are part of Buyer's Family of
Investment Companies, (ii) securities
issued or guaranteed by the U.S. or any instrumentality thereof, (iii) bank
deposit notes and certificates of deposit, (iv) loan participations, (v)
repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
On behalf of Buyer, I acknowledge that Buyer is familiar with Rule 144A and
understands that you and your customers (if you act as a broker for one or more
customers) are and will continue to rely on the statements made herein because
one or more sales to Buyer by you for your own account or your customer's
account will be in reliance on Rule 144A. In addition, on behalf of Buyer, I
agree that, in connection with any purchase of securities sold by or through you
in reliance on Rule 144A, Buyer will only purchase for Buyer's own account.
Finally, on behalf of Buyer or Adviser (as appropriate), I also agree to
notify you of any changes in the information and conclusions herein. Until such
notice is given to you, Buyer's purchase of securities from you, or through you
from your customers, will constitute a reaffirmation of the foregoing
certifications and acknowledgments as of the date of such purchase.
Date:___________________________
Very truly yours,
______________________________________
Name:
Title:
On behalf of:
[Name of Buyer/Adviser]
2
