exhibit103oct172007.htm


    
      
         

      

      
         

        
          

        

      

      
         

              

                  EXHIBIT
            10.3      
    

      

    


    CHARMING
      SHOPPES MASTER TRUST

     

    $211,200,000
      Class A Asset Backed Certificates, Series 2007-1

     

    $19,200,000
      Class M Asset Backed Certificates, Series 2007-1

     

    $30,400,000
      Class B Asset Backed Certificates, Series 2007-1

     

    CERTIFICATE
      PURCHASE AGREEMENT

    


    October
      10, 2007

     

     

    Barclays
      Capital Inc.,

       as
      the Initial Purchaser

    200
      Park
      Avenue

    New
      York,
      New York  10166

     

    Ladies
      and Gentlemen:

     

    1.  Introduction.  Charming
      Shoppes Receivables Corp. (“CSRC” or the “Seller”), a
      special-purpose Delaware corporation whose principal place of business is in
      Ohio and which is a wholly-owned indirect subsidiary of Charming Shoppes, Inc.
      (“Charming”), proposes to sell to Barclays Capital Inc. (the “Initial
      Purchaser”) (a) $211,200,000 Series 2007-1 Class A Asset Backed
      Certificates (the “Class A Certificates”), which shall be issued in two
      subclasses designated as the Class A-1 Certificates (the “Class A-1
      Certificates”) in an initial aggregate outstanding amount of $153,800,000
      and the Class A-2 Certificates (the “Class A-2 Certificates”) in an
      initial aggregate outstanding amount of $57,400,000, (b) $19,200,000 Series
      2007-1 Class M Asset Backed Certificates (the “Class M Certificates”),
      which shall be issued in two subclasses designated as the Class M-1 Certificates
      (the “Class M-1 Certificates”) in an initial aggregate outstanding amount
      of $4,000,000 and the Class M-2 Certificates (the “Class M-2
      Certificates”) in an initial aggregate outstanding amount of $15,200,000,
      and (c) $30,400,000 Series 2007-1 Class B Asset Backed Certificates (the
“Class B Certificates”), which shall be issued in two subclasses
      designated as the Class B-1 Certificates (the “Class B-1
      Certificates”) in an initial aggregate outstanding amount of $16,900,000 and
      the Class B-2 Certificates (the “Class B-2 Certificates”) in an
      initial aggregate outstanding amount of $13,500,000 and, together with the
      Class
      A Certificates and the Class M Certificates, the “Offered
      Certificates”).  The Offered Certificates are to be issued
      pursuant to the Second Amended and Restated Pooling and Servicing Agreement,
      dated as of November 25, 1997 (as amended as of July 22, 1999, May 8, 2001,
      August 5, 2004, March 18, 2005 and October 17, 2007, and as further amended
      from
      time to time, the “Pooling Agreement”) among the Seller, Spirit of
      America, Inc. (“SOAI”), a Delaware corporation which is a wholly-owned
      indirect subsidiary of Charming, as servicer (in such capacity, the
“Servicer”), and U.S. Bank National Association (as successor to Wachovia
      Bank, National Association), as trustee (the “Trustee”), as supplemented
      by the Series 2007-1 Supplement to the Pooling Agreement dated as of the
      Issuance Date (as defined below) (the “Series Supplement”, and the
      Pooling Agreement, as so supplemented, the “Supplemented Pooling
      Agreement”).  Capitalized terms used herein and not otherwise
      defined shall have the meanings assigned to such terms in the Supplemented
      Pooling Agreement.

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    Each
      Offered Certificate will represent an undivided ownership interest in the
      Charming Shoppes Master Trust (the “Trust”).  In addition,
      concurrently with the issuance of the Offered Certificates, the Trust will
      issue
      $28,800,000 Series 2007-1 Class C Asset Backed Certificates (the “Class C
      Certificates”) and $30,400,000 Series 2007-1 Class D Asset Backed
      Certificates (the “Class D Certificates”), which will be issued in two
      subclasses designated as the “Class D-1 Certificates” and the “Class D-2
      Certificates”.  The Offered Certificates, the Class C Certificates
      and the Class D Certificates are referred to herein as the
“Certificates”.  The Class C Certificates will be sold pursuant
      to the Class C Certificate Purchase Agreement (the “Class C Purchase
      Agreement”) among the Trustee, the Seller, the Servicer and the purchasers
      named therein (the “Class C Purchasers”).  The Class D
      Certificates will be sold pursuant to one or more Class D Certificate Purchase
      Agreements (collectively, the “Class D Purchase Agreements”) among
      the Trustee, the Seller, the Servicer and the purchasers named therein (the
      “Class D Purchasers”).  The assets of the Trust include, among
      other things, receivables (the “Receivables”) arising under a pool of
      certain revolving credit card accounts owned by Spirit of America National
      Bank
      (“Spirit of America”) which have been conveyed to the Seller by Spirit of
      America pursuant to a Purchase and Sale Agreement dated as of November 25,
      1997 and as amended as of September 1, 1999, November 9, 2000 and
      May 8, 2001 (the “Purchase Agreement”) and conveyed to the Trust
      pursuant to the Pooling Agreement.

     

    The
      Seller, at its own expense, has prepared an offering memorandum dated October
      10, 2007 (together with any exhibits attached thereto, the “Preliminary
      Memorandum”), describing among other things, the Offered Certificates and
      the Supplemented Pooling Agreement.  Copies of the Preliminary
      Memorandum have been delivered to you.  The Seller, at its own
      expense, shall also prepare a final offering memorandum (together with any
      exhibits attached thereto, the “Final Memorandum”), which it will deliver
      to you no later than three business days prior to the Issuance Date (as herein
      defined).  The Seller hereby confirms that it has authorized the
      Initial Purchaser to use the Preliminary Memorandum and Final Memorandum in
      connection with the offering and resale of the Offered
      Certificates  by the Initial Purchaser. The Seller will advise the
      Initial Purchaser promptly of (i) any proposal to amend or supplement the Final
      Memorandum or the Preliminary Memorandum, (ii) any amendment or supplement
      to
      the Final Memorandum or the Preliminary Memorandum, and (iii) the receipt by
      the
      Seller of any notification with respect to the suspension of qualification
      of
      the Offered Certificates for sale in any jurisdiction or the initiation or
      threatening of any proceeding for such purposes.  The Seller will
      furnish to the Initial Purchaser copies of all amendments and supplements to
      the
      Final Memorandum and the Preliminary Memorandum, in each case as soon as
      available and in such quantities as the Initial Purchaser reasonably
      requests.  From and after the date any amendment or supplement to the
      Final Memorandum or the Preliminary Memorandum, as applicable, has been
      furnished to the Initial Purchaser, the term “Final Memorandum” or
“Preliminary Memorandum” shall mean the Final Memorandum or the
      Preliminary Memorandum, as applicable, as so amended or
      supplemented.  The Pooling Agreement, the Series Supplement and the
      Purchase Agreement shall be collectively referred to herein as the “Related
      Documents”.

     

    The
      Offered Certificates may be resold solely to (i) “qualified institutional buyers
      (“QIBs”) in reliance upon Rule 144A (“Rule 144A”) under the
      Securities Act of 1933, as amended (the “Securities Act”) and (ii)
      non-U.S. persons outside the United States, as defined in Regulation S of the
      Securities Act (“Regulation S”), in a transaction meeting the
      requirements of Regulation S.

     


    
      
         

      

      
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    As
      used
      herein, “Applicable Time” means 2 p.m., EST, on October 10,
      2007.

     

    2.  Representations,
      Warranties and Covenants of CSRC, FSC and SOAI.

     

    (a)  CSRC
      represents and warrants to, and agrees with the Initial Purchaser
      that:

     

    (i)  The
      Preliminary Memorandum and the Final Memorandum, as of their respective dates
      and any amendment thereof or supplement thereto, as of their respective dates,
      and in each case as of the Applicable Time and the Issuance Date (as defined
      herein), do not and will not, as of such dates and at such times, contain any
      untrue statement of a material fact or omit to state a material fact required
      to
      be stated therein or necessary to make the statements therein, in light of
      the
      circumstances under which they were made, not misleading except that the
      representations and warranties in this clause (i) do not relate to any
      statements or omissions made in reliance on and in conformity with the Initial
      Purchaser Information (as defined in Section 7(b)).

     

    (ii)  As
      of the
      Issuance Date (as defined herein), the representations and warranties of the
      Seller in the Pooling Agreement will be true and correct in all material
      respects except to the extent that such representations and warranties expressly
      relate to a date other than the Issuance Date (as defined herein).

     

    (iii)  The
      Seller is duly organized and is validly existing as a Delaware corporation
      in
      good standing under the laws of the State of Delaware, with power and authority
      (corporate and other) and legal right to own its properties and conduct its
      business as described in the Preliminary Memorandum and the Final Memorandum,
      and is duly qualified (or is exempt from such requirement) as a foreign
      corporation for the transaction of business and is in good standing 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 Seller and its Affiliates taken as a whole or on the transactions
      contemplated by this Agreement and the Related Documents.

     

    (iv)  The
      Certificates have been duly authorized for issuance and sale, and, when issued
      and delivered pursuant to the Supplemented Pooling Agreement, executed by the
      Seller and duly authenticated by the Trustee and paid for by the Initial
      Purchaser or the respective initial purchasers of the Class C Certificates
      and
      Class D Certificates therein in accordance with the terms of this Agreement,
      the
      Class C Purchase Agreement, or the Class D Purchase Agreements, as applicable,
      will be duly and validly issued and entitled to the benefits of the Supplemented
      Pooling Agreement; each of this Agreement and the Related Documents to which
      the
      Seller is a party has been duly authorized by the Seller, and, when executed
      and
      delivered by CSRC and the other parties thereto, each of this Agreement and
      the
      Related Documents to which the Seller is a party will constitute a valid,
      binding and enforceable agreement of the Seller; 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

     


    
      
         

      

      
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    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 Offered Certificates and the Related Documents will
      conform to the descriptions thereof in the Final Memorandum in all material
      respects.

     

    (v)  No
      consent, approval, authorization or order of, or filing with, any court,
      governmental agency or body is required to be obtained or made by the Seller
      in
      connection with (i) the issuance and sale of the Certificates or (ii) the
      consummation of the transactions contemplated by this Agreement and the Related
      Documents, except such as have been obtained or made and remain, and will
      continue to remain, in full force and effect, such as may be required under
      state securities laws and the filing of any financing statements required to
      perfect the Trust’s and the Seller’s interest in the Receivables.

     

    (vi)  The
      Seller 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 in this Agreement or in the Supplemented
      Pooling Agreement and the Related Documents.  This Agreement has been
      duly executed and delivered by CRSC.  The execution, delivery and
      performance of this Agreement and the other Related Documents, and the issuance
      and sale of the Certificates, the compliance with the terms and provisions
      hereof and thereof and the consummation of the transactions contemplated herein
      and therein will not result in a breach or violation of any of the terms and
      provisions of, or constitute a default under, the certificate of incorporation
      or by-laws of the Seller or result in a breach or violation of any of the terms
      and provisions of, or constitute a default under, or result in the creation
      or
      imposition of any Lien under, any statute, any rule, regulation or order of
      any
      governmental agency or body or any court, domestic or foreign, having
      jurisdiction over it or any of its properties, or any agreement or instrument
      to
      which it is a party or by which it is bound or to which any of its properties
      is
      subject, and it has full power and authority (corporate and otherwise) to enter
      into this Agreement and the Related Documents to which it is a party and to
      consummate the transactions contemplated hereby and thereby, including the
      full
      power and authority to sell the Offered Certificates as contemplated by this
      Agreement.

     

    (vii)  Other
      than as set forth or contemplated in the Preliminary Memorandum and the Final
      Memorandum, there are no legal or governmental proceedings or investigations
      pending or, to its knowledge, threatened to which any of the Seller or its
      Affiliates is or may be a party or to which any property of the Seller or its
      Affiliates is or may be the subject (x) which, if determined adversely to
      the Seller, 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
      the Seller and its Affiliates, taken as a whole, or that would reasonably be
      expected to materially adversely affect the interests of the holders of the
      Offered Certificates, (y) asserting the invalidity of this Agreement, any of
      the
      Related Documents or the Offered Certificates or (z) seeking to prevent the
      issuance of the

     


    
      
         

      

      
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    Offered
      Certificates or of any of the transactions contemplated by this Agreement or
      any
      of the Related Documents.

     

    (viii)  Any
      taxes, fees and other governmental charges in connection with the execution,
      delivery and performance by the Seller of this Agreement, the Offered
      Certificates, the Class C Certificates, the Class D Certificates or the other
      Related Documents shall have been paid or will be paid by or on behalf of the
      Seller at or prior to the Issuance Date (as defined herein) to the extent then
      due.

     

    (ix)  No
      Early
      Amortization Event, and no event that would become an Early Amortization Event
      after any applicable grace period has elapsed, exists with respect to any
      outstanding Series of Certificates issued by the Trust and no event has occurred
      that would constitute (after the issuance of the Certificates) an Early
      Amortization Event or would become an Early Amortization Event after any
      applicable grace period has elapsed.

     

    (x)  Except
      as
      set forth in or contemplated in the Preliminary Memorandum and the Final
      Memorandum, there has been no material adverse change in the condition
      (financial or otherwise) of the Seller since February 4, 2007.

     

    (xi)  Assuming
      that (i) the Offered Certificates are offered and sold in the manner
      contemplated in this Agreement and in the Preliminary Memorandum and the Final
      Memorandum, (ii) the Initial Purchaser complies with the agreements and
      covenants contained in this Agreement, (iii) the representations
      made in this Agreement by the Initial Purchaser are true and correct and (iv)
      the representations and warranties made or deemed to be made by the purchasers
      of the Certificates are true and correct, the Offered Certificates are not
      required to be registered under Section 5 of the Securities Act in connection
      with the offer, issuance, sale and delivery thereof as contemplated by the
      Preliminary Memorandum and the Final Memorandum and this Agreement and neither
      the Seller nor any agent acting on its behalf (other than the Initial
      Purchaser), has taken or will take any action which would subject the offer,
      issuance, sale or delivery of the Offered Certificates to the provisions of
      Section 5 of the Securities Act or to the registration provisions of any state
      securities laws of any applicable jurisdiction.

     

    (xii)  Neither
      the Seller nor any of its Affiliates has directly or through any agent (it
      being
      understood that the Seller makes no representation and warranty in this regard
      with respect to the Initial Purchaser or any affiliates of the Initial
      Purchaser) engaged in any “directed selling efforts” (as defined in Rule 902(c)
      under Regulation S) with respect to the Offered Certificates.  The
      Seller and its affiliates and any agent acting on their behalf (it being
      understood that the Seller makes no representation or warranty in this regard
      with respect to the Initial Purchaser or any affiliates of the Initial
      Purchaser) have complied with the “offering restrictions” (as defined in Rule
      902(g) under Regulation S) with respect to Offered Certificates sold outside
      the
      United States.  Neither the Seller, any of its Affiliates or any
      person or entity acting on its behalf (it being understood that the Seller
      makes
      no representation or warranty in this regard with respect to the Initial
      Purchaser or any affiliates of the Initial Purchaser) has entered into
      any

     


    
      
         

      

      
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    contractual
      arrangement with respect to the distribution of the Offered Certificates, except
      for this Agreement and the Related Documents.

     

    (xiii)  None
      of
      the Seller, any of its Affiliates or any person or entity acting on its or
      their
      behalf (it being understood that the Seller makes no representation or warranty
      in this regard with respect to the Initial Purchaser or any Affiliates of the
      Initial Purchaser) within the six months preceding the date of this Agreement,
      (A) has offered or sold any securities which are substantially similar to the
      Offered Certificates the result of which would cause the offer and sale of
      any
      of the Offered Certificates pursuant to this Agreement to fail to be entitled
      to
      exemption from registration under the Securities Act or (B) has offered or
      will
      offer to sell the Offered Certificates in the United States by means of any
      form
      of general solicitation or general advertising within the meaning of
      Rule 502(c) under the Securities Act.

     

    (xiv)  Neither
      the Seller nor the Trust is required (or after giving effect to the transactions
      contemplated by the Related Documents, will be required) to be registered as
      an
“investment company” as such term is defined in the Investment Company Act of
      1940, as amended (the “1940 Act”).

     

    (b)  Fashion
      Service Corp. (“FSC”) represents and warrants to, and agrees with the
      Initial Purchaser that:

     

    (i)  As
      of the
      Issuance Date (as defined herein), the representations and warranties of Spirit
      of America in each of the Related Documents to which it is a party will be
      true
      and correct except to the extent that such representations and warranties
      expressly relate to a date other than the Issuance Date (as defined
      herein).

     

    (ii)  FSC
      is
      duly organized and is validly existing as a Delaware corporation in good
      standing under the laws of the State of Delaware, with power and authority
      (corporate and other) and legal right to own its properties and conduct its
      business as currently conducted, and is duly qualified (or is exempt from such
      requirement) as a foreign corporation for the transaction of business and is
      in
      good standing 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 FSC and its Affiliates
      taken as a whole or on the transactions contemplated by this Agreement and
      the
      Related Documents.

     

    (iii)  Spirit
      of
      America 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 Preliminary Memorandum and the Final Memorandum,
      and is duly qualified (or is exempt from such requirement) as a foreign
      corporation for the transaction of business and is in good standing under the
      laws of each jurisdiction in which it owns or leases properties, or conducts
      any
      business, so as to require such qualification, other than where failure to
      be so
      qualified or in good standing would not

     


    
      
         

      

      
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    have
      a
      material adverse effect on Spirit of America and its Affiliates taken as a
      whole
      or on the transactions contemplated by this Agreement and the Related
      Documents.

     

    (iv)  This
      Agreement has been duly authorized, executed and delivered by FSC, and, when
      executed and delivered by the other parties hereto will constitute a valid,
      binding and enforceable agreement of FSC; provided that 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.

     

    (v)  The
      Purchase Agreement has been duly authorized, executed and delivered by Spirit
      of
      America and constitutes a valid, binding and enforceable agreement of Spirit
      of
      America; provided that 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.

     

    (vi)  FSC
      is
      not 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 this Agreement or in the
      Supplemented Pooling Agreement and the Related Documents.  No consent,
      approval, authorization or order of, or filing with, any court, governmental
      agency or body is required to be obtained or made by FSC for the consummation
      of
      the transactions contemplated by this Agreement, or by Spirit of America for
      the
      consummation of the transactions contemplated by the Purchase Agreement, except
      such as have been obtained or made and remain, and will continue to remain,
      in
      full force and effect, such as may be required under state securities laws
      and
      the filing of any financing statements required to perfect the Trust’s and the
      Seller’s interest in the Receivables.

     

    (vii)  The
      execution, delivery and performance of this Agreement by FSC, the compliance
      with the terms and provisions hereof and the consummation of the transactions
      contemplated herein and therein will not result in a breach or violation of
      any
      of the terms and provisions of, or constitute a default under, the certificate
      of incorporation or by-laws of FSC or result in a breach or violation of any
      of
      the terms and provisions of, or constitute a default under, or result in the
      creation or imposition of any Lien under, any statute, any rule, regulation
      or
      order of any governmental agency or body or any court, domestic or foreign,
      having jurisdiction over it or any of its properties, or any agreement or
      instrument to which it is a party or by which it is bound or to which any of
      the
      properties of it is subject, and it has full power and authority (corporate
      and

     


    
      
         

      

      
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    otherwise)
      to enter into this Agreement and to consummate the transactions contemplated
      hereby.

     

    (viii)  Spirit
      of
      America is not 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 and the Supplemented Pooling Agreement.  The execution,
      delivery and performance of the Purchase Agreement by Spirit of America, the
      compliance with the terms and provisions thereof and the consummation of the
      transactions contemplated herein and therein will not result in a breach or
      violation of any of the terms and provisions of, or constitute a default under,
      Spirit of America’s charter or by-laws or result in a breach or violation of any
      of the terms and provisions of, or constitute a default under, or result in
      the
      creation or imposition of any Lien under, any statute, any rule, regulation
      or
      order of any governmental agency or body or any court, domestic or foreign,
      having jurisdiction over Spirit of America or any of its properties, or any
      agreement or instrument to which Spirit of America is a party or by which it
      is
      bound or to which any of its properties is subject, and Spirit of America has
      full power and authority (corporate and otherwise) to enter into the Purchase
      Agreement and to consummate the transactions contemplated thereby.

     

    (ix)  Other
      than as set forth or contemplated in the Preliminary Memorandum and the Final
      Memorandum, there are no legal or governmental proceedings or investigations
      pending or, to its knowledge, threatened to which Spirit of America or any
      of
      its Affiliates is or may be a party or to which any property of Spirit of
      America and its Affiliates is or may be the subject (x) which, if
      determined adversely to Spirit of America, 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 Spirit of America 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, (y) asserting
      the invalidity of this Agreement, any of the Related Documents or the Offered
      Certificates or (z) seeking to prevent the issuance of the Offered Certificates
      or of any of the transactions contemplated by this Agreement or any of the
      Related Documents.

     

    (x)  Other
      than as set forth or contemplated in the Preliminary Memorandum and the Final
      Memorandum, there are no legal or governmental proceedings or investigations
      pending or, to its knowledge, threatened to which FSC or any of its Affiliates
      is or may be a party or to which any of property of FSC or its Affiliates is
      or
      may be the subject (x) 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 or 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, (y) asserting the
      invalidity of this Agreement, any of the Related Documents or the Offered
      Certificates or (z) seeking to prevent the issuance of the Offered Certificates
      or of any of the transactions contemplated by this Agreement or any of the
      Related Documents.

     


    
      
         

      

      
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    (xi)  Any
      taxes, fees and other governmental charges in connection with the execution,
      delivery and performance by FSC of this Agreement or the other Related Documents
      shall have been paid or will be paid by or on behalf of FSC at or prior to
      the
      Issuance Date (as defined herein) to the extent then due.

     

    (xii)  Any
      taxes, fees and other governmental charges in connection with the execution,
      delivery and performance by the Servicer of the Related Documents shall have
      been paid or will be paid by or on behalf of the Servicer at or prior to the
      Issuance Date to the extent then due.

     

    (xiii)  Except
      as
      set forth in or contemplated in the Preliminary Memorandum and the Final
      Memorandum, there has been no material adverse change in the condition
      (financial or otherwise) of FSC or any of its subsidiaries since February 4,
      2007.

     

    (xiv)  Except
      as
      set forth in or contemplated in the Preliminary Memorandum and the Final
      Memorandum, there has been no material adverse change in the condition
      (financial or otherwise) of the Servicer or any of its subsidiaries since
      February 4, 2007.

     

    (c)  SOAI
      represents and warrants to, and agrees with the Initial Purchaser,
      that:

     

    (i)  As
      of the
      Issuance Date (as defined herein), the representations and warranties of SOAI
      in
      each of the Related Documents to which it is a party will be true and correct
      except to the extent that such representations and warranties expressly relate
      to a date other than the Issuance Date (as defined herein).

     

    (ii)  SOAI
      is
      duly organized and is validly existing as a Delaware corporation in good
      standing under the laws of the State of Delaware, with power and authority
      (corporate and other) and legal right to own its properties and conduct its
      business as described in the Preliminary Memorandum and the Final Memorandum,
      and is duly qualified  (or is exempt from such requirement) as a
      foreign corporation for the transaction of business and is in good standing
      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 or on the
      transactions contemplated by this Agreement and the Related
      Documents.

     

    (iii)  Each
      of
      this Agreement and the Related Documents to which SOAI is a party have been
      duly
      authorized, executed and delivered by SOAI, and, when executed and delivered
      by
      the other parties thereto, each of this Agreement and the Related Documents
      to
      which SOAI is a party will constitute a valid, binding and enforceable agreement
      of SOAI; 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,

     


    
      
         

      

      
        9

        
          

        

      

      
         

      

    


    under
      certain circumstances, of provisions indemnifying a party against liability
      where such indemnification is contrary to public policy.

     

    (iv)  No
      consent, approval, authorization or order of, or filing with, any court,
      governmental agency or body is required to be obtained or made by SOAI in
      connection with the consummation of the transactions contemplated by this
      Agreement and the Related Documents, except such as have been obtained or made
      and remain, and will continue to remain, in full force and effect, such as
      may
      be required under state securities laws and the filing of any financing
      statements required to perfect the Trust’s and the Seller’s interest in the
      Receivables.

     

    (v)  SOAI
      is
      not 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 this Agreement or any of the
      Related Documents.  The execution, delivery and performance of this
      Agreement and the other Related Documents, the compliance with the terms and
      provisions hereof and thereof and the consummation of the transactions
      contemplated herein and therein will not result in a breach or violation of
      any
      of the terms and provisions of, or constitute a default under, its certificate
      of incorporation or by-laws or result in a breach or violation of any of the
      terms and provisions of, or constitute a default under, or result in the
      creation or imposition of any Lien under, any statute, any rule, regulation
      or
      order of any governmental agency or body or any court, domestic or foreign,
      having jurisdiction over it or any of its properties, or any agreement or
      instrument to which it is a party or by which it is bound or to which any of
      the
      properties of it is subject, and it has full power and authority (corporate
      and
      otherwise) to enter into this Agreement and the Related Documents to which
      it is
      a party and to consummate the transactions contemplated hereby and
      thereby.

     

    (vi)  Other
      than as set forth or contemplated in the Preliminary Memorandum and the Final
      Memorandum, there are no legal or governmental proceedings or investigations
      pending or, to its knowledge, 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 (x) 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,
      (y) asserting the invalidity of this Agreement, any of the Related Documents
      or
      the Offered Certificates or (z) seeking to prevent the issuance of the Offered
      Certificates or of any of the transactions contemplated by this Agreement or
      any
      of the Related Documents.

     

    (vii)  No
      Early
      Amortization Event, and no event that would become an Early Amortization Event
      after any applicable grace period has elapsed, exists with respect to any
      outstanding Series of Certificates issued by the Trust and no event has occurred
      that would constitute (after the issuance of the Certificates) an Early
      Amortization Event or

     


    
      
         

      

      
        10

        
          

        

      

      
         

      

    


    would
      become an Early Amortization Event after any applicable grace period has
      elapsed.

     

    (viii)  Any
      taxes, fees and other governmental charges in connection with the execution,
      delivery and performance by SOAI of this Agreement or the other Related
      Documents shall have been paid or will be paid by or on behalf of SOAI at or
      prior to the Issuance Date (as defined herein) to the extent then
      due.

     

    (ix)  Except
      as
      set forth in or contemplated in the Preliminary Memorandum and the Final
      Memorandum, there has been no material adverse change in the condition
      (financial or otherwise) of SOAI or any of its subsidiaries since February
      4,
      2007.

     

    3.  Payment
      and Delivery of Offered Certificates; Fees.  On the basis of the
      representations, warranties and agreements herein contained, but subject to
      the
      terms and conditions herein set forth, the Seller agrees to sell to the Initial
      Purchaser and the Initial Purchaser agrees to purchase $211,200,000 principal
      amount of Class A Certificates consisting of Class A-1 Certificates in the
      principal amount of $153,800,000 and Class A-2 Certificates in the principal
      amount of $57,400,000, $19,200,000 principal amount of Class M Certificates
      consisting of Class M-1 Certificates in the principal amount of $4,000,000
      and
      Class M-2 Certificates in the principal amount of $15,200,000, and $30,400,000
      principal amount of the Class B Certificates consisting of Class B-1
      Certificates in the principal amount of $16,900,000 and Class B-2 Certificates
      in the principal amount of $13,500,000.  The Seller hereby agrees,
      that in consideration of the Initial Purchaser’s efforts in the resale of the
      Offered Certificates, it shall pay the Initial Purchaser a fee equal to the
      sum
      of 0.375% of the aggregate original principal amount of the Class A
      Certificates, 0.470% of the aggregate original principal amount of the Class
      M
      Certificates and 0.550% of the aggregate original principal amount of the Class
      B Certificates (the “Initial Purchaser Fee”), payable in full on October
      17, 2007 (or such later date as may be mutually agreed upon by the parties
      hereto) (the “Issuance Date”), to be paid by the Seller by wire transfer
      in immediately available funds to an account designated by the Initial
      Purchaser.  Each class of Offered Certificates is to be purchased at a
      price equal to the principal amount thereof times the percentage specified
      below
      opposite such class:

     

    
      	
              Class

            	
              Percentage

            
	
              Class
                A-1

            	
              100.00000%

            
	
              Class
                A-2

            	
              99.97605%

            
	
              Class
                M-1

            	
              100.00000%

            
	
              Class
                M-2

            	
              99.95653%

            
	
              Class
                B-1

            	
              100.00000%

            
	
              Class
                B-2

            	
              99.97623%

            


    

    .

     


    
      
         

      

      
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    The
      closing and sale of the Certificates (the “Closing”) shall be held at the
      offices of Mayer Brown LLP in Chicago, Illinois, at 10:00 a.m., Chicago time,
      on
      the Issuance Date.  Payment of the purchase price for the Offered
      Certificates being sold and purchased hereunder shall be made on the Issuance
      Date by wire transfer of immediately available funds to an account to be
      designated by the Seller prior to the Issuance Date, against delivery to the
      Initial Purchaser of the Offered Certificates registered in the name of Cede
      & Co., the nominee of The Depository Trust Company
      (“DTC”).  The Initial Purchaser’s interests as beneficial owner
      of the Offered Certificates will be represented by book entries on the records
      of DTC and participating members thereof.

     

    4.  Certain
      Agreements of the Seller.  The Seller agrees with the Initial
      Purchaser that:

     

    (a)  The
      Seller shall furnish such information, execute such instruments and take such
      actions, if any, as may be reasonably requested by the Initial Purchaser to
      effect the resale of the Offered Certificates under the securities “blue sky”
laws of each jurisdiction in which the Offered Certificates are offered for
      sale
      or sold; provided that the Seller shall not be obligated to qualify to do
      business in any jurisdiction in which it is not currently so qualified; and
      provided, further, that the Seller shall not be required to file a
      general consent to service of process in any jurisdiction.

     

    (b)  In
      order
      to render the Offered Certificates eligible for resale pursuant to Rule 144A,
      the Seller shall make or cause to be made available to any beneficial owner
      of
      the Offered Certificates in connection with any sale thereof and any prospective
      purchaser of such Offered Certificates from such beneficial owner, the
      information required by Rule 144A(d)(4) under the Securities Act.

     

    (c)  The
      Seller will not at any time offer, sell, contract to sell, pledge or otherwise
      dispose of, directly or indirectly, any securities under circumstances where
      such offer, sale, pledge, contract or disposition would cause the exemption
      afforded by the Securities Act to cease to be applicable to the offer and sale
      of the Offered Certificates hereunder.

     

    (d)  The
      Seller agrees that it will not and will cause its affiliates (as defined in
      Rule
      501(b) of Regulation D under the Securities Act) not to solicit any offer to
      buy
      or make any offer or sale of or otherwise negotiate in respect of, the Offered
      Certificates if, as a result of the doctrine of “integration” referred to in
      Rule 502 under the Securities Act, such offer or sale would render invalid
      (for
      the purposes of (i) the sale of the Offered Certificates from Seller to the
      Initial Purchaser, (ii) the resale of the Offered Certificates by the Initial
      Purchaser to subsequent purchasers or (iii) the resale of the Offered
      Certificates by such subsequent purchasers to others) the exemption from the
      registration requirements of the Securities Act provided by Section 4(2) thereof
      or by Rule 144A or by Regulation S thereunder or otherwise.

     

    (e)  The
      Seller agrees that neither it nor any of its affiliates (as defined in Rule
      501(b) of Regulation D under the Securities Act) will directly or through any
      person acting on its behalf, assuming the accuracy of the representations and
      warranties of the

     


    
      
         

      

      
        12

        
          

        

      

      
         

      

    


    Initial
      Purchaser in Section 5: (i) engage in any form of general solicitation or
      general advertising in connection with the offering or sale of the Offered
      Certificates in the United States (as those terms are used in Regulation D
      under
      the Securities Act) or in any manner involving a public offering within the
      meaning of Section 4(2) of the Securities Act or (ii) engage in any “directed
      selling efforts” (as defined in Rule 902(c) under Regulation S) with respect to
      the Offered Certificates. The Seller agrees that it and its affiliates (as
      defined in Rule 501(b) of Regulation D under the Securities Act) and any person
      acting on its behalf, assuming the accuracy of the representations and
      warranties of the Initial Purchaser in Section 5, will comply with the “offering
      restrictions” (as defined in Rule 902(g) under Regulation S) with respect to any
      Offered Certificates sold outside the United States.

     

    (f)  Whether
      or not the transactions contemplated by this Agreement are terminated for any
      reason, the Seller agrees to pay promptly all costs and expenses incident to
      the
      performance by the Seller of its obligations hereunder, including, without
      limitation, (i) the preparation, reproduction and printing (to the extent
      such documents are printed) of the Preliminary Memorandum and the Final
      Memorandum and all amendments or supplements thereto (including the exhibits
      thereto), the Pooling Agreement, the Series Supplement, the Certificates, this
      Agreement and the other Related Documents, (ii) the preparation, authentication,
      issuance and delivery of the Offered Certificates, (iii) the expenses (including
      reasonable fees and disbursements of counsel to the Initial Purchaser, provided,
      that Seller shall not be responsible for payment of any fees and disbursements
      of counsel to the Initial Purchaser in excess of $100,000), if any, of
      registering or qualifying the Offered Certificates under state securities or
      “blue sky” laws, (iv) the fees and expenses of the Seller’s accountants and of
      reasonable fees and expenses of counsel for the Seller, (v) the reasonable
      fees and disbursements of counsel for the Initial Purchaser, (vi) the furnishing
      to the Initial Purchaser of such copies of the Preliminary Memorandum and the
      Final Memorandum and all amendments or supplements thereto (including the
      exhibits thereto) as may be requested for use in connection with the offering
      and sale of the Offered Certificates, (vii) fees of each Rating Agency in
      connection with their ratings of the Offered Certificates, (viii) fees of the
      Trustee under the Pooling Agreement, and (ix) the Seller’s performance of and
      compliance with all agreements and conditions contained herein, in the Pooling
      Agreement, the Series Supplement, the Certificates and the other Related
      Documents on its part to be performed or complied
      with.  Notwithstanding the foregoing, the Initial Purchaser shall
      obtain the consent of the Seller prior to incurring any out-of-pocket expense
      in
      excess of $10,000.

     

    (g)  To
      the
      extent, if any, that the ratings provided with respect to the Offered
      Certificates by either Rating Agency is conditional upon the furnishing of
      documents or the taking of any other reasonable actions by the Seller, the
      Seller shall, subject to availability and the reasonableness of such document
      request, furnish such documents and take any such other reasonable
      actions.

     

    (h)  During
      the period any Offered Certificates shall remain outstanding, the Seller will
      furnish or will cause to be furnished to the Initial Purchaser, copies of
      all

     


    
      
         

      

      
        13

        
          

        

      

      
         

      

    


    reports
      or other communication (financial or other) furnished to the holders of the
      Offered Certificates.

     

    5.  Representations,
      Warranties and Covenants of the Initial Purchaser.  The Initial
      Purchaser represents and warrants to, and agrees with the Seller, the Servicer
      and FSC as of the date hereof, and as of the Issuance Date, that:

     

    (a)  It
      understands that the Offered Certificates have not been and will not be
      registered under the Securities Act in reliance upon an exemption therefrom,
      or
      registered or qualified under the securities or “blue sky” laws of any state in
      the United States.  It has advised Seller that it proposes to offer
      the Offered Certificates for resale upon the terms and conditions set forth
      herein and in the Final Memorandum.  It will not offer, sell,
      transfer, pledge, hypothecate or otherwise dispose of the Offered Certificates
      except in accordance with this Agreement and the Supplemented Pooling
      Agreement.

     

    (b)  It
      shall
      not utilize any form of general solicitation or general advertising within
      the
      meaning of Rule 502(c) of the Securities Act in connection with the resale
      of
      the Offered Certificates, including any advertisement, article, notice or other
      communication published in any newspaper, magazine or similar medium or
      broadcast over television or radio, or conduct any seminar or meeting with
      respect to the Offered Certificates whose attendees have been invited by general
      solicitation or general advertising or other action involving a public offering
      within the meaning of Section 4(2) of the Securities Act.

     

    (c)  It
      is an
“accredited investor” (as defined in Regulation D under the Securities Act) and
      a QIB within the meaning of Rule 144A, purchasing the Offered
      Certificates.  It has such knowledge and experience in financial and
      business matters that it is capable of evaluating the merits and risks of an
      investment in the Offered Certificates.

     

    (d)  It
      will
      offer or sell the Offered Certificates only to (i) persons whom it reasonably
      believes to be QIBs, purchasing the Offered Certificates for their own account
      or for the account of other investors who are QIBs in transactions meeting
      the
      requirements of Rule 144A and (ii) non-U.S. persons (as defined in
      Regulation S) in offshore transactions (as defined in Regulation S) made in
      compliance with Regulation S.  It agrees that it will not offer, sell
      or deliver any of the Offered Certificates in any jurisdiction outside the
      United States (as defined in Regulation S) except under circumstances which
      will
      result in compliance with the applicable laws thereof, and that it will take
      whatever action is required to permit its offer and resale of the Offered
      Certificates in such jurisdictions.

     

    (e)  It
      will
      take reasonable steps to inform, and cause each of its affiliates to take
      reasonable steps to inform, persons acquiring Offered Certificates from it
      or
      its affiliates, as the case may be, in the United States that the Offered
      Certificates (i) have not been and will not be registered under the Securities
      Act, (ii) are being sold to them without registration under the Securities
      Act
      in reliance on Rule 144A or Rule 903 or 904 of Regulation S, and (iii) may
      not
      be offered, sold or otherwise transferred except (A) in

     


    
      
         

      

      
        14

        
          

        

      

      
         

      

    


    offshore
      transactions to non-U.S. Persons in accordance with Rule 903 or 904 of
      Regulation S in a principal amount of not less than $100,000, or (B) to a person
      whom the seller reasonably believes is a QIB that is purchasing such Offered
      Certificates for its own account or for the account of a QIB to whom notice
      is
      given that the offer, sale or transfer is being made in reliance on Rule 144A,
      in a principal amount of not less than $100,000, for the purchaser and each
      such
      account, in a transaction meeting the requirements of Rule 144A.

     

    (f)  The
      transfer restrictions and the other
      provisions set forth in the Final Memorandum under the headings “Transfer
      Restrictions” and “Plan of Distribution,” including the legend
      required thereby, shall apply to the Offered Certificates.

     

    (g)  None
      of
      it, its affiliates or any person acting on its behalf has engaged or will engage
      in any directed selling efforts (as defined in Regulation S under the Securities
      Act) with respect to the Offered Certificates, and it, its affiliates and any
      person acting on its behalf have complied and will comply with the offering
      restriction requirements of Regulation S.  It agrees that, at or
      before confirmation of a sale of Offered Certificates (other than a sale of
      Offered Certificates pursuant to Rule 144A) it will have sent to each
      distributor, dealer or person receiving a selling concession, fee or other
      remuneration who purchases the Offered Certificates from or through it during
      the distribution compliance period as defined in Rule 902 of Regulation S,
      a
      confirmation or notice to substantially the following effect:

     

    “The
      Offered Certificates covered hereby have not been registered under the United
      States Securities Act of 1933 (the “Securities Act”) and may not be offered or
      sold within the United States or to or for the account or benefit of U.S.
      persons (as defined in Regulation S), except in accordance with Rule 144A under
      the Securities Act.”

     

    (h)  It
      represents and warrants that:

     

    (i)  it
      has
      only communicated or caused to be communicated and will only communicate or
      cause to be communicated an invitation or inducement to engage in investment
      activity (within the meaning of Section 21 of the Financial Services and Markets
      Act 2000 (“FSMA”)) in connection with the issue or sale of any Offered
      Certificates in circumstances in which Section 21(1) of the FSMA does not apply
      to the Seller; and

     

    (ii)  it
      has
      complied and will comply with all applicable provisions of the FSMA with respect
      to anything done by it in relation to any Offered Certificates in, from or
      otherwise involving the United Kingdom, other than where the failure to so
      comply would not have a material adverse effect on the Seller and its Affiliates
      taken as a whole or on the transactions contemplated by this Agreement and
      the
      Related Documents; and

     

    (iii)  if
      it
      sells Offered Certificates in any other non-U.S. jurisdiction, it has complied
      with and will comply with all applicable laws of such jurisdiction with
      respect

     


    
      
         

      

      
        15

        
          

        

      

      
         

      

    


    to
      anything done by it in relation to the Offered Certificates in, from or
      otherwise involving such jurisdiction, other than where the failure to so comply
      would not have a material adverse effect on the Seller and its Affiliates taken
      as a whole or on the transactions contemplated by this Agreement and the Related
      Documents.

     

    (i)  It
      represents and warrants that (i) it is duly authorized and empowered to execute,
      deliver and perform this Agreement; (ii) the person signing this Agreement
      on
      its behalf has been duly authorized to do so; (iii) the execution, delivery
      and
      performance of this Agreement does not and will not conflict with, violate
      or
      constitute a default under any applicable law or regulation, its articles of
      organization or other organizational document or by-laws and (iv) this Agreement
      constitutes a legal, valid and binding obligation of the Initial Purchaser;
      provided that 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.

     

    (j)  If
      an
      electronic copy of the Preliminary Memorandum or the Final Memorandum is
      delivered by the Initial Purchaser for any purpose, such copy shall be the
      same
      electronic file containing the Preliminary Memorandum or the Final Memorandum
      (as applicable) in the identical form transmitted electronically to the Initial
      Purchaser by or on behalf of  the Seller specifically for use by the
      Initial Purchaser pursuant to this Section; for example, if the Final Memorandum
      is delivered to the Initial Purchaser by or on behalf of  the Seller
      in a single electronic file in .pdf format, then the Initial Purchaser will
      deliver the electronic copy of the Final Memorandum in the same single
      electronic file in .pdf format.

     

    (k)  The
      Initial Purchaser represents and agrees that it will deliver the Preliminary
      Memorandum to each investor to whom Offered Certificates are sold by the Initial
      Purchaser, prior to the Applicable Time or, if later, the time at which a
      contract of sale with such investor becomes effective unless, at such time,
      the
      Final Memorandum has been made available by the Seller to the Initial
      Purchaser.  In such event, the Initial Purchaser shall deliver the
      Final Memorandum to such investor to which it sells an Offered Certificate
      prior
      to the effective time of such sale.

     

    The
      Initial Purchaser acknowledges that the Seller and others will rely upon the
      truth and accuracy of the foregoing acknowledgments, representations and
      agreements.

     

    6.  Conditions
      of the Obligations of the Initial Purchaser.  The Initial
      Purchaser’s obligations hereunder will be subject to the accuracy of the
      representations and warranties herein made on the part of the Seller, FSC and
      the Servicer, to the accuracy of the statements of the officers of each of
      the
      Seller, FSC and the Servicer made pursuant to the provisions hereof, to the
      performance by the Seller, FSC and the Servicer of their respective obligations
      hereunder and to the following additional conditions precedent:

     


    
      
         

      

      
        16

        
          

        

      

      
         

      

    


    (a)  The
      Initial Purchaser shall have received fully executed copies of this Agreement,
      the Supplemented Pooling Agreement and the other Related Documents duly executed
      and delivered by the parties thereto.

     

    (b)  Subsequent
      to the execution and delivery of this Agreement and prior to the Issuance Date,
      there shall not have occurred and be continuing (i) any change, or any
      development involving a prospective change, in or affecting particularly the
      business or properties of the Seller, FSC, the Servicer or Spirit of America
      which, in the reasonable judgment of the Initial Purchaser after consultation
      with the Seller and the Servicer, materially impairs the investment quality
      of
      the Offered Certificates; (ii) any reduction in or withdrawal of the rating
      of
      the Certificates issued by the Trust or any other debt securities of the Seller,
      the Servicer or any Affiliate thereof by any “nationally recognized statistical
      rating organization” (as defined for purposes of Rule 436(g) under the
      Securities Act), or any public announcement that any such organization has
      under
      surveillance or review its rating of the Certificates issued by the Trust or
      any
      other debt securities of the Seller, the Servicer or any Affiliate thereof
      (other than an announcement with positive implications of a possible upgrading,
      and no implication of a possible reduction in or withdrawal of such rating);
      (iii) any suspension or limitation of trading in securities generally on the
      New
      York Stock Exchange, or any setting of minimum prices for trading on such
      exchange, or any suspension of trading of any securities of the Seller or the
      Servicer or any Affiliate of the Seller or the Servicer on any exchange or
      in
      any over-the-counter market; (iv) a general moratorium on commercial banking
      activities in New York shall have been declared by either Federal or New York
      State authorities; (v) any material disruption in commercial banking securities
      settlement or clearance services; if, in the reasonable judgment of the Initial
      Purchaser, the effect of any such disruption makes it impractical or inadvisable
      to proceed with completion of the resale of the Offered Certificates; or
      (vi) any outbreak or escalation of major 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 Initial Purchaser, the effect of any such outbreak, escalation,
      declaration, calamity, emergency or change makes it impractical or inadvisable
      to proceed with completion of the resale of the Offered
      Certificates.

     

    (c)  The
      Initial Purchaser shall have received an opinion of Colin D. Stern, Esq.,
      Executive Vice President and General Counsel to Charming, dated the Issuance
      Date and addressed to the Initial Purchaser, satisfactory in form and substance
      to the Initial Purchaser and its counsel as to certain corporate
      matters.

     

    (d)  The
      Initial Purchaser shall have received an opinion of local tax counsel for the
      Seller and the Servicer, dated the Issuance Date, regarding certain Ohio tax
      matters in form and substance reasonably satisfactory to the Initial Purchaser
      and its counsel.

     

    (e)  The
      Initial Purchaser shall have received an opinion of Mayer Brown LLP, dated
      the
      Issuance Date and addressed to the Initial Purchaser, satisfactory in form
      and
      substance to the Initial Purchaser and its counsel as to enforceability and
      certain securities law matters.  Such counsel shall also deliver a
      negative assurance letter, dated

     


    
      
         

      

      
        17

        
          

        

      

      
         

      

    


    the
      Issuance Date and addressed to the Initial Purchaser, in form and substance
      satisfactory to the Initial Purchaser.

     

    (f)  The
      Initial Purchaser shall have received an opinion of Mayer Brown LLP, dated
      the
      Issuance Date and addressed to the Initial Purchaser, to the effect that the
      transfer of Receivables from the Seller to the Trust creates a perfected
      security interest in such Receivables in favor of the Trustee, in form and
      substance satisfactory to the Initial Purchaser and its counsel.

     

    (g)  The
      Initial Purchaser shall have received an opinion of Squire, Sanders &
Dempsey LLP, dated the Issuance Date and addressed to the Initial Purchaser,
      to
      the effect that the transfer of Receivables from Spirit of America to the Seller
      creates a perfected security interest in such Receivables in favor of the
      Seller, in form and substance satisfactory to the Initial Purchaser and its
      counsel.

     

    (h)  The
      Initial Purchaser shall have received an opinion of Mayer Brown LLP, dated
      the
      Issuance Date and addressed to the Initial Purchaser, with respect to (a) the
      nonconsolidation of FSC with the Seller and (b) certain FDIC matters relating
      to
      the transfer of the Receivables from Spirit of America to the Seller, in each
      case in form and substance satisfactory to the Initial Purchaser and its
      counsel.

     

    (i)  The
      Initial Purchaser shall have received copies of UCC-1 financing statements
      filed
      in the offices of the Secretary of State of the State of Ohio and the Recorder
      of Deeds of the District of Columbia, in the case of Spirit of America, and
      the
      Secretary of State of the State of Delaware, in the case of the Seller,
      reflecting the interests of the Seller and the Trust in the
      Receivables.

     

    (j)  The
      Initial Purchaser shall have received an opinion of Orrick, Herrington &
Sutcliffe LLP, special counsel for the Initial Purchaser, subject to customary
      qualifications, assumptions, limitations and exceptions, dated the Issuance
      Date, in form and substance reasonably satisfactory to the Initial Purchaser,
      with respect to the enforceability of the Supplemental Pooling Agreement and
      the
      Offered Certificates, the Trust Indenture Act of 1939, and securities law
      matters with respect to the Offered Certificates.

     

    (k)  The
      Initial Purchaser shall have received an opinion from Chapman & Cutler LLP,
      counsel for the Trustee, dated the Issuance Date and addressed to the Initial
      Purchaser, with respect to general corporate matters, enforceability of the
      Related Documents to which the Trustee is a party, due authentication and
      delivery of the Offered Certificates and such other matters as the Initial
      Purchaser shall request, in form and substance satisfactory to the Initial
      Purchaser and its counsel.

     

    (l)  The
      Initial Purchaser shall have received a certificate or certificates, dated
      the
      Issuance Date, of a vice president or more senior officer of each of the Seller,
      FSC and the Servicer in which such officer, to the best of his or her knowledge
      after reasonable investigation, shall state that (A) the representations and
      warranties of the Seller, FSC and the Servicer, as applicable, contained in
      this
      Agreement are true and

     


    
      
         

      

      
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    correct
      in all material respects on and as of the Issuance Date, (B) the Seller, FSC
      and
      the Servicer, as applicable, has complied with all agreements and satisfied
      all
      conditions on its part to be performed or satisfied hereunder at or prior to
      the
      Issuance Date, (C) the representations and warranties of the Seller, FSC or
      the
      Servicer, as applicable, in the Related Documents to which it is a party are
      true in all material respects on the Issuance Date, except to the extent such
      representations and warranties relate to an earlier date, and (D) subsequent
      to
      the date as of which information is given in the Final Memorandum, and except
      as
      set forth or contemplated in the Final Memorandum or such certificate, there
      has
      been no material adverse change in the condition (financial or otherwise) of
      the
      Seller, FSC or the Servicer, as applicable, or any of their respective
      subsidiaries.

     

    (m)  The
      Initial Purchaser shall have received a letter of Ernst & Young addressed to
      the Seller and the Initial Purchaser regarding the Receivables, substantially
      in
      the form heretofore agreed to and otherwise in form and in substance
      satisfactory to the Initial Purchaser and its counsel.

     

    (n)  The
      Initial Purchaser shall have received letters from each of the Rating Agencies
      stating that (i) the Class A Certificates have received a rating of “AAA” and
“Aaa” by Standard & Poor’s and Moody's, respectively, (ii) the Class M
      Certificates have received a rating of “AA” and “Aa2” by Standard & Poor’s
      and Moody’s respectively, (iii) the Class B Certificates have received a rating
      of “A” and “A2” by Standard and Poor’s and Moody’s, respectively, (iv) the Class
      C Certificates have received a rating of “Baa2” by Moody’s, and (v) the rating
      of any certificates of any other Series issued by the Trust will not be
      withdrawn or reduced as a result of the issuance of the
      Certificates.

     

    (o)  The
      Initial Purchaser shall have received from the Servicer a Servicer Report dated
      as of the Issuance Date, calculated after giving effect to all transactions
      contemplated on the Issuance Date.

     

    (p)  The
      Seller and the Servicer will furnish the Initial Purchaser with such number
      of
      conformed copies of such opinions, certificates, letters and documents as it
      may
      reasonably request.

     

    If
      any
      condition specified in this Section shall not have been fulfilled when and
      as
      required to be fulfilled, this Agreement may be terminated by the Initial
      Purchaser by notice to the Seller at any time at or prior to the Issuance Date,
      and such termination shall be without liability of any party to any other party
      except as provided in Section 8.

     

    7.  Indemnification
      and Contribution.

     

    (a)  CSRC,
      SOAI and FSC, jointly and severally, agrees to indemnify and hold harmless
      the
      Initial Purchaser, and each person, if any, who controls the Initial Purchaser
      within the meaning of Section 15 of the Securities Act or Section 20 of the
      Securities Exchange Act of 1934, as amended (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,

     


    
      
         

      

      
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    action
      or
      proceeding or any claim asserted) caused by any untrue statement or alleged
      untrue statement of any material fact contained in the Final Memorandum or
      the
      Preliminary Memorandum or caused by any omission or alleged omission to state
      therein a material fact required to be stated therein or necessary in order
      to
      make the statements therein, in light of the circumstances under which they
      were
      made, not misleading, except insofar as any such loss, claim, damage, expense
      or
      liability arises out of or is based upon an untrue statement or alleged untrue
      statement in or omission or alleged omission from any of such documents in
      reliance upon and in conformity with the Initial Purchaser Information (as
      defined in subsection (b) below); provided, further, that none of
      CSRC, SOAI or FSC will be liable under the indemnity agreement in this
      subsection (a) with respect to the Preliminary Memorandum to the extent that
      any
      loss, claim, damage or liability of the Initial Purchaser (or any Person
      controlling the Initial Purchaser within the meaning of the Securities Act)
      results from the fact that the Initial Purchaser sold Offered Certificates
      to a
      person as to whom it is established that there was not sent or given, at or
      prior to consummation of such sale, a copy of the Final Memorandum (including
      any amendment or supplement but excluding documents incorporated by reference)
      if the Seller or the Servicer previously furnished copies of the Final
      Memorandum (including any amendment or supplement but excluding documents
      incorporated by reference) to the Initial Purchaser and the loss, claim, damage
      or liability of the Initial Purchaser (or any Person controlling the Initial
      Purchaser within the meaning of the Securities Act) results from an untrue
      statement or omission of a material fact contained in the Preliminary Memorandum
      that is corrected in the Final Memorandum or any amendment or supplement to
      the
      Final Memorandum.

     

    (b)  The
      Initial Purchaser agrees to indemnify and hold harmless each of CSRC, SOAI
      and
      FSC and each person, if any, who controls the CSRC, SOAI or FSC within the
      meaning of 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 any
      material fact contained in the Final Memorandum or the Preliminary Memorandum
      or
      caused by any omission or alleged omission to state therein a material fact
      required to be stated therein or necessary in order to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading, but only to the extent that such untrue statement or alleged untrue
      statement or omission or alleged omission was made in reliance on or in
      conformity with the Initial Purchaser Information.  The “Initial
      Purchaser Information” includes the name of the Initial Purchaser as it
      appears on the front page of the Preliminary Memorandum and the Final Memorandum
      and the information in the Preliminary Memorandum and the Final Memorandum
      in
      the third paragraph under the heading “Plan of
      Distribution”.

     

    (c)  Promptly
      after receipt by an indemnified party under this Section 7 of notice of the
      commencement of any action, such indemnified party will, if a claim in respect
      thereof is to be made against the indemnifying party under subsection (a) or
      (b)
      above, notify the indemnifying party of the commencement thereof; but the
      omission so to notify the indemnifying party will not relieve it from any
      liability which it may have to

     


    
      
         

      

      
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    any
      indemnified party otherwise than under subsection (a) or (b) above except and
      to
      the extent of any prejudice to such indemnifying party arising from such failure
      to provide such notice.  In case any such action is brought against
      any indemnified party and it notifies the indemnifying party of the commencement
      thereof, the indemnifying party will be entitled to participate therein and,
      to
      the extent that it may elect by written notice to the indemnified party, jointly
      with any other indemnifying party similarly notified, to assume the defense
      thereof, with counsel reasonably satisfactory to such indemnified party (who
      shall not, except with the consent of the indemnified party, be counsel to
      the
      indemnifying party), and after notice from the indemnifying party to such
      indemnified party of its election so to assume the defense thereof, the
      indemnifying party will not be liable to such indemnified party under this
      Section 7 for any legal or other expenses subsequently incurred by such
      indemnified party in connection with the defense thereof other than reasonable
      costs of investigation unless (i) the named parties in any such proceeding
      include both the indemnified party and the indemnifying party and representation
      of both parties by the same counsel would be inappropriate due to actual or
      potential differing interest between them, (ii) the indemnifying party shall
      not
      have employed counsel reasonably satisfactory to the indemnified party to
      represent the indemnified party within a reasonable time after notice of
      commencement of the action and assumption of the defense thereof, or (iii)
      the
      indemnifying party has authorized in writing the employment of counsel for
      the
      indemnified party; it is understood that the indemnifying party 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 parties.  No indemnifying
      party shall, without the prior written consent of the indemnified party, effect
      any settlement of any pending or threatened action in respect of which any
      indemnified party is or could have been a party and indemnity could have been
      sought hereunder by such indemnified party unless such settlement includes
      an
      unconditional release of such indemnified party from all liability on any claims
      that are the subject matter of such action and does not include a statement
      as
      to, or an admission of, fault, culpability or failure to act by or on behalf
      of
      any indemnified party.  No indemnifying party shall be liable under
      this section for any settlement of any claim or action effected without its
      prior written consent, which shall not be unreasonably withheld.

     

    (d)  If
      the
      indemnification provided for in this Section 7 is unavailable or insufficient
      to
      hold harmless an indemnified party under subsection (a) or (b) above, then
      in
      order to provide for just and equitable contribution, each indemnifying party
      shall contribute to the amount paid or payable by such indemnified party as
      a
      result of the losses, claims, damages, expenses or liabilities referred to
      in
      subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
      the relative benefits received by the CSRC, SOAI and FSC on the one hand and
      the
      Initial Purchaser on the other from the offering of the Offered 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
      CSR, SOAI and FSC on the one hand and the Initial Purchaser on the other in
      connection with the statements or omissions which resulted in such losses,
      claims, damages or liabilities as well as any other relevant equitable
      considerations.  The relative benefits received by CSRC, SOAI and FSC
      on the one hand and the Initial Purchaser on the other shall be

     


    
      
         

      

      
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    deemed
      to
      be in the same proportion as the total net proceeds from the sale of the Offered
      Certificates (before deducting expenses) received by CSRC bear to the Initial
      Purchaser Fee.  The relative fault 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, on the one hand, or
      information supplied by the Initial Purchaser, on the other hand, and the
      parties’ relative intent, knowledge, access to information and opportunity to
      correct or prevent such untrue statement or omission with respect to the Offered
      Certificates and any other equitable consideration appropriate under the
      circumstances.  The amount paid by an indemnified party as a result of
      the losses, claims, damages, expenses or liabilities referred to in the first
      sentence of this subsection (d) shall be deemed to include any expenses
      reasonably incurred by such indemnified party in connection with investigating
      or defending any action or claim which is the subject of this subsection
      (d).  Notwithstanding the provisions of this subsection (d), the
      Initial Purchaser shall not be required to contribute any amount in excess
      of
      the amount by which the Initial Purchaser Fee exceeds the amount of damages
      which the Initial Purchaser has otherwise been required to pay by reason of
      such
      untrue or alleged untrue statement or omission or alleged omission with respect
      to the Offered Certificates.  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.

     

    (e)  The
      obligations of CSRC, SOAI and FSC under this section shall be in addition to
      any
      liability which CSRC, SOAI and FSC may otherwise have and shall extend, upon
      the
      same terms and conditions, to the directors and officers of the Initial
      Purchaser and each Person, if any, who controls the Initial Purchaser within
      the
      meaning of the Securities Act; and the obligations of the Initial Purchaser
      under this section shall be in addition to any liability which the Initial
      Purchaser may otherwise have and shall extend, upon the same terms and
      conditions and to each Person, if any, who controls CSRC, SOAI or FSC within
      the
      meaning of the Securities Act.

     

    8.  Survival
      of Certain Representations and Obligations.  The respective
      indemnities, agreements, representations, warranties and other statements of
      CSRC, SOAI  or FSC or their respective officers and of the Initial
      Purchaser or its officers set forth in or made pursuant to this Agreement will
      remain in full force and effect, regardless of any investigation, or statement
      as to the results thereof, made by or on behalf of the Initial Purchaser, the
      Seller, FSC or the Servicer or any of their respective representatives, officers
      or directors or any controlling person, and will survive delivery of and payment
      for the Offered Certificates.  If this Agreement is terminated, in
      whole or in part, or for any reason other than solely because of the occurrence
      of an event specified in clauses (iii), (iv) or (v) of Section 6(b), and the
      purchase of the Offered Certificates is not consummated, the Seller shall remain
      responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4(f) and the obligations of the Seller, FSC and the Servicer
      pursuant to Section 7  shall remain in effect.

     

    9.  Notices.  All
      communications hereunder will be in writing and effective only upon receipt,
      and, if sent to the Initial Purchaser, will be mailed, delivered or telecopied
      and confirmed to the Initial Purchaser, at the following address:

     


    
      
         

      

      
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    Barclays
      Capital Inc.

    200
      Park
      Avenue

    New
      York,
      New York  10166

    Attention:  Giuseppe
      Pagano

    Facsimile:  (212)
      412-6846

     

    if
      sent
      to CSRC, FSC or SOAI, will be mailed, delivered or telecopied and confirmed
      to
      the CSRC, FSC or SOAI, at the following address:

     

    1103
      Allen Drive

    Milford,
      Ohio  45150

    Attention:  President

    Facsimile:  (513)
      576-5320

     

    with
      a
      copy to:

     

    General
      Counsel

    Charming
      Shoppes, Inc.

    450
      Winks
      Lane

    Bensalem,
      PA  19020

    Facsimile:  (215)
      638-6919

     

    10.  Other
      Services.  Nothing in this Agreement is intended to obligate or
      commit the Initial Purchaser or any of its affiliates to provide any services
      other than as set forth herein.

     

    11.  Successors.  This
      Agreement will inure to the benefit of and be binding upon the parties hereto
      and their respective successors and assigns and the officers and directors
      and
      controlling persons referred to in Section 7 hereof, and no other person
      will have any right or obligation hereunder.

     

    12.  APPLICABLE
      LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
      ACCORDANCE WITH LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
      OF
      LAWS PROVISIONS THEREOF.

     

    13.  Benefit
      of Agreement.  This Agreement shall inure to the benefit of and be
      binding upon Seller, the Servicer, FSC, the Initial Purchaser, 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 Offered Certificates from
      the Initial Purchaser shall be deemed to be a successor by reason merely of
      such
      purchase.

     

    Each
      of the Seller, FSC and SOAI
      acknowledges and agrees that (i) the purchase and sale of the Offered
      Certificates pursuant to this Agreement, including the determination of the
      offering price of the Offered Certificates and any related discounts and
      commissions, is an arm’s-length commercial transaction between the Seller, FSC
      and SOAI, on the one hand, and the Initial Purchaser, on the other hand, and
      the
      Seller, FSC and SOAI are capable of evaluating and understanding, and understand
      and accept the terms, risks and conditions of the transactions

     


    
      
         

      

      
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    contemplated
      by this Agreement; (ii) in connection with the transaction contemplated hereby
      and the process leading to such transaction, the Initial Purchaser is and has
      been acting solely as a principal and is not the agent or fiduciary of the
      Seller, FSC, SOAI or their respective Affiliates, stockholders, creditors or
      employees or any other party; (iii) the Initial Purchaser has not assumed and
      will not assume an advisory or fiduciary responsibility in favor of the Seller,
      FSC or SOAI with respect to the transaction contemplated hereby or the process
      leading thereto (irrespective of whether the Initial Purchaser has advised
      or is
      currently advising the Seller, FSC or SOAI on other matters) or any other
      obligations to the Seller, FSC or SOAI, except the obligations expressly set
      forth in this Agreement; (iv) the Initial Purchaser and its Affiliates may
      be
      engaged in a broad range of transactions that involve interests that differ
      from
      those of the Seller, FSC and SOAI, and that the Initial Purchaser has no
      obligation to disclose to the Seller, FSC or SOAI any of such interests by
      virtue of any relationship hereunder; and (v) the Initial Purchaser has not
      provided any legal, accounting, regulatory or tax advice with respect to the
      offering contemplated hereby and the Seller, FSC and SOAI have consulted their
      own legal, accounting, regulatory and tax advisors to the extent they deemed
      appropriate.

     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     

    


     


    
      
         

      

      
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    If
      the
      foregoing is in accordance with your understanding of our agreement, kindly
      sign
      and return to us the enclosed duplicate hereof, whereupon it will become a
      binding agreement among the Seller, FSC, SOAI and the Initial Purchaser in
      accordance with its terms.

     

    
      	
              Very
                truly yours,

            
	 
	
              CHARMING
                SHOPPES RECEIVABLES CORP.

            
	 
	 
	
              By:_____________________________________

            
	
              Name:

            
	
              Title:

            
	 
	 
	
              SPIRIT
                OF AMERICA, INC.

            
	 
	 
	
              By:_____________________________________

            
	
              Name:

            
	
              Title:

            
	 
	 
	
              FASHION
                SERVICE CORP.

            
	 
	 
	
              By:_____________________________________

            
	
              Name:

            
	
              Title:

            


    

    


    
      	
              The
                foregoing Certificate Purchase Agreement

            
	
              is
                hereby confirmed and accepted as

            
	
              of
                the date first above written:

            
	
              BARCLAYS
                CAPITAL INC.,

            
	
              as
                the Initial Purchaser

            
	 
	 
	
              By________________________________

            
	
              Name:

            
	
              Title:

            


    

    



    
      
         

      

      
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