EXHIBIT 10(d)
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Fingerhut Receivables, Inc.
Buyer
and
Fingerhut Companies, Inc.
Seller
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Amended and Restated
Purchase Agreement
Dated as of March 18, 1998
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . . . . . . . . . 3
ARTICLE II
PURCHASE, CONVEYANCE AND SERVICING OF RECEIVABLES
Section 2.1 Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1 Purchase Price. . . . . . . . . . . . . . . . . . . . . . 8
Section 3.2 Payment of Purchase Price . . . . . . . . . . . . . . . . 8
Section 3.3 Settlement. . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Seller's Representations
and Warranties. . . . . . . . . . . . . . . . . . . . . .10
Section 4.2 Seller's Representations and
Warranties Regarding Receivables
Section 4.3 Representations and Warranties . . . . . . . . . . . . .13
of the Buyer. . . . . . . . . . . . . . . . . . . . . . .15
ARTICLE V
COVENANTS OF SELLER AND BUYER
Section 5.1 Seller Covenants. . . . . . . . . . . . . . . . . . . . .18
Section 5.2 Addition of Receivables . . . . . . . . . . . . . . . . .20
Section 5.3 Buyer Covenant Regarding Sale
Treatment . . . . . . . . . . . . . . . . . . . . . . . .21
Section 5.4 Buyer Covenant Regarding
Separate Business. . . . . . . . . . . . . . . . . . . ..21
Section 5.5 Covenants of Seller with
Respect to this Agreement . . . . . . . . . . . . . . . .23
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1 Mandatory Repurchase. . . . . . . . . . . . . . . . . . .25
Section 6.2 Conveyance of Reassigned Receivables. . . . . . . . . . .26
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to the Buyer's
Obligations Regarding Receivables . . . . . . . . . . . .28
Section 7.2 Conditions Precedent to the
Seller's Obligations. . . . . . . . . . . . . . . . . . .28
ARTICLE VIII
TERM AND TERMINATION
Section 8.1 Term. . . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 8.2 Effect of Termination . . . . . . . . . . . . . . . . . .30
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . .32
Section 9.2 Governing Law . . . . . . . . . . . . . . . . . . . . . .32
Section 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . .32
Section 9.4 Severability of Provisions. . . . . . . . . . . . . . . .33
Section 9.5 Assignment. . . . . . . . . . . . . . . . . . . . . . . .33
Section 9.6 Further Assurances. . . . . . . . . . . . . . . . . . . .33
Section 9.7 No Waiver; Cumulative Remedies. . . . . . . . . . . . . .34
Section 9.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . .34
Section 9.9 Binding Effect; Third-Party
Beneficiaries . . . . . . . . . . . . . . . . . . . . . .34
Section 9.10 Xxxxxx and Integration. . . . . . . . . . . . . . . . . .34
Section 9.11 Headings. . . . . . . . . . . . . . . . . . . . . . . . .34
Section 9.12 Xxxxxxxxx and Exhibits. . . . . . . . . . . . . . . . . .34
Section 9.13 No Bankruptcy Petition Against
the Buyer . . . . . . . . . . . . . . . . . . . . . . . .35
Section 9.14 Merger or Consolidation of,
or Assumption of the Obligations
of, the Seller. . . . . . . . . . . . . . . . . . . . . .35
Section 9.15 Protection of Right, Title and
Interest to Receivables . . . . . . . . . . . . . . . . .36
AMENDED AND RESTATED PURCHASE AGREEMENT
AMENDED AND RESTATED PURCHASE AGREEMENT, dated as of March 18, 1998
(the "Agreement"), by and between FINGERHUT COMPANIES, INC., a Minnesota
corporation (the "Seller"), and FINGERHUT RECEIVABLES, INC., a Delaware
corporation ("FRI" or the "Buyer").
W I T N E S S E T H :
WHEREAS, the Buyer desires to purchase from time to time certain
installment sale or installment credit card loan receivables and/or certain
consumer revolving credit card receivables (including private label credit
card receivables) generated or acquired on or after the Initial Closing Date
by the Seller, the Bank or any Affiliate thereof;
WHEREAS, the Seller desires to sell and assign from time to time such
receivables to the Buyer upon the terms and conditions hereinafter set
forth;
WHEREAS, the Buyer is an Affiliate of the Seller;
WHEREAS, the Seller and the Buyer previously entered into that certain
Purchase Agreement dated as of the Initial Closing Date and wish to amend
and restate such agreement as set forth herein;
NOW, THEREFORE, it is hereby agreed by and between the Buyer and the
Seller as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. For all purposes of this Agreement, except
as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms used herein have the following meanings assigned
to them:
"Amendment Date" shall mean the date of this Agreement.
"Bank" shall mean Fingerhut National Bank.
"Credit Adjustment" shall have the meaning set forth in Section 3.2(b)
hereof.
"Debtor Relief Law" shall mean any of (i) the Bankruptcy Code of the
United States of America, as amended, and (ii) all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments,
readjustment of debt, marshalling of assets or similar debtor relief laws of
the United States, any state or any foreign country from time to time in
effect affecting the rights of creditors generally.
"Independent Director" shall have the meaning set forth in subsection
5.4(vii) hereof.
"Initial Closing Date" shall mean January 12, 1997.
"Involuntary Case" shall have the meaning set forth in Section 2.1(c)
hereof.
"Obligor" shall mean a Person obligated to make payments with respect
to a Receivable pursuant to a Contract.
"Opinion of Counsel" shall mean a written opinion of counsel acceptable
to the Buyer and the Seller, which counsel may be an employee of the Person
providing the opinion.
"Outstanding Balance" shall mean (a) with respect to any Closed End
Receivable on any day, the aggregate amount owed by the Obligor thereunder
(net of returns and adjustments) assuming that the related Obligor has
selected the installment credit terms with respect to such Receivable and
(b) with respect to any Revolving Receivable, the outstanding principal
balance of such receivable (not including any amounts related to Periodic
Finance Charges or other fees).
"Pooling and Servicing Agreement" shall mean the Amended and Restated
Pooling and Servicing Agreement dated as of the Amendment Date among FRI, as
Transferor, Fingerhut National Bank, as Servicer, and The Bank of New
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York (Delaware), as Trustee, and any amendments and supplements thereto.
"Purchase Price" shall have the meaning set forth in Section 3.1
hereof.
"Reassignment Date" shall have the meaning set forth in Section 6.1(b)
hereof.
"Sale Papers" shall have the meaning set forth in Section 4.1(a)
hereof.
"Secured Obligations" shall have the meaning set forth in Section
2.1(f) hereof.
"Seller's Discount" shall mean, for any day on which Receivables are
conveyed hereunder, the discount used to determine the Seller's accounting
basis in the Receivables on such day.
"Termination Date" shall have the meaning set forth in Section 8.1
hereof.
Section 1.2 Other Definitional Provisions. The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this
Agreement or any Sale Paper refer to this Agreement as a whole and not to
any particular provision of this Agreement; and Section, subsection,
Schedule and Exhibit references contained in this Agreement are references
to Sections, subsections, Schedules and Exhibits in or to this Agreement
unless otherwise specified. All capitalized terms not otherwise defined
herein are defined in the Pooling and Servicing Agreement. In the event
that any term or provision contained herein conflicts with or is
inconsistent with any provisions contained in the Pooling and Servicing
Agreement, the terms and provisions contained herein shall govern with
respect to this Agreement.
[END OF ARTICLE I]
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ARTICLE II
PURCHASE, CONVEYANCE AND SERVICING
OF RECEIVABLES
Section 2.1 Sale. (a) In consideration for the Purchase Price and
upon the terms and subject to the conditions set forth herein, the Seller
does hereby sell, assign, transfer, set-over, and otherwise convey to the
Buyer, and the Buyer does hereby purchase from the Seller, on the terms and
subject to the conditions specifically set forth herein, all of the Seller's
right, title and interest in, to and under (i) the Receivables now existing
and hereafter created, in each case, immediately upon the Seller's
acquisition of rights therein (or, on the Amendment Date, with respect to
Receivables previously purchased by FCI, immediately upon effectiveness of
this amended Agreement), including, without limitation, all accounts,
general intangibles, chattel paper, contract rights, and other obligations
of any Obligor with respect to the Receivables, now or hereafter existing,
(ii) all monies and investments due or to become due with respect thereto
(including, without limitation, the right to any Finance Charge Receivables,
including any Recoveries), (iii) all proceeds of such Receivables and (iv)
the Bank Receivables Purchase Agreement with respect to Receivables arising
under Eligible Accounts. The foregoing sale, transfer, assignment, set-over
and conveyance does not constitute and is not intended to result in a
creation or an assumption by the Buyer of any obligation of the Seller or
any other Person in connection with the Receivables or any agreement or
instrument relating thereto, including, without limitation, any obligation
to any Obligors, merchants, servicers or insurers, or in connection with the
Bank Receivables Purchase Agreement.
(b) In connection with the foregoing sale, the Seller agrees to record
and file, at its own expense, one or more financing statements (including
any amendments or continuation statements with respect to such financing
statements when applicable) with respect to the Receivables and the other
property described in Section 2.1(a) sold by the Seller hereunder for the
transfer of accounts, chattel paper or general intangibles (each as defined
in Section 9-106 of the UCC as in effect in the
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Relevant UCC State) meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to perfect and protect the
interests of the Buyer created hereby under the applicable UCC against all
creditors of and purchasers from the Seller, and to deliver file-stamped
copies of such financing statements or continuation statements or other
evidence of such filings (which may, for purposes of this Section 2.1,
consist of facsimile confirmation of such filing) to the Buyer within 10
days after the Initial Closing Date, and in the case of any amendments or
continuation statements filed pursuant to this Section 2.1, as soon as
practicable after receipt thereof by the Seller.
(c) The Buyer shall not purchase Receivables hereunder if the Seller
shall become an involuntary party to (or be made the subject of) any
bankruptcy proceeding or any other insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating
to the Seller or relating to all or substantially all of its property (an
"Involuntary Case") upon receipt by the Seller at its head corporate office
of notice of such Involuntary Case.
(d) The Buyer shall not purchase Receivables hereunder if the Seller
shall admit in writing its inability to pay its debts as they are due, or
the Seller shall commence a voluntary case under the federal bankruptcy
laws, as now or hereafter in effect, or any present or future federal or
state bankruptcy, insolvency or similar law, or the Seller shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Seller or
of any substantial part of its property or the Seller shall make an
assignment for the benefit of creditors or the Seller shall fail generally
to pay its debts as such debts become due or the Seller shall take corporate
action in furtherance of any of the foregoing.
(e) In connection with the sale and conveyance hereunder, the Seller
agrees, at its own expense, on or prior to the Initial Closing Date and on
each Business Day thereafter, to indicate or cause to be indicated clearly
and
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unambiguously in its accounting records, and with respect to any Receivables
purchased by the Seller from the Bank, to cause the Bank to indicate clearly
and unambiguously in the Bank's accounting records, that such Receivables
and the other property described in clauses (i), (ii), (iii) and (iv) of
Section 2.1(a) have been sold to the Buyer pursuant to this Agreement as of
the Initial Closing Date or such Business Day as applicable.
(f) It is the express intent of the Seller and the Buyer that the
conveyance of the Receivables by the Seller to the Buyer pursuant to this
Agreement be construed as a sale of such Receivables by the Seller to the
Buyer. It is, further, not the intention of the Seller and the Buyer that
such conveyance be deemed a grant of a security interest in the Receivables
by the Seller to the Buyer to secure a debt or other obligation of the
Seller. However, in the event that, notwithstanding the intent of the
parties, the Receivables are held to continue to be property of the Seller,
then (i) this Agreement also shall be deemed to be and hereby is a security
agreement within the meaning of the UCC; and (ii) the conveyance by the
Seller provided for in this Agreement shall be deemed to be and the Seller
hereby grants to the Buyer a security interest in and to all of the Seller's
right, title and interest in and to (w) all Receivables outstanding on the
Initial Closing Date and thereafter created or acquired by the Seller, in
each case, immediately upon the Seller's acquisition of rights therein (or,
on the Amendment Date, with respect to Receivables previously purchased by
FCI, immediately upon effectiveness of this amended Agreement), and all
rights (but not the obligations) relating to such Receivables, including,
without limitation, all "accounts", "chattel paper" or "general intangibles"
(each as defined in the UCC as in effect in the Relevant UCC State) with
respect to the Receivables outstanding on the Initial Closing Date and
thereafter created or acquired by the Seller, (x) all monies and investments
due or to become due with respect thereto, (y) the Bank Receivables Purchase
Agreement with respect to Receivables arising under Eligible Accounts and
(z) all proceeds of the foregoing to secure (1) the rights of the Buyer and
(2) a loan to the Seller in the amount of the aggregate Purchase Price of
all Receivables outstanding from time to time as set forth in this Agreement
(the "Secured Obligations"). The Seller and the Buyer shall, to the extent
consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in
the Receivables, such security interest would be deemed
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to be a perfected security interest of first priority in favor of the Buyer
under applicable law and will be maintained as such throughout the term of
this Agreement.
[END OF ARTICLE II]
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ARTICLE III
CONSIDERATION AND PAYMENT
Section 3.1 Purchase Price. The purchase price for the Receivables
and related property conveyed to the Buyer under this Agreement (the
"Purchase Price") shall be a dollar amount equal to, for Receivables sold on
any date, the product of (i) the aggregate Outstanding Balance of all such
Receivables as of such date, and (ii) one minus the then applicable Seller's
Discount.
Section 3.2 Payment of Purchase Price. (a) The Purchase Price for
Receivables shall be paid or provided for on the Initial Closing Date with
respect to the Receivables existing on the Initial Closing Date and on each
Business Day thereafter on which Receivables are transferred hereunder, as
the case may be, by payment in immediately available funds to the extent
such funds are available. To the extent that the total Purchase Price for
Receivables is not paid in full by the Buyer on the Initial Closing Date or
on each Business Day on which Receivables are purchased hereunder in cash
and the Seller is the direct corporate parent of the Buyer, the Seller shall
be deemed on the first Business Day of the following week to have
contributed Receivables in an aggregate principal amount equal to such
shortfall to the Buyer.
(b) The Purchase Price shall be reduced on a daily basis (a "Credit
Adjustment") with respect to any Receivable adjusted as provided in
subsection 3.8 of the Pooling and Servicing Agreement in an amount equal to
the amount of such Credit Adjustment specified in subsection 3.8 of the
Pooling and Servicing Agreement. If the Buyer is required thereunder to
deposit amounts into the Excess Funding Account pursuant to subsection 3.8
of the Pooling and Servicing Agreement, the Purchase Price shall not be
reduced by such amount and, the Seller shall pay the amount so adjusted to
the Buyer.
Section 3.3 Settlement. On each Monday (or if any Monday is not a
Business Day the next succeeding Business Day), the Seller shall deliver to
the Buyer a weekly report showing the aggregate Purchase Price of
Receivables generated or acquired, the aggregate amount of Receivables
deemed to have been contributed by the
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Seller to the Buyer, the aggregate amount, if any, paid to the Buyer
pursuant to Section 6.1 hereof, and the aggregate amount of cash paid for
Receivables generated or acquired in each case for the period from and
including the preceding Monday (or next succeeding Business Day, as
applicable) to but not including such Monday.
[END OF ARTICLE III]
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Seller's Representations and Warranties. The Seller
hereby represents and warrants to the Buyer as of the Initial Closing Date,
and shall be deemed to represent and warrant as of the date of any
Supplement and the related Closing Date, that:
(a) Organization and Good Standing. The Seller is a corporation duly
organized and validly existing and in good standing under the laws of the
State of Minnesota and has the corporate power and authority and legal right
to own its properties and conduct its business as such properties are
presently owned and as such business is presently conducted, and to execute,
deliver and perform its obligations under this Agreement and each other
document or instrument to be delivered by the Seller hereunder
(collectively, the "Sale Papers").
(b) Due Qualification. The Seller is duly qualified to do business and
is in good standing (or is exempt from such requirements), as a foreign
corporation in any state required in order to conduct its business, and has
obtained all necessary licenses and approvals with respect to the Seller
required under applicable law; provided, however, that no representation or
warranty is made with respect to any qualifications, licenses or approvals
which the Buyer would have to obtain to do business in any state in which
the Buyer seeks to enforce any Receivable.
(c) Due Authorization. The execution and delivery of the Sale Papers,
and the consummation of the transactions provided for herein and therein
have been duly authorized by the Seller by all necessary corporate action on
its part.
(d) Binding Obligation. Each of the Sale Papers, and the consummation
of the transactions provided for herein and therein, constitutes a legal,
valid and binding obligation of the Seller, enforceable in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereinafter in effect, affecting the enforcement of creditors' rights
10
in general and as such enforceability may be limited by general principles
of equity (whether considered in a proceeding at law or in equity).
(e) No Conflicts. The execution and delivery of the Sale Papers and
the performance of the transactions contemplated hereby and thereby, do not
(i) contravene the Seller's charter or bylaws, (ii) violate any material
provision of law applicable to it, or (iii) require any filing (except for
the filings under the UCC), registration, consent or approval under, any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the
Seller, except for such filings, registrations, consents or approvals as
have already been obtained and are in full force and effect.
(f) Taxes. Except as specified on Schedule 2, the Seller has filed all
tax returns required to be filed and has paid or made adequate provision for
the payment of all taxes, assessments and other governmental charges due
from the Seller or is contesting any such tax, assessment or other
governmental charge in good faith through appropriate proceedings.
(g) No Violation. The execution and delivery of the Sale Papers, the
performance of the transactions contemplated by the Sale Papers and the
fulfillment of the terms hereof and thereof, will not violate any
Requirements of Law applicable to the Seller, will not violate, result in
any breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under (i) any
Requirement of Law applicable to the Seller, or (ii) any material indenture,
contract, agreement, mortgage, deed of trust or other material instrument to
which the Seller is a party or by which it or its properties are bound.
(h) No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of the Seller, threatened against the Seller
before any Governmental Authority (i) asserting the invalidity of the Sale
Papers, (ii) seeking to prevent the consummation of any of the transactions
contemplated hereby and thereby, (iii) seeking any determination or ruling
that would materially and adversely affect the performance by the Seller of
its obligations thereunder or (iv) seeking
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any determination or ruling that would materially and adversely affect the
validity or enforceability thereof.
(i) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Governmental Authority required in connection
with the execution and delivery of the Sale Papers, the performance of the
transactions contemplated by the Sale Papers and the fulfillment of the
terms hereof and thereof, have been obtained.
(j) Bona Fide Receivables. Each Receivable is or will be an account
receivable arising out of the performance by the applicable Originator in
accordance with the terms of the Contract giving rise to such Receivable.
The Seller has no knowledge of any fact which should have led it to expect
at the time of the classification of any Receivable as an Eligible
Receivable that such Receivable would not be paid in full when due, and each
Receivable classified as an Eligible Receivable by the Seller in any
document or report delivered under this Agreement satisfies the requirements
of eligibility contained in the definition of Eligible Receivable set forth
in the Pooling and Servicing Agreement.
(k) Place of Business. The principal executive offices of the Seller
are in Minnetonka, Minnesota and the offices where the Seller keeps its
records concerning the Receivables and related Contracts are in Minnetonka,
Minnesota, St. Cloud, Minnesota and Hennepin County, Minnesota.
(l) Use of Proceeds. No proceeds of the sale of any Receivable
hereunder received by the Seller will be used by the Seller to purchase or
carry any margin security.
(m) Pay Out Event. No Pay Out Event and no condition that with the
giving of notice and/or the passage of time would constitute a Pay Out Event
(a "Prospective Pay Out Event"), has occurred and is continuing.
(n) Not an Investment Company. The Seller is not an "investment
company" within the meaning of the Investment Company Act, or is exempt from
all provisions of such Act.
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The representations and warranties set forth in this Section 4.1 shall
survive the sale of the Receivables to the Buyer. Upon discovery by the
Seller or the Buyer of a material breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice thereof to the other.
Section 4.2 Seller's Representations and Warranties Regarding
Receivables.
(a) Valid Sale, etc. The Seller (x) hereby represents and warrants as
of the Amendment Date, with respect to the Receivables acquired by the
Seller on such date and (y) shall be deemed to represent and warrant as of
the date of the acquisition by the Seller and transfer to the Buyer of any
Receivables with respect to such Receivables, that:
(i) Each of this Agreement and the Bank Receivables Purchase
Agreement constitutes the legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms,
except (A) as 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 (B) as such enforceability may be
limited by general principles of equity (whether considered in a suit
at law or in equity).
(ii) The transfer of Receivables by the Seller to the Buyer under
this Agreement constitutes a valid sale, transfer, assignment, set-over
and conveyance to the Buyer of all right, title and interest of the
Seller in and to the Receivables, whether then existing or thereafter
created, and such Receivables will be held by the Buyer free and clear
of any Lien of any Person claiming through or under the Seller or any
of its Affiliates except for Permitted Liens. This Agreement
constitutes a valid sale, transfer, assignment, set-over and conveyance
to the Buyer of all right, title and interest of the Seller in and to
the Receivables purported to be sold hereunder, whether then existing
or thereafter
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created and all monies due or to become due and all proceeds
thereof.
(iii) The Seller is not insolvent and will not be rendered
insolvent upon sale of the Receivables to the Buyer.
(iv) The Seller is (or, with respect to Receivables arising after
the date hereof, will be) the legal and beneficial owner of all right,
title and interest in and to each Receivable and each Receivable has
been or will be transferred to the Buyer free and clear of any Lien
other than Permitted Liens.
(v) All consents, licenses, approvals or authorizations of or
registrations or declarations with any Governmental Authority required
in connection with the transfer of such Receivables to the Buyer have
been obtained.
(vi) Each Account classified as an "Eligible Account" by the
Seller in any document or report delivered hereunder on or after the
Amendment Date will satisfy the requirements contained in the
definition of Eligible Account as of the time of such document or
report and each Receivable classified as an "Eligible Receivable" by
the Seller in any document or report delivered hereunder will satisfy
the requirements contained in the definition of Eligible Receivable as
of the time of such document or report.
(vii) Each Receivable then existing has been conveyed to the Buyer
free and clear of any Lien of any Person claiming through or under the
Seller or any of its Affiliates (other than Permitted Liens) and in
compliance, in all material respects, with all Requirements of Law
applicable to the Seller.
(b) Daily Representations and Warranties. On each day on which any new
Eligible Receivable is created or acquired by the Seller, the Seller shall
be deemed to represent and warrant to the Buyer that (A) each Eligible
Receivable purchased by the Buyer on such day has been conveyed to the Buyer
in compliance, in all material
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respects, with all Requirements of Law applicable to the Seller and free and
clear of any Lien of any Person claiming through or under the Seller or any
of its Affiliates (other than Permitted Liens) and (B) with respect to each
such Receivable, all consents, licenses, approvals or authorizations of or
registrations or declarations with, any Governmental Authority required to
be obtained, effected or given by the Seller in connection with the
conveyance of such Receivable to the Buyer have been duly obtained, effected
or given and are in full force and effect.
(c) Notice of Breach. The representations and warranties set forth in
this Section 4.2 shall survive the sale, transfer and assignment of the
respective Receivables to the Buyer. Upon discovery by the Seller or the
Buyer of a breach of any of the representations and warranties set forth in
this Section 4.2, the party discovering such breach shall give prompt
written notice thereof to the other. The Seller agrees to cooperate with
the Buyer in attempting to cure any such breach.
Section 4.3 Representations and Warranties of the Buyer. The Buyer
hereby represents and warrants and agrees with, as of the date hereof and as
of the Initial Closing Date, the Seller and shall be deemed to represent and
warrant as of the date of the creation of any Receivable sold to the Buyer
hereunder that:
(a) Organization and Good Standing. The Buyer is a corporation duly
organized and validly existing and in good standing under the laws of the
State of Delaware and has the corporate power and authority and legal right
to own its property and conduct its business as such properties are
presently owned and such business is presently conducted and to execute,
deliver, and perform its obligations under the Sale Papers.
(b) Due Qualification. The Buyer is duly qualified to do business and
is in good standing (or is exempt from such requirements) as a foreign
corporation in any state required in order to conduct business and has
obtained all necessary licenses and approvals with respect to the Buyer
required under federal and Delaware law.
15
(c) Due Authorization. The execution and delivery of the Sale Papers
and the consummation of the transactions provided for in the Sale Papers
have been duly authorized by the Buyer by all necessary corporate action on
its part.
(d) No Conflicts. The execution and delivery of the Sale Papers and
the performance of the transactions contemplated thereby do not (i)
contravene the Buyer's certificate of incorporation or bylaws or (ii)
violate any material provision of law applicable to it, or require any
filing (except for the filings under the UCC), registration, consent or
approval under, any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Buyer, except for such filings, registrations, consents
or approvals as have already been obtained and are in full force and effect.
(e) No Violation. The execution and delivery of the Sale Papers, the
performance of the transactions contemplated by the Sale Papers, and the
fulfillment of the terms of the Sale Papers will not violate any
Requirements of Law applicable to the Buyer, will not violate, result in any
breach of any of the material terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under any Requirement
of Law applicable to the Buyer, or any material indenture, contract,
agreement, mortgage, deed of trust or other material instrument to which the
Buyer is a party or by which it or its properties are bound.
(f) No Proceedings. There are no proceedings or investigations pending
or, to the best knowledge of the Buyer, threatened against the Buyer, before
any Governmental Authority (i) asserting the invalidity of the Sale Papers,
(ii) seeking to prevent the consummation of any of the transactions
contemplated by the Sale Papers, (iii) seeking any determination or ruling
that would materially and adversely affect the performance by the Buyer of
its obligations thereunder or (iv) seeking any determination or ruling that
would materially and adversely affect the validity or enforceability of the
Sale Papers.
(g) All Consents Required. All approvals, authorizations, consents,
orders, or other actions of any
16
Governmental Authority required in connection with the execution and
delivery of the Sale Papers, the performance of the transactions
contemplated by the Sale Papers, and the fulfillment of the terms of the
Sale Papers have been obtained.
The representations and warranties set forth in this Section 4.3 shall
survive the sale of the Receivables to the Buyer. Upon discovery by the
Buyer or the Seller of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written
notice to the other.
[END OF ARTICLE IV]
17
ARTICLE V
COVENANTS OF SELLER AND BUYER
Section 5.1 Seller Covenants. The Seller hereby covenants that:
(a) Receivables to be Accounts, Chattel Paper or General Intangibles.
The Seller will take no action to cause any Receivable to be evidenced by
any instrument (as defined in the UCC as in effect in the Relevant UCC
State), except in connection with the enforcement or collection of a
Receivable. Except in such circumstances, the Seller will take no action to
cause any Receivable to be anything other than an "account", "chattel paper"
or a "general intangible" (each as defined in the UCC as in effect in the
Relevant UCC State).
(b) Security Interests. Except for the conveyances hereunder, the
Seller will not sell, pledge, assign or transfer to any other Person, or
grant, create, incur, assume or suffer to exist any Lien, on any Receivable,
whether now existing or hereafter created, or any interest therein; the
Seller will immediately notify the Buyer of the existence of any Lien on any
Receivable; and the Seller shall defend the right, title and interest of the
Buyer in, to and under the Receivables, whether now existing or hereafter
created, against all claims of third parties claiming through or under the
Seller; provided, however, that nothing in this subsection 5.1(b) shall
prevent or be deemed to prohibit the Seller from suffering to exist upon any
of the Receivables any Permitted Lien.
(c) Contracts and Credit and Collection Policies. The Seller shall take
all actions reasonably within its control to cause each Originator to comply
with and perform its obligations under the Contracts and the Accounts and the
Credit and Collection Policy except insofar as any failure so to comply or
perform would not materially and adversely affect the rights of the Buyer
hereunder. Except as such Originator deems necessary to maintain its credit
card business on a competitive basis or as required by law, it will not
reduce the annual percentage rates of the Periodic Finance Charges assessed
in the Receivables or other fees charged on the Accounts if, as a result of
any such reduction, a pay out event
18
(or other early termination event) would occur under any Pooling and
Servicing Agreement. Subject to compliance with all Requirements of Law,
the Seller may change, and permit an Originator to change, the terms and
provisions of the Contracts or the Credit and Collection Policy in any
respect (including the calculation of the amount, or the timing, of
charge-offs) (i) if it would not, in the reasonable belief of the Seller,
materially impair the collectibility of any Receivable or cause, immediately
or with the passage of time, a pay out event (or other early termination
event) to occur under any Pooling and Servicing Agreement and (ii) if such
change (A) (if it owns a comparable segment of receivables) is made
applicable to the comparable segment of the receivables owned by the Seller
or such Originator, if any, which have characteristics the same as, or
substantially similar to, the Receivables that are the subject of such
change and (B) (if it does not own such a comparable segment of receivables)
will not be made with the intent to materially benefit the Seller over the
Buyer or to materially adversely affect the Buyer, except as otherwise
restricted by an endorsement, sponsorship, or other agreement between the
Seller and an unrelated third party or by the terms of the Contracts.
(d) Delivery of Collections. In the event that the Seller receives
Collections, the Seller agrees to pay such Collections to the Buyer as soon
as practicable after the receipt thereof, but in no event later than the
second Business Day following the Date of Precessing thereof.
(e) Conveyance of Receivables. Except as provided in Section 9.5, the
Seller covenants and agrees that it will not convey, assign, exchange or
otherwise transfer any Receivable, to any Person other than the Buyer prior
to the termination of this Agreement pursuant to Article VIII; provided,
however, that the Seller shall not be prohibited hereby from conveying,
assigning, exchanging or otherwise transferring a Receivable in connection
with a transaction in which the Seller and its successor agree to comply
with provisions substantially similar to those of Section 9.14.
(f) Notice of Liens. The Seller shall notify the Buyer promptly after
becoming aware of any Lien on any Receivable other than Permitted Liens.
19
(g) Enforcement of Purchase Agreements. The Seller agrees to take all
action necessary and appropriate to enforce its rights and claims under this
Agreement and the Bank Receivables Purchase Agreement with respect to
Receivables arising under Eligible Accounts.
(h) Separate Business. The Seller will not permit its assets to be
commingled with those of the Buyer and the Seller shall maintain separate
corporate records and books of account from those of the Buyer. The Seller
will not conduct its business in the name of the Buyer and will cause the
Buyer to conduct its business solely in its own name so as not to mislead
others as to the identity of the entity with which those others are
concerned. The Seller will provide for its own operating expenses and
liabilities from its own funds. The Seller will not hold itself out, or
permit itself to be held out, as having agreed to pay, or as generally being
liable for, the debts of the Buyer. The Seller shall cause the Buyer not to
hold itself out, or permit itself to be held out, as having agreed to pay,
or as being liable for, the debts of the Seller. The Seller will maintain
an arm's length relationship with the Buyer with respect to any transactions
between the Seller, on the one hand, and the Buyer, on the other.
Section 5.2 Addition of Receivables.
Unless either the Seller or the Buyer shall provide written notice to
the other party in writing, all receivables which meet the definition of
Receivables shall be included as Receivables from and after the date upon
which such Receivables are created or acquired by the Seller and all such
Receivables, whether such Receivables are then existing or thereafter
created or acquired, shall be automatically sold to the Buyer, and
receivables which do not meet the definition of Receivables shall not be
sold to the Buyer. For the purpose of this Agreement, all receivables of
such Receivables shall be treated as Receivables upon their creation or
acquisition by the Seller and shall be subject to the eligibility criteria
specified in the definition of "Eligible Receivables" and "Eligible
Account". The Buyer shall provide the Seller with a copy of any notice to
the Trustee designating or excluding accounts as specified in the last
sentence of the definition of "Additional Accounts" in the Pooling and
Servicing Agreement.
20
Section 5.3 Buyer Covenant Regarding Sale Treatment. The Buyer agrees
to treat this conveyance for all purposes (including, without limitation,
tax and financial accounting purposes) as a sale on all relevant books,
records, tax returns, financial statements and other applicable documents.
Section 5.4 Buyer Covenant Regarding Separate Business. The Buyer
shall:
(i) Maintain in full effect its existence, rights and franchises
as a corporation under the laws of the state of its incorporation and
obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement and the
Pooling and Servicing Agreement and each other instrument or agreement
necessary or appropriate to effect proper administration hereof and to
permit and effectuate the transactions contemplated hereby.
(ii) Maintain its own deposit account or accounts, separate from
those of any Affiliate of the Buyer, with commercial banking
institutions. The funds of the Buyer will not be diverted to any other
Person or for other than the corporate use of the Buyer, and, except as
may be expressly permitted by this Agreement or the Pooling and
Servicing Agreement, the funds and assets of the Buyer shall not be
commingled with those of any Affiliate of the Buyer.
(iii) Ensure that, to the extent that it shares the same officers
or other employees as any of its stockholders or Affiliates, the
salaries of and the expenses related to providing benefits to such
officers and other employees shall be fairly allocated among such
entities, and each such entity shall bear its fair share of the salary
and benefit costs associated with all such common officers and
employees.
(iv) Ensure that, to the extent that it jointly contracts with any
of its stockholders or Affiliates to do business with vendors or
service providers or to share overhead expenses, the costs incurred in
so doing shall be allocated fairly among such entities, and each such
entity shall bear its fair share of such costs. To the extent that the
Buyer contracts or does business with vendors or service providers
where the goods and services provided are partially for the benefit of
any other Person, the costs
21
incurred in so doing shall be fairly allocated to or among such
entities for whose benefit the goods and services are provided, and
each such entity shall bear its fair share of such costs. All material
transactions between the Buyer and any of its Affiliates shall be only
on an arm's-length basis.
(v) Maintain a principal executive and administrative office
through which its business is conducted separate from those of its
stockholders and Affiliates. To the extent that the Seller and any of
its stockholders or Affiliates have offices in contiguous space, there
shall be fair and appropriate allocation of overhead costs among them,
and each such entity shall bear its fair share of such expenses.
(vi) Conduct its affairs strictly in accordance with its charter
and bylaws and observe all necessary, appropriate and customary
corporate formalities, including taking all actions of stockholders'
and directors' meetings appropriate to authorize all corporate action,
keeping separate and accurate minutes of such meetings, adopting all
resolutions or consents necessary to authorize actions taken or to be
taken, and maintaining accurate and separate books, records and
accounts, including payroll and intercompany transaction accounts.
(vii) Ensure that its Board of Directors shall be elected
independently from the Boards of Directors of its Affiliates and shall
at all times include at least two members of the Board of Directors of
the Buyer who are not and have not been (x) directors, officers,
employees or shareholders of FCI or Fingerhut or any Affiliate (other
than any other limited purpose subsidiary of either of any of them)
thereof within a period of three years prior to such Person's election
to the Board of Directors
22
or (y) a member of the immediate family of any of the foregoing).
(viii) Ensure that decisions with respect to its business and
daily operations shall be independently made by the Buyer (although the
officer making any particular decision may also be an officer or
director of an Affiliate of the Buyer) and shall not be dictated by an
Affiliate of the Buyer.
(ix) Act solely in its own corporate name and through its own
authorized officers and agents, and no Affiliate of the Buyer shall be
appointed to act as agent of the Buyer, except as expressly
contemplated by this Agreement or the Pooling and Servicing Agreement.
(x) Ensure that no Affiliate of the Buyer shall advance funds to
the Buyer, other than capital contributions from its corporate parent
made to enable the Buyer to pay the purchase price of Receivables or as
is otherwise provided in this Agreement, and no Affiliate of the Buyer
will otherwise supply funds to, or guaranty debts of, the Buyer;
provided, however, that its corporate parent may provide funds to the
Buyer in connection with capitalization of the Buyer to assure that the
Buyer has substantial assets.
(xi) Not enter into any guaranty, or otherwise become liable, with
respect to any obligation of any Affiliate of the Buyer.
(xii) Ensure that any financial reports required of the Buyer
shall comply with generally accepted accounting principles and shall be
issued separately from, but may be consolidated with, any reports
prepared for any of its Affiliates.
Section 5.5 Covenants of Seller with Respect to this Agreement. The
Seller, in its capacity as purchaser of the Receivables from any Originator,
hereby covenants that the Seller will at all times enforce the covenants and
agreements of each Originator, including, without limitation, the covenants
in the Bank Receivables Purchase Agreement with respect to the Credit and
Collection Policy.
23
The Seller further covenants that the Seller will not enter into or
consent to any amendments to the Bank Receivables Purchase Agreement unless
such amendment would be permitted pursuant to the first paragraph of
subsection 13.1(a) of the Pooling and Servicing Agreement (as if such
paragraph of subsection 13.1(a) of the Pooling and Servicing Agreement
related to the Bank Receivables Purchase Agreement rather than the Pooling
and Servicing Agreement) or the Rating Agency Condition shall have been
satisfied.
[END OF ARTICLE V]
24
ARTICLE VI
REPURCHASE OBLIGATION
Section 6.1 Mandatory Repurchase.
(a) Breach of Warranty. In the event of a breach with respect to a
Receivable of any of the representations and warranties set forth in Section
4.1(j) or subsections 4.2(a)(iii) through (vii) or Section 4.2(b), or in the
event that a Receivable is not an Eligible Receivable on the date of its
transfer to the Buyer as a result of the failure to satisfy the conditions
set forth in the definition of Eligible Receivable, such Receivable shall be
designated an "Ineligible Receivable" and the Seller shall pay to the Buyer
an amount in cash equal to the Purchase Price paid for any such Ineligible
Receivable by the Buyer. Such payment must be made by the close of business
on the fifth Business Day following the day such Receivable has been
designated an Ineligible Receivable; provided, however, that such amount
may be offset against any amounts due from the Buyer to the Seller with
respect to the Purchase Price for Receivables sold to the Buyer. The
obligation of the Seller set forth in this Section shall constitute the sole
remedy respecting any breach of the representations and warranties set forth
in the above-referenced Sections or failure to meet the conditions set forth
in the definition of Eligible Receivable with respect to such Receivable
available to the Buyer.
(b) Reassignment of the Sold Assets. In the event of a breach of any
of the representations and warranties set forth in Section 4.1(a), (b), and
(c) and 4.2(a)(i) and (ii), the Buyer by notice given in writing to the
Seller may direct the Seller to accept reassignment of the amount of
Receivables specified in subsection 2.4(e) of the Pooling and Servicing
Agreement (to the extent that such Receivables were sold to the Buyer by the
Seller) within 60 days of such notice (or within such longer period as may
be specified in such notice), and the Seller shall be obligated to accept
reassignment of the Receivables on a Distribution Date specified by the
Buyer (such Distribution Date, the "Reassignment Date") occurring within
such applicable period on the terms and conditions set forth below;
provided, however, that no
25
such reassignment shall be required to be made and no notice of such
reassignment may be given, if, at any time during such applicable period,
the Seller delivers to the Buyer an Officer's Certificate stating that the
representations and warranties contained in Section 4.1(a), (b), and (c) and
4.2(a)(i) and (ii) shall then be true and correct in all material respects.
The Seller shall pay to the Buyer on the day of such reassignment an amount
equal to the product of (i) the aggregate Invested Amount plus accrued and
unpaid interest on the Investor Securities, and (ii) a fraction, the
numerator of which is the Outstanding Balance of Principal Receivables sold
by the Seller to the Buyer hereunder, and the denominator of which is the
sum of the Outstanding Balance of Principal Receivables sold by the Seller
to the Buyer hereunder plus the outstanding balance of Principal Receivables
sold by Fingerhut Corporation to the Buyer pursuant to the receivables
purchase agreement dated as of June 29, 1994 between the Buyer, as purchaser
of such Receivables, and Fingerhut, as seller of such Receivables, as
amended from time to time. On the day on which such amount has been paid,
each Receivable sold to the Buyer hereunder shall be sold and reassigned to
the Seller, and the Buyer shall execute and deliver such instruments of sale
and assignment, in each case without recourse, representation or warranty,
as shall be reasonably requested by the Seller to vest in the Seller, or its
designee or assignee, all right, title and interest of the Buyer in and to
each such Receivable. The obligation of the Seller to purchase Receivables
pursuant to this Section shall constitute the sole remedy available to the
Buyer for a breach of the representations and warranties contained in
Section 4.1(a), (b), and (c) and 4.2(a)(i) and (ii).
Section 6.2 Conveyance of Reassigned Receivables. Upon the request of
the Seller, the Buyer shall execute and deliver to the Seller a reconveyance
substantially in such form and upon such terms as shall be acceptable to the
Seller, pursuant to which the Buyer evidences the conveyance to the Seller
of all of the Buyer's right, title, and interest in any Receivables
reconveyed to the Seller pursuant to Section 6.1(b). The Buyer shall (and
shall cause the Trustee to) execute such other documents or instruments of
conveyance or take such
26
other actions as the Seller may reasonably require to effect any repurchase
of Receivables pursuant to this Article VI.
[END OF ARTICLE VI]
27
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to the Buyer's Obligations Regarding
Receivables. The obligations of the Buyer to purchase the Receivables on
any Business Day shall be subject to the satisfaction of the following
conditions:
(a) All representations and warranties of the Seller contained in
Section 4.2 shall be true and correct on the Initial Closing Date and on the
day of purchase of any Receivable purchased thereafter with the same effect
as though such representations and warranties had been made on such date;
(b) All information concerning the Receivables provided to the Buyer
shall be true and correct in all material respects as of the Initial Closing
Date, in the case of Receivables sold to the Buyer on the Initial Closing
Date, or the applicable Date of Processing, in the case of Receivables
created after the Initial Closing Date;
(c) At the Initial Closing Date, the Seller shall have substantially
performed all other obligations required to be performed by the provisions
of this Agreement;
(d) With respect to Receivables sold to the Buyer on the Initial
Closing Date, the Seller shall have filed the financing statement(s)
required to be filed pursuant to Section 2.1(b); and
(e) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Buyer, and the Buyer shall have
received from the Seller copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Buyer may reasonably have requested.
Section 7.2 Conditions Precedent to the Seller's Obligations. The
obligations of the Seller to
28
sell Receivables on any Business Day shall be subject to the satisfaction of
the following conditions:
(a) All representations and warranties of the Buyer contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on such date;
(b) Payment or provision for payment of the Purchase Price in
accordance with the provisions of Section 3.3 hereof shall have been made;
and
(c) All corporate and legal proceedings and all instruments in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Seller, and the Seller shall have
received from the Buyer copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Seller may reasonably have requested.
[END OF ARTICLE VII]
29
ARTICLE VIII
TERM AND TERMINATION
Section 8.1 Term. This Agreement shall commence as of the date of
execution and delivery hereof and shall continue in full force and effect
until the earlier of: (a) unless otherwise agreed to in writing by the
Buyer and the Seller, the latest Series Termination Date for any Series; or
(b) the occurrence of any of the following events: the Buyer or the Seller
shall consent to the appointment of a bankruptcy trustee or receiver or
liquidator in any bankruptcy proceeding or any other insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to all or substantially all of its property; or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a bankruptcy trustee or
receiver or liquidator in any bankruptcy proceeding or any other insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Buyer or the Seller; or the Buyer or the Seller
shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency
or reorganization statute including the U.S. bankruptcy code, make an
assignment for the benefit of its creditors or voluntarily suspend payment
of its obligations, or become unable for any reason to purchase or
re-purchase Receivables in accordance with the provisions of this Agreement
or default in its obligations hereunder, which default continues unremedied
for more than 30 days after written notice is delivered to the defaulting
party by the non-defaulting party (any such date set forth in clause (a) or
(b) hereof being a "Termination Date"); provided, however, that the
termination of this Agreement pursuant to this Section 8.1 hereof shall not
discharge any Person from any obligations incurred prior to such
termination, including, without limitation, any obligations to make any
payments with respect to, or repurchase, pursuant to Section 6.1 hereof,
Receivables sold prior to such termination.
Section 8.2 Effect of Termination. No termination or rejection
of or failure to assume the executory obligations of this Agreement in the
event of the bank-
30
ruptcy of the Seller or the Buyer shall be deemed to impair or affect the
obligations pertaining to any executed sale or executed obligations,
including, without limitation, pre-termination breaches of representations
and warranties by the Seller or the Buyer. Without limiting the foregoing,
prior to termination, the failure of the Seller to deliver computer records
of Receivables or Settlement Statements shall not render such transfer or
obligation executory, nor shall the continued duties of the parties pursuant
to Section 5 or Section 9.1 of this Agreement render an executed sale
executory.
[END OF ARTICLE VIII]
31
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1 Amendment. This Agreement and any other Sale Papers and
the rights and obligations of the parties hereunder may not be changed
orally, but only by an instrument in writing signed by the Buyer and the
Seller. The Seller shall provide prompt written notice of any such
amendment to the Rating Agencies. The Buyer shall not, without the
consents, approvals and opinions, if any, required by Section 13.1 of the
Pooling and Servicing Agreement as if Section 13.1 of the Pooling and
Servicing Agreement related to the Purchase Agreement rather than the
Pooling and Servicing Agreement, enter into any amendment, supplement or
other modification to, or waiver of any provision of this Agreement.
Section 9.2 Governing Law. THIS AGREEMENT AND THE OTHER SALE PAPERS
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 9.3 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, return receipt
requested, to:
(a) in the case of the Buyer, to:
Fingerhut Receivables, Inc.
0000 Xxxxx Xxxx, Xxxxx X000
Xxxxxxxxxx, Xxxxxxxxx 00000
(000) 000-0000
32
(b) in the case of the Seller, to:
Fingerhut Companies, Inc.
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
(000) 000-0000
or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party.
Section 9.4 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of the Sale Papers shall for any
reason whatsoever be held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining covenants,
agreements, provisions, or terms of the Sale Papers and shall in no way
affect the validity or enforceability of the other provisions of the Sale
Papers.
Section 9.5 Assignment. Notwithstanding anything to the contrary
contained herein, this Agreement may not be assigned by the Buyer or the
Seller except as contemplated by this Section 9.5 and the Pooling and
Servicing Agreement; provided, however, that the Seller consents to the
Buyer's assignment simultaneously with the execution and delivery of this
Agreement, of all its right, title and interest herein to the Trustee of all
Series as provided in Section 2.1 of the Pooling and Servicing Agreement, to
which the Seller hereby expressly consents; provided, further, that except
for the foregoing assignment, no such assignment shall occur unless the
Buyer shall have received confirmation from the Rating Agencies that such
assignment shall not cause a reduction or withdrawal of the rating of any
Series of Securities. The Seller agrees to perform its obligations
hereunder for the benefit of the Trust and that the Trustee may enforce the
provisions of this Agreement, exercise the rights of the Buyer and enforce
the obligations of the Seller hereunder without the consent of the Buyer.
Section 9.6 Further Assurances. The Buyer and the Seller agree to do
and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the other party more
fully to effect the purposes of the Sale
33
Papers, including, without limitation, the execution of any financing
statements or continuation statements or equivalent documents relating to
the Receivables for filing under the provisions of the UCC or other laws of
any applicable jurisdiction.
Section 9.7 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Buyer or the Seller, any
right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privilege provided by law.
Section 9.8 Counterparts. The Sale Papers may be executed in two or
more counterparts including facsimile transmission thereof (and by different
parties on separate counterparts), each of which shall be an original, but
all of which together shall constitute one and the same instrument.
Section 9.9 Binding Effect; Third-Party Beneficiaries. The Sale
Papers will inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns.
Section 9.10 Merger and Integration. Except as specifically stated
otherwise herein, the Sale Papers set forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by the Sale Papers. The Sale Papers may not
be modified, amended, waived or supplemented except as provided herein.
Section 9.11 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.
Section 9.12 Schedules and Exhibits. The schedules and exhibits
attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.
34
Section 9.13 No Bankruptcy Petition Against the Buyer. The Seller
hereby covenants and agrees that, prior to the date which is one year and
one day after the payment in full of all Invested Amounts, it will not
institute against or join any other Person in instituting against the Buyer
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United States
or any state of the United States.
Section 9.14 Merger or Consolidation of, or Assumption of the
Obligations of, the Seller. The Seller shall not consolidate with or merge
into any other corporation or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into
which the Seller is merged or the Person which acquires by conveyance
or transfer the properties and assets of the Seller substantially as an
entirety shall be a corporation organized and existing under the laws
of the United States of America or any State or the District of
Columbia and, if the Seller is not the surviving entity, shall
expressly assume, by an agreement supplemental hereto, executed and
delivered to the Buyer in form satisfactory to the Buyer, the
performance of every covenant and obligation of the Seller hereunder
(to the extent that any right, covenant or obligation of the Seller, as
applicable hereunder, is inapplicable to the successor entity, such
successor entity shall be subject to such covenant or obligation, or
benefit from such right, as would apply, to the extent practicable, to
such successor entity); and
(ii) the Seller shall have delivered to the Buyer an
Officer's Certificate that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this Section 9.14
and that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding with respect to the
successor entity and that the entity surviving such consolidation,
conveyance or transfer is organized and existing under the laws of the
United States of America or any State or the Dis-
35
trict of Columbia. The Rating Agencies shall receive prompt written
notice of such merger or consolidation of the Seller.
Section 9.15 Protection of Right, Title and Interest to Receivables.
(a) The Seller shall cause this Agreement, all amendments hereto and/or
all financing statements and continuation statements and any other necessary
documents covering the Seller's and the Buyer's right, title and interest to
the Receivables to be promptly recorded, registered and filed, and at all
times to be kept recorded, registered and filed, all in such manner and in
such places as may be required by law fully to preserve and protect the
right, title and interest of the Buyer hereunder to the Receivables and
proceeds thereof. The Seller shall deliver to the Buyer file-stamped copies
of, or filing receipts for, any document recorded, registered or filed as
provided above, as soon as available following such recording, registration
or filing. The Buyer shall cooperate fully with the Seller in connection
with the obligations set forth above and will execute any and all documents
reasonably required to fulfill the intent of this subsection 9.15(a).
(b) Within 30 days after the Seller makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) above
materially misleading within the meaning of Section 9-402(7) of the UCC as
in effect in the Relevant UCC State, the Seller shall give the Buyer written
notice of any such change and shall file such financing statements or
amendments as may be necessary to continue the perfection of the Buyer's
security interest in the Receivables and the proceeds thereof.
(c) The Seller will give the Buyer prompt written notice of any
relocation of any office from which it services Receivables or keeps records
concerning the Receivables or of its principal executive office and whether,
as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall file such
financing statements or amendments as may
36
be necessary to continue the perfection of the Buyer's security interest in
the Receivables and the proceeds thereof. The Seller will at all times
maintain each office from which it services Receivables and its principal
executive office within the United States of America.
[END OF ARTICLE IX]
37
IN WITNESS WHEREOF, the Buyer and the Seller each have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
FINGERHUT RECEIVABLES, INC.,
as Buyer
By:
------------------------
Title:
FINGERHUT COMPANIES, INC.
as Seller
By:
------------------------
Title:
EXHIBIT A
FORM OF WEEKLY REPORT
Schedule 1
Seller's Chief Executive Office:
Fingerhut Companies, Inc.
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Schedule 2
TAX RETURNS AND PAYMENTS
The Seller and its subsidiaries have filed all applicable federal, state and
material local tax returns and have paid or caused to be paid all associated
taxes due and payable on such returns or on any assessments received by
them; except that the Seller or its subsidiaries have not filed certain tax
returns purported to be required because the Seller [and its subsidiaries]
believe the requirements are invalid and unenforceable under the commerce
clause of the United States Constitution as interpreted by the Supreme Court
in National Bellas Xxxx v. Department of Revenue of Illinois, 386 U.S. 753
(1967) and the supporting lines of cases, including Quill Corp. v. North
Dakota, 112 S. Ct. 1904 (1992). The following are the states in which the
Seller or its subsidiaries are currently collecting sales/use taxes:
California Pennsylvania
Florida South Carolina
Illinois South Dakota
Iowa Tennessee
Minnesota Utah
New York Wisconsin
Ohio
Notwithstanding the Supreme Court decisions, the following states, to the
best knowledge of the Seller or its subsidiaries, currently have legislation
in effect which purports or may purport to require the Seller or its
subsidiaries to collect sales or use taxes:
Alabama Mississippi
Alaska Missouri
Arizona Nebraska
Arkansas Nevada
California New Jersey
Colorado New Mexico
Connecticut New York
District of Columbia North Carolina
Florida North Dakota
Georgia Ohio
Hawaii Pennsylvania
Idaho Rhode Island
Indiana South Carolina
Illinois South Dakota
Iowa Tennessee
Kansas Texas
Kentucky Utah
Louisiana Vermont
Maine Virginia
Maryland Washington
Massachusetts West Virginia
Michigan Wisconsin
Minnesota Wyoming
