EXHIBIT 99.3
[FORM OF EXCHANGE AGENCY AGREEMENT]
______________, 1996
First Bank National Association
c/o First Trust
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
Fingerhut Companies, Inc. (the "Company"), a Minnesota corporation,
hereby appoints First Bank National Association ("FBNA") to act as exchange
agent (the "Exchange Agent") in connection with an exchange offer by the Company
to exchange up to $125,000,000 aggregate principal amount of its 7.375% Senior
Notes Due 1999 (the "New Notes"), which have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), for a like principal
amount of its outstanding 7.375% Senior Notes Due 1999 (the "Old Notes" and
together with the New Notes, the "Notes"). The terms and conditions of the
exchange offer are set forth in a Prospectus dated , 1996 (as
the same may be amended or supplemented from time to time, the "Prospectus") and
in the related Letter of Transmittal, which together constitute the "Exchange
Offer." The registered holders of the Notes are hereinafter referred to as the
"Holders." Capitalized terms used herein and not defined shall have the
respective meanings described thereto in the Prospectus.
On the basis of the representations, warranties and agreements of the
Company and FBNA contained herein and subject to the terms and conditions
hereof, the following sets forth the agreement between the Company and FBNA as
Exchange Agent for the Exchange Offer:
1. APPOINTMENT AND DUTIES AS EXCHANGE AGENT.
a. The Company hereby authorizes FBNA to act as Exchange Agent in
connection with the Exchange Offer and FBNA agrees to act as Exchange Agent in
connection with the Exchange Offer. As Exchange Agent, FBNA will perform those
services as are outlined herein or which are customarily performed by an
exchange agent in connection with an exchange offer of like nature, including,
but not limited to, accepting tenders of Old Notes, assisting the Company in the
preparation of the documentation necessary to effect the transactions herein
contemplated (without assuming responsibility for such documentation, unless
such information has been furnished to the Company in writing by FBNA) and
communicating generally regarding the Exchange Offer with brokers, dealers,
commercial banks, trust companies and other persons, including Holders of the
Old Notes.
b. The Company acknowledges and agrees that FBNA has been retained
pursuant to this Agreement to act solely as Exchange Agent in connection with
the Exchange Offer, and in such capacity, FBNA shall perform such duties as are
outlined herein and which are specifically set forth in the section of the
Prospectus captioned "The Exchange Offer" and in the Letter of Transmittal;
provided, however, that in no way will FBNA's general duty to act in good faith
and without gross negligence or willful misconduct be discharged by the
foregoing.
c. FBNA will examine each of the Letters of Transmittal and
certificates for Old Notes and any other documents delivered or mailed to FBNA
by or for Holders of the Old Notes, and any book-entry conformations (as defined
in the Prospectus) received by FBNA with respect to the Old Notes, to ascertain
whether: (i) the Letters of Transmittal and any such other documents are duly
executed and properly completed in accordance with the instructions set forth
therein and that such book-entry confirmations are in due and proper form and
contain the information required to be set forth therein, and (ii) the Old Notes
have otherwise been properly tendered. In each case where the Letters of
Transmittal or any other documents have been improperly completed or executed or
where book-entry confirmations are not in due and proper form or omit certain
information, or any of the certificates for Old Notes are not in proper form for
transfer or some other irregularity in connection with the tender or acceptance
of the Old Notes exists, FBNA will endeavor, subject to the terms and conditions
of the Exchange Offer, to advise the tendering Holders of the irregularity and
to take any other action as may be necessary or advisable to cause such
irregularity to be corrected. Notwithstanding the above, FBNA shall not be
under any duty to give any notification of any irregularities in tenders or
incur any liability for failure to give any such notification.
d. With the approval of the President, any Senior Vice President, any
Executive Vice President, any Vice President or the Treasurer or any Assistant
Treasurer of the Company, (such approval, if given orally, to be confirmed in
writing) or any other party designated by any such officer, FBNA is authorized
to waive any irregularities in connection with any tender of Old Notes pursuant
to the Exchange Offer.
e. Tenders of Old Notes may be made only as set forth in the Letter of
Transmittal and in the section of the Prospectus captioned "The Exchange Offer"
and Old Notes shall be considered properly tendered only when tendered in
accordance with such procedures set forth therein. Notwithstanding the
provisions of this paragraph, Old Notes which the President, any Senior Vice
President, any Executive Vice President, any Vice President or the Treasurer,
any Assistant Treasurer or any other designated officer of the Company, shall
approve (such approval, if given orally, to be confirmed in writing) as having
been properly tendered shall be considered to be properly tendered.
f. FBNA shall advise the Company with respect to any Old Notes received
as soon as possible after 5:00 p.m., New York City time, on the Expiration Date
and accept its instructions with respect to disposition of such Old Notes.
g. FBNA shall ensure (i) that each Letter of Transmittal and, if required
pursuant to the terms of the Exchange Offer, the related Old Notes or a bond
power are duly executed (with signatures guaranteed where required) by the
appropriate parties in accordance with the terms of the Exchange Offer; (ii) in
those instances where the person executing the Letter of Transmittal (as
indicated on the Letter of Transmittal) is acting in a fiduciary or a
representative capacity, proper evidence of his or her authority so to act is
submitted; (iii) in those instances where Old Notes are tendered by persons
other than the registered holder of such Old Notes, that customary transfer
requirements, including any applicable transfer taxes, and the requirements
imposed by the transfer restrictions on the Old Notes (including any applicable
requirements for certifications, legal opinions or other information) are
fulfilled; (iv) that Old Notes tendered in part are tendered in principal
amounts of $1,000 and integral multiples thereof and that if any Old Notes are
tendered for exchange in part, the untendered principal amount thereof is
$250,000 or any integral multiple of $1,000 in excess thereof; and (v) FBNA
shall deliver certificates for Old Notes tendered in part to the transfer agent
for split-up and shall return any untendered Old Notes or Old Notes which have
not been accepted by the Company to the Holders promptly after the expiration or
termination of the Exchange Offer.
h. Upon acceptance by the Company of any Old Notes duly tendered pursuant
to the Exchange Offer (such acceptance if given orally, to be confirmed in
writing), FBNA will cause New Notes in exchange therefor to be issued as
promptly as possible (subject to receipt from the Company of appropriate
certificates under the related Indenture) and FBNA will deliver such New Notes
on
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behalf of the Company at the rate of $1,000 principal amount of New Notes for
each $1,000 principal amount of Old Notes tendered as promptly as possible after
acceptance by the Company of the Old Notes for exchange and notice (such notice
if given orally, to be confirmed in writing) of such acceptance by the Company;
provided, however, that in all cases, Old Notes tendered pursuant to the
Exchange Offer will be exchanged only after timely receipt by FBNA of
certificates for such Old Notes (or a book-entry confirmation), a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) with
any required signature guarantees and any other required documents. Unless
otherwise instructed by the Company, FBNA shall issue New Notes only in
denominations of $1,000 or any integral multiple thereof.
i. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and the conditions set forth in the Prospectus and the
Letter of Transmittal, Old Notes tendered pursuant to the Exchange Offer may be
withdrawn at any time on or prior to the Expiration Date in accordance with
the terms of the Exchange Offer.
j. Notice of any decision by the Company not to exchange any Old
Notes tendered shall be given by the Company either orally (if given orally, to
be confirmed in writing) or in a written notice to FBNA.
k. If, pursuant to the Exchange Offer, the Company does not accept
for exchange all or part of the Old Notes tendered because of an invalid tender,
the occurrence of certain other events set forth in the Prospectus under the
caption "The Exchange Offer--Certain Conditions to the Exchange Offer" or
otherwise, FBNA shall, upon notice from the Company (such notice if given
orally, to be confirmed in writing), promptly after the expiration or
termination of the Exchange Offer return such certificates for unaccepted Old
Notes (or effect appropriate book-entry transfer), together with any related
required documents and the Letters of Transmittal relating thereto that are in
FBNA's possession, to the persons who deposited such certificates.
l. Certificates for reissued Old Notes, unaccepted Old Notes or New
Notes shall be forwarded by (a) first-class certified mail, return receipt
requested under a blanket surety bond obtained by FBNA protecting FBNA and the
Company from loss or liability arising out of the non-receipt or non-delivery of
such certificates or (b) by registered mail insured by FBNA separately for the
replacement value of each such certificate.
m. FBNA is not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, commercial bank, trust
company or other nominee or to engage or use any person to solicit tenders.
n. As Exchange Agent, FBNA:
(i) shall have no duties or obligations other than those specifically
set forth in the Prospectus, the Letter of Transmittal or herein or as may
be subsequently agreed to in writing;
(ii) will make no representations and will have no
responsibilities as to the validity, value or genuineness of any of the
certificates for the Old Notes deposited pursuant to the Exchange Offer,
and will not be required to and will make no representation as to the
validity, value or genuineness of the Exchange Offer; PROVIDED, HOWEVER,
that in no way will FBNA's general duty to act in good faith and without
gross negligence or willful misconduct be limited by the foregoing;
(iii) shall not be obligated to take any legal action hereunder
which might in FBNA's reasonable judgment involve any expense or liability,
unless FBNA shall have been furnished with reasonable indemnity;
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(iv) may reasonably rely on and shall be protected in acting in
reliance upon any certificate, instrument, opinion, notice, letter,
telegram or other document or security delivered to FBNA and reasonably
believed by FBNA to be genuine and to have been signed by the proper party
or parties;
(v) may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due execution
and validity and effectiveness of its provisions, but also as to the truth
and accuracy of any information contained therein, which FBNA believes in
good faith to be genuine and to have been signed or represented by a proper
person or persons acting in a fiduciary or representative capacity (so long
as proper evidence of such fiduciary's or representative's authority so to
act is submitted to FBNA) and FBNA examines and reasonably concludes that
such evidence properly establishes such authority;
(vi) may rely on and shall be protected in acting upon written or
oral instructions from the President, any Senior Vice President, any
Executive Vice President, any Vice President, the Treasurer, any Assistant
Treasurer or any other designated officer of the Company;
(vii) may consult with its own counsel with respect to any
questions relating to FBNA's duties and responsibilities and the written
opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken
by FBNA hereunder in good faith and in accordance with the written opinion
of such counsel; and
(viii) shall not advise any person tendering Old Notes pursuant to
the Exchange Offer as to whether to tender or refrain from tendering all or
any portion of its Old Notes or as to the market value, decline or
appreciation in market value of any Old Notes that may or may not occur as
a result of the Exchange Offer or as to the market value of the New Notes.
FBNA shall take such action as may from time to time be requested by the
Company (and such other action as FBNA may reasonably deem appropriate) to
furnish copies of the Prospectus, Letter of Transmittal and the Notice of
Guaranteed Delivery or such other forms as may be approved from time to
time by the Company, to all persons requesting such documents and to accept
and comply with telephone requests for information relating to the Exchange
Offer, provided that such information shall relate only to the procedures
for tendering into (or withdrawing from) the Exchange Offer. The Company
will furnish you with copies of such documents at your request.
p. FBNA shall advise orally and promptly thereafter confirm in
writing to the Company and such other person or persons as the Company may
request, daily (and more frequently during the week immediately preceding the
Expiration Date and if otherwise reasonably requested) up to and including the
Expiration Date, the aggregate principal amount of Old Notes which have been
duly tendered pursuant to and in compliance with the terms of the Exchange Offer
and the items received by FBNA pursuant to the Exchange Offer and this
Agreement, separately reporting and giving cumulative totals as to items
properly received and items improperly received. In addition, FBNA will also
provide, and cooperate in making available to the Company, or any such other
person or persons upon request (such request if made orally, to be confirmed in
writing) made from time to time, such other information as the Company may
reasonably request. Such cooperation shall include, without limitation, the
granting by FBNA to the Company, and such person or persons as the Company may
request, access to those persons on FBNA's staff who are responsible for
receiving tenders, in order to ensure that immediately prior to the Expiration
Date the Company shall have received adequate information in sufficient detail
to enable the Company to decide whether to extend the Exchange Offer. FBNA
shall prepare a final list of all persons whose tenders were accepted, the
aggregate principal
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amount of Old Notes tendered, the aggregate principal amount of Old Notes
accepted and deliver said list to the Company.
q. Letters of Transmittal, book-entry confirmations and Notices of
Guaranteed Delivery shall be stamped by FBNA as to the date and the time of
receipt thereof and shall be preserved by FBNA for a period of time at least
equal to the period of time FBNA preserves other records pertaining to the
transfer of securities, or one year, whichever is longer, and thereafter shall
be delivered by FBNA to the Company. FBNA shall dispose of unused Letters of
Transmittal and other surplus materials by returning them to the Company.
r. FBNA hereby expressly waives any lien, encumbrance or right of
set-off whatsoever that FBNA may have with respect to funds deposited with it
for the payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with FBNA or for compensation owed to FBNA hereunder or for any other
matter.
2. COMPENSATION.
Pursuant to a letter agreement, dated as of , 1996
(the "Bond Trusteeships Fee Schedule"), between the Company and FBNA, no
additional compensation will be payable to FBNA in its capacity as Exchange
Agent, it being understood and agreed that the Acceptance Fee and the Annual
Administration Fee payable pursuant to the Bond Trusteeships Fee Schedule are
intended to cover, among other things, the services of FBNA as Exchange Agent;
provided, further, that FBNA reserves the right to receive reimbursement from
the Company for any reasonable out-of-pocket expenses incurred as Exchange Agent
in performing the services described herein, provided, however, that FBNA shall
not be entitled to reimbursement for the fees or disbursements of its legal
counsel without the prior written consent of the Company.
3. INDEMNIFICATION.
a. The Company hereby agrees to protect, defend, indemnify and hold
harmless FBNA against and from any and all costs, losses, liabilities, expenses
(including reasonable counsel fees and disbursements) and claims imposed upon or
asserted against FBNA on account of any action taken or omitted to be taken by
FBNA in connection with its acceptance of or performance of its duties under
this Agreement and the documents related thereto as well as the reasonable costs
and expenses of defending itself against any claim or liability arising out of
or relating to this Agreement and the documents related thereto. This
indemnification shall survive the release, discharge, termination, and/or
satisfaction of this Agreement. Anything in this Agreement to the contrary
notwithstanding, the Company shall not be liable for indemnification or
otherwise for any loss, liability, cost or expense to the extent arising out of
FBNA's bad faith, gross negligence or willful misconduct. In no case shall the
Company be liable under this indemnification agreement with respect to any claim
against FBNA unless the Company shall be notified by FBNA, by letter, of the
written assertion of a claim against FBNA or of any other action commenced
against FBNA, promptly after FBNA shall have received any such written assertion
or shall have been served with a summons in connection therewith. The Company
shall be entitled to participate at its own expense in the defense of any such
claim or other action, and, if the Company so elects, the Company may assume the
defense of any pending or threatened action against FBNA in respect of which
indemnification may be sought hereunder, in which case the Company shall not
thereafter be responsible for the fees and disbursements of legal counsel for
FBNA under this paragraph; provided that the Company shall not be entitled to
assume the defense of any such action if the named parties to such action
include both the Company and FBNA and representation of both parties by the same
legal counsel would, in the written opinion of counsel for FBNA, be
inappropriate due to actual or potential conflicting interests between them. It
is understood that the Company shall not be liable under this paragraph for the
fees and disbursements of more than
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one legal counsel for FBNA. In the event that the Company shall assume the
defense of any such suit, the Company shall not therewith be liable for the
fees and expenses of any counsel retained by FBNA.
b. FBNA agrees that, without the prior written consent of the Company
(which consent shall not be unreasonably withheld), it will not settle,
compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding in respect of which indemnification
could be sought in accordance with the indemnification provision of this
Agreement (whether or not FBNA or the Company or any of its directors,
officers and controlling persons is an actual or potential party to such
claim, action or proceeding), unless such settlement, compromise or consent
includes an unconditional release of the Company and its directors, officers
and controlling persons from all liability arising out of such claim, action
or proceeding.
4. TAX INFORMATION.
a. FBNA shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company understands that FBNA is required, in certain
instances, to deduct 31% with respect to interest paid on the New Notes and
proceeds from the sale, exchange, redemption or retirement of the New Notes from
Holders who have not supplied their correct Taxpayer Identification Number or
required certification. Such funds will be turned over by FBNA to the Internal
Revenue Service.
b. FBNA shall notify the Company of the amount of any transfer taxes
payable in respect of the exchange of Old Notes and, upon receipt of written
approval from the Company shall deliver or cause to be delivered, in a timely
manner, to each governmental authority to which any transfer taxes are payable
in respect of the exchange of Old Notes, a check in the amount of all transfer
taxes so payable, and the Company shall reimburse FBNA for the amount of any and
all transfer taxes payable in respect of the exchange of Old Notes; PROVIDED,
HOWEVER, that FBNA shall reimburse the Company for amounts refunded to it in
respect of its payment of any such transfer taxes, at such time as such refund
is received by FBNA.
5. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts
executed in and to be performed in that state.
6. NOTICES. Any communication or notice provided for hereunder shall be
in writing and shall be given (and shall be deemed to have been given upon
receipt) by delivery in person, telecopy, or overnight delivery or by registered
or certified mail (postage prepaid, return receipt requested) to the applicable
party at the addresses indicated below:
If to the Company:
Fingerhut Companies, Inc.
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, General Counsel and Secretary
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With a copy to:
Xxxxxx & Xxxxxxx LLP
Pillsbury Center South
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telecopier No.: (000)-000-0000
Attention: Xxxxxxxxx X. Xxxxx
If to First Bank National Association:
c/o First Trust
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
With a copy to:
Attention:
or, as to each party, at such other address as shall be designated by such party
in a written notice complying as to delivery with the terms of this Section.
7. PARTIES IN INTEREST. This Agreement shall be binding upon and inure solely
to the benefit of each party hereto and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
Without limitation to the foregoing, the parties hereto expressly agree that no
holder of Old Notes or New Notes shall have any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
8. COUNTERPARTS; SEVERABILITY. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which when so executed shall be deemed an original, and all of such counterparts
shall together constitute one and the same agreement. If any term or other
provision of this Agreement or the application thereof is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the agreements contained herein is
not affected in any manner adverse to any party. Upon such determination that
any term or provision or the application thereof is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the agreements contained
herein may be performed as originally contemplated to the fullest extent
possible.
9. CAPTIONS. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
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10. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement may not be amended or modified nor may any provision hereof be
waived except in writing signed by each party to be bound thereby.
11. TERMINATION. This Agreement shall terminate upon the earlier of (a)
the 90th day following the expiration, withdrawal, or termination of the
Exchange Offer, (b) the close of business on the date of actual receipt of
written notice by FBNA from the Company stating that this Agreement is
terminated, (c) one year following the date of this Agreement, or (d) the time
and date on which this Agreement shall be terminated by mutual consent of the
parties hereto.
12. MISCELLANEOUS.
a. FBNA hereby acknowledges receipt of the Prospectus and the
Letter of Transmittal and the Notice of Guaranteed Delivery and further
acknowledges that it has examined each of them. Any inconsistency between this
Agreement, on the one hand, and the Prospectus and the Letter of Transmittal and
the Notice of Guaranteed Delivery (as they may be amended or supplemented from
time to time), on the other hand, shall be resolved in favor of the latter three
documents, except with respect to the duties, liabilities and indemnification of
FBNA as Exchange Agent which shall be controlled by this Agreement.
Kindly indicate your willingness to act as Exchange Agent and FBNA's
acceptance of the foregoing provisions by signing in the space provided below
for that purpose and returning to the Company a copy of this Agreement so
signed, whereupon this Agreement and FBNA's acceptance shall constitute a
binding agreement between FBNA and the Company.
Very truly yours,
FINGERHUT COMPANIES, INC.
By: ___________________________
Name: _________________________
Title: ________________________
Accepted and agreed to as of
the date first written above:
FIRST BANK NATIONAL ASSOCIATION
By: _____________________________
Name: ___________________________
Title: __________________________
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