PLEDGE AGREEMENT
XXXXX XXXXXX INC.
000 XXXXXXXXX XXXXXX--00XX XX.
XXX XXXX, XX 00000
ATTN: XXXXX X. KOKAHAIS, SVP
EXECUTIVE FINANCIAL SERVICES DEPARTMENT
This agreement made the 1st day of September 1998, between Xxx Xxxxxx
residing at 00000 Xxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000 (the Pledgor), and
Xxxxx Xxxxxx Inc. (the Pledgee).
In consideration of Pledgee's initial extension of the loan made by
the Pledgee to the Pledgor in the sum of $16,365,000.00 and in
consideration of the Pledgee accepting for the Pledgor one or more accounts
in Xxxxx Xxxxxx Inc., at the election of the Pledgee, the Pledgor agree(s)
to the following:
1. PLEDGE AGREEMENT CONTROLLING
A form of "client agreement" between the Pledgor and the Pledgee dated
September 1, 1998 and executed by the Pledgor is hereby incorporated by
reference as a part of this agreement ("Pledge Agreement") except that in
the event
of conflict, the express terms of the Pledge Agreement shall prevail over
any contrary terms in the customer agreement.
2. PLEDGE
The Pledgor agrees to pledge the securities hereinafter mentioned to
the Pledgee as security for the repayment of the aforementioned loan.
3. DELIVERY OF THE SECURITIES PLEDGED
The Pledgor herewith delivers to the Pledgee the following collateral,
duly endorsed in blank:
3,127,750 shares of the common .01 par value (class) of Fingerhut
Companies (the Corporation) represented by certificate(s) _________
(the Collateral).
4. MANNER IN WHICH THE PLEDGED SECURITIES WERE OBTAINED
AND FULLY PAID FOR
The Pledgor represents that he obtained the securities pledged herein
as follows:
(a) acquired on 2,203,146 9/1/98; 1,113,866 12/24/92
(b) fully paid for on 9/1/98 and 12/24/92
(c) nature of acquisition--option exercise
5. NUMBER OF SHARES OWNED BY PLEDGOR
The Pledgor represents that:
(a) the total number of shares that he owns of the class of
security of the Corporation hereby being pledged is 6.015%; and
(b) the total number of all other classes of the securities of
the Corporation owned by the Pledgor is 189,262, common stock
239-43941-1-4 167,444, common stock 239-46722-1-2 21,818.
6. DIVIDENDS AND SPLITS
The Pledgor:
(a) shall be entitled to receive all cash dividends paid by the
Corporation to its security holders during the term of the loan,
unless such cash dividend or payment represents a dividend or payment
resulting from a corporate restructuring, reorganization or like
corporate event; and
(b) shall not be entitled to receive any stock dividends or stock
split of any type declared, granted or made by the Corporation during
the term of the loan and Pledgor shall pay over and deliver such
distribution to the Pledgee unless Pledgee shall have received such
distribution directly from the Corporation.
7. SALES BY PLEDGOR
The Pledgor represents to the Pledgee that during the last three
months he, or any person(s) who Pledgor must aggregate his sales with under
applicable SEC regulations,
(a) has sold 533,853 shares of Corporation to Fingerhut for taxes
on 9/1/98 exercise; and
(b) has sold 0 convertible securities which are convertible into
the shares of the Corporation.
In addition, the Pledgor and such person(s) currently have no sale
orders open with any broker and that he and they will not place any such
sale orders to sell shares of the Corporation or such convertible
securities without the express written consent of the Pledgee.
8. NO SHARES PLEDGED ELSEWHERE
The Pledgor further represents that there are no shares of the
Corporation that the Pledgor, or any person(s) whose sales must be
aggregated with Pledgor's under applicable SEC
regulations, which are currently pledged as security for the payment of a
loan elsewhere, and that he and they will not pledge any shares of the
Corporation as security for the repayment of a loan elsewhere without the
express written consent of the Pledgee.
9. REDUCED LINE OF CREDIT
In the event of a sale of any class of security of the Corporation by
or on behalf of the Pledgor or a party specified in paragraph 8, the
Pledgor agrees and acknowledges that the Pledgee may reduce the line of
credit given pursuant to this Pledge Agreement in the same proportion as
the number of shares sold bears to the number of shares carried in all
accounts with the Pledgee to secure a line of credit immediately prior to
such sale. However, the preceding sentence, notwithstanding, if the
applicable margin maintenance requirements would preclude such a line of
credit after such sale, the line of credit shall be reduced below the
maximum line of credit permitted by such margin maintenance requirements.
10. ADDITIONAL COLLATERAL TO MEET MARGIN CALLS
The Pledgor may not meet margin calls by depositing additional Rule
145, control, restricted or shelf registered securities into the account
without the prior express written consent of the Pledgee. The Pledgor
guarantees that all pledged shares sold to satisfy outstanding margin calls
will readily transfer into "street name" in good deliverable form.
11. INTERCHANGEABLE TERMS
Wherever the term "his" or "he" is used herein, it shall be deemed to
refer to "her", "she" or "they" where applicable.
12. HEADINGS ARE DESCRIPTIVE
The heading of each provision hereof is for descriptive purposes only
and shall not be deemed to modify or qualify any of the rights or
obligations set forth in each such provision.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hand(s)
the day and year first above written.
DATED: ACCOUNT NO:
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BY:
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ACCEPTED & AGREED:
XXXXX XXXXXX INC.
BY:
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