Execution Copy
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SECURITY PURCHASE AGREEMENT
among
FINGERHUT RECEIVABLES, INC.,
as the Transferor,
and
KITTY HAWK FUNDING CORPORATION,
FALCON ASSET SECURITIZATION CORPORATION,
FOUR WINDS FUNDING CORPORATION,
as Conduit Purchasers,
and
THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO,
as Alternate Purchasers,
and
NATIONSBANK, N.A.,
THE FIRST NATIONAL BANK OF CHICAGO,
COMMERZBANK AKTIENGESELLSCHAFT, CHICAGO BRANCH,
as Managing Agents,
and
NATIONSBANK, N.A.,
as Administrative Agent for the Purchasers
Dated as of July 30, 1998
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TABLE OF CONTENTS
ARTICLE IDEFINITIONS
Section 1.01 Certain Defined Terms 2
Section 1.02 Other Rules of Construction 5
Section 1.03 Computation of Time Periods 6
ARTICLE IIPURCHASE OF SENIOR SECURITIES
Section 2.01 Sale and Delivery of the Senior Securities 6
Section 2.02 Increases and Decreases in the Invested
Amount 7
Section 2.03 Selection of Funding Periods 8
Section 2.04 Distribution of Interest and Principal
Payments 8
Section 2.05 Extension of Term 10
Section 2.06 Certain Payment 10
ARTICLE IIICONDITIONS PRECEDENT
Section 3.01 Conditions Precedent to the Obligations
of the Purchasers 10
ARTICLE IVREPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the
Transferor 11
Section 4.02 Representations, Warranties and Covenants
of the Purchasers 13
ARTICLE VCOVENANTS OF THE TRANSFEROR
Section 5.01 Access to Information 15
Section 5.02 Reporting Requirements of the Transferor 15
ARTICLE VIINDEMNIFICATION; EXPENSES; RELATED MATTERS
Section 6.01 Indemnities by the Transferor 16
Section 6.02 Indemnity for Taxes, Reserves and Expenses 17
Section 6.03 Taxes 18
Section 6.04 Other Costs, Expenses and Related Matters 20
Section 6.05 Indemnity for Breakage Costs 20
ARTICLE VIITHE ADMINISTRATIVE AGENT; MANAGING AGENTS
Section 7.01 Authorization and Action of Administrative
Agent 21
Section 7.02 Administrative Agent's Reliance, Etc. 21
Section 7.03 Credit Decision 22
Section 7.04 Indemnification of the Administrative Agent 22
Section 7.05 Successor Administrative Agent 22
Section 7.06 Payments by the Administrative Agent 23
Section 7.07 Authorization and Action of Managing Agent 23
Section 7.08 Managing Agent's Reliance, Etc. 24
Section 7.09 Credit Decision 24
Section 7.10 Indemnification of the Managing Agent 25
Section 7.11 Successor Managing Agent 25
Section 7.12 Payments by a Managing Agent 26
ARTICLE VIIIASSIGNMENTS AND PARTICIPATIONS
Section 8.01 Assignments. 26
Section 8.02 Participations 30
ARTICLE VIIIMISCELLANEOUS
Section 9.01 Termination of Agreement; Survival 30
Section 9.02 Waivers; Amendments 31
SECTION 9.03 GOVERNING LAW; SUBMISSION TO JURISDICTION;
WAIVER OF JURY TRIAL. 31
Section 9.04 Integration 32
Section 9.05 Counterparts 32
Section 9.06 Headings 32
Section 9.07 Notices 32
Section 9.08 Successors and Assigns 33
Section 9.09 Severability of Provisions 33
Section 9.10 Further Assurances 34
Section 9.11 Non-Petition Covenant 34
Section 9.12 Limited Recourse Against Transferor 34
SCHEDULES AND EXHIBITS
Schedule I -- List of Closing Documents
Schedule II -- Alternate Purchaser Commitments
Exhibit A -- Form of Assignment and Assumption Agreement
Exhibit B -- Form of Investment Letter
SECURITY PURCHASE AGREEMENT
THIS SECURITY PURCHASE AGREEMENT, entered into and
dated as of July 30, 1998 (as hereinafter amended, restated,
supplemented or otherwise modified from time to time, the
"Agreement"), is by and among FINGERHUT RECEIVABLES, INC., a
Delaware corporation (the "Transferor"), KITTY HAWK FUNDING
CORPORATION, a Delaware corporation ("Kitty Hawk"), as a Conduit
Purchaser, FALCON ASSET SECURITIZATION CORPORATION, a Delaware
corporation ("Falcon"), as a Conduit Purchaser, FOUR WINDS
FUNDING CORPORATION, a Delaware corporation ("Four Winds"), as a
Conduit Purchaser, NATIONSBANK, N.A., a national banking
association ("NationsBank"), in its capacity as a Managing Agent
and individually as an Alternate Purchaser, THE FIRST NATIONAL
BANK OF CHICAGO, a national banking association ("FNBC"), in its
capacity as a Managing Agent and individually as an Alternate
Purchaser, COMMERZBANK AKTIENGESELLSCHAFT, CHICAGO BRANCH, a bank
organized under the laws of the Republic of Germany, acting
through its Chicago branch ("Commerzbank"), in its capacity as a
Managing Agent and individually as an Alternate Purchaser, THE
OTHER FINANCIAL INSTITUTIONS PARTIES HERETO FROM TIME TO TIME, as
Alternate Purchasers, and NATIONSBANK, as Administrative Agent
for the Purchasers.
WITNESSETH:
WHEREAS, the Transferor has conveyed and proposes to
convey Receivables and certain other assets to the Fingerhut
Master Trust (the "Trust") pursuant to an Amended and Restated
Pooling and Servicing Agreement dated as of March 18, 1998, among
the Transferor, Fingerhut National Bank, a national banking
association, in its capacity as servicer (the "Servicer"), and
The Bank of New York, in its capacity as trustee (the "Trustee")
of the Trust (as amended, restated, supplemented or otherwise
modified from time to time, the "Pooling and Servicing
Agreement").
WHEREAS, on the Closing Date, the Transferor will be
the owner of Class A Securities, Series 1998-3 representing a
fluctuating principal amount of not more than $336,363,636 (the
"Class A Securities"), Class B Securities, Series 1998-3
representing a fluctuating principal amount of not more than
$9,090,909 (the "Class B Securities"), and Class C Securities,
Series 1998-3 representing a fluctuating principal amount of not
more than $54,545,455 (the "Class C Securities", and together
with the Class A Securities and the Class B Securities,
collectively, the "Senior Securities"), each as issued by the
Trust pursuant to the Series 1998-3 Supplement dated as of July
30, 1998 among the Transferor, the Servicer and the Trustee (as
amended, restated, supplemented or otherwise modified from time
to time, the "Series Supplement") to the Pooling and Servicing
Agreement.
WHEREAS, the Transferor wishes to sell to the
Purchasers and the Purchasers wish to buy from the Transferor,
the Senior Securities on the terms and conditions stated herein.
NOW, THEREFORE, In consideration of the premises and
the mutual covenants herein contained, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Certain Defined Terms. All capitalized
terms used and not otherwise defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement
or in the Series Supplement, as applicable. As used in this
Agreement, the terms defined in the foregoing paragraphs shall
have their defined meanings when used herein, and the following
terms shall have the following meanings:
"Accredited Investor" shall mean an accredited investor
within the meaning of Rule 501(a) under the Securities Act.
"Administrative Agent" shall mean NationsBank or any
successor administrative agent appointed as herein provided.
"Alternate Purchaser" shall mean, individually, each of
(i) with respect to the Purchaser Group of which Kitty Hawk
is a member, NationsBank and its respective successors and
assigns, (ii) with respect to the Purchaser Group of which
Falcon is a member, FNBC and its respective successors and
assigns, (iii) with respect to the Purchaser Group of which
Four Winds is a member, Commerzbank and its respective
successors and assigns, and (iv) with respect to any other
Purchaser Group, the financial institutions specified as
such in any supplement hereto and their respective
successors and permitted assigns, and "Alternate Purchasers"
shall mean, collectively, all of the foregoing.
"Assignment" shall mean, with respect to each Purchaser
Group, an assignment pursuant to an Assignment and
Assumption Agreement by which a Conduit Purchaser or
Alternate Purchaser may assign its interests in one or more
Classes of the Senior Securities of its Purchaser Group
pursuant to Section 8.01 hereof.
"Assignment Amount" shall mean, at any time with
respect to an Assignment:
(a) by a Conduit Purchaser in the Purchaser Group with
respect to which NationsBank is the Managing Agent to an
Alternate Purchaser in such Purchaser Group, an amount equal
to the sum of (i) the lesser of (A) such Alternate
Purchaser's Pro Rata Share of the portion of the related
Purchaser Group Percentage of the Class A Invested Amount,
if any, being assigned at such time and (B) such Alternate
Purchaser's unused Class A Commitment Amount, (ii) the
lesser of (A) such Alternate Purchaser's Pro Rata Share of
the portion of the related Purchaser Group Percentage of the
Class B Invested Amount, if any, being assigned at such time
and (B) such Alternate Purchaser's unused Class B Commitment
Amount and (iii) the lesser of (A) such Alternate
Purchaser's Pro Rata Share of the portion of the related
Purchaser Group Percentage of the Class C Invested Amount,
if any, being assigned at such time and (B) such Alternate
Purchaser's unused Class C Commitment Amount;
(b) by a Conduit Purchaser in the Purchaser Group with
respect to which FNBC is the Managing Agent to an Alternate
Purchaser in such Purchaser Group, an amount determined in
accordance with the Liquidity Provider Agreement with
respect to such Conduit Purchaser; and
(c) by a Conduit Purchaser in the Purchaser Group with
respect to which Commerzbank is the Managing Agent to an
Alternate Purchaser in such Purchaser Group, an amount
determined in accordance with the Liquidity Provider
Agreement with respect to such Conduit Purchaser.
"Assignment and Assumption Agreement" shall mean an
Assignment and Assumption Agreement substantially in the
form of Exhibit A attached hereto.
"Class A Commitment Amount" shall mean, with respect to
each Alternate Purchaser, the maximum amount of the Class A
Invested Amount to be funded by such Alternate Purchaser as
set forth on Schedule II hereto or in an Assignment and
Assumption Agreement, as such amount may be reduced as a
result of an Assignment and/or pursuant to a reduction in
the Facility Limit in accordance with the proviso of the
definition of the term "Facility Limit" in the Series
Supplement.
"Class B Commitment Amount" shall mean, with respect to
each Alternate Purchaser, the maximum amount of the Class B
Invested Amount to be funded by such Alternate Purchaser as
set forth on Schedule II hereto or in an Assignment and
Assumption Agreement, as such amount may be reduced as a
result of an Assignment and/or pursuant to a reduction in
the Facility Limit in accordance with the proviso of the
definition of the term "Facility Limit" in the Series
Supplement.
"Class C Commitment Amount" shall mean, with respect to
each Alternate Purchaser, the maximum amount of the Class C
Invested Amount to be funded by such Alternate Purchaser as
set forth on Schedule II hereto or in an Assignment and
Assumption Agreement, as such amount may be reduced as a
result of an Assignment and/or pursuant to a reduction in
the Facility Limit in accordance with the proviso of the
definition of the term "Facility Limit" in the Series
Supplement.
"Conduit Assignee" shall mean, with respect to any
Purchaser Group, any commercial paper conduit administered
by the applicable Managing Agent and designated from time to
time to accept an Assignment from the related Conduit
Purchaser (and thus becoming a Conduit Purchaser hereunder)
of all or a portion of the related Purchaser Group
Percentage of the Class A Invested Amount, the Class B
Invested Amount and the Class C Invested Amount.
"Conduit Purchaser" shall mean, individually, each of
(i) with respect to the Purchaser Group of which Kitty Hawk
is a member, Kitty Hawk and any related Conduit Assignee,
(ii) with respect to the Purchaser Group of which Falcon is
a member, Falcon and any related Conduit Assignee, and (iii)
with respect to the Purchaser Group of which Four Winds is a
member, Four Winds and any related Conduit Assignee, and
"Conduit Purchasers" shall mean, collectively, all of the
foregoing.
"Excluded Taxes" has the meaning given to such term in
Section 6.03(a) hereof.
"Fee Letter" shall mean the letter agreement of even
date herewith, among the Transferor, the Administrative
Agent and each Managing Agent, regarding certain fees
payable by the Transferor under or in connection with this
Agreement, as the same may be amended, restated or otherwise
modified from time to time.
"Funding Period" shall mean each period determined
pursuant to Section 2.03 to which all or a portion of each
Purchaser Group Percentage of the Invested Amount is
allocated for the purposes of determining the Cost of Funds
for such Invested Amount.
"Increased Costs" shall mean Indemnified Amounts,
Section 6.02 Costs, Taxes and any amounts payable pursuant
to Section 6.05 hereof, as applicable.
"Indemnified Amounts" has the meaning given to such
term in Section 6.01(a) hereof.
"Indemnified Claim" has the meaning given to such term
in Section 6.01(b) hereof.
"Indemnified Parties" has the meaning given to such
term in Section 6.01(a) hereof.
"Interest Payment" has the meaning given to such term
in Section 2.04(a) hereof.
"Liquidity Provider" shall mean the Person or Persons
who will provide liquidity support to a Conduit Purchaser
pursuant to a Liquidity Provider Agreement.
"Liquidity Provider Agreement" shall mean an agreement
between a Conduit Purchaser and a Liquidity Provider
evidencing the obligation of such Liquidity Provider to
provide liquidity support to such Conduit Purchaser in
connection with the issuance by such Conduit Purchaser of
Commercial Paper.
"Managing Agents" shall mean, (i) with respect to the
Purchaser Group of which Kitty Hawk is a member,
NationsBank, (ii) with respect to the Purchaser Group of
which Falcon is a member, FNBC, (iii) with respect to the
Purchaser Group of which Four Winds is a member,
Commerzbank, and (iv) with respect to any other Purchaser
Group, the financial institution or other Person identified
as such in any supplement hereto for such Purchaser Group.
"Principal Agreements" shall mean this Agreement, the
Pooling and Servicing Agreement, the Series Supplement and
the Senior Securities.
"Program Support Agreement" shall mean an agreement
between a Conduit Purchaser and a Program Support Provider
evidencing the obligation of such Program Support Provider
to provide liquidity or credit enhancement or asset purchase
facilities for or in respect of any assets or liabilities of
any Conduit Purchaser in connection with the issuance by
such Conduit Purchaser of Commercial Paper.
"Program Support Provider" shall mean the Person or
Persons who will provide program support to a Conduit
Purchaser pursuant to a Program Support Agreement.
"Pro Rata Share" shall mean, with respect to each
Alternate Purchaser at any time, (i) with respect to the
Class A Securities, a percentage equal to such Alternate
Purchaser's Class A Commitment Amount at such time divided
by the aggregate Class A Commitment Amounts of all Alternate
Purchasers in the same Purchaser Group as such Alternate
Purchaser at such time; (ii) with respect to the Class B
Securities, a percentage equal to such Alternate Purchaser's
Class B Commitment Amount at such time divided by the
aggregate Class B Commitment Amounts of all Alternate
Purchasers in the same Purchaser Group as such Alternate
Purchaser at such time; and (iii) with respect to the Class
C Securities, a percentage equal to such Alternate
Purchaser's Class C Commitment Amount at such time divided
by the aggregate Class C Commitment Amounts of all Alternate
Purchasers in the same Purchaser Group as such Alternate
Purchaser at such time.
"Purchaser Group" shall mean each group of Purchasers
consisting of a Conduit Purchaser and any Conduit
Assignee(s) of such Conduit Purchaser, the related Alternate
Purchaser, the related Liquidity Provider(s) and Program
Support Provider(s), if any, the related Managing Agent and
their respective assigns and participants.
"Purchaser" shall mean a Conduit Purchaser or an
Alternate Purchaser, as the context requires, and
"Purchasers" shall mean all of the Conduit Purchasers and
Alternate Purchasers, collectively.
"Section 6.02 Costs" has the meaning given to such term
in Section 6.02(c) hereof.
"Specified Termination Date" shall mean July 29, 1999,
or such later date to which the Specified Termination Date
may be extended in accordance with Section 2.05 hereof.
"Taxes" has the meaning given to such term in Section
6.03(a) hereof.
Section 1.02 Other Rules of Construction. References
in this Agreement to sections, schedules and exhibits are to
sections of and schedules and exhibits to this Agreement unless
otherwise indicated. The words "hereof", "herein", "hereunder"
and comparable terms refer to the entirety of this Agreement and
not to any particular article, section or other subdivision
hereof or attachment hereto. Words in the singular include the
plural and in the plural include the singular. The word "or" is
not exclusive. The word "including" shall be deemed to mean
"including, without limitation". The section and article
headings and table of contents contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Except as otherwise
specified herein, all references herein (a) to any Person shall
be deemed to include such Person's successors and assigns and (b)
to any law, rule or regulation of any Governmental Authority
specifically defined or referred to herein shall be deemed
references to such law, rule or regulation as the same may be
supplemented, amended, waived, consolidated, replaced or modified
from time to time, but only to the extent permitted by, and
effected in accordance with, the terms thereof.
Section 1.03 Computation of Time Periods. Unless
otherwise stated in this Agreement, in the computation of a
period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding."
ARTICLE II
PURCHASE OF SENIOR SECURITIES
Section 2.01 Sale and Delivery of the Senior
Securities. (a) On the terms and subject to the conditions set
forth in this Agreement, the Pooling and Servicing Agreement and
the Series Supplement, and in reliance on the covenants, repre
sentations, warranties and agreements set forth herein, the
Pooling and Servicing Agreement and the Series Supplement, the
Transferor agrees to sell to each Managing Agent on behalf of the
Purchasers in the related Purchaser Group, and each Conduit
Purchaser, acting through its Managing Agent, may, in its
discretion, and the related Alternate Purchasers, acting through
the applicable Managing Agent, shall, if the related Conduit
Purchaser determines not to so purchase, purchase from the
Transferor, on the Closing Date, (i) a Class A Security issued to
its Managing Agent having an aggregate maximum face amount equal
to the related Purchaser Group Percentage of the Class A Maximum
Invested Amount, (ii) a Class B Security issued to its Managing
Agent having an aggregate maximum face amount equal to the
related Purchaser Group Percentage of the Class B Maximum
Invested Amount and (iii) a Class C Security issued to its
Managing Agent having an aggregate maximum face amount equal to
the related Purchaser Group Percentage of the Class C Maximum
Invested Amount. Without limiting any other provision of this
Agreement, the obligation of any Purchaser to purchase an
interest in the Senior Securities of its Purchaser Group on the
Closing Date is subject to the satisfaction of the conditions
precedent set forth in Section 3.01 hereof. On the Closing Date,
the Transferor shall deliver to each Managing Agent on behalf of
the Purchasers in the related Purchaser Group a Class A Security,
a Class B Security and a Class C Security as described above,
each duly executed by the Transferor and duly authenticated by
the Trustee, registered in the name of (x) with respect to the
Purchaser Group of which Kitty Hawk is a member, "NationsBank,
N.A., in its capacity as Managing Agent for the members of the
Purchaser Group of which Kitty Hawk Funding Corporation and
NationsBank, N.A. are members", (y) with respect to the Purchaser
Group of which Falcon is a member, "The First National Bank of
Chicago, in its capacity as Managing Agent for the members of the
Purchaser Group of which Falcon Asset Securitization Corporation
and The First National Bank of Chicago are members", and (z) with
respect to the Purchaser Group of which Four Winds is a member,
"Commerzbank Aktiengesellschaft, Chicago branch, in its capacity
as Managing Agent for the members of the Purchaser Group of which
Four Winds Funding Corporation and Commerzbank
Aktiengesellschaft, Chicago branch, are members".
(b) On the Closing Date, as payment in full for the
Senior Securities being delivered to it pursuant to Section
2.01(a) of this Agreement, each Managing Agent on behalf of the
Purchasers in the related Purchaser Group shall deliver to the
Transferor or, at the direction of the Transferor, to any account
or entity as specified by the Transferor, by the wire transferor
of immediately available funds, an amount equal to such Purchaser
Group Percentage of the sum of the Class A Initial Invested
Amount, the Class B Initial Invested Amount and the Class C
Initial Invested Amount. It is understood and agreed that the
obligation of the Transferor to deliver the Senior Securities to
each Managing Agent on behalf of the Purchasers in the related
Purchaser Group is conditioned upon the Transferor's receipt of
such payment from such Managing Agent.
(c) Each Managing Agent on behalf of the Purchasers in
the related Purchaser Group agrees to execute and deliver to the
Transferor and the Trustee on the Closing Date an Investment
Letter in the form attached hereto as Exhibit B with respect to
the Senior Securities.
Section 2.02 Increases and Decreases in the Invested
Amounts. (a) Each Conduit Purchaser, through its respective
Managing Agent, may (but is not committed to), prior to the
Increase Termination Date and subject to the provisions of
Section 6.15 of the Pooling and Servicing Agreement, purchase the
related Purchaser Group Percentage of any Additional Class A
Invested Amount, Additional Class B Invested Amount and
Additional Class C Invested Amount from time to time requested by
the Transferor from the Purchasers in accordance with the
procedures described in Section 6.15 of the Pooling and Servicing
Agreement. If any Conduit Purchaser chooses at any time not to
purchase such Purchaser Group Percentage of any Additional Class
A Invested Amount, Additional Class B Invested Amount and/or
Additional Class C Invested Amount when requested by the
Transferor, each related Alternate Purchaser, through the
applicable Managing Agent, shall, prior to the Increase
Termination Date and subject to the provisions of Section 6.15 of
the Pooling and Servicing Agreement, purchase its Pro Rata Share
of the related Purchaser Group Percentage of such Additional
Class A Invested Amount, Additional Class B Invested Amount
and/or Additional Class C Invested Amount, as applicable.
(b) As payment in full for each purchase by a
Purchaser of the Additional Invested Amounts pursuant to Section
2.02(a), on the date of such purchase each Managing Agent on
behalf of the Purchasers in the related Purchaser Group shall
deliver to the Transferor, the amount equal to the related
Purchaser Group Percentage of the Additional Invested Amounts
determined in accordance with Section 6.15 of the Pooling and
Servicing Agreement at the time and in the manner set forth in
such Section.
(c) Each Purchaser agrees that its Class A Invested
Amount, Class B Invested Amount and Class C Invested Amount may
be decreased from time to time pursuant to subsections 4.9(b) and
4.9(c) and Section 4.12 of the Pooling and Servicing Agreement
and Section 9A of the Series Supplement; provided, however, that
the Class A Invested Amount, the Class B Invested Amount or the
Class C Invested Amount shall in no event be reduced below zero.
Section 2.03 Selection of Funding Periods. With
respect to any portion of the Invested Amount which is funded by
a Conduit Purchaser through the issuance of Commercial Paper, the
Transferor may, subject to the applicable Managing Agent's
approval and the limitations described below, request that the
Invested Amount so funded by a Conduit Purchaser be allocated
among one or more Funding Periods, so that the aggregate amounts
so allocated with respect to such Conduit Purchaser at all times
shall equal the Invested Amount held by such Conduit Purchaser.
No such Funding Period applicable to Invested Amounts funded by
the issuance of Commercial Paper shall be longer than 270 days
and no such Funding Period applicable to Invested Amounts funded
other than by the issuance of Commercial Paper shall be longer
than one month. The Transferor shall give each Managing Agent
irrevocable notice by telephone of the new requested Funding
Period(s) at least one (1) Business Days prior to the expiration
of any then existing Funding Period; provided, however, that the
applicable Conduit Purchaser or the related Managing Agent may
select any such new Funding Period if (1) the Transferor fails to
provide such notice on a timely basis or (ii) such Conduit
Purchaser or the related Managing Agent determines, in its sole
discretion, that the Funding Period requested by the Transferor
is unavailable or for any reason commercially undesirable.
Section 2.04 Distribution of Interest and Principal
Payments. (a) On each day on which the Administrative Agent
receives a payment under the Pooling and Servicing Agreement or
Series Supplement in respect of interest on the Senior Securities
(an "Interest Payment"), the Administrative Agent shall
distribute such amounts as follows:
(i) to the extent such Interest Payment relates to the
accrued Interest Component of Commercial Paper of a Conduit
Purchaser maturing on such day, to the applicable Managing
Agent, for the benefit of such Conduit Purchaser, an amount
equal to such accrued Interest Component;
(ii) to the extent such Interest Payment relates to the
interest accrued on amounts borrowed by a Conduit Purchaser
under a Liquidity Provider Agreement which have been
allocated to a Funding Period maturing on such day, to the
applicable Managing Agent, for the benefit of such Conduit
Purchaser, an amount equal to such accrued interest;
(iii) to the extent such Interest Payment relates
to the interest accrued on amounts funded by an Alternate
Purchaser which have been allocated to a Funding Period
maturing on such day, to the applicable Managing Agent, for
the benefit of such Alternate Purchaser, an amount equal to
such accrued interest; and
(iv) to the extent such Interest Payment is made on a
Distribution Date under Section 4.11(b) of the Pooling and
Servicing Agreement in respect of the accrued Interest
Component of Commercial Paper of a Conduit Purchaser,
interest accrued on amounts borrowed by a Conduit Purchaser
under a Liquidity Provider Agreement or interest accrued on
amounts funded by an Alternate Purchaser, in each case,
which interest does not relate to maturing Commercial Paper
or the last day of a Funding Period, to the applicable
Managing Agent(s) for the benefit of the applicable
Purchaser(s), the portion of such interest payment as
notified by each Managing Agent to the Administrative Agent.
In the event that the Interest Payment received by the
Administrative Agent on any day is insufficient to fully pay the
accrued and unpaid interest described in clauses (i), (ii) and
(iii) above, such Interest Payment shall be allocated pro rata
among the applicable Purchaser Groups (based upon each Purchaser
Group's funded portion of the Class A Invested Amount, the Class
B Invested Amount and the Class C Invested Amount, as applicable)
and further allocated pro rata among the Purchasers within each
Purchaser Group (based upon each Purchaser Group's funded portion
of the Class A Invested Amount, the Class B Invested Amount and
the Class C Invested Amount, as applicable) unless otherwise
agreed among the Purchasers in such Purchaser Group.
(b) On each day on which the Administrative Agent
receives a payment under the Pooling and Servicing Agreement or
Series Supplement in respect of Program Fees, Class A Facility
Usage Fees, Class B Facility Usage Fees, Class C Facility Usage
Fees or Facility Unused Fees, the Administrative Agent shall
distribute such amounts to the applicable Managing Agent, for the
benefit of the applicable Purchaser(s) in the related Purchaser
Group, an amount equal to such Purchaser Group's pro rata share
of such fees.
(c) On each day on which the Administrative Agent
receives a payment under the Pooling and Servicing Agreement or
Series Supplement in respect of Increased Costs, the
Administrative Agent shall distribute such amounts to the
applicable Managing Agent, for the benefit of the applicable
Purchaser(s) in the related Purchaser Group, an amount equal to
the Increased Costs for such Purchaser Group.
(d) On each Business Day on which the Administrative
Agent receives a payment in respect of the principal of the
Senior Securities pursuant to the Pooling and Servicing
Agreement, the Administrative Agent shall distribute, to each
Managing Agent, for the benefit of the applicable Purchaser(s) in
the related Purchaser Group, the related Purchaser Group's pro
rata share of the Class A Principal, the Class B Principal and
the Class C Principal (based upon each Purchaser Group's funded
portion of the Class A Invested Amount, the Class B Invested
Amount and the Class C Invested Amount, as applicable); provided,
however, that, with respect to each such Business Day which
occurs prior to the Early Amortization Period and to the extent
that any Purchaser Group's funded portion of the Class A Invested
Amount, the Class B Invested Amount and/or the Class C Invested
Amount exceeds such Purchaser Group's pro rata share thereof
(based on the applicable Purchaser Group Percentage), such
payments of principal shall be paid to the applicable Managing
Agent, for the benefit of the applicable Purchaser(s) in such
Purchaser Group, on a non-pro rata basis to the extent necessary
to return the related Purchaser Group to its pro rata status
based on the applicable Purchaser Group Percentage.
(e) All distributions by the Administrative Agent to
the Managing Agents hereunder shall be made by wire transfer of
immediately available funds to such depository account as each
such Managing Agent directs the Administrative Agent in writing
prior to the applicable Distribution Date. Each Managing Agent
shall further distribute the amounts received by it in accordance
with subsection (a) , (b), (c) and (d) of this Section 2.04 to
the applicable members of its related Purchaser Group.
Section 2.05 Extension of Term. The Transferor may,
at any time during the period which is no more than sixty (60)
days or less than thirty (30) days immediately preceding the
Specified Termination Date (as such date may have previously been
extended pursuant to this Section 2.05), request that the then
applicable Specified Termination Date be extended for an
additional 364 days; provided, however, that with respect to the
first extension hereunder, the Transferor may request such
extension between February 1, 1999 and March 31, 1999. Any such
request shall be in writing and delivered to each Managing Agent,
and shall be subject to the following conditions: (i) at no time
will this Agreement have a remaining term of more than 364 days
and, if any such request would result in a remaining term of more
than 364 days, such request shall be deemed to have been made for
such number of days so that, after giving effect to such
extension from the date approved, such remaining term will not
exceed 364 days, (ii) no Purchaser shall have any obligation to
extend the Specified Termination Date at any time, and (iii) any
such extension shall be effective only upon the written agreement
of the Administrative Agent, each Managing Agent, each Purchaser
and the Transferor. Each Managing Agent will (on behalf of the
applicable Purchasers) respond to any such request within thirty
(30) days of its receipt of such request, provided, that a
failure by any Managing Agent to respond within such 30-day
period shall be deemed to be a rejection of the requested
extension.
Section 2.06 Certain Payment. In consideration of the
agreements of the Purchasers hereunder, the Transferor agrees
that if on any Transfer Date the portion of the Facility Unused
Fee payable on the next succeeding Distribution Date exceeds the
aggregate amount of funds available pursuant to the applicable
provisions of the Series Supplement to pay such Facility Unused
Fee, the Transferor shall pay to the Administrative Agent, for
distribution to each Managing Agent for each Purchaser Group, on
such Distribution Date an amount equal to such excess; provided,
however, that, notwithstanding the foregoing, in no event shall
the amount of any payment made pursuant to this Section 2.06 on
any date exceed the remaining principal amount of the FCI Note on
such date. All payments pursuant to this Section 2.06 shall be
made in immediately available funds.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01 Conditions Precedent to the Obligations
of the Purchasers. The Purchasers' obligations hereunder to
purchase the Senior Securities on the Closing Date shall be
subject to the satisfaction (or waiver by the Administrative
Agent and the Managing Agents) of the following conditions
precedent:
(a) All the terms, covenants, agreements and
conditions of this Agreement and the other Principal Agreements
to be complied with and performed by the Transferor and the
Servicer by the Closing Date shall have been complied with and
performed in all material respects.
(b) Each of the representations and warranties of the
Transferor and the Servicer contained in this Agreement and the
other Principal Agreements, as applicable, shall be true and
correct in all material respects on and as of the Closing Date as
if made on and as of such date, except to the extent such
representations and warranties expressly relate to a particular
date, in which case such representations and warranties shall be
true and correct on and as of such date.
(c) On or before the Closing Date, each of the
documents listed on Schedule I to this Agreement shall have been
duly authorized and executed by each signatory thereto (other
than the Purchasers, Managing Agents and Administrative Agent)
and delivered to the Administrative Agent in form and substance
satisfactory to the Administrative Agent and its counsel.
(d) On or before the Closing Date, the Transferor
shall have paid to the extent due all reasonable fees and out-of-
pocket costs and expenses (including, without limitation,
reasonable legal fees and expenses) required to be paid hereunder
and under the other Principal Agreements, including amounts due
under the Fee Letter.
(e) No change shall have occurred on or before the
Closing Date in any law, rule or regulation that would prohibit
the consummation of any transaction contemplated hereby.
(f) On or before the Closing Date, the Transferor
shall have provided the Administrative Agent with written
confirmation from Moody's that the Class A Securities, the Class
B Securities and the Class C Securities have been rated at xxxxx
"Xx0", "X0", xxx "Xxx0", respectively.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties of the
Transferor. The Transferor hereby represents and warrants to
each Purchaser, each Managing Agent and the Administrative Agent
as of the date of this Agreement and as of the Closing Date, with
reference to the facts and circumstances then existing, as
follows:
(a) Due Authorization and No Conflict. The execution,
delivery and performance by the Transferor of this Agreement, and
the transactions contemplated hereby, are within its corporate
powers, have been duly authorized by all necessary corporate
action on its part, do not contravene (i) its charter or by-laws,
(ii) any law, rule or regulation applicable to it, (iii) any
material contractual restriction contained in any material inden
ture, loan or credit agreement, lease, mortgage, security agree
ment, bond, note, or other material agreement or instrument
binding on it or its property or (iv) any material order, writ,
judgment, award, injunction or decree binding on it or its
property, and do not result in or require the creation of any
Lien upon or with respect to any of its properties pursuant to
any material indenture, loan or credit agreement, lease,
mortgage, security agreement, bond, note or other material
agreement binding on it or its properties. This Agreement has
been duly executed and delivered on behalf of the Transferor.
(b) Governmental Consent. Assuming the correctness
and accuracy of the representations of each Purchaser contained
herein, to the Transferor's knowledge, other than those obtained,
no authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or regulatory body is
required for the due execution, delivery and performance by the
Transferor of this Agreement or any other agreement, document or
instrument to be delivered by it hereunder.
(c) Enforceability of This Agreement. This Agreement
constitutes the legal, valid and binding obligation of the
Transferor enforceable against it in accordance with its
respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or equity).
(d) No Litigation. There are no actions, suits or
proceedings pending, or to the knowledge of the Transferor
threatened in writing, against or affecting the Transferor, or
its property, in any court, or before any arbitrator of any kind,
or before or by any governmental body, which (i) assert the
invalidity of this Agreement or any action to be taken by the
Transferor in connection herewith, or (ii) seek to prevent the
consummation of the transactions contemplated by this Agreement.
(e) Accuracy of Information. No certificate, report
or statement, furnished or to be furnished by the Transferor to
the Administrative Agent or the Managing Agents in connection
with this Agreement is or shall be inaccurate in any material
respect as of the date it is or shall be dated or as of the date
so furnished (except as otherwise disclosed to the Administrative
Agent or the Managing Agents, as the case may be, at such time
or, after such time, as otherwise corrected by the Transferor
prior to such inaccuracy having a material adverse effect on (i)
the interests of the Purchasers, the Managing Agents or the
Administrative Agent under this Agreement, (ii) the interests of
the Purchasers in the Trust Property or any Senior Security, or
(iii) the ability of the Transferor to perform its obligations
hereunder or under the other Principal Agreements).
(f) Senior Securities. Each of the Senior Securities
has been duly and validly authorized, and, when executed and
authenticated in accordance with the terms of the Pooling and
Servicing Agreement and the Series Supplement and delivered to
and paid for by each Managing Agent on behalf of the Purchasers
in the related Purchaser Group in accordance with this Agreement,
will be duly and validly issued and outstanding, and will be
entitled to the benefits of the Pooling and Servicing Agreement
and the Series Supplement.
(g) Absence of Material Adverse Change. Since
December 31, 1997, there shall not have occurred any event which
would reasonably be expected to have a material adverse effect on
(i) the interests of the Purchasers in the Trust Property or any
Senior Security or (ii) the ability of the Transferor to perform
its obligations hereunder or under the other Principal
Agreements.
In addition to the foregoing, the representations and
warranties of the Transferor set forth in the Pooling and
Servicing Agreement and the Series Supplement are hereby
incorporated herein by reference for the benefit of the
Administrative Agent, the Purchasers and the Managing Agents.
Section 4.02 Representations, Warranties and Covenants
of the Purchasers. Each Purchaser hereby represents and warrants
to the Transferor that as of the date hereof and the Closing
Date:
(a) Such Purchaser understands that the Senior
Securities have not been and will not be registered under the
Securities Act or any other applicable securities law and agrees
that the Senior Securities may not be offered or sold by it
except in accordance with Rule 144A under the Securities Act or
pursuant to any other exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act
and, accordingly, that the Senior Securities may not be offered,
sold, transferred, pledged, hypothecated or otherwise disposed of
except as permitted herein, the Pooling and Servicing Agreement
and the Series Supplement.
(b) It is an Accredited Investor and it has such
knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of an investment
in the Senior Securities. It is aware that it may be required to
bear the economic risk of an investment in the Senior Securities
for an indefinite period of time, and it is able to bear such
risk until the Series 1998-3 Termination Date.
(c) Neither the Transferor nor any person representing
the Transferor has made any representation to it with respect to
the Transferor or the offer or sale of the Senior Securities
other than as set forth in this Agreement and the other Principal
Agreements (and in any document delivered pursuant to this
Agreement), which have been delivered to it, and upon which it is
relying in making its investment decision with respect to the
Senior Securities (it being understood that copies of any
nonpublic document received by it pursuant to this Agreement or
any other Principal Agreement are solely for it and are not to be
distributed or furnished to any other Person other than the
members of its Purchaser Group and other Persons on a need to
know basis). It has had the opportunity to ask questions and to
obtain information concerning the Transferor, the Servicer, the
Trust and the Senior Securities, it has received adequate
information concerning the Transferor, the Servicer, the Trust
and the Senior Securities to make an informed investment decision
with respect to its purchase of the Senior Securities, and it
acknowledges that an investment in the Senior Securities involves
special considerations.
(d) It will not offer, sell, transfer, pledge,
hypothecate or otherwise dispose of the Senior Securities except
in accordance with the applicable provisions of the Series
Supplement, including Section 10 thereof, and the Pooling and
Servicing Agreement, including Article VI thereof.
(e)(i) The securities representing the Class A
Securities, Class B Securities and the Class C Securities held by
it will contain the legends set forth in Section 10 of the Series
Supplement.
(f) It is not subscribing to purchase the Senior
Securities as a result of or subsequent to any advertisement,
article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television
or radio, or presented at any seminar or meeting, or any
solicitation of a subscription by a Person not previously known
to it in connection with investments in securities generally.
(g) The Purchaser represents and warrants (i) it is
duly authorized and empowered to execute, deliver and perform
this Agreement and to purchase the Senior Securities, and has
duly taken all requisite action in connection therewith; (ii) the
Person signing this Agreement on behalf of the Purchaser has been
duly authorized by the Purchaser to do so; (iii) this Agreement
is a valid and binding legal obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other
similar laws now or hereafter in effect affecting the enforcement
of creditors' rights in general and except as such enforceability
may be limited by general principles of equity (whether
considered in a suit at law or equity); and (iv) the execution,
delivery and performance of this Agreement and the purchase of
the Senior Securities do not and will not breach, violate or
constitute a default under any applicable law or regulation
(without considering the effect of any federal, state or other
securities laws), the Purchaser's constituent documents or any
agreement or arrangement to which the Purchaser is a party or by
which it may be bound.
(h) The Purchaser is not acting in a fiduciary
capacity in purchasing the Senior Securities.
(i) All information which the Purchaser has furnished
and is furnishing to the Transferor, including, without
limitation, the representation as to the Purchaser's status as an
Accredited Investor and all other representations contained in
this Agreement, is correct and complete as of the date of this
Agreement; the Purchaser acknowledges that the Transferor and
others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations and agreements and agrees that,
if any of the acknowledgments, representations or warranties made
or deemed to have been made by it or by its purchase of the
Senior Securities are no longer accurate, it shall promptly
notify the Transferor.
(j) The Purchaser is not an employee benefit plan. No
part of the funds to be used by the Purchaser to pay the purchase
price of the Senior Securities purchased hereunder, directly or
indirectly, constitutes "plan assets" of any employee benefit
plan (or its related trust). The term "employee benefit plan"
shall have the meaning assigned to such term in Section 3 of
ERISA; and the term "plan assets" shall have the meaning
specified in Department of Labor Regulation Section 2510.3-101.
ARTICLE V
COVENANTS OF THE TRANSFEROR
Section 5.01 Access to Information. The Transferor
hereby covenants to each Purchaser, each Managing Agent and the
Administrative Agent that, at any time and from time to time
during regular business hours, on reasonable notice to the
Transferor or the Servicer, as applicable, it will permit the
Administrative Agent, any Managing Agent, or their agents or
representatives, (a) to examine all books, records and documents
(including computer tapes and disks) in the possession or under
the control of the Transferor or the Servicer relating to the
Trust Property, and (b) to visit the offices and properties of
the Transferor or the Servicer for the purpose of examining such
materials described in clause (a) above, and to discuss matters
relating to the Trust Property or the Transferor's or the
Servicer's performance under the Principal Agreements with any of
the officers or employees of the Transferor or the Servicer
having knowledge of such matters. Any nonpublic information
obtained by the Administrative Agent or any Managing Agent
pursuant to this Section 5.01 shall be held in confidence by the
Administrative Agent or such Managing Agent; provided, however,
that any such nonpublic information may be disclosed to the
extent such disclosure is (i) required in order to comply with
any applicable law, order, regulation or ruling, or (ii) required
in response to any summons or subpoena or in connection with any
litigation. Except upon the occurrence and during the
continuation of a Pay Out Event, all requests by the Managing
Agents under this Section 5.01 shall be made through and
coordinated by the Administrative Agent with a view to minimizing
inconvenience to the Transferor.
Section 5.02 Reporting Requirements of the Transferor.
The Transferor will, or will cause the Servicer to, unless the
Administrative Agent and the Managing Agents shall otherwise
consent in writing, furnish to the Administrative Agent and the
Managing Agents:
(a) upon the request of the Administrative Agent or
any Managing Agent, copies of any certificate, report, statement,
notice or other communication provided with respect to Series
1998-3 to the Trustee in connection with the Pooling and
Servicing Agreement or the Series Supplement;
(b) as soon as possible and in any event within five
(5) Business Days after the Transferor obtains actual knowledge
of the occurrence thereof, notice of each Pay Out Event or
Servicer Default or event that with the giving of notice or lapse
of time or both would constitute such a Pay Out Event or Servicer
Default;
(c) the Transferor will cause the Servicer to provide
each Managing Agent prompt written notice of any downgrading of
the rating of Fingerhut Companies, Inc.'s most senior notes; and
(d) promptly, from time to time, such other
information, documents, records, opinions or reports with respect
to the Trust Property or Receivables, as the Administrative Agent
or any Managing Agent may from time to time reasonably request in
order to protect any Purchaser's interests under or contemplated
by the Principal Agreements.
ARTICLE VI
INDEMNIFICATION; EXPENSES; RELATED MATTERS
Section 6.01 Indemnities by the Transferor. (a)
Without limiting any other rights which the Administrative Agent,
the Managing Agents, the Conduit Purchasers or the Alternate
Purchasers may have hereunder or under applicable law, the
Transferor hereby agrees to indemnify each Conduit Purchaser,
each Alternate Purchaser, each Managing Agent, each Liquidity
Provider, each Program Support Provider, the Administrative Agent
and any successors and permitted assigns and any of their
respective directors, officers, employees, agents and
representatives (collectively, the "Indemnified Parties") from
and against any and all damages, losses, claims, liabilities,
costs and expenses, including, without limitation, reasonable
attorneys' fees (which such attorneys may be employees of an
Indemnified Party) and disbursements (all of the foregoing being
collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them in any action or proceeding or
any threatened action or proceeding (whether or not such
Indemnified Party is a party thereto) arising out of or as a
result of this Agreement, the other Principal Agreements, the
ownership or maintenance, either directly or indirectly, by an
Indemnified Party of any interest in the Senior Securities or any
of the other transactions contemplated hereby or thereby,
excluding, however, (i) Indemnified Amounts to the extent
resulting from gross negligence, willful misconduct or bad faith
on the part of such Indemnified Party and (ii) recourse for
amounts due under the Receivables which are uncollectible.
(b) In order for any Indemnified Party to be entitled
to any indemnification provided for under this Section 6.01 in
respect of, arising out of, or involving a claim made by any
Person against the Indemnified Party (a "Indemnified Claim"),
such Indemnified Party must notify the Transferor in writing of
the Indemnified Claim within a reasonable time after receipt by
such Indemnified Party of written notice of the Indemnified Claim
unless the Transferor shall have previously obtained actual
knowledge thereof. Thereafter, the Indemnified Party shall
deliver to the Transferor, within a reasonable time after the
Indemnified Party's receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified
Party relating to the Indemnified Claim. If an Indemnified Claim
is made against an Indemnified Party, (i) the Transferor will be
entitled to participate in the defense thereof and, (ii) if it so
chooses, to assume the defense thereof with counsel selected by
the Transferor, provided that, in connection with such
assumption, such counsel is not reasonably objected to by the
Indemnified Party. Should the Transferor so elect to assume the
defense of an Indemnified Claim, the Transferor will not be
liable to the Indemnified Party for any legal expenses
subsequently incurred by the Indemnified Party in connection with
the defense thereof except for reasonable out-of-pocket expenses
of such Indemnified Party (including, without limitation,
reasonable travel expenses of such Indemnified Party's personnel
who are required to testify at depositions, hearings and/or trial
or to participate in settlement conferences); provided, however,
that, if one or more defenses are available to such Indemnified
Party with respect to such Indemnified Claim which are not
otherwise available to the Transferor, (i) such Indemnified Party
will be entitled to participate in the defense of such
Indemnified Claim and (ii) the Transferor shall pay for the legal
expenses incurred by such Indemnified Party in connection
therewith; provided, further, that, with respect to subsection
(ii) and to the extent that an Indemnified Claim is made against
two or more Indemnified Parties, the Transferor shall only be
obligated to pay the fees and expenses of one law firm with
respect to all such Indemnified Parties unless there are
conflicts of interest between such Indemnified Parties. If the
Transferor elects to assume the defense of an Indemnified Claim,
the Indemnified Party will (x) cooperate in all reasonable
respects with the Transferor in connection with such defense and
(y) not admit any liability with respect to, or settle,
compromise or discharge such Indemnified Claim without the
Transferor's prior written consent. If the Transferor shall
assume the defense of any Indemnified Claim, the Indemnified
Party shall be entitled to participate in (but not control) such
defense with its own counsel at its own expense. If the
Transferor does not assume the defense of any such Indemnified
Claim, the Indemnified Party may defend the same in such manner
as it may deem appropriate, including settling such claim or
litigation after obtaining the consent of the Transferor, which
consent shall not be unreasonably withheld, to such terms, and
the Transferor will promptly reimburse the Indemnified Party upon
written request.
Section 6.02 Indemnity for Taxes, Reserves and
Expenses. (a) If after the date hereof, the adoption of any law
or bank regulatory guideline or any amendment or change in the
interpretation of any existing or future law or bank regulatory
guideline by any Governmental Authority charged with the
administration, interpretation or application thereof, or the
compliance with any directive of any Governmental Authority (in
the case of any bank regulatory guideline, whether or not having
the force of law):
(i) shall subject any Indemnified Party to any tax,
duty or other charge (other than Excluded Taxes) with
respect to this Agreement, the ownership, maintenance or
financing of the Senior Securities or payments of amounts
due hereunder, or shall change the basis of taxation of
payments to any Indemnified Party of amounts payable in
respect of this Agreement, the ownership, maintenance or
financing of any interest in the Senior Securities or
payments of amounts due hereunder or its obligation to
purchase or to advance funds hereunder, under a Liquidity
Provider Agreement or a Program Support Agreement (except
for changes in the rate of general corporate, franchise, net
income or other income tax imposed on such Indemnified Party
by the jurisdiction in which such Indemnified Party's
principal executive office is located); or
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System) against
assets of, deposits with or for the account of, or credit
extended by, any Indemnified Party or shall impose on any
Indemnified Party or on the London interbank market any
other condition affecting this Agreement, the ownership,
maintenance or financing of any interest in the Senior
Securities or payments of amounts due hereunder or its
obligation to purchase or to advance funds hereunder or
under a Liquidity Provider Agreement or Program Support
Agreement;
and the result of any of the foregoing is to increase the cost to
such Indemnified Party with respect to this Agreement, the
ownership, maintenance or financing of any interest in the Senior
Securities, the obligations hereunder, the funding of the
purchase or any increases hereunder, a Liquidity Provider
Agreement or a Program Support Agreement, by an amount reasonably
deemed by such Indemnified Party to be material, then, on the
next succeeding Business Day after demand by such Indemnified
Party through the Administrative Agent, such Indemnified Party
shall be entitled to receive, pursuant to Section 4.9(a)(xvi) of
the Pooling and Servicing Agreement, such additional amount or
amounts as will compensate such Indemnified Party for such
increased cost or reduction.
(b) If any Indemnified Party shall have determined
that after the date hereof, the adoption of any applicable law or
bank regulatory guideline regarding capital adequacy, or any
change therein, or any change in the interpretation thereof by
any Governmental Authority, or any directive regarding capital
adequacy (in the case of any bank regulatory guideline, whether
or not having the force of law) of any such Governmental
Authority, has or would have the effect of reducing the rate of
return on capital of such Indemnified Party (or its parent) as a
consequence of such Indemnified Party's obligations hereunder or
under a Liquidity Provider Agreement or Program Support Agreement
or with respect hereto or thereto to a level below that which
such Indemnified Party (or its parent) could have achieved but
for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by
an amount reasonably deemed by such Indemnified Party to be
material, then, on the next succeeding Business Day after demand
by such Indemnified Party through the Administrative Agent, such
Indemnified Party shall be entitled to receive, pursuant to
Section 4.9(a)(xvi) of the Pooling and Servicing Agreement, such
additional amount or amounts as will compensate such Indemnified
Party (or its parent) for such reduction.
(c) Each Indemnified Party will promptly notify the
Administrative Agent and the Administrative Agent will promptly
notify the Transferor upon learning that amounts for which it is
entitled to seek reimbursement under this Section 6.02 ("Section
6.02 Costs") have begun to accrue. A notice by the
Administrative Agent or the applicable Indemnified Party claiming
compensation under this Section 6.02 and setting forth the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such
amount, the Administrative Agent or any applicable Indemnified
Party may use any reasonable averaging and attributing methods,
consistent with the averaging and attribution methods generally
used by such Indemnified Party. Each of the Indemnified Parties
further agrees to take such steps as may be reasonably available
to it to avoid the need for, or reduce the amount of, any such
amounts that may thereafter accrue under this Section 6.02;
provided, however, that the Indemnified Parties shall have no
obligation to take any such step that is inconsistent with its
internal policy or legal and regulatory restrictions.
Section 6.03 Taxes. (a) Any and all payments to the
Managing Agents for the benefit of the Purchasers in the related
Purchaser Group with respect to the Senior Securities shall be
made, in accordance with the Pooling and Servicing Agreement,
free and clear of and without deduction for any present or future
excise, stamp or franchise taxes and any other taxes, fees,
duties, withholdings or other charges of any nature whatsoever
imposed by any taxing authority on any recipient (or any assignee
of such parties), but excluding franchise taxes and taxes imposed
on or measured by the recipient's net income or gross receipts
(such excluded items being "Excluded Taxes" and such items other
than Excluded Taxes being "Taxes"). If the Paying Agent or the
Transferor, if such amount is to be paid directly by the
Transferor, shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder or under the other
Principal Agreements with respect to any Purchaser, (i) such
Purchaser shall be entitled to receive, pursuant to Section
4.9(a)(xvi) of the Pooling and Servicing Agreement, an amount
sufficient so that, after making all required deductions
(including deductions applicable to additional sums payable under
this Section 6.03), such Purchaser receives an amount equal to
the sum it would have received had no such deductions been made,
(ii) the Paying Agent or the Transferor, if such amount is to be
paid directly by the Transferor, shall make such deductions and
(iii) the Paying Agent or the Transferor, if such amount is to be
paid directly by the Transferor, shall pay the full amount
deducted to the relevant taxation authority or other authority in
accordance with applicable law. The Purchasers further agree to
take such steps as may be reasonably available to it to avoid the
need for, or reduce the amount of, any such amounts that may
thereafter accrue under this Section 6.03; provided, however,
that the Purchasers shall have no obligation to take any such
step that is inconsistent with its internal policy or legal and
regulatory restrictions.
(b) If as a result of any event or circumstances
similar to those described in subsection (a) above, any Conduit
Purchaser is required to compensate a Liquidity Provider or
Program Support Provider in connection with borrowings,
commitments or purchases under the Liquidity Provider Agreement
or Program Support Agreement, respectively, by such Conduit
Purchaser for the funding or maintenance of such Purchaser's
investment in the Senior Securities hereunder, then within ten
(10) days after demand by the Managing Agent for the account of
such Conduit Purchaser through the Administrative Agent, such
Conduit Purchaser shall be entitled to receive, pursuant to
Section 4.9(a)(xvi) of the Pooling and Servicing Agreement, such
additional amount or amounts as may be necessary to pay such
Liquidity Provider or Program Support Provider, as applicable the
amounts due or to otherwise reimburse such Conduit Purchaser for
amounts paid by it. Such Conduit Purchaser agrees to use its
best efforts to enforce the provisions of the Liquidity Provider
Agreement or Program Support Agreement, as applicable, which
require each Liquidity Provider or Program Support Provider, as
applicable, to take certain actions to reduce the amount of such
compensation due to such Liquidity Provider or Program Support
Provider.
(c) Each Managing Agent and each Purchaser that is
created or organized in or under the laws of a jurisdiction other
than the United States or a state thereof hereby agrees to
complete, execute and deliver to the Trustee from time to time
prior to the initial Distribution Date on which such Person will
be entitled to receive distributions pursuant to the Pooling and
Servicing Agreement, the Series Supplement and this Agreement, as
applicable, Internal Revenue Service Form 4224 (or any successor
form), as applicable, or such other forms or certificates as may
be required under the laws of any applicable jurisdiction in
order to permit the Paying Agent, the Transferor, if such
payments are to be paid directly by the Transferor, or the
Administrative Agent in accordance with Section 2.04 hereof to
make payments to, and deposit funds to or for the account of,
such Person under the Pooling and Servicing Agreement, the Series
Supplement, and this Agreement, as applicable, without any
deduction or withholding for or on account of any tax. Each
Managing Agent and each Purchaser agrees to provide like
additional subsequent duly executed forms on or before the date
that any such form expires or becomes obsolete, or upon the
occurrence of any event requiring an amendment, resubmission or
change in the most recent form previously delivered by it and to
provide such extensions or renewals as may be reasonably
requested by the Transferor or the Trustee. Each Managing Agent
and each Purchaser further agrees that compliance with this
Section 6.03(c) is a condition to the payment of any amount
otherwise due pursuant to Sections 6.03(a) and (b) hereof.
Section 6.04 Other Costs, Expenses and Related
Matters. The Transferor agrees, upon receipt of a written
invoice, to pay or cause to be paid, and to save the Conduit
Purchasers, the Alternate Purchasers, the Managing Agents and the
Administrative Agent harmless against liability for the payment
of, all reasonable out-of-pocket expenses (including, without
limitation, attorneys', accountants' and other third parties'
fees and expenses, any filing fees and expenses incurred by
officers or employees of the Conduit Purchasers, Alternate
Purchasers, Managing Agents and/or the Administrative Agent) or
intangible, documentary or recording taxes incurred by or on
behalf of the Conduit Purchasers, Alternate Purchasers, Managing
Agents and the Administrative Agent (i) in connection with the
negotiation, execution, delivery and preparation of this
Agreement, the other Principal Agreements and any documents or
instruments delivered pursuant hereto and thereto and the
transactions contemplated hereby or thereby and (ii) from time to
time (A) relating to any amendments, waivers or consents under
this Agreement and the other Principal Agreements, (B) relating
to the syndication of the facility contemplated hereby, (C)
arising in connection with any Conduit Purchaser's, any Alternate
Purchaser's, any Managing Agent's or the Administrative Agent's
enforcement or preservation of rights, or (D) arising in
connection with any dispute, disagreement, litigation or
preparation for litigation involving this Agreement or any of the
other Principal Agreements; provided, however, that, with respect
to subsection (i) and subclauses (A) and (B) of subsection (ii)
of the foregoing sentence, the Transferor shall only be liable
for the attorneys' fees and expenses of one law firm with respect
to the Conduit Purchasers, the Alternate Purchasers, the Managing
Agents and the Administrative Agent as a group.
Section 6.05 Indemnity for Breakage Costs. To the
extent the Transferor reduces, on any day other than a day which
occurs on the last day of a Funding Period, the Class A Invested
Amount, the Class B Invested Amount and/or the Class C Invested
Amount allocated to such Funding Period, the Transferor agrees to
pay or cause to be paid the amount, if any, by which (i) the
additional interest which would have accrued on such reductions
during the balance of such Funding Period (as so computed) if
such reductions had not occurred exceeds (ii) the income, if any,
received by the applicable Managing Agent for the benefit of the
applicable Purchaser(s) in the related Purchaser Group, from the
investment by such Person of the proceeds of such reductions.
ARTICLE VII
THE ADMINISTRATIVE AGENT; MANAGING AGENTS
Section 7.01 Authorization and Action of
Administrative Agent. (a) Each Conduit Purchaser and each
Alternate Purchaser hereby appoints and authorizes the
Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other
Principal Agreements as are delegated to the Administrative Agent
by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. In furtherance, and without
limiting the generality, of the foregoing, each Conduit Purchaser
and each Alternate Purchaser hereby appoints the Administrative
Agent as its agent to execute and deliver all further instruments
and documents, and agrees to take all further action that the
Administrative Agent may deem necessary or appropriate or that a
Conduit Purchaser or an Alternate Purchaser may reasonably
request in order to perfect, protect or more fully evidence the
interests transferred or to be transferred from time to time by
the Transferor hereunder, or to enable any of them to exercise or
enforce any of their respective rights hereunder. With respect
to actions which are incidental to the actions specifically
delegated to the Administrative Agent hereunder, the
Administrative Agent shall not be required to take any such
incidental action hereunder, but shall be required to act or to
refrain from acting (and shall be fully protected in acting or
refraining from acting) upon the direction of the Managing
Agents; provided, however, the Administrative Agent shall not be
required to take any action hereunder if the taking of such
action, in the reasonable determination of the Administrative
Agent, shall be in violation of any applicable law, rule or
regulation or contrary to any provision of this Agreement or
shall expose the Administrative Agent to liability hereunder or
otherwise.
(b) The Administrative Agent shall exercise such
rights and powers vested in it by this Agreement and the other
Principal Agreements, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own
affairs.
Section 7.02 Administrative Agent's Reliance, Etc.
Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them as Administrative
Agent under or in connection with this Agreement or any of the
other Principal Agreements, except for its or their own gross
negligence or willful misconduct. Without limiting the
foregoing, the Administrative Agent: (i) may consult with legal
counsel (including counsel for the Transferor and the Servicer),
independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (ii) makes no warranty or
representation to any Conduit Purchaser or any Alternate
Purchaser and shall not be responsible to any Conduit Purchaser
or any Alternate Purchaser for any statements, warranties or
representations made in or in connection with this Agreement;
(iii) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or
conditions of this Agreement or any of the other Principal
Agreements on the part of the Transferor or the Servicer or to
inspect the property (including the books and records) of the
Transferor or the Servicer; (iv) shall not be responsible to any
Conduit Purchaser or any Alternate Purchaser for the due
execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any of the other
Principal Agreements or any other instrument or document
furnished pursuant hereto or thereto; and (v) shall incur no
liability under or in respect of this Agreement or any of the
other Principal Agreements by acting upon any notice (including
notice by telephone), consent, certificate or other instrument or
writing (which may be by telex) believed by it to be genuine and
signed or sent by the proper party or parties.
Section 7.03 Credit Decision. Each Conduit Purchaser
and each Alternate Purchaser acknowledges that it has,
independently and without reliance upon the Administrative Agent,
any of the Administrative Agent's Affiliates, any Managing Agent,
any other Alternate Purchaser or any other Conduit Purchaser and
based upon such documents and information as it has deemed
appropriate, made its own evaluation and decision to enter into
this Agreement and the other Principal Agreements to which it is
a party and, if it so determines, to accept the transfer of an
interest in the Senior Securities hereunder. Each Conduit
Purchaser and each Alternate Purchaser also acknowledges that it
will, independently and without reliance upon the Administrative
Agent, any of the Administrative Agent's Affiliates, any Managing
Agent, any other Alternate Purchaser or any other Conduit
Purchaser and based on such documents and information as it shall
deem appropriate at the time, continue to make its own decisions
in taking or not taking action under this Agreement and the other
Principal Agreements to which it is a party.
Section 7.04 Indemnification of the Administrative
Agent. Each Alternate Purchaser agrees to indemnify the
Administrative Agent (to the extent not reimbursed by the
Transferor), ratably in accordance with its respective Purchaser
Group Percentage, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted
against the Administrative Agent (in its capacity as such) in any
way relating to or arising out of this Agreement and any of the
other Principal Agreements or such action taken or omitted by the
Administrative Agent hereunder or thereunder; provided, however,
that such Alternate Purchaser shall not be liable for any portion
of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each
Alternate Purchaser agrees to reimburse the Administrative Agent,
ratably in accordance with its respective Purchaser Group
Percentage, promptly upon demand for any out-of-pocket expenses
(including counsel fees) incurred by the Administrative Agent in
connection with the administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and the other Principal
Agreements, to the extent that such expenses are incurred in the
interests of or otherwise in respect of the Conduit Purchasers or
the Alternate Purchasers hereunder and/or thereunder and to the
extent that the Administrative Agent is not reimbursed for such
expenses by the Transferor.
Section 7.05 Successor Administrative Agent. The
Administrative Agent may resign at any time, effective upon the
appointment and acceptance of a successor Administrative Agent as
provided below, by giving written notice thereof to each Managing
Agent, each Conduit Purchaser, each Alternate Purchaser and the
Transferor. Upon any such resignation, the Managing Agents shall
appoint a successor Administrative Agent. Each Conduit Purchaser
and each Alternate Purchaser agrees that it shall not
unreasonably withhold or delay its approval of the appointment of
a successor Administrative Agent. If no such successor
Administrative Agent shall have been so appointed, and shall have
accepted such appointment, within thirty (30) days after the
retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the
Conduit Purchasers and the Alternate Purchasers, appoint a
successor Administrative Agent with the prior consent of the
Managing Agents (which such consent will not be unreasonably
withheld) which such successor Administrative Agent shall be
either (i) a commercial bank organized under the laws of the
United States or of any state thereof and having a combined
capital and surplus of at least $250,000,000 or (ii) an Affiliate
of such a bank. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation hereunder as Administrative
Agent, the provisions of this Article VII shall continue to inure
to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Agreement. The
successor Administrative Agent shall promptly notify the
Transferor, the Servicer and the Trustee of its appointment
hereunder.
Section 7.06 Payments by the Administrative Agent.
Unless specifically allocated to a Conduit Purchaser or an
Alternate Purchaser pursuant to Section 2.04 of this Agreement,
all amounts received by the Administrative Agent, if any, on
behalf of the Conduit Purchasers or Alternate Purchasers shall be
paid by the Administrative Agent to the applicable Managing Agent
(at the account specified in writing to Administrative Agent) in
accordance with the related Purchaser Group Percentage on the
Business Day received by the Administrative Agent, unless such
amounts are received after 12:00 noon (New York time) on such
Business Day, in which case the Administrative Agent shall use
its reasonable efforts to pay such amounts to such Managing
Agent, on behalf of the related Purchaser, on such Business Day,
but, in any event, shall pay such amounts to such Managing Agent,
on behalf of the related Purchaser, not later than 11:00 a.m.
(New York time) on the following Business Day.
Section 7.07 Authorization and Action of Managing
Agent. (a) Each Conduit Purchaser and each Alternate Purchaser
of each Purchaser Group hereby appoints and authorizes the
Managing Agent with respect to such Purchaser Group to take such
action as agent on its behalf and to exercise such powers under
this Agreement and the other Principal Agreements as are
delegated to the Managing Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto.
In furtherance, and without limiting the generality, of the
foregoing, each Conduit Purchaser and each Alternate Purchaser
hereby appoints the related Managing Agent as its agent to
execute and deliver all further instruments and documents, and
agrees to take all further action that the related Managing Agent
may deem necessary or appropriate or that a Conduit Purchaser or
an Alternate Purchaser may reasonably request in order to
perfect, protect or more fully evidence the interests transferred
or to be transferred from time to time by the Transferor
hereunder, or to enable any of them to exercise or enforce any of
their respective rights hereunder or under the related Senior
Securities, and such other instruments or notices, as may be
necessary or appropriate for the purposes stated hereinabove.
The Conduit Purchasers and Alternate Purchasers may direct the
related Managing Agent (i) to direct the Administrative Agent to
take any action which is incidental to the actions specifically
delegated to the Administrative Agent hereunder and (ii) not to
take or to cease taking any action which is incidental to the
actions specifically delegated to the Administrative Agent
hereunder. With respect to actions which are incidental to the
actions specifically delegated to a Managing Agent hereunder, a
Managing Agent shall not be required to take any such incidental
action hereunder, but shall be required to act or to refrain from
acting (and shall be fully protected in acting or refraining from
acting) upon the direction of the related Conduit Purchaser and
Alternate Purchaser; provided, however, that no Managing Agent
shall be required to take any action hereunder if the taking of
such action, in the reasonable determination of such Managing
Agent, shall be in violation of any applicable law, rule or
regulation or contrary to any provision of this Agreement or
shall expose such Managing Agent to liability hereunder or
otherwise.
(b) The Managing Agent shall exercise such rights and
powers vested in it by this Agreement and the other Principal
Agreements, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
Section 7.08 Managing Agent's Reliance, Etc. Neither
any Managing Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be
taken by it or them as Managing Agent under or in connection with
this Agreement or any of the other Principal Agreements, except
for its or their own gross negligence or willful misconduct.
Without limiting the foregoing, the Managing Agent: (i) may
consult with legal counsel (including counsel for the Transferor
and the Servicer), independent public accountants and other
experts selected by it and shall not be liable for any action
taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts; (ii)
makes no warranty or representation to any Conduit Purchaser or
any Alternate Purchaser and shall not be responsible to any
Conduit Purchaser or any Alternate Purchaser for any statements,
warranties or representations made in or in connection with this
Agreement; (iii) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or any of the other
Principal Agreements on the part of the Transferor or the
Servicer or to inspect the property (including the books and
records) of the Transferor or the Servicer; (iv) shall not be
responsible to any Conduit Purchaser or any Alternate Purchaser
for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Senior
Securities or any other instrument or document furnished pursuant
hereto or thereto; and (v) shall incur no liability under or in
respect of this Agreement or any of the other Principal
Agreements by acting upon any notice (including notice by
telephone), consent, certificate or other instrument or writing
(which may be by telex) believed by it to be genuine and signed
or sent by the proper party or parties.
Section 7.09 Credit Decision. Each Conduit Purchaser
and each Alternate Purchaser acknowledges that it has,
independently and without reliance upon the Managing Agent, any
of the Managing Agent's Affiliates, any other Alternate Purchaser
or any other Conduit Purchaser and based upon such documents and
information as it has deemed appropriate, made its own evaluation
and decision to enter into this Agreement and the other Principal
Agreements to which it is a party and, if it so determines, to
accept the transfer of an interest in the Senior Securities
hereunder. Each Conduit Purchaser and each Alternate Purchaser
also acknowledges that it will, independently and without
reliance upon the Managing Agent, any of the Managing Agent's
Affiliates, any other Alternate Purchaser or any other Conduit
Purchaser and based on such documents and information as it shall
deem appropriate at the time, continue to make its own decisions
in taking or not taking action under this Agreement and the other
Principal Agreements to which it is a party.
Section 7.10 Indemnification of the Managing Agent.
Each Alternate Purchaser agrees to indemnify the related Managing
Agent (to the extent not reimbursed by the Transferor), ratably
in accordance with its respective Purchaser Group Percentage,
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Managing Agent
(in its capacity as such) in any way relating to or arising out
of this Agreement and any of the other Principal Agreements or
such action taken or omitted by the Managing Agent hereunder or
thereunder; provided, however, that such Alternate Purchaser
shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the
Managing Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Alternate Purchaser agrees to
reimburse the Managing Agent, ratably in accordance with its
respective Purchaser Group Percentage, promptly upon demand for
any out-of-pocket expenses (including counsel fees) incurred by
the Managing Agent in connection with the administration,
modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice
in respect of rights or responsibilities under, this Agreement
and the other Principal Agreements, to the extent that such
expenses are incurred in the interests of or otherwise in respect
of the Conduit Purchasers or the Alternate Purchasers hereunder
and/or thereunder and to the extent that the Managing Agent is
not reimbursed for such expenses by the Transferor.
Section 7.11 Successor Managing Agent. A Managing
Agent may resign at any time, effective upon the appointment and
acceptance of a successor Managing Agent as provided below, by
giving written notice thereof to the Administrative Agent, each
Conduit Purchaser, each Alternate Purchaser and the Transferor.
Upon any such resignation, the members of the related Purchaser
Group acting jointly shall appoint a successor Managing Agent.
Each Conduit Purchaser and each Alternate Purchaser agrees that
it shall not unreasonably withhold or delay its approval of the
appointment of a successor Managing Agent. If no such successor
Managing Agent shall have been so appointed, and shall have
accepted such appointment, within thirty (30) days after the
retiring Managing Agent's giving of notice of resignation, then
the retiring Managing Agent may, on behalf of the Conduit
Purchasers and the Alternate Purchasers, appoint a successor
Managing Agent which shall be either (i) a commercial bank
organized under the laws of the United States or of any state
thereof and having a combined capital and surplus of at least
$50,000,000 or (ii) an Affiliate of such a bank. Upon the
acceptance of any appointment as Managing Agent hereunder by a
successor Managing Agent, such successor Managing Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Managing Agent, and
the retiring Managing Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring
Managing Agent's resignation hereunder as Managing Agent, the
provisions of this Article VII shall continue to inure to its
benefit as to any actions taken or omitted to be taken by it
while it was Managing Agent under this Agreement. The successor
Managing Agent shall promptly notify the Transferor, the Servicer
and the Trustee of its appointment hereunder.
Section 7.12 Payments by a Managing Agent. Unless
specifically allocated to a Conduit Purchaser or an Alternate
Purchaser pursuant to the terms of this Agreement, all amounts
received by a Managing Agent (i) on behalf of the related Conduit
Purchaser(s) shall be paid by such Managing Agent to such Conduit
Purchaser(s) (at an account specified in writing to such Managing
Agent) in accordance with such Conduit Purchaser's pro rata share
of such amounts and (ii) on behalf of the related Alternate
Purchaser(s) shall be paid by such Managing Agent to such
Alternate Purchaser(s) (at an account specified in writing to
such Managing Agent) in accordance with such Alternate
Purchaser's Pro Rata Share of such amounts. All such payments
shall be made on the Business Day received by such Managing
Agent, unless such amounts are received after 12:00 noon (New
York time) on such Business Day, in which case such Managing
Agent shall use its reasonable efforts to pay such amounts, on
such Business Day, but, in any event, shall pay such amounts not
later than 11:00 a.m. (New York time) the following Business Day.
ARTICLE VIII
ASSIGNMENTS AND PARTICIPATIONS
Section 8.01 Assignments. Subject to the applicable
limitations and requirements set forth in the Pooling and
Servicing Agreement and the Series Supplement, the Purchasers may
assign all or a portion of its rights and obligations hereunder
to any other Persons as set forth in this Section 8.01.
(a) At any time prior to the Specified Termination
Date, in the event that any Conduit Purchaser has elected in its
discretion not to fund its portion of the Class A Initial
Invested Amount, the Class B Initial Invested Amount and the
Class C Initial Invested Amount or any Additional Invested Amount
as requested under Section 2.02 hereof, then the Transferor shall
have the right to direct the related Managing Agent to designate
the Alternate Purchasers in the related Purchaser Group to fund,
and such Alternate Purchasers shall fund, such Class A Initial
Invested Amount, Class B Initial Invested Amount and/or Class C
Initial Invested Amount or such Additional Invested Amount, as
applicable, subject to the conditions set forth in Section 6.15
of the Pooling and Servicing Agreement. In addition, at any
time, a Conduit Purchaser may elect to assign all or a portion of
its interest in any of the Senior Securities of its Purchaser
Group to the Alternate Purchasers in its Purchaser Group pursuant
to this Section 8.01. Upon any such election by a Conduit
Purchaser or any such direction by the Transferor, such Conduit
Purchaser shall make an Assignment and the Alternate Purchasers
in the related Purchaser Group shall accept such Assignment and
shall assume all or a portion of the obligations of such Conduit
Purchaser hereunder. In connection with an Assignment from any
Conduit Purchaser to the Alternate Purchasers in its Purchaser
Group pursuant to this Section 8.01, each Alternate Purchaser
shall, on the date of such Assignment, pay to such Conduit
Purchaser its Pro Rata Share of the applicable Assignment Amount
against delivery by such Conduit Purchaser of an Assignment and
Assumption Agreement. In the event that the Assignment Amount
paid by the Alternate Purchasers is less than the sum of the
portion of the applicable Purchaser Group Percentage of the
Invested Amount subject to such Assignment plus the interest
component of all outstanding Commercial Paper with respect
thereto, then to the extent payments made hereunder in respect of
the Invested Amount exceed the Assignment Amount, such excess
amounts shall be remitted by the applicable Managing Agent to the
Conduit Purchaser.
Without limiting the foregoing, any Conduit Purchaser
may, from time to time, with prior or concurrent notice to the
Transferor and the Servicer, in one transaction or a series of
transactions, assign to a Conduit Assignee all or a portion of
the related Purchaser Group Percentage of the Class A Invested
Amount, the Class B Invested Amount or the Class C Invested
Amount and such Conduit Purchaser's rights and obligations under
this Agreement and any other Principal Agreements to which it is
a party. Upon and to the extent of such assignment by a Conduit
Purchaser to a Conduit Assignee, (i) such Conduit Assignee shall
be the owner of the assigned portion of the related Purchaser
Group Percentage of the Class A Invested Amount, the Class B
Invested Amount or the Class C Invested Amount, as applicable,
(ii) the related Managing Agent for such Conduit Purchaser will
act as the Managing Agent for such Conduit Assignee, with all
corresponding rights and powers, express or implied, granted to
the related Managing Agent hereunder or under the other Principal
Agreements, (iii) such Conduit Assignee and its Liquidity
Providers and Program Support Providers and other related parties
shall have the benefit of all the rights and protections provided
to such Conduit Purchaser and its Liquidity Providers and Program
Support Providers and other related parties, respectively, herein
and in the other Principal Agreements (including, without
limitation, any limitation on recourse against such Conduit
Purchaser or related parties, any agreement not to file or join
in the filing of a petition to commence an insolvency proceeding
against such Conduit Purchaser, and the right to assign to
another Conduit Assignee as provided in this paragraph), (iv)
such Conduit Assignee shall assume such Conduit Purchaser's right
to fund the assigned portion of the related Purchaser Group
Percentage of any Additional Invested Amount requested by the
Transferor subsequent to the date of such assignment and all
other obligations, if any, of such Conduit Purchaser under and in
connection with this Agreement or any other Principal Agreements,
and such Conduit Purchaser shall be released from such
obligations, in each case to the extent of such assignment, and
the obligations of such Conduit Purchaser and Conduit Assignee
shall be several and not joint, (v) all distributions in respect
of the related Purchaser Group Percentage of the Class A Invested
Amount, the Class B Invested Amount or the Class C Invested
Amount, as applicable, shall be made to the applicable Managing
Agent, on behalf of such Conduit Purchaser and such Conduit
Assignee on a pro rata basis according to their respective
interests, (vi) the defined terms and other terms and provisions
of this Agreement and the other Principal Agreements shall be
interpreted in accordance with the foregoing, and (vii) if
requested by the applicable Managing Agent, the parties will
execute and deliver such further agreements and documents and
take such other actions as such Managing Agent may reasonably
request to evidence and give effect to the foregoing. No
Assignment by a Conduit Purchaser to a Conduit Assignee of all or
any portion of the related Purchaser Group Percentage of the
Class A Invested Amount, the Class B Invested Amount or the Class
C Invested Amount, as applicable, shall in any way diminish the
related Alternate Purchaser's obligation under Section 8.01(a) to
fund any Additional Invested Amount not funded by such Conduit
Purchaser or Conduit Assignee.
(b) In addition to the limitations and requirements
set forth in the Pooling and Servicing Agreement and the Series
Supplement, no Alternate Purchaser (or assignee thereof) may
assign all or a portion of its interests in the Senior Securities
of its Purchaser Group, the Class A Invested Amount, the Class B
Invested Amount, the Class C Invested Amount and its rights and
obligations hereunder to any Person unless approved in writing by
the related Managing Agent (in each case such approval not to be
unreasonably withheld or delayed). In the case of an Assignment
by an Alternate Purchaser (or assignee thereof) to another
Person, the assignor shall deliver to the assignee(s) an
Assignment and Assumption Agreement, duly executed, assigning to
the assignee, all or any portion of its interest in the Senior
Securities of its Purchaser Group, the Class A Invested Amount,
the Class B Invested Amount and/or the Class C Invested Amount,
and the assignor's rights and obligations hereunder. Any
assignor hereunder shall promptly execute and deliver all further
instruments and documents required hereby or by the Pooling and
Servicing Agreement, and take all further action, that the
assignee may reasonably request, in order to protect or more
fully evidence the assignee's right, title and interest in and to
such interest and to enable the Administrative Agent, on behalf
of such assignee, to exercise or enforce any rights hereunder and
under the other Principal Agreements to which such assignor is
or, immediately prior to such Assignment, was a party. Upon any
Assignment hereunder, (i) the assignee shall have all of the
rights and obligations of the assignor hereunder and under the
other Principal Agreements to which such assignor is or,
immediately prior to such Assignment, was a party with respect to
such interest for all purposes of this Agreement and such other
Principal Agreements (it being understood that the Alternate
Purchasers (or assignees thereof), as assignees, shall be
obligated to fund Additional Invested Amounts under Section 2.02
in accordance with the terms thereof, notwithstanding that the
Conduit Purchasers were not so obligated), and (ii) the assignor
shall relinquish its rights with respect to such interest for all
purposes of this Agreement and under the other Principal
Agreements to which such assignor is or, immediately prior to
such Assignment, was a party. No such Assignment shall be
effective unless a fully executed copy of the related Assignment
and Assumption Agreement shall be delivered to the Administrative
Agent and the Transferor. All out-of-pocket costs and legal
expenses of the Administrative Agent, the assignor and the
assignee incurred in connection with any Assignment hereunder
shall be borne as agreed among the Transferor, such assignor and
such assignee.
(c) By executing and delivering an Assignment and
Assumption Agreement, the assignor and assignee thereunder
confirm to and agree with each other and the other parties hereto
as follows: (i) other than as provided in such Assignment and
Assumption Agreement, the assignor makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with this Agreement, the other Principal Agreements or
any other instrument or document furnished pursuant hereto or
thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the other
Principal Agreements, the Receivables or other Trust Property or
any such other instrument or document; (ii) the assignor makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Transferor or the
Servicer or the performance or observance by the Transferor or
the Servicer of any of their respective obligations under this
Agreement, the other Principal Agreements or any other instrument
or document furnished pursuant hereto or thereto; (iii) such
assignee confirms that it has received a copy of this Agreement,
the Series Supplement, the Pooling and Servicing Agreement and
such other instruments, documents and information as it has
deemed appropriate to make its own credit analysis and decision
to enter into such Assignment and Assumption Agreement and to
purchase such interest; (iv) such assignee will, independently
and without reliance upon the Administrative Agent or any of its
Affiliates, the Managing Agents or any of their Affiliates, the
assignor or any other Purchaser and based on such agreements,
documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement and the other Principal
Agreements; (v) such assignee appoints and authorizes the
Administrative Agent and the related Managing Agent to take such
action as agent on its behalf and to exercise such powers under
this Agreement, the other Principal Agreements and any other
instrument or document furnished pursuant hereto or thereto as
are delegated to the Administrative Agent or such Managing Agent,
as applicable, by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto and to enforce its
respective rights and interests in and under this Agreement, the
other Principal Agreements and the Trust Property; (vi) such
assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement
and the other Principal Agreements are required to be performed
by it as such assignee; and (vii) such assignee agrees that it
will not institute against any Conduit Purchaser any proceeding
of the type referred to in Section 9.11 prior to the date which
is one year and one day after the payment in full of all
commercial paper and other debt securities issued by any Conduit
Purchaser.
(d) If at any time prior to any assignment by the
Conduit Purchaser in the Purchaser Group with respect to which
NationsBank is the Managing Agent to a related Alternate
Purchaser as contemplated pursuant to this Section 8.01, the
short term debt rating of any Alternate Purchaser shall be "A-2"
or "P-2" from Standard & Poor's or Moody's, respectively, with
negative credit implications, such Alternate Purchaser, upon
request of the Managing Agent, shall, within 30 days of such
request, assign its rights and obligations hereunder to another
financial institution (which institution's short term debt shall
be rated at least "A-2" and "P-2" from Standard & Poor's and
Moody's, respectively, and which shall not be so rated with
negative credit implications). If the short term debt rating of
an Alternate Purchaser shall be "A-3" or "P-3", or lower, from
Standard & Poor's or Moody's, respectively (or such rating shall
have been withdrawn by Standard & Poor's or Moody's), such
Alternate Purchaser, upon request of the Managing Agent, shall,
within five (5) Business Days of such request, assign its rights
and obligations hereunder to another financial institution (which
institution's short term debt shall be rated at least "A-2" and
"P-2" from Standard & Poor's and Moody's, respectively, and which
shall not be so rated with negative credit implications). In
either such case, if any such Alternate Purchaser shall not have
assigned its rights and obligations under this Agreement within
the applicable time period described above, the Conduit Purchaser
shall have the right to require such Alternate Purchaser to
accept the assignment of such Alternate Purchaser's Pro Rata
Share of the Purchaser Group Percentage of the Class A Invested
Amount, the Class B Invested Amount and/or the Class C Invested
Amount; such assignment shall occur in accordance with the
applicable provisions of this Section 8.01. Such Alternate
Purchaser shall be obligated to pay to the Conduit Purchaser, in
connection with such assignment, in addition to the Pro Rata
Share of the Purchaser Group Percentage of the Class A Invested
Amount, the Class B Invested Amount and/or the Class C Invested
Amount, an amount equal to the interest component of the
outstanding Commercial Paper issued to fund the portion of the
Class A Invested Amount, the Class B Invested Amount and/or the
Class C Invested Amount being assigned to such Alternate
Purchaser, as reasonably determined by the Managing Agent.
Notwithstanding anything contained herein to the contrary, upon
any such assignment to a downgraded Alternate Purchaser as
contemplated pursuant to the immediately preceding sentence, the
aggregate available amount of the Facility Limit, solely as it
relates to new Additional Invested Amounts by the Conduit
Purchaser, shall be reduced by the amount of unused Class A
Commitment Amount, Class B Commitment Amount and/or Class C
Commitment Amount of such downgraded Alternate Purchaser; it
being understood and agreed, that nothing in this sentence or the
two preceding sentences shall affect or diminish in any way any
such downgraded Alternate Purchaser's commitment to the
Transferor or such downgraded Alternate Purchaser's other
obligations and liabilities hereunder and under the other
Principal Agreements.
Section 8.02 Participations. (a) Subject to the
limitations and requirements set forth in the Pooling and
Servicing Agreement and the Series Supplement, any Conduit
Purchaser or Alternate Purchaser may sell participations to one
or more Persons in or to all or a portion of its rights and
obligations hereunder; provided, however, that (i) such Conduit
Purchaser's or Alternate Purchaser's obligations under this
Agreement (including, without limitation, any Alternate
Purchaser's commitment to fund its portion of any Additional
Invested Amount hereunder) shall remain unchanged, (ii) such
Conduit Purchaser or Alternate Purchaser shall remain solely
responsible to the Transferor, the other Conduit Purchasers and
Alternate Purchasers and the Administrative Agent for the
performance of such obligations, (iii) the Managing Agent of such
Conduit Purchaser or Alternate Purchaser shall remain the holder
of the Senior Securities (for the benefit of the members of the
related Purchaser Group) for all purposes of this Agreement, and
(iv) the Transferor, Administrative Agent and the other Conduit
Purchasers and Alternate Purchasers shall continue to deal solely
and directly with such Conduit Purchaser or Alternate Purchaser
(or the related Managing Agent) in connection with such Conduit
Purchaser's or Alternate Purchaser's rights and obligations under
this Agreement.
(b) Notwithstanding anything contained herein, no
participant shall be entitled to any payments under Section 6.02
and 6.03 in excess of any amounts which would be payable to the
Conduit Purchaser or Alternate Purchaser from which such
participant acquired its interest herein.
ARTICLE VIII
MISCELLANEOUS
Section 9.01 Termination of Agreement; Survival. This
Agreement shall terminate on the Series 1998-3 Termination Date;
provided, however, that the indemnification and payment
provisions of Article VI hereof, shall be continuing and shall
survive any termination of this Agreement. The provisions of
Sections 9.01 and 9.11 hereof shall survive any termination or
cancellation of this Agreement.
Section 9.02 Waivers; Amendments. No failure or delay
on the part of the Administrative Agent, any Managing Agent or
any Purchaser in exercising any power, right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or remedy preclude
any other further exercise thereof or the exercise of any other
power, right or remedy. The rights and remedies herein provided
shall be cumulative and nonexclusive of any rights or remedies
provided by law. Any provision of this Agreement may be amended
or waived if, but only if, such amendment or waiver is in writing
and is signed by the Transferor and the Required Securityholders
(and, if Article VII or the rights or duties of the
Administrative Agent or the Managing Agents are affected thereby,
by the Administrative Agent or the Managing Agents, as
applicable); provided, however, that, no such amendment or waiver
shall, unless signed by each Conduit Purchaser and/or each
Alternate Purchaser directly affected thereby, (A) increase the
Commitment Amount of an Alternate Purchaser, (B) reduce the
amount of the Class A Invested Amount, the Class B Invested
Amount and/or the Class C Invested Amount or rate of interest to
accrue thereon or any fees or other amounts payable hereunder, or
(C) modify the definition of the term "Required Securityholder."
SECTION 9.03 GOVERNING LAW; SUBMISSION TO
JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) EACH OF THE PARTIES HERETO HEREBY AGREES THAT A
FINAL JUDGMENT IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT IN ANY NEW YORK STATE COURT OR ANY FEDERAL COURT OF THE
UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, OR ANY
APPELLATE COURT WITH RESPECT TO ANY OF THE FOREGOING, SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF
VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT IN ANY NEW YORK STATE OR FEDERAL
COURT, OR ANY APPELLATE COURT WITH RESPECT TO ANY OF THE
FOREGOING. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
(c) EACH OF THE PARTIES HERETO HEREBY WAIVES ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE AMONG ANY OF THEM ARISING
OUT OF, CONNECTED WITH, RELATING TO OR INCIDENTAL TO THE
RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
THE OTHER PRINCIPAL AGREEMENTS.
Section 9.04 Integration. This Agreement together
with the other Principal Agreements and the Fee Letter contains
the final and complete integration of all prior expressions by
the parties hereto with respect to the subject matter hereof and
thereof and shall constitute the entire agreements among the
parties hereto with respect to the subject matter hereof and
thereof superseding all prior oral or written understandings.
Section 9.05 Counterparts. This Agreement may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken
together shall constitute one and the same Agreement.
Section 9.06 Headings. The headings in this Agreement
are for purposes of reference only and shall not limit or
otherwise affect the meaning or interpretation of any provisions
hereof.
Section 9.07 Notices. Every demand, notice, and
communication under this Agreement shall be in writing and shall
be deemed to have been duly given, made and received (i) one (1)
Business Day after it is delivered against receipt of registered
or certified mail or upon actual receipt of registered or
certified mail, postage prepaid, return receipt requested; (ii)
when delivered by courier with appropriate evidence of receipt;
or (iii) one (1) Business Day after it is transmitted via
facsimile transmission with appropriate evidence of receipt at
the following addresses of the recipient:
(a) in the case of the Transferor, to Fingerhut
Receivables, Inc. 0000 Xxxxx Xxxx, Xxxxx X000, Xxxxxxxxxx,
Xxxxxxxxx 00000, Attention: President, Telecopy: (612) 932-
3302;
(b) in the case of the Servicer, to Fingerhut National
Bank, 0000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xxxxx,
Xxxxx Xxxxxx 00000, Attention: President, Telecopy: (605)
361-0986; and with a copy to: Fingerhut Companies, Inc.,
0000 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Treasurer, Telecopy: (000) 000-0000;
(c) in the case of the Conduit Purchasers, to
(1) Kitty Hawk Funding Corporation, c/o Lord
Securities Corporation, Xxx Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx
Xxxxxx, Telecopy: (000) 000-0000,
(2) Falcon Asset Securitization Corporation, c/o
The First National Bank of Chicago, Suite
0596, 21st Floor, Xxx Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx
Xxxxxxxxx, Telecopy: (000) 000-0000, and
(3) Four Winds Funding Corporation, 2 World
Financial Center, Attention: Xxxxxx Xxxxxxxx,
Telecopy: (000) 000-0000;
(d) in the case of the Alternate Purchasers and
Managing Agents, to
(1) NationsBank, N.A., NationsBank Corporate
Center, 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention:
Xxxxxxxx Xxxxx, Telecopy: (000) 000-0000,
(2) The First National Bank of Chicago, Suite
0596, 21st Floor, Xxx Xxxxx Xxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx
Xxxxxxxxx, Telecopy: (000) 000-0000, and
(3) Commerzbank Aktiengesellschaft, Chicago
branch, 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxx
Shortly, Telecopy: (000) 000-0000;
(e) in the case of the Administrative Agent, to
NationsBank, N.A., NationsBank Corporate Center, 000 Xxxxx
Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Xxxxxxxx Xxxxx, Telecopy: (000) 000-0000; and
(f) in the case of any other Alternate Purchaser party
to this Agreement from time to time, to the address set
forth under such Alternate Purchaser's name on the signature
page to the Assignment and Assumption Agreement executed by
such Alternate Purchaser.
Any party may alter the address to which communications are to be
sent by giving notice of such change of address in conformity
with the provisions of this Section 9.07 for giving notice and by
otherwise complying with any applicable terms of this Agreement.
Section 9.08 Successors and Assigns. This Agreement
shall be binding on, and shall inure to the benefit of, the
parties hereto and their respective successors and assigns;
provided, however, that the Transferor may not assign any of its
rights or delegate any of its duties hereunder without the prior
written consent of the Administrative Agent and the Managing
Agents. No provision of this Agreement shall in any manner
restrict the ability of the Purchasers to assign, participate,
grant security interests in, or otherwise transfer any portion of
the Senior Securities of its related Purchaser Group or any
interest therein.
Section 9.09 Severability of Provisions. If any one
or more of the covenants, agreements, provisions or terms of this
Agreement 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 this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of
the Senior Securities or rights of the Administrative Agent,
Managing Agents and/or Purchasers thereof.
Section 9.10 Further Assurances. The Transferor
agrees 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 Administrative Agent or the Managing Agents more
fully to effect the purposes of this Agreement in a manner
consistent with this Agreement.
Section 9.11 Non-Petition Covenant. Each party hereto
hereby covenants and agrees that, prior to the date that is one
year and one day after the payment in full, in the case of the
Trust and Transferor, of the Senior Securities, and, in the case
of any Conduit Purchaser, of all commercial paper and other debt
securities issued by such Conduit Purchaser, neither it nor any
Affiliate thereof will file any involuntary petition or otherwise
institute against, or join any other Person or entity in
instituting against, the Trust, Transferor or any Conduit
Purchaser, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under
any federal or state bankruptcy or similar law.
Section 9.12 Limited Recourse Against Transferor.
Notwithstanding anything to the contrary contained in this
Agreement, none of the Purchasers, the Managing Agents or the
Administrative Agent shall have any claim against the Transferor
in respect of any amounts payable on a recourse basis by the
Transferor hereunder, to the extent that there are not funds of
the Transferor available to pay such amounts (it being understood
that funds of the Transferor available for such purpose shall be
limited to all amounts distributed to the Transferor in respect
of the Transferor Interest, all amounts otherwise distributed to
the Transferor pursuant to the Pooling and Servicing Agreement
and Series Supplement and relating to a Series, and, with respect
to any payments made pursuant to Section 2.06 hereof, all amounts
available to be drawn by the Transferor under the FCI Note).
IN WITNESS WHEREOF, the parties have caused this Agree
ment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
FINGERHUT RECEIVABLES, INC.,
as Transferor
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: President and Treasurer
KITTY HAWK FUNDING CORPORATION,
as Conduit Purchaser
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
FALCON ASSET SECURITIZATION
CORPORATION, as Conduit Purchaser
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
FOUR WINDS FUNDING CORPORATION,
as Conduit Purchaser
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Vice President
NATIONSBANK, N.A.,
as Alternate Purchaser and Managing Agent
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as Alternate Purchaser and Managing Agent
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
COMMERZBANK AKTIENGESELLSCHAFT,
CHICAGO BRANCH, as Alternate Purchaser
and Managing Agent
By: /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: Vice President
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Assistant Vice President
NATIONSBANK, N.A.,
as Administrative Agent for the Purchasers
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Vice President
SCHEDULE I
LIST OF CLOSING DOCUMENTS
(Attached).
SCHEDULE II
ALTERNATE PURCHASER COMMITMENT AMOUNTS
Class A Class B Class C
Alternate Purchaser Commitment Amount Commitment Amount Commitment Amount
NationsBank, N.A. $126,136,363.50 $3,409,090.88 $20,454,545.63
The First National
Bank of Chicago 126,136,363.50 3,409,090.88 20,454,545.63
Commerzbank
Aktiengesellschaft,
Chicago branch 84,090.909.00 2,272,727.25 13,636,363.75
Class Maximum
Invested Amount: $336,363,636.00 $9,090,909.00 $54,545,455.00
EXHIBIT A
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to the Security Purchase Agreement
dated as of July 30, 1998 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the
"Security Purchase Agreement"), by and among Fingerhut
Receivables, Inc., as Transferor, certain Purchasers and Managing
Agents parties thereto, and NationsBank, N.A., as Administrative
Agent for such Purchasers. To the extent not defined herein,
capitalized terms used herein have the meanings assigned to such
terms in the Security Purchase Agreement.
[_______________], a [____________] corporation, in its
capacity as a [Conduit] [Alternate] Purchaser under the Security
Purchase Agreement (the "Assignor") and [__________], a
[___________] corporation (the "Assignee"), hereby agree as follows:
1. In consideration of the Assignee's payment of
$[___________] (the "Purchase Price"), the Assignor hereby sells
and assigns to the Assignee, and the Assignee hereby purchases
and assumes from the Assignor, a [___]% interest in [its interest
in the Senior Securities of its Purchaser Group, the Class A
Invested Amount, the Class B Invested Amount and/or the Class C
Invested Amount,]1 [the related Purchaser Group Percentage of the
Class A Invested Amount, the Class B Invested Amount or Class C
Invested Amount,]2 and to such Assignor's rights and obligations
under the Security Purchase Agreement on [the applicable date]
(the "Purchase Date"). The Purchase Price shall be made on the
Purchase Date.3
2. The Assignor (i) represents and warrants that it
is the legal and beneficial owner of the interest being assigned
by it hereunder and that such interest is free and clear of any
Lien created by it; (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warran
ties or representations made in or in connection with the
Security Purchase Agreement, the other Principal Agreements or
any other instrument or document furnished pursuant thereto or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Security Purchase Agreement, the
other Principal Agreements, the Receivables or other Trust
Property or any such other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial
condition of Transferor or Servicer or the performance or xxxxx
xxxxx by Transferor or Servicer of any of their respective
obligations under the Security Purchase Agreement, the other
Principal Agreements or any instrument or document furnished
pursuant thereto.
3. The Assignee (i) confirms that it has received a
copy of the Security Purchase Agreement, the Pooling and
Servicing Agreement, the Series Supplement and such other instruments,
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment
and Assumption Agreement and purchase such interest in the
Assignor's rights and obligations under the Security Purchase
Agreement; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent or any of its Affiliates,
the Managing Agents or any of their Affiliates, the Assignor or
any other Purchaser and based on such agreements, documents and
information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action
under the Security Purchase Agreement and the other Principal
Agreements; (iii) appoints and authorizes the Administrative Agent
[and the Managing Agent for the Assignor] to take such action as
agent on its behalf and to exercise such powers under the Security
Purchase Agreement, the other Principal Agreements and any other
instrument or document delivered pursuant thereto as are
delegated to the Administrative Agent [or Managing Agent, if
applicable,] by the terms thereof, together with such powers as
are reasonably incidental thereto and to enforce its respective
rights and interests in and under the Security Purchase Agreement,
the other Principal Agreements and the Trust Property; (iv) agrees
that it will perform in accordance with their terms all of
the obligations which by the terms of the Security Purchase
Agreement and the other Principal Agreements are required to be
performed by it as such Assignee; (vi) specifies as its address for
notices the office set forth beneath its name on the signature
pages hereof; and (vii) agrees that it will not institute against
any Conduit Purchaser any proceeding of the type referred to in
Section 9.11 of the Security Purchase Agreement prior to the date
which is one year and one day after the payment in full of all
commercial paper and other debt securities issued by any Conduit Purchaser.
[__. The Assignee shall have all of the rights and
obligations of the Assignor under the Security Purchase Agreement
and under the other Principal Agreements to which such Assignor
is or, immediately prior to such Assignment, was a party with
respect to such interest for all purposes of the Security
Purchase Agreement and such other Principal Agreements (it being
understood that the Assignee, as an assignee of an Alternate
Purchaser, shall be obligated to fund Additional Invested Amounts
under Section 2.02 of the Security Purchase Agreement in
accordance with the terms thereof, notwithstanding that the
related Conduit Purchaser was not so obligated), and the Assignor
shall relinquish its rights with respect to such interest for all
purposed of the Security Purchase Agreement and under the other
Principal Agreements to which such Assignor is or, immediately
prior to such Assignment, was a party.]4
[__. (i) The Assignee shall be the owner of the
assigned portion of the related Purchaser Group Percentage of the
Class A Invested Amount, the Class B Invested Amount or the Class
C Invested Amount, as applicable, (ii) the related Managing Agent
for such Assignor will act as the Managing Agent for the
Assignee, with all corresponding rights and powers, express or
implied, granted to the related Managing Agent under the Security
Purchase Agreement or under the other Principal Agreements, (iii)
the Assignee and its Liquidity Providers and Program Support
Providers and other related parties shall have the benefit of all
the rights and protections provided to the Assignor and its
Liquidity Providers and Program Support Providers and other
related parties, respectively, in the Security Purchase Agreement
and in the other Principal Agreements (including, without
limitation, any limitation on recourse against the Assignor or
related parties, any agreement not to file or join in the filing
of a petition to commence an insolvency proceeding against the
Assignor, and the right to assign to another assignee as provided
in the Security Purchase Agreement), (iv) the Assignee shall
assume the Assignor's right to fund the assigned portion of the
related Purchaser Group Percentage of any Additional Invested
Amount requested by the Transferor subsequent to the Effective
Date and all other obligations, if any, of the Assignor under and
in connection with the Security Purchase Agreement or any other
Principal Agreements, and the Assignor shall be released from
such obligations, in each case to the extent of this Assignment
and Assumption Agreement, and the obligations of the Assignor and
Assignee shall be several and not joint, (v) all distributions in
respect of the related Purchaser Group Percentage of the Class A
Invested Amount, the Class B Invested Amount or the Class C
Invested Amount, as applicable, shall be made to the applicable
Managing Agent, on behalf of the Assignor and Assignee on a pro
rata basis according to their respective interests, (vi) the
defined terms and other terms and provisions of the Security
Purchase Agreement and the other Principal Agreements shall be
interpreted in accordance with the foregoing, and (vii) if
requested by the applicable Managing Agent, the Assignor and
Assignee will execute and deliver such further agreements and
documents and take such other actions as such Managing Agent may
reasonably request to evidence and give effect to the foregoing.]5
4. This Assignment and Assumption Agreement shall be
effective on the date hereof (the "Effective Date") [upon receipt
by the Administrative Agent and the Transferor of this Assignment
and Assumption Agreement duly executed by Assignor, Assignee and
the Managing Agent for the Assignor]6.
5. As of the Effective Date, (i) the Assignee shall
be a party to the Security Purchase Agreement and, to the extent
provided in this Assignment and Assumption Agreement, have the
rights and obligations of a [Conduit] [Alternate] Purchaser
thereunder and (ii) the Assignor shall, to the extent provided in
this Assignment and Assumption Agreement, relinquish its rights
and be released from its obligations under the Security Purchase
Agreement.
6. Upon such acceptance and recording, from and after
the Effective Date, the Managing Agent shall make all payments
received by it in respect of the interest assigned hereby to the
Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Security Purchase Agreement for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Assumption Agreement may be
executed by one or more of the parties on any number of separate
counterparts, and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.
8. This Assignment and Assumption Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Assumption Agreement to be executed by their
respective officers thereunto duly authorized as of the __ day of
______, 19__.
[ASSIGNOR]
By:_______________________
Name:
Title:
[ASSIGNEE]
By:______________________
_ Name:
Title:
Address for notices:
[NAME]
_____________
_____________
Attn: ___________
Telecopy: (___) ___-____
Consented to this __ day
of ________, 199_
[MANAGING AGENT], as
Managing Agent
By: ________________________
Name:
Title:
[The following acknowledgment only applies with respect to an
Assignment between an Alternate Purchaser and another Person].
Acknowledged to this __ day
of ________, 199_
NATIONSBANK, N.A.,
as Administrative Agent
By: ________________________
Name:
Title:
FINGERHUT RECEIVABLES, INC.,
as Transferor
By: ________________________
Name:
Title:
EXHIBIT B
FORM OF INVESTMENT LETTER
[Date]
Fingerhut Receivables, Inc.
0000 Xxxxx Xxxx
Xxxxx X000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Chief Financial Officer
and General Counsel
Bank of New York
Xxxxx Xxxx Center
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust Specialized
Agency Services
Re: Fingerhut Master Trust; Purchase of the Senior Securities
Ladies and Gentlemen:
This letter (the "Investment Letter") is delivered by
the undersigned (the "Purchaser") pursuant to Section 2.01(c) of
that certain Security Purchase Agreement dated as of July 30,
1998 (as the same may be amended, restated, supplemented or other
wise modified from time to time, the "Security Purchase
Agreement"), by and among Fingerhut Receivables, Inc., as
transferor (the "Transferor"), Kitty Hawk Funding Corporation, as
a Conduit Purchaser, Falcon Asset Securitization Corporation, as
a Conduit Purchaser, Four Winds Funding Corporation, as a Conduit
Purchaser, NationsBank, N.A., in its capacity as a Managing Agent
and individually as an Alternate Purchaser, The First National
Bank of Chicago, in its capacity as a Managing Agent and
individually as an Alternate Purchaser, Commerzbank
Aktiengesellschaft, Chicago branch, in its capacity as a Managing
Agent and individually as an Alternate Purchaser, and
NationsBank, N.A., as Administrative Agent for such Purchasers.
To the extent not defined herein, capitalized terms used herein
have the meanings assigned to such terms in the Security Purchase
Agreement. The undersigned Purchaser hereby represents to and
agrees with the Transferor as follows:
(a) The Purchaser understands that the Senior
Securities have not been and will not be registered under the
Securities Act or any other applicable securities law and agrees
that the Senior Securities may not be offered or sold by it
except in accordance with Rule 144A under the Securities Act or
pursuant to any other exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act
and, accordingly, that the Senior Securities may not be offered,
sold, transferred, pledged, hypothecated or otherwise disposed of
except as permitted in the Security Purchase Agreement, the
Pooling and Servicing Agreement and the Series Supplement.
(b) The Purchaser is an Accredited Investor and it has
such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an
investment in the Senior Securities. It is aware that it may be
required to bear the economic risk of an investment in the Senior
Securities for an indefinite period of time, and it is able to
bear such risk until the Series 1998-3 Termination Date.
(c) Neither the Transferor nor any person representing
the Transferor has made any representation to the Purchaser with
respect to the Transferor or the offer or sale of the Senior
Securities other than as set forth in the Security Purchase
Agreement and the other Principal Agreements (and in any document
delivered pursuant to the Security Purchase Agreement), which
have been delivered to it, and upon which it is relying in making
its investment decision with respect to the Senior Securities.
The Purchaser has had the opportunity to ask questions and to
obtain information concerning the Transferor, the Servicer, the
Trust and the Senior Securities, has received adequate
information concerning the Transferor, the Servicer, the Trust
and the Senior Securities to make an informed investment decision
with respect to its purchase of an interest in the Senior
Securities, and acknowledges that an investment in the Senior
Securities involves special considerations.
(d) The Purchaser will not offer, sell, transfer,
pledge, hypothecate or otherwise dispose the Senior Securities
except in accordance with the applicable provisions of the Series
Supplement, including Section 10 thereof, and the Pooling and
Servicing Agreement, including Article VI thereof.
(e)(i) The Purchaser understands that each of the
Class A Securities, Class B Securities and the Class C Securities
held by it will contain the following legend:
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT
OF FINGERHUT RECEIVABLES, INC. THAT SUCH PURCHASER IS NOT (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"))
THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, (II) A
PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE") THAT IS SUBJECT TO SECTION 4975
OF THE CODE, (III) A GOVERNMENTAL PLAN, AS DEFINED IN SECTION
3(32) OF ERISA, SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW WHICH
IS, TO A MATERIAL EXTENT, SIMILAR TO THE PROVISIONS OF SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE, (IV) AN ENTITY WHOSE
UNDERLYING ASSETS INCLUDE "PLAN ASSETS" (AS DEFINED IN 29 C.F.R.
SECTION 2510.3-101 OR OTHERWISE UNDER ERISA) BY REASON OF A
PLAN'S INVESTMENT IN THE ENTITY OR (V) A PERSON INVESTING "PLAN
ASSETS" OF ANY SUCH PLAN (INCLUDING WITHOUT LIMITATION, FOR
PURPOSES OF CLAUSE (IV) AND THIS CLAUSE (V), ANY INSURANCE
COMPANY GENERAL ACCOUNT, BUT EXCLUDING ANY ENTITY REGISTERED
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED).
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAW. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES THAT THIS SECURITY MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN
COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS AND
ONLY PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO AN
INSTITUTIONAL INVESTOR THAT THE HOLDER REASONABLY BELIEVES AS A
QUALIFIED INSTITUTIONAL BUYER WITH THE MEANING OF RULE 144A
("QIB") PURCHASING FOR ITS OWN ACCOUNT OR A QIB PURCHASING FOR
THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE,
THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, OR TO THE TRANSFEROR. EACH SECURITY
OWNER BY ACCEPTING A BENEFICIAL INTEREST IN THIS SECURITY IS
DEEMED TO REPRESENT AND WARRANT THAT IT IS A QIB PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF ANOTHER
QIB. THE TRANSFER OF THIS SECURITY IS SUBJECT TO CERTAIN
CONDITIONS SET FORTH IN THE POOLING AND SERVICING AGREEMENT
REFERRED TO HEREIN. EACH CLASS [A] [B] [C] SECURITY OWNER BY
ACCEPTING A BENEFICIAL INTEREST IN THIS SECURITY FURTHER
REPRESENTS AND WARRANTS FOR THE BENEFIT OF FINGERHUT RECEIVABLES,
INC. THAT SUCH PURCHASER IS NOT AND WILL NOT BECOME A
PARTNERSHIP, SUBCHAPTER S CORPORATION OR GRANTOR TRUST FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES FOR SO LONG AS SUCH PURCHASER
HOLDS A BENEFICIAL INTEREST IN THIS SECURITY.
THIS SECURITY MAY NOT BE ACQUIRED BY OR SOLD, TRADED OR
TRANSFERRED TO A PERSON WHO IS NOT EITHER (A) (I) A CITIZEN OR
RESIDENT OF THE UNITED STATES, (II) A CORPORATION, PARTNERSHIP OR
OTHER ENTITY ORGANIZED IN OR UNDER THE LAWS OF THE UNITED STATES
OR ANY POLITICAL SUBDIVISION THEREOF OR (III) A PERSON NOT
DESCRIBED IN (I) OR (II) WHOSE OWNERSHIP OF THE CLASS [A] [B]
[C] SECURITIES IS EFFECTIVELY CONNECTED WITH SUCH PERSON'S
CONDUCT OF A TRADE OR BUSINESS WITHIN THE UNITED STATES (WITHIN
THE MEANING OF THE CODE) AND ITS OWNERSHIP OF ANY INTEREST IN A
CLASS [A] [B] [C] SECURITY WILL NOT RESULT IN ANY WITHHOLDING
OBLIGATION WITH RESPECT TO ANY PAYMENTS WITH RESPECT TO THE CLASS
[A] [B] [C] SECURITIES BY ANY PERSON (OTHER THAN WITHHOLDING,
IF ANY, UNDER SECTION 1446 OF THE CODE) OR (B) AN ESTATE THE
INCOME OF WHICH IS INCLUDIBLE IN GROSS INCOME FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES OR ANY TRUST IF A COURT WITHIN THE
UNITED STATES IS ABLE TO EXERCISE PRIMARY SUPERVISION OVER THE
ADMINISTRATION OF THE TRUST AND ONE OR MORE UNITED STATES
FIDUCIARIES HAVE THE AUTHORITY TO CONTROL ALL SUBSTANTIAL
DECISIONS OF THE TRUST.
NO SALE, ASSIGNMENT, PARTICIPATION, PLEDGE, HYPOTHECATION,
TRANSFER OR OTHER DISPOSITION OF THIS SECURITY (OR ANY INTEREST
THEREIN) SHALL BE MADE UNLESS THE TRANSFEROR SHALL HAVE GRANTED
ITS PRIOR CONSENT THERETO, WHICH CONSENT MAY NOT BE UNREASONABLY
WITHHOLD. THIS SECURITY MAY NOT BE ACQUIRED, SOLD, TRADED OR
TRANSFERRED, NOR MAY AN INTEREST IN THIS SECURITY BE MARKETED, ON
OR THROUGH (I) AN "ESTABLISHED SECURITIES MARKET" WITHIN THE
MEANING OF SECTION 7704(b) (1) OF THE CODE AND ANY PROPOSED,
TEMPORARY OR FINAL TREASURY REGULATION THEREUNDER, INCLUDING,
WITHOUT LIMITATION, AN OVER-THE-COUNTER-MARKET OR AN INTERDEALER
QUOTATION SYSTEM THAT REGULARLY DISSEMINATES FIRM BUY OR SELL
QUOTATIONS OF (II) A "SECONDARY MARKET" WITHIN THE MEANING OF
SECTION 7704(b)(2) OF THE CODE AND ANY PROPOSED, TEMPORARY OR
FINAL TREASURY REGULATION THEREUNDER, INCLUDING A MARKET WHEREIN
INTERESTS IN THE CLASS [A] [B] [C] SECURITIES ARE REGULARLY
QUOTED BY ANY PERSON MAKING A MARKET IN SUCH INTERESTS AND A
MARKET WHEREIN ANY PERSON REGULARLY MAKES AVAILABLE BID OR OFFER
QUOTES WITH RESPECT TO INTERESTS IN THE CLASS [A] [B] [C]
SECURITIES AND STANDS READY TO EFFECT BUY OR SELL TRANSACTIONS AT
THE QUOTED PRICES FOR ITSELF OR ON BEHALF OF OTHERS.
(f) The Purchaser is not subscribing to purchase an
interest in the Senior Securities as a result of or subsequent to
any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or
broadcast over television or radio, or presented at any seminar
or meeting, or any solicitation of a subscription by a Person not
previously known to it in connection with investments in
securities generally.
(g) The Purchaser represents and warrants (i) it is
duly authorized and empowered to execute, deliver and perform the
Security Purchase Agreement and to purchase an interest in the
Senior Securities, and has duly taken all requisite action in
connection therewith; (ii) the Person signing the Security
Purchase Agreement on behalf of the Purchaser has been duly
authorized by the Purchaser to do so; (iii) the Security Purchase
Agreement is a valid and binding legal obligation of the
Purchaser, enforceable against the Purchaser in accordance with
its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity
(whether considered in a suit at law or equity); and (iv) the
execution, delivery and performance of the Security Purchase
Agreement and the purchase of an interest in the Senior
Securities do not and will not conflict with, violate or
constitute a default under any applicable law or regulation
(without considering the effect of any federal, state or other
securities laws), the Purchaser's constituent documents or any
agreement or arrangement to which the Purchaser is a party or by
which it may be bound.
(h) The Purchaser is not acting in a fiduciary
capacity in purchasing an interest in the Senior Securities.
(i) All information which the Purchaser has furnished
and is furnishing to the Transferor, including, without
limitation, the representation as to the Purchaser's status as an
Accredited Investor and all other representations contained in
the Security Purchase Agreement, is correct and complete as of
the date of the Security Purchase Agreement; the Purchaser
acknowledges that the Transferor and others will rely upon the
truth and accuracy of the foregoing acknowledgments,
representations and agreements and agrees that, if any of the
acknowledgments, representations or warranties made or deemed to
have been made by it or by its purchase of an interest in the
Senior Securities are no longer accurate, it shall promptly
notify the Transferor.
(j) The Purchaser is not an employee benefit plan. No
part of the funds to be used by the Purchaser to pay the purchase
price of an interest in the Senior Securities purchased under the
Security Purchase Agreement, directly or indirectly, constitutes
"plan assets" of any employee benefit plan (or its related
trust). The term "employee benefit plan" shall have the meaning
assigned to such term in Section 3 of ERISA; and the term "plan
assets" shall have the meaning specified in Department of Labor
Regulation Section 2510.3-101.
(k) This Investment Letter has been duly executed and
delivered and constitutes a valid and binding legal obligation of
the Purchaser, enforceable against the Purchaser in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law
or equity).
Please acknowledge your agreement to the terms of this
letter by signing in the space provided below. This letter may
be executed in one or more counterparts, each of which shall be
deemed to be an original, but all of which together shall
constitute one and the same instrument.
Very truly yours,
[PURCHASER]
By:___________________________
Name:
Title:
ACKNOWLEDGED TO AS OF THE
DATE FIRST ABOVE WRITTEN:
FINGERHUT RECEIVABLES, INC.,
as Transferor,
By:________________________
Name:
Title:
_______________________________
1 Applicable to an Assignment (a) by a Conduit Purchaser to
an Alternate Purchaser in its Purchaser Group or (b) by an
Alternate Purchaser to another Person.
2 Applicable to an Assignment by a Conduit Purchaser to a
Conduit Assignee.
3 This Section will need to be revised if the Purchase Price
will be made by a Conduit Assignee to the related Conduit
Purchaser on two or more Commercial Paper maturity dates.
4 This Section is applicable if the Assignment is from an
Alternate Purchaser to another Person.
5 This Section is applicable if the Assignment is from a
Conduit Purchaser to a Conduit Assignee.
6 Applicable if the Assignment is from an Alternate Purchaser
to another Person.
