AMENDMENT NO. 1, dated as of June 10, 1996 (this
"Agreement"), by and among FINGERHUT FINANCIAL SERVICES RECEIVABLES,
INC., a corporation organized and existing under the laws of the State of
Delaware, as Transferor, DIRECT MERCHANTS CREDIT CARD BANK, NATIONAL
ASSOCIATION, a national banking organization organized and existing under
the laws of the United States of America, as Servicer, and THE BANK OF
NEW YORK (DELAWARE), a Delaware banking corporation organized and
existing under the laws of the State of Delaware, as Trustee, to the
POOLING AND SERVICING AGREEMENT, dated as of May 26, 1995 (the "Pooling
and Servicing Agreement"), by and among the Transferor, the Servicer and
the Trustee.
W I T N E S S E T H:
WHEREAS, the Transferor, the Servicer and the Trustee
desire to amend the Pooling and Servicing Agreement pursuant to Section
13.1(a) therein in order to provide for the terms contained herein.
WHEREAS, the Transferor suspended the automatic inclusion
in Accounts of Additional Accounts at the close of business on May 31,
1996 and the Transferor desires to reinstate such automatic inclusion in
Accounts of Additional Accounts upon the effectiveness of this Agreement.
Therefore, in consideration of the mutual agreements
herein contained, each party agrees as follows for the benefit of the
other parties and the Certificate-holders:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Except as provided herein, all
capitalized terms used in this Agreement but not defined herein shall
have their respective meanings in the Pooling and Servicing Agreement.
Section 1.2 Additional Accounts. The definition of
Additional Account in the Pooling and Servicing Agreement is hereby
replaced in its entirety by the following:
"Additional Account" shall mean each revolving credit consumer credit
card account owned by a Credit Card Originator coming into existence
after the Initial ClosTing Date which is an Approved Account that the
Transferor has not elected to exclude from the Trust after June 7, 1996.
Any election to exclude certain Approved Accounts shall be made by the
Transferor or the Servicer providing to the Trustee a written notice
thereof clearly identifying such excluded accounts.
"New Accounts" shall have the meaning specified in Section 2.5 of this
Agreement.
ARTICLE II
Section 2.1 Receivables in Defaulted Accounts. The
following Section 2.10 shall be read in conjunction with Article II of
the Pooling and Servicing Agreement:
"Section 2.10. Receivables in Defaulted Accounts. On the date on which an
Account becomes a Defaulted Account, the Trust shall automatically and
without further action or consideration be deemed to transfer, set over,
and otherwise convey to the Transferor, without recourse, representation
or warranty, all the right, title and interest of the Trust in and to the
Receivables in such Defaulted Account, all monies due or to become due
with respect thereto, all proceeds of such Receivables allocable to the
Trust with respect to such Receivable, excluding Recoveries relating
thereto, which shall remain a part of the Trust Property. On each
Determination Date, the Servicer shall calculate the aggregate Investor
Default Amount for the preceding Monthly Period with respect to each
Series."
Section 2.2 Amendment of Section 2.6(a). The first
sentence of Section 2.6(a) of the Pooling and Servicing Agreement is
hereby replaced in its entirety by the following:
"Unless otherwise specified in any Supplement, and subject to the
conditions of subsection 2.6(f) herein, all accounts which meet the
definition of Additional Accounts shall be included as Accounts from and
after the date upon which such Additional Accounts are created and all
Receivables in such Additional Accounts, whether such Receivables are
then existing or thereafter created, shall be transferred automatically
to the Trust upon purchase by the Transferor."
Section 2.3 Amendment of Section 2.6(c). Section 2.6(c) of
the Pooling and Servicing Agreement is hereby replaced in its entirety by
the following:
"In addition to its obligation under subsection 2.6(b), the Transferor
may, by giving ten Business Days notice to the Trustee and each Rating
Agency, but shall not be obligated to, designate from time to time
Supplemental Accounts of the Transferor to be included as Accounts."
Section 2.4 Amendment of Section 2.6(f). Section 2.6(f) of
the Pooling and Servicing Agreement is hereby replaced in its entirety by
the following:
"Additional Accounts shall be deemed to be Accounts the Receivables of
which shall be designated for inclusion in the Trust if, unless each
Rating Agency otherwise consents, on and after the beginning of the June
1996 Monthly Period, the following conditions are met: the number of
Accounts the Receivables of which are designated to be included in the
Trust pursuant to subsection 2.6(a) since (i) the first day of the
eleventh preceding Monthly Period (or, in the case of any date on which
Additional Accounts are to be added to the Trust which occurs on or
before the last day of the May 1997 Monthly Period, June 1, 1996) minus
the number of Accounts of the type described in clause (ii) of the
definition of "Approved Account" which have been added on the initial day
of the addition of such type of Account pursuant to such clause (ii)
since the first day of such eleventh preceding Monthly Period (or June 1,
1996, as the case may be) minus any Removed Accounts removed since the
first day of such eleventh preceding Monthly Period (or June 1, 1996, as
the case may be) shall not exceed 20% of number of Accounts on the
first day of such eleventh preceding Monthly Period (or June 1, 1996,
as the case may be), and (ii) the first day of the second preceding
Monthly Period (or, in the case of any date on which Additional Accounts
are to be added to the Trust which occurs on or before the last day of
the August 1996 Monthly Period, June 1, 1996) minus the number of
Accounts of the type described in clause (ii) of the definition of
"Approved Accounts" have been added on the initial day of the addition of
such type of Account pursuant to such clause (ii) since the first day of
such second preceding Monthly Period (or June 1, 1996, as the case may
be) minus any Removed Accounts removed since the first day of such second
preceding Monthly Period (or June 1, 1996, as the case may be) shall not
exceed 15% of the number of Accounts on the first day of such second
preceding Monthly Period (or June 1, 1996, as the case may be).
Section 2.5 Automatic Additions. Upon the effectiveness of
this Agreement, Additional Accounts shall be automatically designated for
inclusion in the Trust to the extent provided in Section 2.6 of the Pool-
ing and Servicing Agreement as amended hereby and all revolving credit
consumer credit card accounts which are Approved Accounts originated
after the close of business on May 31, 1996 until the date the Transferor
elects to exclude any accounts from the Trust (such accounts, "New
Accounts") shall be Accounts for all purposes under the Pooling and
Servicing Agreement and the Transferor hereby conveys the Receivables in
the New Accounts to the Trust pursuant to Section 2.1 of the Pooling and
Servicing Agreement.
Section 2.6 Conditions to Effectiveness. This Agreement
shall become effective upon the satisfaction of the following conditions:
(i) the Servicer shall have provided an Officer's Certificate to
the Trustee to the effect that such amendment will not materially
and adversely affect the interests of the Certificateholders,
(ii) receipt by the Trustee of an Opinion of Counsel pursuant to
Section 13.1(a)(ii) of the Pooling and Servicing Agreement;
(iii) receipt by the Trustee of an Opinion of Counsel pursuant to
Section 13.1(g) of the Pooling and Servicing Agreement;
(iv) the Servicer shall have provided at least ten Business Days
prior written notice to each Rating Agency of this Agreement and
shall have received written confirmation from each Rating Agency
to the effect that the rating of any Series or any class of any
Series will not be reduced or withdrawn as a result of such
amendment; and
(v) execution of this Agreement by each of the parties hereto.
Section 2.7 Governing Law. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 2.8 Counterparts. This Agreement may be executed
in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Transferor, the Servicer and the
Trustee have caused this Agreement to be duly executed by their
respective officers as of the day and year first above written.
FINGERHUT FINANCIAL SERVICES
RECEIVABLES, INC.,
as Transferor
By:/s/ XXXXXX X. XXXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
DIRECT MERCHANTS CREDIT CARD
BANK, NATIONAL ASSOCIATION,
as Servicer
By:/s/ XXXXXX X. XXXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President and
Treasurer
THE BANK OF NEW YORK (DELAWARE),
as Trustee
By:/s/ XXXXXXX XXXXXXXX
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
