Exhibit 10(u) RECEIVABLES PURCHASE AGREEMENT dated as of December 18, 1996

Exhibit 10(u)

RECEIVABLES PURCHASE AGREEMENT

dated as of December 18, 1996

among

FTL RECEIVABLES COMPANY,

as Seller,

UNION UNDERWEAR COMPANY, INC.,

as initial Servicer,

▇▇▇▇▇▇ CAPITAL CORPORATION,

as Purchaser,

and

SOCIETE GENERALE,

as Agent
2
TABLE OF CONTENTS

PAGE
ARTICLE I.

THE COMMITMENT; PURCHASE AND REINVESTMENT LIMITS

1.01 Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Purchase and Reinvestment Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 Making Purchases from Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 Number of Yield Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.05 Commitment Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.06 Purchase and Reinvestment Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.07 Voluntary Termination of Commitment or Reduction
of Facility Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE II.

UNDIVIDED INTEREST AND PURCHASER'S SHARE

2.01 Undivided Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.02 Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.03 Net Pool Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.04 Purchaser's Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.05 Yield Reserve; Earned Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.06 Servicer's Fee Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.07 Required Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE III.

SETTLEMENTS

3.01 Establishment and Use of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.02 Settlement and Reinvestment Procedures to be Followed
Absent the Occurrence of a Liquidation Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.03 Settlement Procedures to be Followed if a
Liquidation Day Occurs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.04 Special Settlement Procedures; Reduction of
Investment, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.05 Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.06 Payments and Computations, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.07 Dividing or Combining Undivided Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

ARTICLE IV.

FEES AND YIELD PROTECTION

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TABLE OF CONTENTS
(CONTINUED)

PAGE

4.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.02 Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

ARTICLE V.

CONDITIONS OF PURCHASES

5.01 Conditions Precedent to Initial Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.02 Conditions Precedent to All Purchases and Reinvestments . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

6.01 Representations and Warranties of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.02 Representations and Warranties of Union. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

ARTICLE VII.

GENERAL COVENANTS OF SELLER AND SERVICER

7.01 Affirmative Covenants of Seller and Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.02 Reporting Requirements of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.03 Negative Covenants of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

ARTICLE VIII.

ADMINISTRATION AND COLLECTION

8.01 Designation of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
8.02 Duties of Servicer and Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.03 Rights of the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.04 Responsibilities of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.05 Certain Responsibilities of Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.06 Further Action Evidencing Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.07 Application of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

ARTICLE IX.

SECURITY INTEREST

9.01 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
9.02 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

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TABLE OF CONTENTS
(CONTINUED)

PAGE

9.03 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

ARTICLE X.

LIQUIDATION EVENTS

10.01 Liquidation Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
10.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

ARTICLE XI.

THE AGENT

11.01 Authorization and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.02 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
11.03 Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

ARTICLE XII.

ASSIGNMENT OF PURCHASER'S INTEREST

12.01 Restrictions on Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.02 Rights of Assignee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.03 Evidence of Assignment; Endorsement on Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.04 Rights of the Banks and Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

ARTICLE XIII.

INDEMNIFICATION

13.01 Indemnity by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

ARTICLE XIV.

MISCELLANEOUS

14.01 Amendments, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
14.02 Notices, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
14.03 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
14.04 Binding Effect; Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
14.05 Costs, Expenses and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
14.06 No Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
14.07 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
14.08 Captions and Cross References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
14.09 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
14.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

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TABLE OF CONTENTS
(CONTINUED)

PAGE

14.11 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
14.12 Consent to Jurisdiction; Waiver of Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
14.13 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
14.14 Recourse to Directors or Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

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APPENDICES

APPENDIX A Definitions

SCHEDULES

SCHEDULE 6.01(f) Description of Proceedings of Seller

SCHEDULE 6.02(f) Description of Proceedings of Union

SCHEDULE 6.01(m) List of Offices of Seller and Servicer
Where Records are Kept

SCHEDULE 6.01(n) List of Lockbox Banks

SCHEDULE 6.01(r) List of Trade Names

SCHEDULE 7.01(f) Description of Credit and Collection Policies

SCHEDULE 7.03(d) List of Account Banks

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EXHIBITS

EXHIBIT 1.03(a) Notice of Purchase

EXHIBIT 2.03(b) Specific Concentration Limits
for Wal-Mart Stores

EXHIBIT 3.05(a) Form of Periodic Report

EXHIBIT 5.01(a) Form of Certificate

EXHIBIT 5.01(i)(i) Form of Opinion of Special
Counsel to Seller

EXHIBIT 5.01(i)(ii) Form of Opinion of Special
Counsel of Seller

EXHIBIT 7.01(i)(a) Form of Lockbox Agreement

EXHIBIT 7.01(i)(b) Form of Collection Account
Agreement

EXHIBIT 7.01(i)(c) Form of Liquidation Account
Agreement

EXHIBIT 12.04 Form of Assignment (for
assignment to third party)

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RECEIVABLES PURCHASE AGREEMENT

dated as of December 18, 1996

THIS IS A RECEIVABLES PURCHASE AGREEMENT among FTL RECEIVABLES
COMPANY, a Delaware corporation ("Seller"), UNION UNDERWEAR COMPANY, INC., a
New York corporation ("Union") as the initial Servicer, ▇▇▇▇▇▇ CAPITAL
CORPORATION, a Delaware corporation, as purchaser (in such capacity, together
with its successors and assigns in such capacity, the "Purchaser") and SOCIETE
GENERALE, a banking corporation organized under the laws of France, acting
through its Chicago Branch ("SG"), as agent for Purchaser (in such capacity,
together with its successors and assigns in such capacity, the "Agent").
Unless otherwise indicated, capitalized terms used in this Agreement are
defined in Appendix A.

Background

1. Seller is a party to a Purchase and Contribution Agreement
with the Originators, pursuant to which Seller has purchased, and expects to
purchase Receivables. Seller intends to sell interests, herein called
Undivided Interests, in Pool Receivables. Seller and Purchaser have agreed, on
the terms and subject to the conditions contained in this Agreement, that
Purchaser will purchase such Undivided Interests from Seller from time to time
during the term of this Agreement.

2. Seller and Purchaser have also agreed that, on the terms and
subject to the conditions set forth in this Agreement, certain of the
Collections related to such Undivided Interests shall be reinvested in
additional undivided interests in Pool Receivables.

3. Seller, Purchaser and the Agent have asked Union to undertake
certain collecting and servicing responsibilities in respect of the Receivables
and Union, as initial Servicer, is willing to undertake such responsibilities.

4. SG has been requested, and is willing, to act as the Agent.

NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
9
ARTICLE I.

THE COMMITMENT; PURCHASE AND REINVESTMENT LIMITS

1.01 Commitment. On the terms and subject to the conditions set
forth in this Agreement (including Article V), Purchaser agrees to make
Purchases and Reinvestments from time to time from the date hereof to the
Commitment Termination Date as follows:

(a) Purchases. Purchaser shall purchase from Seller
Undivided Interests (as defined in Section 2.01). Each such purchase
is herein called a "Purchase".

(b) Reinvestments. Pursuant to Section 3.02, Purchaser
shall make reinvestments in Pool Receivables (herein called
"Reinvestments") by permitting Servicer to reinvest certain of the
Collections in additional undivided interests in Pool Receivables.

Purchaser's obligation to make such Purchases and Reinvestments is herein
called the "Commitment".

1.02 Purchase and Reinvestment Limits. Under no circumstances shall
Purchaser be obligated to make any Purchase or Reinvestment to the extent that,
after giving effect to such Purchase or Reinvestment, as the case may be:

(a) Facility Limit. The Aggregate Investment would
exceed an amount equal to $200,000,000 as such amounts may be reduced
pursuant to Section 1.07 (such amounts, as so reduced, herein being
called the "Facility Limit").

(b) Aggregate Undivided Interest Limit. The Aggregate
Undivided Interest (expressed as a percentage) would exceed 100% (the
"Aggregate Undivided Interest Limit").

1.03 Making Purchases from Seller.

(a) Notice of Purchase. Each Purchase shall be made on a Business
Day pursuant to a notice substantially in the form of Exhibit 1.03(a) from
Seller to the Agent and shall be received by the Agent not later than 2:00 p.m.
(Chicago time) on the second Business Day before the date of such proposed
Purchase. Each such notice of a proposed Purchase shall specify the desired
amount and date of such Purchase and the desired duration of the initial Yield
Period for the resulting Undivided Interest. The Seller shall select the
duration of such initial, and each subsequent Yield Period, and the Agent shall
use reasonable

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efforts, taking into account market conditions, to accommodate Seller's
selections.

(b) Amount of Purchase. The amount of each Purchase shall be
equal to the lesser of (x) the amount proposed by Seller pursuant to Section
1.03(a) and (y) the maximum amount permitted under Section 1.02.

(c) Funding of Purchase. On the date of each Purchase, Purchaser
shall, upon satisfaction of the applicable conditions set forth in Article V,
make available to the Agent at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in
Chicago, Illinois, not later than 1:00 p.m. (Chicago time), the amount in
payment of its Purchase in same day funds and, after receipt by the Agent of
such funds, the Agent will make such funds immediately available to the
Collection Account.

(d) Notice of Purchaser Rate. On the day of each Purchase, and
after each selection of a Yield Period, the Agent shall provide written notice
to Seller of the Purchaser Rate (including each interest rate used in its
determination) and/or the Bank Rate that applies to such Purchase and/or Yield
Period, as the case may be, and, subject to the provisions of subparagraph (a)
hereof, the duration of such Yield Period. All Purchases (and Yield Periods)
shall be funded by the issuance of Commercial Paper Notes, unless, because of
market conditions, the issuance of Commercial Paper Notes is impracticable. If
the ability of the Purchaser to issue Commercial Paper Notes shall become
impracticable, the Agent shall so notify the Seller promptly after it shall
discover that the issuance of Commercial Paper Notes is impracticable.

1.04 Number of Yield Periods. The number of Yield Periods hereunder
at any one time, after giving effect to any Purchase, or any division or
combination of Undivided Interests, shall not exceed 8.

1.05 Commitment Termination Date.

(a) The "Commitment Termination Date" shall be the earlier to
occur of (i) December 17, 1999 (such date, as the same may be extended pursuant
to this Section 1.05, being herein called the "Scheduled Commitment Termination
Date"), and (ii) the date on which the Commitment is terminated pursuant to
Section 1.06, 1.07, or 10.02.

(b) The then Scheduled Commitment Termination Date may be
extended, in the sole discretion of Purchaser and the Agent, from time to time
on each Anniversary Date for an additional one-year period, by written request
given by Seller to the Agent not more than ninety nor less than 60 days before
such Anniversary Date,

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and written acceptance given by the Agent to Seller (upon the Agent's receipt
of a written consent to such extension from Purchaser) not later than 30 days
prior to such Anniversary Date.

1.06 Purchase and Reinvestment Termination Date. The Commitment
shall terminate with respect to Purchases and Reinvestments, and Purchaser
shall have no obligation to make any further Purchases or Reinvestments
hereunder, upon the termination of either (i) the Banks' commitments under the
Stand-by Purchase Agreement or (ii) the Enhancement Bank's commitment under the
Enhancement Agreement. Purchaser agrees to give Seller at least 30 days' prior
written notice of the termination of the Commitment with respect to Purchases
and Reinvestments pursuant to the foregoing sentence.

1.07 Voluntary Termination of Commitment or Reduction of Facility
Limit. Seller may, upon at least five Business Days' notice to the Agent,
terminate the Commitment in whole or reduce in part the unused portion of the
Facility Limit; provided, however, that (a) each partial reduction shall be in
an amount equal to $25,000,000 or an integral multiple thereof and (b) after
giving effect to any partial reduction, the remaining Facility Limit will not
be less than $100,000,000.

ARTICLE II.

UNDIVIDED INTEREST AND PURCHASER'S SHARE

2.01 Undivided Interest.

(a) Definition and Computation of Undivided Interest. For
purposes of this Agreement, "Undivided Interest" means an undivided ownership
interest, expressed as a floating percentage determined from time to time, in
(A) all then outstanding Pool Receivables, (B) all rights to, but not the
obligations under, all Related Security with respect to such Pool Receivables,
and (C) all Collections with respect to, and other proceeds of, such Pool
Receivables and Related Security. Each Undivided Interest shall be computed as
follows:

UI = I + SFR + RR + YR
-----------------
NPB

where:

UI = the Undivided Interest at any time;

I = the Investment in such Undivided Interest at such
time, as determined pursuant to Section 2.02;

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SFR = the Servicer's Fee Reserve for such Undivided
Interest at such time, as determined pursuant to
Section 2.06;

RR = the Required Reserve for such Undivided Interest at
such time, as determined pursuant to Section 2.07;

YR = the Yield Reserve for such Undivided Interest at such
time, as determined pursuant to Section 2.05; and

NPB = the Net Pool Balance at such time, as determined
pursuant to Section 2.03.

The "related" Undivided Interest with respect to any of the foregoing items
shall mean the Undivided Interest as to which such item is calculated.

(b) Frequency of Computation of Purchaser's Interest. Each
Undivided Interest initially shall be computed as of the opening of Servicer's
business on the date of the Purchase of such Undivided Interest from Seller.
Thereafter, such Undivided Interest shall be recomputed as of the opening of
business on any day on which the Aggregate Investment shall be increased and
upon receipt of each Periodic Report using the information in such Periodic
Report. In addition, until such Undivided Interest shall be reduced to zero,
such Undivided Interest shall be deemed to be recomputed automatically as of
the close of Servicer's business on each day (other than a day on which an
actual recomputation is done), and, as so recomputed, shall constitute the
percentage ownership interest held by Purchaser on such day in the Pool
Receivables. Such Undivided Interest shall become zero at such time as (i)
Purchaser shall have received the accrued Earned Return for such Undivided
Interest, shall have recovered the Investment in such Undivided Interest and
shall have received all other amounts payable to Purchaser pursuant to this
Agreement in respect of such Undivided Interest, (ii) the Agent shall have
received all amounts payable to the Agent pursuant to this Agreement and (iii)
Servicer shall have received the accrued Servicer's Fee allocated to such
Undivided Interest. Each Undivided Interest shall remain constant, and the Net
Pool Balance shall be deemed to remain constant for purposes of computing such
Undivided Interest, from the time as of which any such computation or
recomputation is made until the time as of which the next such recomputation,
if any, shall be made.

2.02 Investment.

(a) Subject to subsection (b), the "Investment" in an Undivided
Interest at any time means an amount equal to

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(i) the sum of the original Dollar amount paid by
Purchaser to Seller for such Undivided Interest at the time Purchaser
acquired it by Purchase pursuant to Section 1.03, less

(ii) the aggregate amount of Collections of Pool
Receivables theretofore received and actually distributed to Purchaser
on account of such Investment pursuant to Sections 3.02, 3.03 and
3.04.

(b) If at any time any distribution of any portion of such
Collections is rescinded or must otherwise be returned for any reason, the
Investment shall not be considered reduced to the extent of such rescission or
return.

(c) The "related" Investment with regard to a Yield Period or
Undivided Interest (or portion thereof) means the Investment calculated with
regard to such Yield Period or Undivided Interest (or such portion), as the
case may be.

2.03 Net Pool Balance.

(a) The "Net Pool Balance" at any time means an amount equal to

(i) the aggregate Unpaid Balance of the Eligible
Receivables in the Receivables Pool at such time, less

(ii) the sum of the separate amounts calculated for each
Obligor as the excess of (x) the aggregate Unpaid Balance of all
Eligible Receivables in the Receivables Pool (that have not become
Defaulted Receivables) owed by such Obligor at such time over (y) the
Concentration Limit for such Obligor at such time.

(b) "Concentration Limit" for any Obligor at any time means 3%
(the "Normal Concentration Percentage") of the Unpaid Balance of all Eligible
Receivables in the Receivables Pool at such time; provided, however, that with
respect to Wal-Mart Stores, the Concentration Limit therefore shall be the
applicable amount indicated on Exhibit 2.03(b) ("Specific Concentration Limit")
if the long-term ratings issued by S&P and ▇▇▇▇▇'▇ for Wal-Mart Stores shall
equal or exceed the required ratings set forth on such Exhibit 2.03(b).

2.04 Purchaser's Share. With respect to each Undivided Interest,
"Purchaser's Share" of Collections of Pool Receivables received by Servicer on
any day means an amount equal to the product of

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(a) the amount of all such Collections received by
Servicer on such day, times

(b) (i) if such day is not a Liquidation Day, such
Undivided Interest (expressed as a decimal) on such day, or

(ii) if such day is a Liquidation Day, such
Undivided Interest (expressed as a decimal) on the day immediately
preceding the first Liquidation Day to have occurred during the then
current Liquidation Period, or, if higher such Undivided Interest
(expressed as a decimal) on such Liquidation Day; provided that after
such time as an Undivided Interest shall have been reduced to zero,
the Purchaser's Share of such Collections therefor shall also equal
zero.

2.05 Yield Reserve; Earned Return.

(a) The "Yield Reserve" for any Undivided Interest at any time in
a Yield Period means an amount determined as follows:

YR = ER + LR

where:

YR = the Yield Reserve for such Undivided Interest at such time;

ER = the accrued and unpaid Earned Return for such Undivided
Interest at such time (for which Collections have not been
deposited and held in the Liquidation Account or Agent's
Account pursuant to Section 3.02 or 3.03), as determined
pursuant to subsection (b) of this Section 2.05; and

LR = Liquidation Return for such Undivided Interest at such time,
as determined pursuant to subsection (c) of this Section 2.05.

(b) The "Earned Return" for any Undivided Interest for each day in
a particular Yield Period means an amount determined as follows:

ER = I x PR x 1/360; or

if the Purchaser Rate for such Undivided Interest is based upon the Alternate
Base Rate:

ER = I x PR x 1/365/6;

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provided, however, that if, pursuant to the definition of "Purchaser Rate",
different Purchaser Rates would apply to different portions of an Undivided
Interest, then Earned Return shall be calculated separately with respect to
each such portion, and the Earned Return shall be the sum of the Earned Return
so calculated for such portions;

where:

ER = Earned Return for such Undivided Interest (or such portion)
accrued on such day;

I = the Investment in such Undivided Interest (or such portion) on
such day, as determined pursuant to Section 2.02; and

PR = the Purchaser Rate for such Undivided Interest (or such
portion) on such day.

No provision of this Agreement shall require the payment or permit the
collection of Earned Return in excess of the maximum permitted by applicable
law. If at any time a distribution of any portion of Collections is rescinded
or must otherwise be returned for any reason, Earned Return for any Undivided
Interest shall not be considered paid to the extent of such rescission or
return.

(c) Liquidation Return. The "Liquidation Return" for any
Undivided Interest at any time means an amount determined as follows:

LR = I x (BR + VF) x AAM
-------------------
360

where:

LR = the Liquidation Return for such Undivided Interest at such
time;

I = the Investment in such Undivided Interest at such time;

BR = the Bank Rate for such Undivided Interest for a Yield Period
of 30 calendar days deemed to commence at such time;

VF = the Variance Factor deemed to be in effect at such time, as
determined pursuant to subsection (d) of this Section 2.05;
and

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16
AAM = the Adjusted Average Maturity of the Receivables Pool related
to such Undivided Interest.

(d) Variance Factor. The "Variance Factor" means (i) during any
Yield Period when no Liquidation Day occurs, zero, and (ii) during any Yield
Period in which one or more Liquidation Days occur resulting from a Liquidation
Event, such percentage per annum not exceeding 1% as the Agent may designate
from time to time in its sole discretion.

2.06 Servicer's Fee Reserve.

(a) The "Servicer's Fee Reserve" for any Undivided Interest at any
time means an amount determined as follows:

SFR = SF + LSF

where:

SFR = the Servicer's Fee Reserve for such Undivided Interest at any
time;

SF = the accrued and unpaid Servicer's Fee allocated to such
Undivided Interest at such time (for which Collections have
not been deposited and held in a Bank Account or the Agent's
Account in respect thereof pursuant to Section 3.02 or 3.03),
as determined pursuant to subsection (b) of this Section 2.06;
and

LSF = the Liquidation Servicer's Fee allocated to such Undivided
Interest at such time, as determined pursuant to subsection
(c) of this Section 2.06.

(b) The Servicer's Fee allocated to any Undivided Interest accrued
for any day means

(i) at any time when Union is Servicer, an amount equal
to (w) 0.50% per annum, times (x) the Investment in such Undivided
Interest at such time, times (y) 1/360; or

(ii) at any time when Union is not Servicer, either the
amount calculated pursuant to the foregoing clause (i) or an
alternative amount specified by Servicer not exceeding

(A) (1) 110% of Servicer's reasonable estimate of
the costs and expenses that it shall incur in connection with
performing its obligations under this Agreement and the other
Transaction Documents during a calendar year, times (2) 1/360,
times

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(B) a fraction, the numerator of which shall be
the then-current amount of the Investment in such Undivided
Interest and the denominator of which shall be the
then-current Aggregate Investment.

(c) For purposes of calculating the Servicer's Fee Reserve under
Section 2.06(a), the "Liquidation Servicer's Fee" allocated to any Undivided
Interest accrued for any day means an amount equal to

(i) the amount calculated for such day pursuant to the
foregoing subsection (b), times

(ii) the number of days equal to the then Adjusted Average
Maturity.

2.07 Required Reserve. The "Required Reserve" for any Undivided
Interest on any day means an amount determined as follows:

RR = RP x I

where

RR = the Required Reserve for such Undivided Interest at
the time of computation;

RP = the Reserve Percentage which, as to each Undivided
Interest at the time of such computation, shall be
the quotient (expressed as a percentage) obtained by
dividing (x), the greater of (i) 12%, (ii) four times
the Normal Concentration Percentage and (iii) 2.25
times the product of (a) the Loss Ratio, (b) the Loss
Horizon Ratio and (c) the Payment Terms Multiplier,
by (y) 1 minus the percentage determined pursuant to
clause (x) above; and

I = the Investment in such Undivided Interest at the time
of such computation, as determined pursuant to
Section 2.02.

ARTICLE III.

SETTLEMENTS

3.01 Establishment and Use of Accounts.

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(a) Collection Account. Seller hereby agrees to establish and
maintain a Collection Account on or before the first Purchase hereunder. The
Collection Account shall be used to receive Collections (directly or via
transfer from the Lockbox Accounts) and for the other purposes described in the
Transaction Documents. Servicer shall cause all Collections to be deposited
into such Collection Account on the day on which such Collections are available
funds. No funds other than Collections or Purchases shall be deposited or
transferred into such Collection Account.

(b) Lockbox Accounts. Seller hereby agrees to establish the
Lockbox Accounts listed on Schedule 6.01(n) (and the related post office boxes)
on or before the first Purchase hereunder. The Lockbox Accounts shall be used
to receive Collections. No funds other than Collections shall be deposited or
transferred into any Lockbox Account.

(c) Liquidation Account. Seller hereby agrees to establish the
Liquidation Account on or before the date of the first Purchase hereunder. The
Liquidation Account shall be used to receive transfers of certain amounts of
Purchaser's Share of Collections prior to Settlement Dates and for the other
purposes described in the Transaction Documents. No funds other than those
transferred in accordance with this Article III shall be transferred or
deposited into the Liquidation Account.

(d) Agent's Account. The Agent hereby agrees to establish the
Agent's Account on or before the date of the first Purchase hereunder. The
Agent's Account shall be used to receive payments of amounts that are to be
distributed by the Agent to itself and/or to Purchaser, and for the other
purposes described in the Transaction Documents.

3.02 Settlement and Reinvestment Procedures to be Followed Absent the
Occurrence of a Liquidation Day.

(a) Daily Procedure (Non-Liquidation). On each day (other than a
Liquidation Day), Servicer shall deem received an amount equal to Purchaser's
Share of the Collections of Pool Receivables that are deposited in the Lockbox
Accounts on such day in respect of all Undivided Interests and that constitute
available funds; and

(i) Servicer may transfer to the Collection Account (or
may retain in one or more of the Lockbox Accounts) an amount equal to
the excess of (A) the aggregate of such Collections deposited in the
Lockbox Accounts on such day over (B) the Purchaser's Share of such
Collections for all Undivided Interests;

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(ii) Out of the portion of the Purchaser's Share of such
Collections that is allocable to each respective Undivided Interest,
Servicer shall hold in trust for the benefit of Purchaser and shall
transfer to the Liquidation Account an amount equal to the sum of (A)
the Earned Return on the Investment in such Undivided Interest accrued
to (and including) such day and not previously so transferred to the
Liquidation Account as aforementioned plus (B) any amount payable
pursuant to Section 4.02 in respect of such Undivided Interest;

(iii) Out of the portion of the Purchaser's Share of such
Collections that is allocable to each respective Undivided Interest,
Servicer shall transfer to its own account at its convenience, but in
any event within five (5) days, the amount of Servicer's Fee allocated
to such Undivided Interest (as determined in accordance with Section
2.06(b)) which has accrued to (and including) such day but which has
not previously been transferred to Servicer's account as aforesaid;

(iv) Servicer shall apply an amount equal to the remainder
of the portion of the Purchaser's Share of such Collections that is
allocable to each respective Undivided Interest to reduce the
Investment in each such Undivided Interest, such amount to be applied
pro rata in accordance with the amount of each such Investment before
such reduction (it being understood that such amount need not be
physically paid to Purchaser under this clause (iv));

(v) After such reduction, but subject to Section 3.04,
the amount referred to in the foregoing clause (iv) with respect to
each Investment shall be reinvested by Servicer by means of a
Reinvestment in the related Undivided Interest, thereby increasing the
Investment in such Undivided Interest and causing a deemed
recomputation of such Undivided Interest pursuant to Section 2.01 as
of the end of such day; and

(vi) After any such Reinvestment, Servicer may transfer to
the Collection Account (or may retain in one or more of the Lockbox
Accounts) the amount referred to in the foregoing clause (v) and that
constitute available funds.

Each recomputed Undivided Interest shall constitute the percentage ownership
interest in the Pool Receivables on such day held by Purchaser with regard to
the related recomputed Investment. Except as expressly provided in the
foregoing clauses (i) through (iv), all transfers referred to in such clauses
shall be made within two Business Days after the deposit

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20
or transfer of the relevant Collections into the relevant Lockbox Account to
the extent of available funds.

(b) Settlement Date Procedure (Non-Liquidation). On the
Settlement Date for each Undivided Interest (if no Liquidation Day shall have
occurred during the Settlement Period then ending), Servicer shall transfer
from the Liquidation Account to the Agent's Account (i) all amounts that have
been deposited in the Liquidation Account in respect of such Undivided
Interests pursuant to Section 3.02(a) and (ii) amounts, if any, set aside
pursuant to Section 3.04(b) or (c) for payment to the Agent on such Settlement
Date.

(c) Order of Distribution. Upon the Agent's receipt of
funds transferred pursuant to Section 3.02(b), on each Settlement Date the
Agent shall distribute such funds (i) to Purchaser in payment of the accrued
and unpaid Earned Return for such Undivided Interest and the amounts payable to
Purchaser in respect of such Undivided Interest pursuant to Section 4.02, and
(ii) in the case of any amounts set aside pursuant to Section 3.04(b) or (c),
to Purchaser in reduction of the related Investment.

3.03 Settlement Procedures to be Followed if a Liquidation Day
Occurs.

(a) Daily Procedure (Liquidation). On each Liquidation Day,
Servicer shall set aside and hold in trust for the benefit of Purchaser the
Purchaser's Share (calculated in respect of all Undivided Interests) of the
Collections of Pool Receivables that were deposited in the Lockbox Accounts on
such day by transferring an amount equal to such Purchaser's Share, no later
than two Business Days after deposit of such Collections into the relevant
Lockbox Account to the extent of available funds, (i) to the Liquidation
Account (if no Liquidation Event shall be continuing on such day) or (ii) to
the Agent's Account (if a Liquidation Event shall be continuing on such day).
All amounts transferred to the Agent's Account pursuant to this Section 3.03(a)
shall be distributed by the Agent pursuant to Section 3.03(c). In addition, on
each Liquidation Day, Servicer shall transfer to the Collection Account an
amount equal to the excess of (x) the aggregate Collections deposited in the
Lockbox Accounts on such Liquidation Day over (y) the Purchaser's Share
(calculated in respect of all Undivided Interests) of such Collections.

(b) Settlement Date Procedure (Liquidation). On each Settlement
Date for each Undivided Interest, if one or more Liquidation Days have occurred
during the Settlement Period then ending, Servicer shall transfer from the
Liquidation Account to the Agent's Account all amounts that were transferred to
the

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Liquidation Account in respect of all Undivided Interests during the preceding
Settlement Period pursuant to Section 3.02(a) and 3.03(a) (but that have not
already been transferred to the Agent's Account); provided, however, that the
total amount transferred to the Agent's Account in respect of each respective
Undivided Interest shall not exceed the sum (without duplication) of (A) the
accrued and unpaid Earned Return for such Undivided Interest, (B) the amounts
payable pursuant to Section 4.02 that have then accrued, (C) all other
Obligations (other than with respect to the Investment in such Undivided
Interest) then due and payable with respect to such Undivided Interest, (D) the
aggregate amount of Servicer's Fee allocated to such Undivided Interest (as
determined in accordance with Section 2.06(b)) which has accrued since the
preceding Settlement Date for such Undivided Interest to the extent such amount
has not previously been paid to Servicer's own account, and (E) the Investment
in such Undivided Interest. No amount described in any of the foregoing
clauses (A) through (E) shall be deemed to have been reduced or paid on account
of the Purchaser's Share of any Collections until the relevant amount actually
is transferred to the Agent's Account as provided for herein (and, in the case
of payments received by the Agent pursuant to Section 3.03(a) or Section
3.04(c)(iii), the date on which such payments are required to be transferred to
Purchaser pursuant to Section 3.03(c) shall have occurred).

(c) Timing of Distributions by the Agent. On each Settlement
Date, the Agent shall distribute, in the manner set forth in Section 3.03(d),
all amounts that have been transferred to the Agent's Account pursuant to
Section 3.03(a), Section 3.03(b) and Section 3.04(c)(iii) prior to 10:00 a.m.,
Chicago time, on such Settlement Date. If amounts that are intended to be
transferred to the Agent's Account on a Settlement Date are not so transferred
before 10:00 a.m., Chicago time, on such Settlement Date, the Agent shall
distribute such amounts, in the manner set forth in Section 3.03(d), as soon as
is practicable after receipt of such amounts in the Agent's Account.

(d) Order of Distribution. On each Business Day on which the
Agent is obligated to distribute amounts in the Agent's Account pursuant to
Section 3.03(c), the Agent shall distribute such funds (i) to Purchaser or the
Agent (as the case may be) in payment of the accrued and unpaid Earned Return
for the relevant Undivided Interest(s), (ii) to Servicer in payment of the
accrued Servicer's Fee allocated to such Undivided Interest(s) (to the extent
described in clause (D) of the proviso to subsection (b) of this Section 3.03)
until reduced to zero, and (iii) to the Purchaser or Agent (as the case may be)
(A) in reduction of the Investment in such Undivided Interest(s) and (B) in
payment of any other amounts owed by Seller hereunder to Purchaser or the
Agent, in the case of each of foregoing, until reduced to zero.

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If insufficient funds shall have been transferred to the Agent's Account to
enable the Agent to distribute funds in payment in full of the aforementioned
amounts, the Agent shall distribute funds, first, the amount described in the
foregoing clause (ii) owing to the Servicer, second, in payment of the accrued
Earned Return for the relevant Undivided Interest(s), third, in reduction of
the Investment in such Undivided Interest(s), and fourth, in payment of all
other amounts then due and payable to Purchaser or the Agent hereunder.

3.04 Special Settlement Procedures; Reduction of Investment, etc.

(a) Deemed Collections. If on any day

(i) the Unpaid Balance of any Pool Receivable is

(A) reduced as a result of any defective,
rejected or returned goods or services, any cash discount, any
incorrect billing, or any adjustment by Servicer, an
Originator or any Affiliate of an Originator,

(B) reduced or cancelled as a result of a setoff
in respect of any claim by the Obligor thereof against Seller,
an Originator or any Affiliate of an Originator (whether such
claim arises out of the same or a related or unrelated
transaction), or

(ii) any of the representations or warranties of Seller or
Union set forth in Section 6.01(d), (k) or (v) is no longer true with
respect to a Receivable;

then, on such day, Seller shall be deemed to have received a Collection of the
relevant Receivable(s)

(I) in the case of clause (i) above, in the
amount of such reduction or cancellation; and

(II) in the case of clause (ii) above, in the
amount of the Unpaid Balance of such Receivable(s).

On or before the fifteenth Business Day after the Month End Date of each month
that contains one or more days on which Seller is deemed to have received such
a Collection, Seller shall transfer an amount equal to the aggregate amount of
such deemed Collections to Servicer and Servicer shall distribute such
transferred

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amount in the manner set forth in Section 3.02(a) or Section 3.03(a), as the
case may be, as if such transferred amount actually had been received by Seller
on the date of such transfer from the Obligors of such Pool Receivables and as
if such transferred amount actually had been deposited into a Lockbox Account
on the date of such transfer. For so long as (i) the Aggregate Undivided
Interest is less than the Aggregate Undivided Interest Limit, (ii) the
Aggregate Investment is less than the Facility Limit, and (iii) no Liquidation
Event or Unmatured Liquidation Event shall have occurred and be continuing,
Seller may discharge its obligation with respect to such deemed Collections set
forth in the immediately preceding sentence by directing the Servicer to reduce
the amount of any Collections to be reinvested pursuant to Section 3.02(a)(v)
by the amount of such deemed Collections and deposit such amount in accordance
with the immediately preceding sentence. Purchaser acknowledges the provisions
of Section 3.5 of the Purchase and Contribution Agreement and upon receipt or
deemed receipt of such deemed Collections pursuant hereto, hereby releases any
Adverse Claim upon any Receivable and Related Rights reconveyed by Seller to
any Originator.

(b) Unreinvested Collections. Any amount of Purchaser's share of
Collections of Pool Receivables that may not be reinvested by means of
Reinvestments in an Undivided Interest because of the requirements set forth in
Section 1.02(a) or (b) shall be so reinvested as soon as it is possible to do
so without violating either of such requirements unless the Agent designates a
Liquidation Commencement Date. To the extent and so long as such Collections
may not be so reinvested, or until otherwise required to take a specific action
in respect of such Collections pursuant to this Agreement, Servicer shall hold
such Collections in trust for the benefit of Purchaser in the Liquidation
Account, for payment to the Agent on the next following Settlement Date for the
Yield Period in which such Collections are accumulated, to the extent that
permitted Reinvestment cannot occur before such Settlement Date; provided,
however, that during any Liquidation Period, upon one Business Day's written
notice given by the Agent to Servicer, Servicer shall transfer all such
Collections to the Agent's Account. Neither the Investment in such Undivided
Interest, the related Earned Return nor any other amount owing hereunder shall
be deemed reduced or paid on account of such unreinvested Collections until the
amount to be paid to the Agent pursuant to this Section 3.04(b) is in fact
finally so paid.

(c) Seller's Reduction of Investment. If at any ▇▇▇▇ ▇▇▇▇▇▇ shall
wish to cause the reduction of the Investment in an Undivided Interest (but not
to commence the liquidation, or reduction to zero, of all Undivided Interests),
such reduction shall be made as follows:

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(i) Seller shall give the Agent at least five Business
Days' prior written notice thereof (including the amount of such
proposed reduction and the proposed date on which such reduction will
commence),

(ii) on the proposed date of commencement of such
reduction and on each day thereafter, Servicer shall refrain from
reinvesting such Collections pursuant to Section 3.02(a) and Section
3.04(b) until the amount thereof not so reinvested shall equal the
desired amount of reduction, and

(iii) Servicer shall hold such Collections for the benefit
of Purchaser in the Liquidation Account, for payment to the Agent on
the next following Settlement Date,

and the Investment in such Undivided Interest shall be deemed reduced in the
amount to be paid to the Agent only when in fact so paid and allocated by the
Agent to the Investment in such Undivided Interest; provided that

(A) the amount of any such reduction shall be not less
than $1,000,000 and shall be an integral multiple thereof, and the
Investment in such Undivided Interest, if any, after giving effect to
such reduction shall be not less than $1,000,000,

(B) if (I) Seller shall commence any voluntary reduction
in a Yield Period containing all or a portion of any Liquidation
Period or (II) a Liquidation Event shall occur after Seller shall have
commenced any voluntary reduction, then all such Collections that have
not been reinvested because of this Section 3.04(c), but that have not
already been transferred to the Agent's Account, shall be transferred
to the Agent's Account (for the benefit of Purchaser and the Agent and
for distribution pursuant to Section 3.03(c)) no later than the day
next following such Liquidation Event,

(C) Seller shall use reasonable efforts to attempt to
choose a reduction amount, and the date of commencement thereof, so
that such reduction shall commence and conclude in the same Yield
Period, and

(D) if two or more Undivided Interests shall be
outstanding at the time of any proposed reduction, such proposed
reduction shall be applied, unless the Agent shall consent otherwise,
to the Undivided Interest with the shortest remaining Yield Period.

(d) Allocations of Obligor Payments. Except as provided in
Section 3.04(a) and 8.07, or as otherwise required by law or the

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underlying Contract, all Collections received from a particular Obligor in
respect of any Receivable shall be applied to the Receivables payable by such
Obligor in the order of the age of such Receivables, starting with the oldest
such Receivable; provided, however, that, if payment is designated by such
Obligor for application to specified Receivables, it shall be applied to such
specified Receivables.

(e) Permitted Investments. Any amount in the Collection Account
and the Liquidation Account, as the case may be, may be invested by Seller (or
Servicer on Seller's behalf) in Permitted Investments, and Seller (or Servicer
on its behalf) shall take all actions necessary to ensure that Purchaser shall
have a first priority perfected security interest in such Permitted
Investments; provided, however, that investments with respect to amounts on
deposit in the Liquidation Account shall mature not later than one Business Day
next preceding the Settlement Date for any Undivided Interest next succeeding
the date of such investment.

3.05 Reporting.

(a) No later than 2:00 p.m., Chicago time, on the second Business
Day before the date of each Purchase other than the initial Purchase hereunder,
as a condition precedent to each such Purchase, Servicer shall prepare and
forward to the Agent a certificate containing a calculation of (i) the Net Pool
Balance (the calculation of which shall be based upon the information contained
in the most recent Periodic Report) and (ii) the Aggregate Investment and the
Reserves (in each case, after giving effect, on a pro forma basis, to such
Purchase).

(b) On or prior to the fifteenth Business Day of each month,
Servicer shall prepare and forward to the Agent:

(i) a Periodic Report relating to all outstanding Pool
Receivables and all Undivided Interests owned by Purchaser, as of the
close of business of Servicer on the immediately preceding Month End
Date,

(ii) an aging of all Receivables in the Receivables Pool
as of the immediately preceding Month End Date, and

(iii) concentration analyses in respect of the ten largest
Obligors of all Eligible Receivables in the Receivables Pool as of the
immediately preceding Month End Date and each Obligor that owes Pool
Receivables with an aggregate Unpaid Balance in excess of the
Concentration Limit.

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(c) On or prior to each Settlement Date, Seller will advise the
Agent and Servicer of each Liquidation Day occurring during the Settlement
Period ending on such Settlement Date.

3.06 Payments and Computations, etc.

(a) All amounts to be paid or deposited into the Agent's Account
by Seller or Servicer hereunder shall be paid or deposited in accordance with
the terms hereof no later than 9:00 a.m. (Chicago time) on the day when due in
lawful money of the United States of America in same day funds.

(b) Seller or Servicer, as applicable, shall, to the extent
permitted by law, pay to the Agent (for the benefit of Purchaser or the Agent,
as the case may be) interest on all amounts not paid or deposited when due
hereunder, such interest to be calculated at the Default Rate from (and
including) the date due and payable to the date paid and such interest shall be
payable on demand; provided, however, that the applicable interest rate shall
not at any time exceed the maximum rate permitted by applicable law.

(c) All computations of interest, Earned Return, Liquidation
Return and any fees hereunder shall be made on the basis of a year of 360 days
(or 365/6 days if such Earned Return or Liquidation Return is calculated with
respect to the Alternate Base Rate) for the actual number of days (including
the first day but excluding the last day) elapsed.

3.07 Dividing or Combining Undivided Interests.

(a) Division of Undivided Interests. The Seller, so long as no
Liquidation Event has occurred and is continuing, may at any time, as of the
last day of any Yield Period for any then existing Undivided Interest, divide
such existing Undivided Interest on such last day into two or more new
Undivided Interests, each such new Undivided Interest having an Investment as
designated by the Seller and all such new Undivided Interests collectively
having aggregate Investments equal to the Investment in such existing Undivided
Interest. The Agent shall use reasonable efforts, taking into account market
conditions, to accommodate Seller's directions.

(b) Combination of Undivided Interests. The Seller, so long as no
Liquidation Event has occurred and is continuing, may at any time, as of the
last day of any Yield Period for two or more existing Undivided Interests, on
or before the date of any proposed Purchase of an Undivided Interest pursuant
to Section 1.01 by Purchaser, on such last day or such date of Purchase, as the
case may be, combine into one new Undivided Interest such existing and/or
proposed Undivided Interests or any combination

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thereof, such new Undivided Interest having an Investment equal to the
aggregate Investments of such Undivided Interests so combined. The Agent shall
use reasonable efforts, taking into account market conditions, to accommodate
Seller's directions.

(c) Effect of Division or Combination. On and after any division
or combination of Undivided Interests as described above, each of the new
Undivided Interests resulting from such division, or the new Undivided Interest
resulting from such combination, as the case may be, shall be a separate
Undivided Interest having an Investment as set forth above, and shall take the
place of such existing Undivided Interest or Undivided Interests or proposed
Undivided Interest, as the case may be, in each case under and for all purposes
of this Agreement.

ARTICLE IV.

FEES AND YIELD PROTECTION

4.01 Fees. Seller shall pay to Purchaser for its own account such
fees on such dates and in such amounts as set forth in the letter agreement of
even date herewith between the Agent and Seller (as such letter agreement may
be amended, restated, supplemented or modified from time to time, the "Fee
Letter").

4.02 Yield Protection.

(a) If (i) any law or regulation relating to deposit insurance or
(ii) any Regulatory Change, in each case, occurring after the date hereof

(A) shall subject an Affected Party to any tax, duty or
other charge with respect to the Certificate, any Undivided Interest
owned by or funded by it, or any obligations or right to make
Purchases or Reinvestments or to provide funding therefor, or shall
change the basis of taxation of payments to the Affected Party of any
Investments or Earned Return owned by, owed to or funded by it or any
other amounts due under this Agreement or any of the other Transaction
Documents in respect of the Certificate, any Undivided Interest owned
by or funded by it or its obligations or rights, if any, to make
Purchases or Reinvestments or to provide funding therefor (except for
changes in the rate of tax on the overall net income of such Affected
Party); or

(B) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Federal
Reserve Board, but excluding any reserve

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included in the determination of Earned Return), special
deposit or similar requirement against assets of any Affected Party,
deposits or obligations with or for the account of any Affected Party
or credit extended by any Affected Party; or

(C) shall change the amount of capital maintained or
required or requested or directed to be maintained by any Affected
Party; or

(D) shall impose any other condition affecting the
Certificate, any Undivided Interest owned or funded by any Affected
Party or its obligations or rights, if any, to make Purchases or
Reinvestments or to provide funding therefor;

and the result of any of the foregoing is or would be

(x) to increase the cost to (or in the case of any law or
regulation relating to deposit insurance, to impose a cost on) (I) an
Affected Party funding or making or maintaining any Purchases or
Reinvestments, any purchases, reinvestments, or loans or other
extensions of credit under the Stand-by Purchase Agreement, or any
Credit Advance, or any commitment of such Affected Party with respect
to any of the foregoing, or (II) the Agent for continuing its or
Seller's relationship with Purchaser,

(y) to reduce the amount of any sum received or
receivable by an Affected Party under this Agreement or the
Certificate, or under the Stand-by Purchase Agreement or the
Enhancement Agreement with respect thereto, or

(z) in the sole determination of such Affected Party, to
reduce the rate of return on such Affected Party's capital as a
consequence of its obligations hereunder or arising in connection
herewith to a level below that which such Affected Party could
otherwise have achieved,

then within thirty days after demand by such Affected Party (which demand shall
be accompanied by a statement setting forth the basis of such demand), Seller
shall pay to the Agent (for the benefit of such Affected Party) such additional
amount or amounts as will in good faith compensate such Affected Party for such
additional or increased cost or such reduction.

(b) Each Affected Party will notify Seller and the Agent promptly
after it has received official notice of any event occurring after the date
hereof which will entitle such Affected Party to such additional amounts as
compensation pursuant to this Section 4.02. Such additional amounts shall
accrue from the date as to which such Affected Party becomes subject to such

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additional costs as a result of such event (or if such notice of such event is
not given to Seller by such Affected Party within 90 days after such Affected
Party received such official notice of such event, from the date which is 90
days prior to the date such notice is given to Seller by such Affected Party).

(c) In determining any amount provided for or referred to in this
Section 4.02, an Affected Party may use any reasonable averaging and
attribution methods that it (in its sole discretion) shall deem applicable.
When making a claim under this Section 4.02, each Affected Party shall submit
to Seller a statement as to such increased cost or reduced return (including
calculation thereof in reasonable detail), which statement shall, in the
absence of manifest error, constitute conclusive evidence of such increased
cost or reduced return.

ARTICLE V.

CONDITIONS OF PURCHASES

5.01 Conditions Precedent to Initial Purchase. The initial Purchase
hereunder is subject to the condition precedent that the Agent shall have
received, on or before the date of such Purchase, the following, each (unless
otherwise indicated) dated such date and in form and substance satisfactory to
the Agent:

(a) A Certificate;

(b) A copy of the resolutions of the Board of Directors
of each of Seller and Union approving each Transaction Document to be
delivered by it and the transactions contemplated thereby, and
addressing such other matters as may be required by the Agent,
certified by the respective Secretary or Assistant Secretary of each
such Person;

(c) Good standing certificates for Seller and Union
issued as of a recent date acceptable to the Agent by the Secretary of
State of the jurisdiction of such Person's incorporation and the
jurisdiction of such Person's principal place of business;

(d) A certificate of the Secretary or Assistant Secretary
of each of Seller and Union certifying the names and true signatures
of the officers authorized on such Person's behalf to sign the
Transaction Documents to be delivered by it (on which certificate
Purchaser and the Agent may conclusively rely until such time as the
Agent

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shall receive from such Person a revised certificate meeting
the requirements of this subsection (d));

(e) The certificate of incorporation or other
organizational document of each of Seller and Union, duly certified by
the Secretary of State of the jurisdiction of such Person's
incorporation as of a recent date acceptable to the Agent, together
with a copy of the by-laws of each of Seller and Union, each duly
certified by the Secretary or an Assistant Secretary of such Person;

(f) Evidence (which may be telephonic) of the filing of
proper financing statements (Form UCC-1), filed on or prior to the
date of the initial Purchase, naming Seller as the assignor and
Purchaser as assignee of Receivables or an undivided interest therein
and of the other rights, instruments and moneys specified in Section
9.01, or other, similar instruments or documents, as may be necessary
or, in the opinion of the Agent, desirable under the UCC of all
appropriate jurisdictions or any comparable law of all appropriate
jurisdictions to perfect Purchaser's interests in all Undivided
Interests in the Receivables;

(g) A written search report from a Person satisfactory to
the Agent listing all effective financing statements that name Seller
or Union as debtor or assignor and that are filed in the jurisdictions
in which filings were made pursuant to subsection (f) above, together
with copies of such financing statements (none of which, except for
those described in subsection (f) above, shall cover any Receivable),
and tax and judgment lien search reports from a Person satisfactory to
the Agent showing no evidence of such liens filed against Seller or
Union;

(h) [Reserved];

(i) Favorable opinions from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇,
special counsel to Union, substantially in the form of Exhibits
5.01(i)(i) and 5.01(i)(ii);

(j) Such powers of attorney as the Agent shall reasonably
request to enable the Agent to collect all amounts due under any and
all Receivables following a Liquidation Event;

(k) A Periodic Report calculated as of the most recent
Month End Date;

(l) Evidence (i) of the execution and delivery by each of
the parties thereto of the Purchase and Contribution Agreement and all
documents, agreements and instruments

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contemplated thereby (which evidence shall include copies,
either original or facsimile, of each of such documents, instruments
and agreements), (ii) that each of the conditions precedent to the
execution and delivery of the Purchase and Contribution Agreement has
been satisfied to the Agent's satisfaction and (iii) that the initial
purchases under the Purchase and Contribution Agreement have been
consummated;

(m) A certificate from an officer of each of the
Originators to the effect that Servicer and the Originators have
placed on the most recent, and have taken all steps reasonably
necessary to ensure that there shall be placed on each subsequent,
data processing report that it generates which are of the type which
any proposed purchaser or lender would use to evaluate the
Receivables, the following legend (or the substantive equivalent
thereof): "THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD TO FTL
RECEIVABLES COMPANY AND UNDIVIDED, FRACTIONAL OWNERSHIP INTERESTS IN
THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD BY FTL RECEIVABLES
COMPANY TO ▇▇▇▇▇▇ CAPITAL CORPORATION;"

(n) The fees payable to the Agent pursuant to the Fee
Letter, together with all costs and expenses due and payable pursuant
to Section 14.05, if then invoiced;

(o) Original UCC-3 financing statements that are duly
executed and that shall effect, upon filing, the termination of all
financing statements relating to the Receivables;

(p) A certificate from an authorized officer of Union and
an authorized officer of Seller as to the satisfaction of the
conditions set forth in Section 5.02; and

(q) A copy of the resolutions of the Board of Directors
of Seller evidencing the capitalization of Seller in accordance with
Section 6.01(o), certified by the Secretary or Assistant Secretary of
Seller.

5.02 Conditions Precedent to All Purchases and Reinvestments. Each
Purchase (including the initial Purchase) and each Reinvestment shall be
subject to the further conditions precedent (collectively, "Conditions
Precedent" and individually, a "Condition Precedent") that on the date of such
Purchase or Reinvestment the following statements shall be true (and Seller by
accepting the amount of such Purchase or by receiving the proceeds of such
Reinvestment, as the case may be, shall be deemed to have represented and
warranted that):

(a) The representations and warranties contained in
Section 6.01 (other than Section 6.01(i)(ii)) are true and

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correct on and as of such day with the same effect as though
made on and as of such day and shall be deemed to have been made on
such day;

(b) No event has occurred and is continuing, or would
result from such Purchase or Reinvestment, that constitutes a
Liquidation Event or an Unmatured Liquidation Event;

(c) After giving effect to each proposed Purchase or
Reinvestment, the Aggregate Investment will not exceed the Facility
Limit and the Aggregate Undivided Interest will not exceed the
Aggregate Undivided Interest Limit; and

(d) The Commitment Termination Date shall not have
occurred.

ARTICLE VI.

REPRESENTATIONS AND WARRANTIES

6.01 Representations and Warranties of Seller. In order to induce
Purchaser and the Agent to enter into this Agreement and to make Purchases and
Reinvestments hereunder, Seller hereby represents and warrants to Purchaser and
the Agent as follows:

(a) Organization and Good Standing. It is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and has the corporate power and
authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business
in which it is currently engaged.

(b) Due Qualification. It is duly qualified and in good
standing as a foreign corporation, and is duly authorized to do
business, in each jurisdiction where the ownership or leasing of
property or the character of its operations makes such qualification
necessary, except where the failure to so qualify or be so authorized
would not reasonably be expected to have a Material Adverse Effect.

(c) Power and Authority; Due Authorization. It has (i)
all necessary corporate power, authority and legal right to (A)
execute, deliver and perform its obligations under this Agreement, the
Certificate and each other Transaction Document to which it is a
party, and (B) to sell and assign Undivided Interests on the terms and
subject to the conditions herein provided and (ii) duly authorized by
all

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necessary corporate action such execution, delivery and
performance of this Agreement and the other Transaction Documents and
the sale and assignment of Undivided Interests on the terms and
conditions herein provided. Seller had at all relevant times, and now
has, all necessary power, authority and legal right to acquire and own
the Receivables, to sell and assign Undivided Interests, and to incur
obligations hereunder.

(d) Binding Obligations. Each Purchase made pursuant to
this Agreement shall constitute a valid sale, transfer, and assignment
of the relevant Undivided Interests in Receivables to Purchaser, or
the assignment of a perfected first priority security interest
therein, in either case, enforceable against creditors of, and
purchasers from, Seller; and this Agreement constitutes, and each
other Transaction Document to be signed by Seller when duly executed
and delivered will constitute, a legal, valid and binding obligation
of Seller enforceable in accordance with its terms, except as
enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).

(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction
Documents and the fulfillment of the terms hereof will not (i)
conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time or both) a
default under the articles or certificate of incorporation or by-laws
of Seller, (ii) violate any material Contractual Obligation applicable
to the Seller, (iii) result in or require the creation or imposition
of any Lien of any nature upon or with respect to any of the
properties now owned or hereafter acquired by the Seller, other than
any Lien under the Transaction Documents, or (iv) violate any
Requirement of Law applicable to Seller.

(f) No Proceedings. Except as described in Schedule
6.01(f),

(i) there is no order, judgment, decree,
injunction, stipulation or consent order of any Governmental
Authority to which Seller is subject, and there is no action,
suit, arbitration, regulatory proceeding or other litigation,
proceeding or governmental investigation pending or, to the
knowledge of Seller, threatened, before or by any arbitrator
or

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Governmental Authority, against Seller that is reasonably
likely to have a Material Adverse Effect; and

(ii) there is no action, suit, proceeding,
arbitration, regulatory or governmental investigation, pending
or, to the knowledge of Seller threatened, before or by any
arbitrator or Governmental Authority (A) asserting the
invalidity of this Agreement, the Certificate or any other
Transaction Document, (B) seeking to prevent the sale and
assignment of any Undivided Interest, the issuance of the
Certificate or the consummation of any of the other
transactions contemplated by this Agreement or any other
Transaction Document, or (C) seeking to adversely affect the
federal income tax attributes of the Undivided Interests as
debt.

Notwithstanding the description of any orders, judgments,
decrees, injunctions, stipulations, consent orders, or of any pending
or threatened actions, suits, arbitrations, proceedings or other
litigation, set forth in Schedule 6.01(f), Seller acknowledges and
agrees that neither Purchaser nor the Agent, by permitting the initial
Purchase under this Agreement, is releasing, waiving or otherwise
restricting or adversely modifying, or agreeing to release, waive,
restrict or otherwise adversely modify, its right to assert that any
subsequent development with respect to any matter described in
Schedule 6.01(f) has the effect set forth in Section 6.01(f)(i) or any
similar effect under any other term, condition or provision of this
Agreement.

(g) Bulk Sales Act. No transaction contemplated by this
Agreement or any of the other Transaction Documents requires
compliance with, or will be subject to avoidance under, any bulk sales
act or similar law.

(h) Government Approvals. Except for the filing of the
UCC financing statements referred to in Article V, all of which, at
the time required in Article V, shall have been duly made and shall be
in full force and effect, no authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by Seller of
any Transaction Document to which it is a party.

(i) Financial Condition.

(i) The consolidated balance sheet of FTL and its
consolidated subsidiaries as of September 30, 1996, and the
related statement of earnings and cash flows of FTL

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35
and its consolidated subsidiaries for the nine (9) months
ended September 30, 1996, copies of which will be furnished
to the Agent, present fairly in all material respects the
consolidated financial position of FTL and its consolidated
subsidiaries as at such date and the consolidated results of
the operations of FTL and its consolidated subsidiaries for
the period ended on such date, all in accordance with GAAP;
and

(ii) Since September 30, 1996 until the Initial Closing
Date, no event has occurred that has had, or is reasonably
likely to have, a Material Adverse Effect.

(j) Margin Regulations. No use of any funds obtained by
Seller under this Agreement will be used for buying, purchasing,
or carrying any margin stock within the respective meanings of
each of the quoted terms under Regulations G or U promulgated by the
Federal Reserve Board from time to time or for any purpose which
violates the provisions of the regulations of the Federal Reserve
Board.

(k) Quality of Title. Each Receivable in which an
Undivided Interest is to be sold to Purchaser (together with the
Related Security for such Undivided Interest) shall be owned by Seller
free and clear of any Adverse Claim (other than any Adverse Claim
arising solely as the result of any action taken by Purchaser or by
the Agent) except as expressly provided otherwise herein or in the
Purchase and Contribution Agreement. When Purchaser makes a Purchase
it shall acquire and shall continue to maintain (at all times when the
Aggregate Undivided Interest is not zero) a valid and perfected first
priority undivided fractional interest to the extent of its Undivided
Interest in each Receivable and Collections with respect thereto, free
and clear of any Adverse Claim (other than any Adverse Claim arising
solely as the result of any action taken by Purchaser or by the
Agent). No effective financing statement or other instrument similar
in effect covering any Receivable, any interest therein, or the
Related Security or Collections with respect thereto is on file in any
recording office except for financing statements that may be filed (i)
in favor of the Originators in accordance with the Contracts, (ii) in
favor of Seller in accordance with the Purchase and Contribution
Agreement, (iii) in favor of Purchaser or the Agent in accordance with
this Agreement, (iv) in connection with any Adverse Claim arising
solely as the result of any action taken by Purchaser (or any assignee
thereof) or by the Agent or (v) in favor of the Collateral Agent or
any successor in such capacity.

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(l) Accuracy of Information. All written information
heretofore or contemporaneously furnished by Seller to Purchaser or
the Agent for purposes of, or in connection with, this Agreement and
all other Transaction Documents or any transaction contemplated hereby
or thereby, taken as a whole, is, and all other such factual, written
information hereafter furnished (if prepared by Seller or, if not
prepared by Seller, to the extent that information contained therein
was supplied by Seller) by Seller to Purchaser or the Agent pursuant
to, or in connection with, this Agreement and the other Transaction
Documents, including, without limitation, each Periodic Report and
financial statement, taken as a whole, does not contain any material
misstatement of fact and is not incomplete by omitting to state a
material fact necessary to make the statements contained therein not
misleading on the date as of which such information is dated or
certified.

(m) Offices. The principal places of business and chief
executive offices of Seller are located at the address referred to in
Section 14.02, and the offices where Seller keeps all its books,
records and documents evidencing Receivables, the related Contracts
and all purchase orders and other agreements related to such
Receivables are located at the addresses specified in Schedule 6.01(m)
(or at such other locations, notified to the Agent in accordance with
Section 7.01(e), in jurisdictions where all action required by Section
8.05has been taken and completed).

(n) Lockbox Accounts. The names and addresses of all the
Lockbox Banks, together with the account numbers of the lockbox
accounts at such Lockbox Banks, are specified in Schedule 6.01(n) (or
have been notified to the Agent in accordance with Section 7.03(d)).

(o) Capitalization. The authorized capital stock of
Seller consists of 1,000 shares of common stock, no par value ("Seller
Common Stock"), all of which shares are currently issued and
outstanding. All of such outstanding shares of Seller Common Stock
are validly issued, fully paid and nonassessable and are owned
(beneficially and of record) by Union.

(p) Solvent. On the date hereof, the Seller is not
Insolvent, nor will the Seller be rendered Insolvent by reason of (1)
the incurrence of its obligations under the Transaction Documents, or
(2) the consummation of any transactions contemplated hereby, and
after giving effect to the transactions contemplated hereby (including
before and after giving effect to all Purchases hereunder), the Seller

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will have adequate capacity to pay its then current liabilities, on a
timely basis, as they become due.

(q) Licenses, Contingent Liabilities, and Labor
Controversies.

(i) Seller owns or is licensed to use all
trademarks, tradenames, copyrights, technology, know-how,
patents and processes necessary for the conduct of its
business as currently conducted, except for those the failure
to own or be licensed to use would not be reasonably likely to
have a Material Adverse Effect.

(ii) Except to the extent that such practices,
circumstances, events or questions would not, individually or
in the aggregate, reasonably be expected to have a Material
Adverse Effect, (1) Seller is not engaged in any unfair labor
practice and (2) no significant strike, labor dispute,
slowdown or stoppage is pending against Seller, or, to the
best knowledge of Seller, threatened against Seller.

(iii) Other than any liability incident to any
litigation or proceedings described in Section 6.01(f), Seller
has no contingent liabilities not provided for or disclosed in
the financial statements referred to in Section 6.01(i) that,
individually or in the aggregate, are material to Seller.

(r) Trade Names. Seller does not use any trade name
other than its actual corporate name and the trade names set forth in
Schedule 6.01(r). From and after the date that fell five (5) years
before the date hereof, Seller has not been known by any legal name
other than its corporate name as of the date hereof, nor has any such
Person been the subject of any merger or other corporate
reorganization, except as set forth in Schedule 6.01(r).

(s) Taxes. Seller has filed or caused to be filed all
material tax returns and reports which are required to be filed and
has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its properties or assets and
all other taxes, fees and other charges imposed on its or any of their
respective properties by any Governmental Authority other than those
the amount or validity of which are currently being contested in good
faith by appropriate proceedings diligently pursued and with respect
to which reserves in conformity with GAAP have been provided on the
books of Seller and no tax Lien has been filed or received. There is
no proposed tax assessment

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against Seller which would reasonably be expected to have a Material Adverse
Effect.

(t) Compliance with Applicable Laws. Seller is in
compliance with all Requirements of Law, except to the extent that all
failures to comply therewith would not be reasonably expected to have
a Material Adverse Effect.

(u) Receivables Evidenced By Instruments. None of the
Receivables is evidenced by any "instrument" (as defined in the
applicable UCC).

(v) Eligible Receivables. Each Receivable included in
the Net Pool Balance as an Eligible Receivable on the date of any
Purchase or Reinvestment and each additional Receivable included in
the Net Pool Balance as an Eligible Receivable on the date of any
Reinvestment shall be an Eligible Receivable on such date.

6.02 Representations and Warranties of Union. In order to induce
Purchaser and the Agent to enter into this Agreement, Union as initial Servicer
hereby represents and warrants to Purchaser and the Agent as follows:

(c) Power and Authority; Due Authorization. It has (i)
all necessary corporate power, authority and legal right to execute,
deliver and perform its obligations under this Agreement and each
other Transaction Document to which it is a party in its capacity as
Servicer and (ii) duly authorized by all necessary corporate action
such execution, delivery and performance of this Agreement and such
other Transaction Documents.

(d) Binding Obligations. This Agreement constitutes, and
each other Transaction Document to be signed by Union in

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39
its capacity as Servicer when duly executed and delivered will
constitute, a legal, valid and binding obligation of Union, in its
capacity as Servicer, enforceable in accordance with its terms,
except as enforcement thereof may be subject to (i) the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforcement is
sought in a proceeding in equity or at law).

(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents and
the fulfillment of the terms hereof will not (i) conflict with, result
in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under the
articles or certificate of incorporation or by-laws of Union, (ii)
violate any material Contractual Obligation applicable to Union, (iii)
result in or require the creation or imposition of any Lien of any
nature upon or with respect to any of the properties now owned or
hereafter acquired by Union, other than any Lien under the Transaction
Documents, or (iv) violate any Requirement of Law applicable to Union.

(f) No Proceedings. Except as described in Schedule
6.02(f),

(i) there is no order, judgment, decree,
injunction, stipulation or consent order of, or with any
Governmental Authority to which Union is subject, and there is
no action, suit, arbitration, regulatory proceeding or other
litigation, proceeding or governmental investigation pending
or to the knowledge of Union threatened in writing, before or
by any arbitrator or Governmental Authority, against Union,
that is reasonably likely to have a Material Adverse Effect;
and

(ii) there is no action, suit, proceeding,
arbitration, regulatory or governmental investigation, pending
or to the knowledge of Union threatened, before or by any
arbitrator or Governmental Authority (A) asserting the
invalidity of this Agreement or any other Transaction Document
to which Union is a party as Servicer, (B) seeking to prevent
the consummation of any of the transactions contemplated by
this Agreement or any other Transaction Document to which
Union is a party as Servicer, or (C) seeking any determination
that could reasonably be expected to have a Material Adverse
Effect.

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(g) Government Approvals. 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 Union of any Transaction Document to which
it is a party in its capacity as Servicer.

(h) Financial Condition.

(i) The consolidated balance sheet of FTL and its
consolidated subsidiaries as of September 30, 1996, and the
related statement of earnings and cash flows of FTL and its
consolidated subsidiaries for the nine (9) months ended
September 30, 1996, copies of which will be furnished to the
Agent, present fairly the consolidated financial position of
FTL and its consolidated subsidiaries as at such date and the
consolidated results of the operations of Union and its
consolidated subsidiaries for the period ended on such date,
all in accordance with GAAP; and

(ii) Since September 30, 1996 until the Initial
Closing Date, no event has occurred that has had, or is
reasonably likely to have, a Material Adverse Effect.

(i) Accuracy of Information. All written information
heretofore or contemporaneously furnished by Union in its capacity as
Servicer to Purchaser or the Agent for purposes of, or in connection
with, this Agreement and all other Transaction Documents or any
transaction contemplated hereby or thereby is, taken as a whole, and
all other such factual, written information hereafter furnished (if
prepared by Union in its capacity as Servicer or, if not prepared by
Union in its capacity as Servicer, to the extent that information
contained therein was supplied by Union in its capacity as Servicer)
by Union in its capacity as Servicer to Purchaser or the Agent
pursuant to, or in connection with, this Agreement and the other
Transaction Documents, including, without limitation, each Periodic
Report and financial statement, taken as a whole, does not contain any
material misstatement of fact and is not incomplete by omitting to
state a material fact necessary to make the statements contained
therein not misleading on the date as of which such information is
dated or certified.

(j) Offices. The principal places of business and chief
executive offices of each of the Originators are located at the
address referred to in Section 14.02, and the offices where each of
the Originators keeps all of its respective books, records and
documents evidencing Receivables, the related Contracts and all
purchase orders

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41
and other agreements related to such Receivables are located at the
addresses specified in Schedule 6.01(m) (or at such other locations,
notified to the Agent in accordance with Section 7.01(e), in
jurisdictions where all action required by Section 8.05 has been
taken and completed).

(k) Lockbox Accounts. The names and addresses of all the
Lockbox Banks, together with the account numbers of the lockbox
accounts at such Lockbox Banks, are specified in Schedule 6.01(n) (or
have been notified to the Agent in accordance with Section 7.03(d)).

(l) Taxes. Union has filed or caused to be filed all
material tax returns and reports which are required to be filed and
has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its properties or assets and
all other taxes, fees and other charges imposed on its or any of their
respective properties by any Governmental Authority other than those
the amount or validity of which are currently being contested in good
faith by appropriate proceedings diligently pursued and with respect
to which reserves in conformity with GAAP have been provided on the
books of Union and no tax Lien has been filed or received. There is
no proposed tax assessment against Union which would reasonably be
expected to have a Material Adverse Effect.

(m) Compliance with Applicable Laws. Union, in its
capacity as Servicer, is in compliance with all Requirements of Law
with respect to the Receivables and the related Contracts, except to
the extent that all failures to comply therewith, would not be
reasonably expected to have a Material Adverse Effect.

ARTICLE VII.

GENERAL COVENANTS OF SELLER AND SERVICER

7.01 Affirmative Covenants of Seller and Union. From the date hereof
until the first day, following the Commitment Termination Date, on which (i)
all Undivided Interests shall be reduced to zero, and (ii) all Obligations that
have ever been outstanding hereunder shall have been finally and fully paid and
performed, Seller and Union (in its capacity as Servicer) each hereby covenants
and agrees with Purchaser and the Agent as to itself that, unless the Agent
shall otherwise consent in writing, it shall:

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(a) Compliance with Laws, Etc. Comply in all material
respects with all Requirements of Law except to the extent that
failure to comply therewith would not in the aggregate reasonably be
expected to have a Material Adverse Effect.

(b) Preservation of Corporate Existence. Continue to
engage in the business of the same type as now conducted by it and
preserve, renew and keep in full force and effect its corporate
existence and take all reasonable action to maintain all rights,
privileges and franchises material to its businesses except as
permitted otherwise hereunder and with all Contractual Obligations
except to the extent that failure to comply therewith would not in the
aggregate reasonably be expected to have a Material Adverse Effect.

(c) Audits. (i) At any time and from time to time during
regular business hours, upon five Business Days' prior written notice
from the Agent, permit the Agent (or such other Person who may be
designated from time to time by Purchaser), or their respective agents
or representatives, at Seller's expense, (A) to examine and make
copies of and abstracts from all books, records and documents
(including, without limitation, computer tapes and disks) in its
possession or under its control relating to Receivables and the
Undivided Interests, including, without limitation, the related
Contracts and purchase orders and other agreements, and (B) to visit
its offices and properties for the purpose of examining such materials
described in clause (i)(A) next above, and to discuss matters relating
to Receivables or its performance hereunder with any of its officers
or employees having knowledge of such matters; and (ii) without
limiting the provisions of clause (i) next above, from time to time
during regular business hours, upon two Business Days prior written
notice from the Agent, permit certified public accountants or other
auditors acceptable to the Agent to conduct, at Seller's or Union's
expense as the case may be, a review of its books and records with
respect to the Receivables; provided, however, that unless a
Liquidation Event has occurred and is continuing, such review shall
occur at the Seller's or Union's expense no more than once in any
calendar year. The Agent, or its agents and representatives, may (and
the Agent (or such other Person who may be designated from time to
time by Purchaser) shall, upon the request of Purchaser) conduct a
review of the type described hereinabove whenever Purchaser or the
Agent, as the case may be, in its and their reasonable judgment,
deem such review appropriate.

(d) Keeping of Records and Books of Account. Maintain
and implement administrative and operating procedures (including,
without limitation, an ability to recreate

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43
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain, all documents, books,
records and other information which is reasonably necessary for the
collection of all Receivables (including, without limitation, records
adequate to permit the prompt identification of each new Receivable
and all Collections of, and adjustments to, each existing Receivable).

(e) Location of Records. Keep its principal place of
business and chief executive office, and the offices where it keeps
its records concerning the Receivables, all related Contracts and all
purchase orders and other agreements related to such Receivables (and
all original documents relating thereto), at its address(es) referred
to in Section 6.01(m) in the case of Seller, or Section 6.02(j) in the
case of Union, or, upon 30 days' prior written notice to the Agent, at
such other locations in jurisdictions where all action required by
Section 8.05 shall have been taken and completed.

(f) Credit and Collection Policies. Comply in all
material respects with the Credit and Collection Policy in connection
with each Receivable and each Contract related thereto.

(g) Collections.

(i) Remit to the Lockbox Accounts within two
Business Days all Collections received by it; and

(ii) cause all invoices that are part of any
Contract to instruct all Obligors to cause all Collections of
Receivables to be deposited directly to one or more lockboxes
or Lockbox Accounts.

(h) Separate Corporate Existence. Seller hereby
acknowledges that Purchaser and the Agent are entering into the
transactions contemplated by this Agreement in reliance upon Seller's
identity as a legal entity separate from Servicer and Union.
Therefore, from and after the date hereof, Seller shall take all
reasonable steps to continue Seller's identity as a separate legal
entity and to make it apparent to third Persons that Seller is an
entity with assets and liabilities distinct from those of Servicer,
Union, and any Affiliate thereof, and is not a division of Servicer,
Union or any other Person. Without limiting the generality of the
foregoing and in addition to and consistent with the covenant set
forth in Section 7.01(b), Seller shall take such actions as shall be
required in order that:

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(i) Seller will be a limited purpose corporation
whose primary activities are restricted in its certificate of
incorporation to purchasing Receivables from Union, owning,
holding, granting security interests, or selling interests, in
Receivables, Contracts, Related Security and Collections
purchased from Union, entering into agreements for the
servicing of such Receivables, and conducting such other
activities as it deems necessary or appropriate to carry out
its primary activities;

(ii) Not less than one member of Seller's Board of
Directors (the "Independent Director") shall be an individual
who is not a direct, indirect or beneficial stockholder,
officer, director, employee, affiliate, associate, customer or
supplier of any of its Affiliates. The Certificate of
Incorporation of Seller shall provide that Seller's Board of
Directors shall not approve, or take any other action to cause
the commencement of a voluntary case or other proceeding with
respect to Seller under any applicable bankruptcy, insolvency,
reorganization, debt arrangement, dissolution or other similar
law, or the appointment of or taking possession by, a
receiver, liquidator, assignee, trustee, custodian, or other
similar official for Seller, unless in each case the
Independent Director shall approve the taking of such action
in writing prior to the taking of such action. The
Independent Director's fiduciary duty shall be to Seller (and
its creditors) and not to Seller's shareholders in respect of
any decision of the type described in the preceding sentence.
In the event the Independent Director resigns or otherwise
ceases to be a director of Seller, there shall be selected a
replacement Independent Director who shall not be an
individual within the proscriptions of the first sentence of
this clause (ii) or any individual who has any other type of
professional relationship with Union or any of its Affiliates
or any management personnel of any such Person or Affiliate
and who shall be (x) a tenured professor at a business or law
school, (y) a retired judge or (z) an established independent
member of the business community, having a sound reputation
and experience relative to the duties to be performed by such
individual as an Independent Director;

(iii) No Independent Director shall at any time
serve as a trustee in bankruptcy for any Affiliate of Union;

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(iv) Any employee, consultant or agent of Seller
will be compensated from Seller's own bank accounts for
services provided to Seller except as provided herein in
respect of the Servicer's Fee. Seller will engage no agents
other than an agent for service of process and a Servicer for
the Receivables, which Servicer will be fully compensated for
its services to Seller by payment of the Servicer's Fee;

(v) Seller will contract with Servicer to perform
for Seller all operations required on a daily basis to service
its Receivables. Seller will pay Servicer a monthly fee based
on the level of Receivables being managed by Servicer. Seller
will not incur any material indirect or overhead expenses for
items shared between Seller, Union and any other Affiliate
thereof that are not reflected in the Servicer's Fee. To the
extent, if any, that Seller, Union and any other Affiliate
thereof share items of expenses not reflected in the
Servicer's Fee, such as legal, auditing and other professional
services, such expenses will be allocated to the extent
practical on the basis of actual use or the value of services
rendered, and otherwise on a basis reasonably related to the
actual use or the value of services rendered, it being
understood that Union shall pay all expenses relating to the
preparation, negotiation, execution and delivery of the
Transaction Documents and the Stand-by Purchase Agreement and
any amendments thereto, including, without limitation, legal,
commitment, agency and other fees;

(vi) Seller's operating expenses will not be paid
by Union or any Affiliate thereof;

(vii) Seller will have its own separate stationery
and telephone number;

(viii) Seller's books and records will be maintained
separately from those of Union and any Affiliate thereof;

(ix) Any financial statements of Union which are
consolidated to include Seller will contain detailed notes
clearly stating that (A) all of Seller's assets are owned by
Seller and (B) Seller is a separate corporate entity with
creditors who have received ownership and security interests
in Seller's assets;

(x) Seller's assets will be maintained in a
manner that facilitates their identification and

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segregation from those of Union or any Affiliate thereof;

(xi) Seller will strictly observe corporate
formalities in its dealings with Union and any Affiliate
thereof, and funds or other assets of Seller will not be
commingled with those of Union and any Affiliate thereof.
Seller shall not maintain joint bank accounts or other
depository accounts to which Union or any Affiliate thereof
(other than Union in its capacity as Servicer) has independent
access. None of Seller's funds will at any time be pooled
with any funds of Union or any Affiliate thereof;

(xii) Seller shall pay to Union or the appropriate
Affiliate of Union, as applicable, the marginal increase (or,
in the absence of such increase, the market amount of its
portion of) in the premium payable with respect to any
insurance policy that covers Seller and Union or any Affiliate
thereof, but Seller shall not, directly or indirectly, be
named or enter into an agreement to be named, as a direct or
contingent beneficiary or loss payee, under any such insurance
policy, with respect to any amounts payable due to occurrences
or events related to Union or any Affiliate thereof (other
than Seller); and

(xiii) Seller will maintain arm's length
relationships with Union and any Affiliate thereof. Any
Person that renders or otherwise furnishes services to Seller
will be compensated by Seller at market rates for such
services. Seller will not be or will not hold itself out to
be responsible for the debts of Union or any Affiliate thereof
or the decisions or actions respecting the daily business and
affairs of Union or any Affiliate thereof.

(i) Post Office Boxes. Within 10 Business Days after the
date hereof, Union shall deliver to the Agent (i) duly executed (a)
Lockbox Agreements with each of the Lockbox Banks listed on Schedule
6.01(n) in form and substance substantially similar to Exhibit
7.01(i)(a), (b) the Collection Account Agreement with the Collection
Account Bank in form and substance substantially similar to Exhibit
7.01(i)(b), and (c) the Liquidation Account Agreement with the
Liquidation Account Bank in form and substance substantially similar
to Exhibit 7.01(i)(c) and (ii) a certificate from an authorized
officer of Union to the effect that (a) the name of the renter of all
post office boxes into which Collections may from time to time be
mailed have been changed to the name of Seller (unless such post

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office boxes are in the name of the relevant Lockbox Banks) and (b) all
relevant postmasters have been notified that Servicer and the Agent are
authorized to collect mail delivered to such post office boxes
(unless such post office boxes are in the name of the relevant
Lockbox Banks).

7.02 Reporting Requirements of Seller. From the date hereof until
the first day following the Commitment Termination Date on which (i) the
Aggregate Undivided Interest shall be reduced to zero, and (ii) all Obligations
that have ever been outstanding hereunder shall have been finally and fully
paid and performed, Seller will, unless Purchaser and the Agent shall otherwise
consent in writing, furnish to the Agent:

(a) Quarterly Financial Statements. As soon as available
and in any event within 60 days after the end of each of the first
three quarters of each fiscal year of FTL, (i) copies of (A) the
unaudited consolidated balance sheet of Seller, and (B) the unaudited
condensed consolidated balance sheet of FTL and its consolidated
subsidiaries, in each case as at the end of such quarter, together
with unaudited condensed consolidated statement of earnings and cash
flows for the portion of the fiscal year through such quarter,
certified by the chief financial officer, treasurer or chief
accounting officer of FTL (such officer being herein called the
"Financial Officer"), (ii) a letter from the Financial Officer
certifying to the best knowledge of the Financial Officer, that
neither a Liquidation Event nor an Unmatured Liquidation Event has
occurred and is continuing;

(b) Annual Financial Statements. As soon as available
and in any event within 150 days after the end of each fiscal year of
each of FTL and Seller, a copy of (A) the consolidated balance sheet
of FTL and its consolidated subsidiaries, together with the related
statement of earnings and cash flows for such fiscal year prepared in
accordance with GAAP and audited by independent certified public
accountants of nationally recognized standing and (B) Seller's audited
consolidated balance sheet as at the end of such fiscal year, together
with a special purpose report prepared by independent certified public
accountants of nationally recognized standing prepared in accordance
with GAAP;

(c) Reports to Holders and Exchanges. In addition to the
reports required by subsections (a) and (b) next above, promptly upon
the Agent's request, copies of any reports specified therein which
Union sends, generally, to any security holders, and any reports or
registration statements that Union or Seller files with the Securities
and Exchange

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Commission or any national securities exchange other than registration
statements relating to employee benefit plans;

(d) ERISA. Promptly after receiving notice of any
Reportable Event (as defined in Title IV of ERISA) with respect to
Union or any Affiliate thereof, a copy of such notice;

(e) Liquidation Events. As soon as possible after the
occurrence of each Liquidation Event and each Unmatured Liquidation
Event, a written statement of the Financial Officer describing such
event and the action that Servicer and Seller propose to take with
respect thereto, in each case in reasonable detail;

(f) Proceedings. As soon as reasonably practicable
written notice of (i) any litigation, investigation or proceeding of
the type described in Section 6.01(f) not previously disclosed to
Purchaser and the Agent and (ii) any material adverse development that
has occurred with respect to any such previously disclosed litigation,
proceedings and investigations; and

(g) Other. Promptly, from time to time, such other
information, documents, records or reports respecting the Receivables
or the condition or operations, financial or otherwise, of Seller or
Union as the Agent may from time to time reasonably request in order
to protect the interests of Purchaser or the Agent under or as
contemplated by this Agreement.

7.03 Negative Covenants of Seller. From the date hereof until the
first day, following the Commitment Termination Date, on which (i) all
Undivided Interests shall be reduced to zero and (ii) all Obligations that have
ever been outstanding hereunder shall have been finally and fully paid and
performed, Seller shall perform its Obligations under this Section 7.03 unless
the Agent shall otherwise consent in writing.

(a) Sales, Liens, Etc. Except as otherwise provided
herein or in the Purchase and Contribution Agreement, Seller shall not
sell, assign (by operation of law or otherwise) or otherwise dispose
of, or create or suffer to exist any Adverse Claims upon or with
respect to, any Receivable, any Related Security, any of the other
assets, accounts or interests described in Section 9.01, or any
related Contract, or any interest in any of the foregoing (including
any right to receive income from or in respect of any thereof).

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(b) Extension or Amendment of Receivables. Except in
accordance with the Credit and Collection Policy, Seller shall not
extend, amend or otherwise modify the terms of any Receivable, or
amend, modify or waive, in any material respect, any term or condition
of any Contract related thereto (which term or condition relates to
payments under, or the enforcement of, such Contract).

(c) Change in Business or Credit and Collection Policy.
Seller shall not make any change in the character of its business or
materially alter its Credit and Collection Policy, which change would,
in either case, materially impair the collectibility of a material
portion of the Receivables.

(d) Addition of Lockbox Bank or Change in Payment
Instructions to Obligors; Change in Account Banks. Seller shall not
add or terminate any bank as a Lockbox Bank from those listed in
Schedule 6.01(n) or make any change in its instructions to Obligors
regarding Collections, unless (i) the Agent shall have received notice
of such addition, termination or change and duly executed counterparts
of a Lockbox Agreement with each new Lockbox Bank and copies of such
instructions (which shall be in form and substance acceptable to the
Agent) and (ii) the Agent previously shall have consented in writing
to such addition, termination or change (which consent, in the case of
any such addition or termination, shall not be unreasonably withheld
or delayed by Agent). Seller shall not add or terminate any bank as
an Account Bank from those listed in Schedule 7.03(d) or make any
change in its instructions regarding payments to be made by any
Account Bank, unless (A) the Agent shall have received duly executed
counterparts of an Account Agreement with each new Account Bank and
copies of such instructions (which shall be in form and substance
acceptable to the Agent) and (B) Purchaser previously shall have
consented in writing to such addition, termination or change (which
consent, in the case of any such addition or termination, shall not be
unreasonably withheld or delayed by Purchaser).

(e) [Reserved.]

(f) Restricted Payments.

(i) General Restriction. Except in accordance
with this Section 7.03(f), Seller shall not (A) purchase or
redeem any shares of its capital stock, (B) declare or pay any
Dividend or set aside any funds for any such purpose, (C)
prepay, purchase or redeem any subordinated indebtedness of
Seller, (D) lend or advance any funds or (E) repay any loans
or advances

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to, for or from Union or any Affiliate thereof. Actions of the type described
in this clause (i) are herein collectively called "Restricted Payments".

(ii) Types of Permitted Payments. Subject to the
limitations set forth in clause (iii) below, Seller may make
Restricted Payments so long as such Restricted Payments are
made only to an Originator and only in one or more of the
following ways:

(A) Seller may make cash payments (including
prepayments) on any FTL Note in accordance with its
terms; and

(B) if no amounts are then outstanding under
any FTL Note, Seller may declare and pay Dividends.

(iii) Specific Restrictions. Seller may make
Restricted Payments only out of funds in the Collection
Account or the Lockbox Accounts that do not represent the
Purchaser's Share of any Collections (or deemed Collections)
(prior to any Reinvestment thereof). Furthermore, Seller
shall not pay, make or declare

(A) any Dividend if, after giving effect
thereto, Seller's Tangible Net Worth would be less
than Twenty Million Dollars ($20,000,000);

(B) any Restricted Payment (including any
Dividend) if, after giving effect thereto a
Liquidation Event or Unmatured Liquidation Event
shall have occurred and be continuing.

Notwithstanding the foregoing, the restrictions set forth in this Section
7.03(f) shall not be in effect until following the redemption of all Fruit of
the Loom, Inc. Senior 7.875% Notes due October 15, 1999.

(g) Amendments to Certain Documents. Seller shall not
amend, supplement, amend and restate, or otherwise modify the Purchase
and Contribution Agreement, any FTL Note, any Account Agreement, any
Lockbox Agreement, any agreement between a Lockbox Bank and Seller
and/or Union which is referred to in any Lockbox Agreement, or
Seller's certificate of incorporation or by-laws, except (A) in
accordance with the terms of such document, instrument or agreement
and (B) with the advance written consent of the Agent.

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(h) Deposits to Special Accounts. Seller shall not
deposit or otherwise credit, or cause or permit to be so deposited or
credited to any Lockbox Account or the Collection Account cash or cash
proceeds other than Collections of Receivables.

(i) Incurrence of Indebtedness. Seller shall not (i)
create, incur or permit to exist, any Indebtedness or liability or
(ii) cause or permit to be issued for its account any letters of
credit or bankers' acceptances, except Indebtedness incurred pursuant
to the FTL Notes and liabilities incurred pursuant to or in connection
with the Transaction Documents.

ARTICLE VIII.

ADMINISTRATION AND COLLECTION

8.01 Designation of Servicer.

(a) Union as Initial Servicer. The servicing, administering and
collection of the Receivables shall be conducted by the Person designated as
Servicer hereunder ("Servicer") from time to time in accordance with this
Section 8.01. Until the Agent gives notice to Union of the designation of a
new Servicer (the "Successor Notice"), which notice may be given at any time
after the occurrence and during the continuance of a Liquidation Event, Union
is hereby designated as, and hereby agrees to perform the duties and
obligations of, Servicer pursuant to the terms hereof.

(b) Successor Notice. Upon Union's receipt of a Successor Notice,
Union agrees that it will terminate its activities as Servicer hereunder in a
manner that the Agent indicates will facilitate the transition of the
performance of such activities to the new Servicer. The Agent, or such other
Person as the Agent shall designate, shall assume each and all of the
obligations of Union to service, administer and collect such Receivables, on
the terms and subject to the conditions herein set forth, and Union shall use
its best efforts to assist the Agent (or its designee) in assuming such
obligations. Any successor Servicer shall agree for the benefit of Seller to
make distributions in accordance with Article III hereof and otherwise to be
bound hereby.

(c) Servicer's Fee. Seller hereby agrees to pay to Servicer a fee
(the "Servicer's Fee") for each calendar month (or portion thereof in which
such Person was acting as Servicer) from and including the date hereof to but
excluding the date on which

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all amounts payable under or in connection with this Agreement and the Purchase
and Contribution Agreement have been finally paid in full (and this Agreement
and the Purchase and Contribution Agreement shall have terminated), in an
amount calculated as follows:

(i) at any time when Union is Servicer, an amount equal
to one-twelfth of 0.50% of the Unpaid Balance of the Receivables as
measured on the latest Month End Date referred to in the most recent
Periodic Report (or, for the period from and including the initial
closing date of the transactions contemplated hereby to (but
excluding) the date on which the first Periodic Report is delivered
hereunder, one-twelfth of 0.50% of the Unpaid Balance of the
Receivables as measured at Servicer's close of business on such
closing date); or

(ii) on and after Servicer's reasonable request made at
any time when Union is not Servicer, the greater of (A) an amount
calculated pursuant to the foregoing clause (i) or (B) an alternative
amount specified by Servicer not exceeding 110% of the aggregate
documented reasonable costs and expenses incurred by Servicer during
such calendar month in connection with performing its obligations
under this Agreement and the other Transaction Documents; provided,
however, that in no event shall any Servicer's Fee calculated pursuant
to this clause (ii)(B) for any calendar month exceed an amount equal
to one-twelfth of 1.0% of the Unpaid Balance of the Receivables as
measured on the latest Month End Date referred to in the most recent
Periodic Report.

Such Servicer's Fee shall be paid out of Seller's share of the Collections of
Receivables, except to the extent Servicer's Fee is expressly provided to be
paid out of Purchaser's Share of such Collections pursuant to Article III
hereof. Accrued Servicer's Fee shall be payable at the times and in the
amounts specified in Article III hereof. In addition, on the fifteenth day of
each calendar month (or, if such day is not a Business Day, on the next
following Business Day), Seller and Servicer shall determine whether there was
an aggregate underpayment (in which case Seller shall make an appropriate
additional payment to Servicer on such date) or overpayment (in which case
Servicer shall make, out of Seller's share of such Collections, an appropriate
rebate to Seller on such date) of Servicer's Fee during the preceding calendar
month.

(d) Subservicers. Purchaser and the Agent hereby consent to the
appointment by Servicer of any agent or subservicer selected by Servicer in
good faith to perform all or any portion

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of the Servicer's obligations hereunder; provided that Servicer shall remain
liable for the performance of all duties and obligations of Servicer pursuant
to the terms of this Agreement and the other Transaction Documents.

8.02 Duties of Servicer and Seller.

(a) Appointment; Duties in General. Each of Seller, Purchaser and
the Agent hereby appoints Servicer, from time to time designated pursuant to
Section 8.01, as its agent to enforce their respective rights and interests in
and under the Receivables, the Contracts and the Related Security. Servicer
shall take or cause to be taken all such actions as may be necessary or
advisable to collect each Receivable (or shall cause each subservicer to take
or cause to be taken all such actions as may be necessary or advisable to
collect each Receivable with respect to which it has been appointed as
subservicer) from time to time, all in accordance with applicable laws, rules
and regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.

(b) Allocation of Collections. Servicer shall set aside for the
account of Seller and Purchaser their respective allocable shares of the
Collections in accordance with Article III.

(c) Modification of Receivables. Servicer may adjust, and may
permit each subservicer to adjust, in accordance with the Credit and Collection
Policy, the Unpaid Balance of any Receivable to reflect the reductions or
cancellations described in the first sentence of Section 3.04(a). Servicer
shall write off Receivables from time to time in accordance with the Credit and
Collection Policy.

(d) Documents and Records. Servicer shall hold in trust for
Seller and Purchaser in accordance with their respective interests, all
documents, instruments and records (including, without limitation, computer
tapes or disks, and Contracts) that evidence or relate to the Receivables.
Upon request by the Agent, the Servicer shall deliver quarterly to the Agent on
computer its most recent domestic trial balances.

(e) Certain Duties to Seller. Servicer shall, as soon as
practicable following receipt, turn over to Seller that portion of Collections
of Receivables representing its undivided interest therein, less, in the event
Union is no longer Servicer, all reasonable and appropriate out-of-pocket costs
and expenses of Servicer of servicing, collecting and administering the
Receivables to the extent not covered by the Servicer's Fee received by it.
The Servicer shall provide to the Seller a

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written statement setting forth the out-of-pocket costs and expenses described
in the preceding sentence.

(f) Authorization to Act as Seller's Agent. Seller hereby
appoints Servicer (but only for so long as Union is Servicer, in the case of
clauses (i), (ii) and (iv) below) as its agent for the following purposes: (i)
selecting the amount of each requested Purchase, (ii) specifying accounts to
which payments are to be made to Seller, (iii) making transfers among, deposits
to and withdrawals from the Bank Accounts, the Lockbox Accounts and other
deposit accounts of Seller for the purposes described in the Transaction
Documents and (iv) arranging payment by Seller of all fees, expenses, other
Obligations and other amounts payable under the Transaction Documents. Seller
irrevocably agrees that (A) it shall be bound by all actions taken by Servicer
pursuant to the preceding sentence, and (B) that Purchaser, the Agent, the
Collection Account Bank, the Lockbox Banks, the Liquidation Account Bank and
the banks holding all other deposit accounts of Seller are entitled to accept
submissions, determinations, selections, specifications, transfers, deposits
and withdrawal requests, and payments from Servicer on behalf of Seller.

(g) Termination. The authorization of Servicer under this
Agreement shall terminate upon receipt by the Agent, after the Commitment
Termination Date, of an amount equal to (i) the Aggregate Investment plus (ii)
accrued Earned Return for each Undivided Interest, plus (iii) all other amounts
owed to Purchaser and the Agent and (unless otherwise agreed to by Servicer and
the Agent) to Servicer under this Agreement.

(h) Agreement Not to Resign. Union acknowledges that Purchaser
and the Agent have relied on Union's agreement to act as Servicer hereunder in
their respective decisions to execute and deliver the Transaction Documents.
In recognition of the foregoing, Union agrees not to resign as Servicer
voluntarily unless Union is not permitted by law to serve in such capacity, as
evidenced by an opinion of counsel to such effect, which opinion shall be
satisfactory in form and substance to the Agent.

8.03 Rights of the Agent.

(a) Notice to Obligors. At any time after the occurrence of and
during the continuation of a Liquidation Event, the Agent may notify the
Obligors of Receivables, or any of them, of the Purchaser's ownership of
Undivided Interests.

(b) Notice to Lockbox Banks and Account Banks. At any time
following the occurrence of and during the continuation of a Liquidation Event,
the Agent is hereby authorized (upon Purchaser's direction) to give notice to
the Lockbox Banks, as

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provided in the Lockbox Agreements, of the transfer to the Agent (for the
benefit of Purchaser) of dominion and control over the Lockbox Accounts to
which the Obligors of Receivables make payments. Seller hereby transfers to
the Agent (for the benefit of Purchaser), effective when the Agent shall give
notice to the Lockbox Banks as provided in the Lockbox Agreements, the
exclusive dominion and control over such Lockbox Accounts, and shall take any
further action that the Agent may reasonably request to effect such transfer.
The Agent is hereby authorized to give notice to the Account Banks, as provided
in the Account Agreements, of the transfer of dominion and control over the
Bank Accounts to the Agent (for the benefit of Purchaser). Seller hereby
transfers to the Agent (for the benefit of Purchaser), effective when the Agent
shall give notice to the Account Banks as provided in the Account Agreements,
the exclusive dominion and control over such Bank Accounts, and shall take any
further action that the Agent may reasonably request to effect such transfer.

(c) Rights on Servicer Transfer. At any time following the
designation of a Servicer other than Union pursuant to Section 8.01:

(i) The Agent may direct any Obligors of Receivables to
pay all amounts payable under any Receivable directly to the Agent or
its designee.

(ii) The Agent may direct Union to make payment of all
amounts payable to Seller under any Transaction Document to which
Union is a party directly to the Agent or its designee.

(iii) Seller shall, at the Agent's request and at Seller's
expense, give notice of Purchaser's ownership of Undivided Interests
to each Obligor and direct that payments be made directly to the Agent
or its designee.

(iv) Seller and Union shall, at the Agent's request, (A)
assemble all of the documents, instruments and other records
(including, without limitation, computer programs, tapes and disks,
and Contracts) which evidence the Pool Receivables, and the related
Contracts and Related Security, or which are otherwise necessary or
desirable to collect such Pool Receivables, and shall make the same
available to the Agent at a place selected by the Agent or its
designee, (B) segregate all cash, checks and other instruments
received by it from time to time constituting Collections of Pool
Receivables in a manner acceptable to the Agent and shall, promptly
upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the Agent
or its designee and

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(C) permit any successor Servicer and its agents, employees and
assignees access to its respective facilities and its books, records,
documents and instruments (including, without limitation, computer
programs, tapes and disks, and Contracts) related to Receivables.

(v) Each of Seller, Union and Purchaser hereby authorizes
he Agent to take any and all steps in Seller's name and on
behalf of Seller, Union or Purchaser which are necessary, in the
reasonable determination of the Agent, to collect all amounts due
under any and all Receivables, including, without limitation,
indorsing Seller's or Union's name on checks and other instruments
representing Collections and enforcing such Receivables, the related
Contracts, and the Related Security therefor.

(vi) Seller hereby irrevocably appoints the Agent to act
as Seller's attorney-in-fact, with full authority in the place and
stead of Seller and in the name of Seller or otherwise, to take any
action and to execute any instrument that the Agent, in its reasonable
determination, may deem necessary to accomplish the purposes of this
Agreement, including, without limitation:

(A) to ask, demand, collect, ▇▇▇ for, recover,
compromise, receive and give acquittance and receipts for
moneys due and to become due under or in respect of any
Receivable;

(B) to receive, indorse, and collect any drafts or
other instruments, documents and chattel paper related to the
Receivables or the Related Security, or constituting
Collections;

(C) to file any claims or take any action or
institute any proceedings which Purchaser, in its reasonable
determination, may deem necessary for the collection of any of
the Receivables or otherwise to enforce the rights of the
Agent and Purchaser with respect to any of the Receivables;
and

(D) to perform the affirmative obligations of Seller
under any Transaction Document.

Seller hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section 8.03(c) is irrevocable and coupled with an
interest.

8.04 Responsibilities of Seller. Anything herein to the contrary
notwithstanding:

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(a) Seller shall perform and comply with all of its
obligations (i) pursuant to the provisions, covenants and other
promises required to be observed by it under the Contracts related to
the Receivables and under all purchase orders and other agreements and
(ii) under the Purchase and Contribution Agreement; and the Agent's
exercise of its rights hereunder shall not relieve Seller from any
such obligations.

(b) Neither Purchaser nor the Agent shall have any
obligation or liability with respect to any Receivables, related
Contracts or any other related purchase orders or other agreements,
nor shall any of them be obligated to perform any of the obligations
thereunder.

(c) Seller hereby grants to Servicer an irrevocable power
of attorney, with full power of substitution, coupled with an
interest, to take in the name of Seller all steps which are necessary
or advisable to indorse, negotiate or otherwise realize on any writing
or other right of any kind held or transmitted by Seller or
transmitted or received by Purchaser or the Agent (whether or not from
Seller) in connection with any Receivable.

8.05 Certain Responsibilities of Union. If at any time Union shall
not be Servicer, Union shall deliver all Collections received by it to the
Agent promptly upon receipt thereof and the Agent shall distribute such
Collections to the same extent as if such Collections had actually been
received from the related Obligor on the applicable dates. So long as Union
shall hold any Collections required to be paid to the Agent, it shall hold such
Collections in trust (and, if the Agent shall so request, separate and apart
from its own funds) and shall clearly ▇▇▇▇ its records to reflect such trust.
Union hereby grants to the Agent an irrevocable power of attorney, with full
power of substitution, coupled with an interest and exercisable at any time
following the occurrence and continuance of any Liquidation Event, to take in
the name of Union all steps necessary or advisable to indorse, negotiate or
otherwise realize on any writing or other right of any kind held or transmitted
by Union or transmitted and received by Purchaser or the Agent (whether or not
from Union) in connection with any Receivable.

8.06 Further Action Evidencing Purchases.

(a) Each of Seller and Servicer agrees that from time to time at
Seller's expense, it will promptly execute and deliver (or, cause the relevant
subservicer to execute and deliver) all further instruments and documents, and
take all further action, that the Agent may reasonably request in order to
perfect, protect or more fully evidence the Purchases hereunder and the

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resulting Undivided Interests, or to enable Purchaser or the Agent to exercise
or enforce any of their respective rights hereunder or under any other
Transaction Document. Without limiting the generality of the foregoing, upon
the Agent's reasonable request, Seller (or, in the case of clause (ii) below,
Servicer) will:

(i) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate; and

(ii) ▇▇▇▇ its master data processing records that
evidence or list (A) Receivables and (B) related Contracts with the
legend described in Section 5.01(n).

(b) Seller and Servicer shall file one or more financing or
continuation statements, and amendments thereto and assignments thereof,
relative to all or any of the Receivables or the Related Security now existing
or hereafter arising in the name of Seller or Servicer. If Seller or Servicer
fails to perform any of its agreements or obligations under any Transaction
Document and does not remedy such failure within the applicable cure period, if
any, in the applicable Transaction Document, the Agent may (but shall not be
required to) itself perform, or cause performance of, such agreement or
obligation, and the expenses of the Agent incurred in connection therewith
shall be payable by Seller as provided in Section 13.01.

8.07 Application of Collections. Any payment by an Obligor in
respect of any indebtedness owed by it to an Originator shall, except as
otherwise specified by such Obligor or otherwise required by contract or law
and unless the Agent instructs otherwise, be applied as a Collection of any
Pool Receivable or Pool Receivables of such Obligor to the extent of any
amounts then due and payable thereunder before such payment is applied to any
other indebtedness of such Obligor.

ARTICLE IX.

SECURITY INTEREST

9.01 Grant of Security Interest. To secure the prompt payment and
performance of all Obligations of Seller arising in connection with this
Agreement, the Certificate and each other Transaction Document, whether now or
hereafter existing, due or to become due, direct or indirect, or absolute or
contingent, including, without limitation, all Indemnified Amounts, all Earned
Return, payments on account of Collections received or

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deemed to be received and fees, Seller hereby assigns and grants to Purchaser a
first priority security interest in all of Seller's right, title and interest
in, to and under all of the following, whether now or hereafter existing: (a)
all Receivables, all Related Security and all Collections related thereto, (b)
all of Seller's rights, remedies, powers and privileges under, or in respect
of, the Purchase and Contribution Agreement, (c) all Lockbox Accounts, the Bank
Accounts, all funds on deposit in each of the foregoing accounts and all
certificates and instruments, if any, from time to time evidencing such
accounts and funds on deposit therein, all investments made with such funds,
all claims thereunder or in connection therewith, and all interest, dividends,
moneys, instruments, securities and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing, and (d) all proceeds and amounts received or receivable by
Seller under any or all of the foregoing. This Agreement shall constitute a
security agreement under applicable law with regard to the security interest
granted pursuant to this Section 9.01.

9.02 Further Assurances. The provisions of Section 8.06 shall apply
to the security interest granted under Section 9.01 as well as to the Purchases
and all Undivided Interests hereunder.

9.03 Remedies. Upon the occurrence of and during the continuance of
a Liquidation Event, Purchaser shall have, with respect to the collateral
granted pursuant to Section 9.01, and in addition to all other rights and
remedies available to Purchaser or the Agent under this Agreement or other
applicable law, (a) the right to apply Collections to payment of the
obligations referred to in Section 9.01 and (b) all the rights and remedies of
a secured party upon default under the UCC.

ARTICLE X.

LIQUIDATION EVENTS

10.01 Liquidation Events. The following events shall be "Liquidation
Events" hereunder:

(a) (i) Servicer or Seller shall fail to make when due
any payment or deposit of any Earned Return, Investment, Program Fee,
Commitment Fee, Servicer's Fee (if Union is not Servicer) or other
amount required to be paid by it hereunder or to be deposited by it
hereunder in the Agent's Account, including the amount of any deemed
Collection or

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(ii) Servicer or Seller shall fail to make when due any other
payment or deposit to be made by it hereunder; or

(b) Servicer (if Union) shall (i) fail to deliver any
Periodic Report on the date when such Periodic Report is due or shall
fail to deliver any other report that it is required to deliver
hereunder and such failure shall continue to be unremedied for a
period of five days after such Periodic Report was due, or (ii) fail
to perform or observe in any material respect any term, covenant or
agreement hereunder on its part to be performed or observed (other
than as referred to in clause (a) or (b)(i) above) and such failure
shall remain unremedied for a period of 30 days after written notice
thereof shall have been given to the Servicer by the Agent; or

(c) Any representation or warranty made or deemed to be
made by Servicer, Union or Seller under or in connection with
any Transaction Document (including any Periodic Report or other
information or report delivered pursuant hereto) shall prove to have
been false or incorrect in any material respect when made or deemed
made; or

(d) Seller or Union shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement or any
other Transaction Document on its part to be performed or observed and
any such failure shall remain unremedied for 30 days after written
notice thereof from the Agent; or

(e) (i) A default shall have occurred in the payment when
due (after giving effect to any applicable grace period and the giving
of any required notice), whether by acceleration or otherwise, of (A)
any Indebtedness (other than any Obligation constituting Indebtedness)
of, (B) any reimbursement obligation in respect of any letter of
credit issued for the account of, or (C) any payment obligation in
respect of any Guaranty issued by Union, which Indebtedness,
reimbursement obligation or payment obligation is in a principal
amount, individually at any time in excess of ten million dollars
($10,000,000), or (ii) a default shall occur in the performance or
observance of any material obligation or condition with respect to
such Indebtedness, any such letter of credit or any such Guaranty if
the effect of such default described in this clause (ii) is (A) to
accelerate the maturity of any such Indebtedness or any obligation
which is supported by any such Guaranty or (B) to require the advance
payment or cash collateralization of any such letter of credit
reimbursement obligation; or

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(f) An Event of Bankruptcy shall have occurred and remain
continuing with respect to Seller, Union or FTL;

(g) Either (i) the Aggregate Undivided Interest Amount
shall at any time exceed the sum of (x) the Net Pool Balance and (y)
the Net Liquidation Account Balance, and such condition shall continue
for five Business Days or (ii) the Aggregate Investment shall at any
time exceed the Facility Limit, and such condition shall continue for
five Business Days; or

(h) The arithmetic mean of the Delinquency Ratio for the
prior three consecutive Fiscal Months shall exceed 8.0%; or

(i) The arithmetic mean of the Default Ratio for the
prior three consecutive Fiscal Months shall exceed 5.0%; or

(j) The arithmetic mean of the Dilution Ratios for the
prior three consecutive Fiscal Months shall exceed 10%; or

(k) (i) The Internal Revenue Service shall file notice of
a lien pursuant to Section 6323 of the Internal Revenue Code with
regard to any of the assets of Seller or Union or (ii) the Pension
Benefit Guaranty Corporation shall file notice of a lien pursuant to
Section 4068 of ERISA with regard to any of the assets of Seller or
Union, and in each case, such lien shall not have been released within
15 Business Days; or

(l) Seller shall have failed to comply with Section
7.03(f)(i), (ii) or (iii) and such failure shall remain unremedied for
three Business Days; or

(m) The Purchase and Sale Termination Date shall have
occurred at the option of the Company or all of the Originators, or
the Facility shall have terminated; or

(n) A Change in Control shall have occurred; or

(o) (i) Any Transaction Document, or any security
interest granted thereunder, shall (except in accordance with its
terms), in whole or in part, terminate, cease to be effective or cease
to be the legally valid, binding and enforceable obligation of Seller,
Servicer or an Originator, or (ii) Seller, Servicer or an Originator
shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or (iii)
any security interest securing any Obligation shall not attach or
shall, in whole or in part, cease to be a perfected first

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priority security interest, subject only to those exceptions
expressly permitted herein; or

(p) The cessation of, or failure to create, a valid first
priority ownership interest of Purchaser, to the extent of the
Aggregate Undivided Interest in the Receivables Pool, Related
Security, Collections and other security contemplated hereby; or

(q) The long-term debt rating of FTL shall be withdrawn
by either S&P or ▇▇▇▇▇'▇ or shall be lowered by either S&P or ▇▇▇▇▇'▇
to a rating below BB or Ba2 respectively; or

(r) Seller's Tangible Net Worth shall decrease to less
than $20,000,000; or

(s) Seller shall have completed or attempted to complete
any Merger.

10.02 Remedies.

(a) Optional Liquidation. Upon the occurrence of a Liquidation
Event (other than a Liquidation Event described in subsection (f) of Section
10.01), the Agent shall, at the request (or may with the consent) of Purchaser,
by notice to Seller, declare the Commitment Termination Date to have occurred.

(b) Automatic Liquidation. Upon the occurrence of a Liquidation
Event described in subsection (f) of Section 10.01, the Commitment Termination
Date shall be deemed to have occurred automatically upon the occurrence of such
event; provided, however, that with respect to any proceeding instituted
against Seller pursuant to 11 U.S.C. Section 303 (an "Involuntary Federal
Proceeding"), the settlement procedures described in Section 3.03 shall become
applicable upon the commencement of such Involuntary Federal Proceeding or
event and no further Purchases or Reinvestments of Collections shall be made;
and provided, further, that if such Involuntary Federal Proceeding is dismissed
within 60 days after its commencement, and if no other Liquidation Event has
occurred, then following such dismissal, the Commitment shall be reinstated as
if the Commitment Termination Date had not occurred upon the commencement of
such Involuntary Federal Proceeding.

(c) Additional Remedies. Upon any termination of the Commitment
pursuant to this Section 10.02, Purchaser and the Agent shall have, in addition
to all other rights and remedies under this Agreement or otherwise, all other
rights and remedies provided under the UCC of each applicable jurisdiction and
other applicable laws, which rights shall be cumulative. Without

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limiting the foregoing or the general applicability of Article XIII hereof, the
occurrence of a Liquidation Event shall not deny to Purchaser or the Agent any
remedy in addition to termination of the Commitment to which any such Person
may be otherwise appropriately entitled, whether at law or in equity.

ARTICLE XI.

THE AGENT

11.01 Authorization and Action. Purchaser hereby appoints SG as its
Agent under and for purposes of each Transaction Document, and authorizes the
Agent to act on its behalf under each Transaction Document and to exercise such
powers hereunder and thereunder as are delegated to the Agent by the terms
hereof and thereof, together with such powers as may be reasonably incidental
thereto.

11.02 Exculpation. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted
to be taken by it in good faith under or in connection with this Agreement
(including, without limitation, the servicing, administering or collecting
Receivables pursuant to Section 8.01), except for its or their own gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, the Agent: (a) may consult with legal counsel (including internal
counsel and counsel for Seller and Servicer), independent certified 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; (b) makes no warranty or
representation to Purchaser or any other holder of any interest in Receivables
and shall not be responsible to Purchaser or any such other holder for any
statements, warranties or representations made in or in connection with any
Transaction Document; (c) 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 any Transaction Document on the part of Seller or Servicer or to inspect the
property (including the books and records) of Seller or Servicer; (d) shall not
be responsible to Purchaser or any other holder of any interest in Receivables
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Transaction Document; and (e) shall incur no
liability under or in respect of any Transaction Document by acting upon any
notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by facsimile or telex) believed by it in
good faith to be genuine and signed or sent by the proper party or parties.

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11.03 Agent and Affiliates. SG and any of its Affiliates may accept
deposits, lend money to and generally engage in any kind of business with
Seller, an Originator or any Obligor, any of their respective Affiliates and
any Person who may do business with or own securities of Seller, an Originator
or any Obligor or any of their respective Affiliates, all as if SG were not the
Agent and without any duty to account therefor to Purchaser or any other holder
of an interest in Receivables.

ARTICLE XII.

ASSIGNMENT OF PURCHASER'S INTEREST

12.01 Restrictions on Assignments.

(a) None of Union, Seller or Purchaser may assign its rights
hereunder or any interest herein without the prior written consent of the
Agent, and Purchaser may not assign any Undivided Interest (or portion thereof)
to any Person without the prior written consent of Seller; provided, however,
that Purchaser may assign and grant a security interest in any interest in, to
and under any Undivided Interest, this Agreement and any other Transaction
Documents to the Collateral Agent, and any successor in such capacity, to
secure ▇▇▇▇▇▇'▇ obligations under or in connection with the Commercial Paper
Notes, the Stand-by Purchase Agreement, the Enhancement Agreement and any
letter of credit issued thereunder, and certain other obligations of Purchaser
incurred in connection with the funding of the Purchases and Reinvestments
hereunder, which assignment and grant of a security interest shall not be
considered an "assignment" for purposes of Section 12.01(b) or Section 12.03
or, prior to the enforcement of such security interest, for purposes of any
other provision of this Agreement.

(b) Seller agrees to advise the Agent within five Business Days
after notice to Seller of any proposed assignment by Purchaser of any Undivided
Interest (or portion thereof), not otherwise permitted under subsection (a) of
this Section 12.01, of Seller's consent or non-consent to such assignment. If
Seller does not consent to such assignment, Purchaser may upon five days'
notice to Seller assign such Undivided Interest (or portion thereof) to SG, any
Bank or any Affiliate of SG or any Bank. All of the aforementioned assignments
shall be upon such terms and conditions as Purchaser and the assignee may
mutually agree.

12.02 Rights of Assignee. Upon the assignment by Purchaser of any
Undivided Interest (or portion thereof) in accordance with this Article XII,
the assignee receiving such assignment shall

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have all of the rights of Purchaser hereunder with respect to such Undivided
Interest (or such portion thereof).

12.03 Evidence of Assignment; Endorsement on Certificate. Any
assignment of any Undivided Interest (or portion thereof) to any Person may be
evidenced by an instrument of assignment in the form of Exhibit 12.04 or by
such other instrument(s) or document(s) as may be satisfactory to Purchaser,
the Agent and the assignee. Purchaser authorizes the Agent to, and the Agent
agrees that it shall, endorse the Certificate to reflect any assignments made
pursuant to this Article XII or otherwise.

12.04 Rights of the Banks and Collateral Agent. Seller hereby agrees
that, upon notice to Seller, the Collateral Agent may exercise all the rights
of the Agent hereunder, with respect to all Undivided Interests (or portions
thereof), and Collections with respect thereto, which are owned by Purchaser,
and all other rights and interests of Purchaser in, to or under this Agreement
or any other Transaction Document. Without limiting the foregoing, upon such
notice Collateral Agent may request Servicer to segregate Purchaser's and the
Banks' allocable shares of Collections from Seller's allocable share, and from
each other's allocable share, may give a Successor Notice pursuant to Section
8.01(a), may give or require the Agent to give notice to the Lockbox Banks and
Account Banks in accordance with Section 8.03(b), and may direct the Obligors
of Receivables to make payments in respect thereof directly to an account
designated by them, in each case, to the same extent as the Agent might have
done.

ARTICLE XIII.

INDEMNIFICATION

13.01 Indemnity by Seller.

(a) General Indemnity. Without limiting any other rights which
any such Person may have hereunder or under applicable law, Seller hereby
agrees to indemnify each of Purchaser, the Agent, the Banks, Enhancement Bank,
SG, and each of their respective Affiliates, successors, transferees,
participants and assigns and all officers, directors, shareholders, controlling
persons, employees and agents of any of the foregoing (each of the foregoing
Persons being individually called an "Indemnified Party"), forthwith on demand,
from and against any and all damages, losses, claims, liabilities and related
costs and expenses, including reasonable attorneys' fees and disbursements (all
of the foregoing being collectively called "Indemnified Amounts") awarded
against or incurred by any of them arising out

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of or relating to any Transaction Document or the transactions contemplated
thereby or the use of proceeds therefrom, including (without limitation) in
respect of the ownership or funding of any Undivided Interest or in respect of
any Receivable or any Contract, excluding, however, (a) Indemnified Amounts to
the extent determined by a court of competent jurisdiction to have resulted
from gross negligence or willful misconduct on the part of such Indemnified
Party, or (b) non-payment by any Obligor of an amount due and payable with
respect to a Receivable due to the credit of such Obligor (except as otherwise
specifically provided in this Agreement). Without limiting the foregoing,
Seller agrees to indemnify each Indemnified Party for Indemnified Amounts
arising out of or relating to:

(i) the transfer by Seller of any interest in any
Receivable other than an Undivided Interest to Purchaser pursuant to
this Agreement and the grant of a security interest to Purchaser
pursuant to Section 9.01;

(ii) the breach of any representation or warranty made by
Seller (or any of its officers) under or in connection with this
Agreement or any other Transaction Document, any Periodic Report or
any other information or report delivered by Seller or Servicer
pursuant hereto, which shall have been false or incorrect in any
material respect when made or deemed made;

(iii) the failure by Seller to comply with any applicable
law, rule or regulation with respect to any Receivable or the related
Contract, or the nonconformity of any Receivable or the related
Contract with any such applicable law, rule or regulation;

(iv) the failure to vest and maintain vested in Purchaser
an undivided fractional ownership interest, to the extent of each
Undivided Interest owned by it hereunder, in the Pool Receivables in,
or purporting to be in, the Receivables Pool, free and clear of any
Adverse Claim, other than an Adverse Claim arising solely as a result
of an act of Purchaser or the Agent, any assignee from Purchaser or
the Agent, whether existing at the time of any Purchase or
Reinvestment of such Undivided Interest or at any time thereafter;

(v) the failure to file, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables
Pool, whether at the time of any Purchase or Reinvestment or at any
time thereafter;

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(vi) to the extent not otherwise reimbursed as a deemed
collection pursuant to Section 3.04(a), any dispute, claim, offset or
defense (other than discharge in bankruptcy) of the applicable Obligor
to the payment of any Receivable in, or purporting to be in, the
Receivables Pool (including, without limitation, a defense based on
such Receivable's or the related Contract's not being a legal, valid
and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale
of the merchandise or services related to such Receivable or the
furnishing or failure to furnish such merchandise or services;

(vii) any claim involving products liability or
environmental liability that arises out of or relates to merchandise
or services that are the subject of any Receivable; or

(viii) any tax or governmental fee or charge, and all
interest and penalties thereon or with respect thereto, and all
out-of-pocket costs and expenses, including the reasonable fees and
expenses of counsel in defending against the same, which may arise by
reason of the purchase or ownership of any Undivided Interest, or any
other interest in the Receivables or in any goods which secure any
such Receivables.

(b) Indemnity by Union. Without limiting any other rights which
any such person may have hereunder under applicable law, Union hereby agrees to
indemnify each Indemnified Party, forthwith on demand, from and against any and
all Indemnified Amounts awarded against or incurred by any of them arising out
of or relating to:

(i) any representation or warranty made by Union under or
in connection with any Transaction Document in its capacity as
Servicer or any information or report delivered by or on behalf of
Union in its capacity as Servicer pursuant hereto, which shall have
been false, incorrect or misleading in any material respect when made
or deemed made;

(ii) the failure by Union, in its capacity as Servicer, to
comply with any applicable law, rule or regulation (including truth in
lending, fair credit billing, usury, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) with
respect to any Pool Receivable or other related Contract; or

(iii) any failure of Union to perform its duties, covenants
and obligations in accordance with the applicable provisions of this
Agreement.

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(c) Contribution. If for any reason the indemnification provided
above in this Section 13.01 is unavailable to an Indemnified Party or is
insufficient to hold an Indemnified Party harmless, then Seller or Union or
both, as applicable, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnified Party, on the one hand, and Seller or Union or both, as
applicable, on the other hand, but also the relative fault of such Indemnified
Party as well as any other relevant equitable considerations.

(d) Promptly after the receipt by an Indemnified Party or Parties
of a notice of the commencement of any action, suit, proceeding, investigation
or claim against such Indemnified Party or Parties as to which it proposes to
demand indemnification from the Seller or Union (either or both such parties,
as applicable, the "Indemnifying Party" or "Parties") pursuant to this Section
13.01, such Indemnified Party or Parties shall notify the Indemnifying Party or
Parties in writing of the commencement thereof; but the failure so to notify
the Indemnifying Party or Parties will not relieve such Indemnifying Party or
Parties from any liability which such Indemnifying Party or Parties may have to
such Indemnified Party or Parties pursuant to this Section 13.01 unless to the
extent that such failure results in the forfeiture by any such Indemnifying
Party or Parties of substantive rights and defenses. After such notice, if (i)
an Indemnifying Party or Parties shall acknowledge in writing to such
Indemnified Party or Parties that such Indemnifying Party or Parties shall be
obligated to indemnify such Indemnified Party or Parties under this Section
13.01 with respect to such action, suit, proceeding, investigation or claim,
(ii) the defendants in, or targets of, any such action, suit, proceeding,
investigation or claim include both the Indemnifying Party or Parties and any
such Indemnified Party or Parties, and (iii) no Liquidation Event of Unmatured
Liquidation Event shall have occurred and be continuing, the Indemnifying Party
or Parties, to the extent that it or they shall wish, jointly with such
Indemnified Party or Parties, shall be entitled to participate therein in
defense of such action, suit, proceeding or investigation, and the Indemnifying
Party or Parties and such Indemnified Party or Parties shall cooperate in the
defense thereof and shall retain counsel reasonably satisfactory to the
Indemnifying Party or Parties and such Indemnified Party or Parties to
undertake the joint defense of such Indemnifying Party or Parties and such
Indemnified Party or Parties at such Indemnifying Party's or Parties' cost,
risk and expense. If (i) in the reasonable opinion of such Indemnified Party
or Parties, the engagement of such counsel would present a conflict of interest
that would prevent such counsel from effectively undertaking such joint
defense, (ii) such Indemnified Party or Parties reasonably

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conclude that there may be legal defenses available to it or them that are
different from or in addition to those available to such Indemnifying Party or
Parties, (iii) such Indemnifying Party or Parties fail to employ counsel
reasonably satisfactory to such Indemnified Party or Parties in a timely
manner, or (iv) if a Liquidation Event or Unmatured Liquidation Event shall
have occurred and be continuing, then such Indemnified Party or Parties may
employ separate counsel to represent or defend it or them in any such action,
suit, proceeding or investigation and such Indemnifying Party or Parties shall
pay all fees, expenses and disbursements of such counsel; provided, however,
that in no event shall such Indemnifying Party or Parties be liable for the
fees, expenses and disbursements of more than one counsel representing all
Indemnified Parties that are parties to the same action, suit, proceeding,
investigation or claim.

(e) No Indemnifying Party shall (i) without the prior written
consent of the relevant Indemnified Party or Parties (which consent shall not
be unreasonably withheld or delayed) settle or compromise or consent to the
entry of any judgment with respect to any pending action, suit, proceeding,
investigation or claim in respect to which indemnification or contribution may
be sought hereunder (whether or not the relevant Indemnified Party or Parties
are actual or potential parties to such claim) unless such settlement,
compromise or consent includes an unconditional release of each relevant
Indemnified Party from all liability arising out of such action, suit,
proceeding, investigation or claim or (ii) be liable for any settlement of any
such action affected without its written consent (which consent shall not be
unreasonably withheld or delayed), but if settled with its written consent or
if there be a final judgment of the plaintiff in any action, the Indemnifying
Parties agree to indemnify and hold harmless any Indemnified Party from and
against any indemnified amounts relating thereto.

In the event of any dispute between any Indemnified Party or Parties,
on the one hand, and any Indemnifying Party, on the other hand, as to whether
such Indemnifying Party is acting reasonably in objecting to any proposed
settlement, compromise or consent, such dispute shall be resolved through
binding arbitration in Chicago, Illinois in accordance with the commercial
arbitration rules of the American Arbitration Association. There shall be a
single arbitrator to be selected by mutual agreement of such Indemnified Party
or Parties and such Indemnifying Party or Parties (or if such parties cannot
agree on an arbitrator, by an arbitrator selected by a federal or state court
located in the City of Chicago). Any such arbitration must be commenced not
later than 30 days after the date such dispute arose.

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ARTICLE XIV.

MISCELLANEOUS

14.01 Amendments, etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by Seller or Union therefrom shall
in any event be effective unless the same shall be in writing and signed by (a)
Seller, Union, Purchaser and the Agent (with respect to an amendment) or (b)
Purchaser and the Agent (with respect to a waiver or consent by them) or Seller
or Union (as applicable) (with respect to a waiver or consent by it), as the
case may be, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

14.02 Notices, etc. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
facsimile communication) and shall be personally delivered or sent by certified
mail, postage prepaid, by overnight courier, or by facsimile, to the intended
party at the address or facsimile number of such party set forth under its name
on the signature pages of this Agreement (or the Purchase and Contribution
Agreement) or at such other address or facsimile number as shall be designated
by such party in a written notice given to the other parties hereto in
accordance with this Section 14.02. All such notices and communications shall
be effective, (a) if personally delivered, when received, (b) if sent by
certified mail, three Business Days after having been deposited in the mail,
postage prepaid, (c) if sent by overnight courier, two Business Days after
having been given to such courier unless sooner received by the addressee, (d)
if transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means, except that notices and communications pursuant to Article I
shall not be effective until received.

14.03 No Waiver; Remedies. No failure on the part of the Agent, any
Affected Party, any Indemnified Party, Purchaser or any other holder of any
Undivided Interest to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law. Without limiting the foregoing,
SG is hereby authorized by Seller and Union at any time and from time to time
after the occurrence and during the continuance of a Liquidation Event, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, SG and such Bank to or for the
credit or the account of

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Seller or Union, against any Obligation (including, if a Liquidation Period has
occurred and is continuing, all Obligations with respect to the then current
Settlement Period that are not yet due and payable) now or hereafter existing
under this Agreement, to the Agent, any Affected Party, any Indemnified Party
or Purchaser, or their respective successors and assigns.

14.04 Binding Effect; Survival. This Agreement shall be binding upon
and inure to the benefit of Seller, Union, Purchaser, the Agent and their
respective successors and assigns, and the provisions of Section 4.02 and
Article XIII shall inure to the benefit of the Affected Parties and the
Indemnified Parties, respectively, and their respective successors and assigns;
provided, however, that nothing in the foregoing shall be deemed to authorize
any assignment not permitted by Section 12.01. This Agreement shall create and
constitute the continuing obligations of the parties hereto in accordance with
its terms, and shall remain in full force and effect until such time, after the
Commitment Termination Date, as all Undivided Interests shall have been reduced
to zero and all Obligations shall have been finally and fully paid and
performed. The rights and remedies with respect to any breach of any
representation and warranty made by Seller or Union pursuant to Article VI and
the indemnification and payment provisions of Article XIII and Sections 4.02,
14.05, 14.06 and 14.07 shall be continuing and shall survive any termination of
this Agreement.

14.05 Costs, Expenses and Taxes.

In addition to their obligations under Article XIII, Seller agrees to
pay on demand:

(i) all reasonable costs and expenses (including, without
limitation, the reasonable fees and expenses of counsel of Purchaser,
the Agent, SG and their respective Affiliates) in connection with (A)
the preparation, execution and delivery of this Agreement, the other
Transaction Documents and the Stand-by Purchase Agreement (and, in
each case, all related certificates and other documents), (B) the
preparation, execution and delivery of any waiver, amendment or other
modification to this Agreement, the Stand-by Purchase Agreement, any
of the Transaction Documents and, to the extent caused by any such
waiver, amendment or modification, any waiver, amendment or other
modification to the Enhancement Agreement or the Stand-by Purchase
Agreement, and, in each case, all related certificates and other
documents (provided, that Seller shall be obligated to make such
payment whether or not any of the foregoing are executed and
delivered), and (C) the enforcement of this Agreement, the Certificate
and the other Transaction Documents or any claim of breach of
contract,

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breach of warranty or any other breach of this Agreement, the
Certificate or any of the other Transaction Documents or any tort
claim relating to any of the foregoing; and

(ii) all stamp and other similar taxes and fees payable or
determined to be payable in connection with the execution, delivery,
filing and recording of this Agreement, the Certificate or the other
Transaction Documents, and agrees to indemnify each Indemnified Party
against any liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees.

14.06 No Proceedings. Each of Seller, Union and SG (individually and
as the Agent) hereby agrees that it will not institute against Purchaser, or
join any other Person in instituting against Purchaser, any insolvency
proceeding (namely, any proceeding of the type referred to in the definition of
Event of Bankruptcy) so long as any Commercial Paper Notes issued by Purchaser
shall be outstanding or there shall not have elapsed one year plus one day
since the last day on which any such Commercial Paper Notes shall have been
outstanding.

14.07 Confidentiality.

(a) Each party hereto acknowledges that SG regards the Fee Letter
to be proprietary, and each such party severally agrees that:

(i) it (A) will not disclose without the prior consent of
SG (other than to its Representatives (as defined below)) (1) any
information regarding, or copies of, the Fee Letter, or (2) any
information regarding Purchaser or SG, which information is furnished
by Purchaser or SG to such party and which, at the time of delivery,
is designated by Purchaser or SG to such party in writing or otherwise
as confidential or not otherwise available to the general public (the
information referred to in clauses (1) and (2) is collectively
referred to as the "SG Information") and (B) will inform its
Representatives of the confidential nature of the SG Information and
the terms of this Section 14.07; provided, however, that such party
may disclose any such SG Information (v) to any other party to this
Agreement for the purposes contemplated hereby, (w) as may be required
by any municipal, state, federal or other regulatory body having or
claiming to have jurisdiction over such party, (x) in order to comply
with any law, order, regulation, regulatory request or ruling
applicable to such party, or (y) subject to subsection (b) below, in
the event such party is legally compelled (by interrogatories,
requests for information or copies, subpoena, civil investigative
demand or similar process) to disclose any such SG Information;

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(ii) it will use the SG Information solely for the
purposes of evaluating, administering and enforcing the transactions
contemplated by this Agreement and the other Transaction Documents and
making any necessary business judgments with respect thereto; and

(iii) it will, upon demand, return (and cause each of its
Representatives to return) to SG all documents or other written
material received from SG in connection with clause (a)(i)(A)(2) above
and all copies thereof made by such party which contain the SG
Information.

(b) In the event that any party or anyone to whom such party or
its Representatives transmits the SG Information is requested or becomes
legally compelled (by interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process) to disclose any of the
SG Information, such party will

(i) provide SG with prompt written notice so that SG may
seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 14.07;

(ii) unless SG waives compliance by such party with the
provisions of this Section 14.07, make a timely objection to the
request or confirmation to provide such SG Information on the basis
that such SG Information is confidential and subject to the agreements
contained in this Section 14.07; and

(iii) take such action as is necessary to preserve such
confidentiality, such as seeking a protective order or other
appropriate remedy.

In the event that a protective order or other remedy is not obtained, or SG
waives compliance with the provisions of this Section 14.07, such party will
furnish only that portion of the SG Information which is legally required to be
furnished and will exercise such party's best efforts to obtain reliable
assurance that confidential treatment will be accorded to the SG Information.

(c) Purchaser and the Agent acknowledge that FTL and the
Originators regard certain information provided, and to be provided, by any of
them to Purchaser and the Agent in connection with the transactions
contemplated by the Transaction Documents to be confidential, and each of
Purchaser and the Agent agrees that:

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(i) it (A) will not disclose without the prior written
consent of Union (other than to each Affected Party and its
Representatives (as defined below)) any information regarding FTL or
any of its subsidiaries (or any Affiliate thereof) that is furnished
by FTL or any Originator (or any Affiliate thereof) to Purchaser or
the Agent and which, at the time of delivery, is designated by FTL or
any Originator (or such Affiliate) in writing or otherwise as
confidential or not otherwise available to the general public (such
information is collectively referred to as "FTL Group Information")
and (B) will inform its Representatives and each Affected Party (who
shall be obligated to inform its Representatives) of the confidential
nature of the FTL Group Information and the terms of this Section
14.07; provided, however, that Purchaser, the Agent, and any Affected
Party and their respective Representatives may disclose any such FTL
Group Information to the extent permitted in the proviso to clause (i)
of subsection (a) above with the term "SG Information" replaced by the
term "FTL Group Information" and the reference to subsection (b)
replaced by a reference to subsection (d) below and to commercial
paper rating agencies and commercial paper placement agents and
dealers and investors or potential investors in Commercial Paper
Notes; and

(ii) it will use the FTL Group Information solely for the
purposes of evaluating, administering, enforcing and funding the
transactions contemplated by this Agreement and the other Transaction
Documents and making any necessary business judgments with respect
thereto.

(d) In the event Purchaser, the Agent, or any Affected Party or
any of their respective Representatives to whom FTL Group Information is
transmitted is requested or becomes legally compelled (by interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the FTL Group Information, it will comply
with the provisions of subsections (b)(i), (ii) and (iii) of this Section 14.07
with all references to "SG" replaced by references to "FTL Group".

(e) The term "Representatives," when used in this Section 14.07,
means in subsections (a) and (b) above, the directors, employees, auditors,
counsel or affiliates of any party; and means in subsections (c) and (d) the
directors, employees, auditors, counsel or affiliates of the Agent, Purchaser
or any Affected Party.

(f) This Section 14.07 shall be inoperative as to such portions of
the SG Information or the FTL Group Information which are or become generally
available to the public or such Person on

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a nonconfidential basis from a source other than SG or Union (or any Affiliate
thereof), respectively, or were known to such Person on a nonconfidential
basis prior to its disclosure to such Person by SG or Union (or any Affiliate
thereof), respectively.

(g) This Section 14.07 shall survive termination of this
Agreement.

14.08 Captions and Cross References. The various captions
(including, without limitation, the table of contents) in this Agreement are
provided solely for convenience of reference and shall not affect the meaning
or interpretation of any provision of this Agreement. Unless otherwise
indicated, references in this Agreement to any Section, Appendix, Schedule or
Exhibit are to such Section of or Appendix, Schedule or Exhibit to this
Agreement, as the case may be, and references in any Section, subsection, or
clause to any subsection, clause or subclause are to such subsection, clause or
subclause of such Section, subsection or clause.

14.09 Integration. This Agreement and the other Transaction
Documents contain a final and complete integration of all prior and
contemporaneous expressions by the parties hereto with respect to the subject
matter hereof and thereof and shall together constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof,
superseding all prior and contemporaneous oral or written understandings.

14.10 Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES
OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW), EXCEPT TO THE EXTENT THAT THE PERFECTION OF THE
INTERESTS OF PURCHASER IN THE RECEIVABLES IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.

14.11 Waiver of Jury Trial. SELLER AND UNION EACH HEREBY EXPRESSLY
WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS UNDER THIS AGREEMENT, THE CERTIFICATE, ANY OTHER TRANSACTION
DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT OR DOCUMENT DELIVERED OR WHICH MAY
BE IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM OR
RELATING TO ANY BANKING OR OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, THE CERTIFICATE OR ANY OTHER TRANSACTION DOCUMENT AND AGREE THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY TRIAL.

14.12 Consent to Jurisdiction; Waiver of Immunities. EACH OF SELLER
AND UNION HEREBY ACKNOWLEDGES AND AGREES THAT:

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(a) IT IRREVOCABLY (i) SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION, FIRST, OF ANY FEDERAL COURT, AND SECOND, IF FEDERAL
JURISDICTION IS NOT AVAILABLE, OF ANY NEW YORK STATE COURT, IN EITHER
CASE SITTING IN THE BOROUGH OF MANHATTAN, STATE OF NEW YORK, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
(ii) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
SHALL BE HEARD AND DETERMINED ONLY IN SUCH NEW YORK STATE OR FEDERAL
COURT AND NOT IN ANY OTHER COURT, AND (iii) WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM
TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING.

(b) TO THE EXTENT THAT IT HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID TO EXECUTION, EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER OR IN CONNECTION WITH
THIS AGREEMENT.

14.13 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by the 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.

14.14 Recourse to Directors or Officers. Each of Seller, Union and
Servicer hereby agrees that the directors and officers of Purchaser shall have
no liability with respect to Purchaser's obligations hereunder.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

FTL RECEIVABLES COMPANY

By: ______________________________
Name:
______________________________
Title:
______________________________

▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇

UNION UNDERWEAR COMPANY, INC.,
as initial Servicer

By: ______________________________
Name:
______________________________
Title:
______________________________

▇▇▇▇▇▇ CAPITAL CORPORATION,
as Purchaser

By: ______________________________
Name:
______________________________
Title:
______________________________

c/o Amacar Group, L.L.C.
▇▇▇▇-▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
78
SOCIETE GENERALE,
as the Agent

By: ______________________________
Name:
______________________________
Title:
______________________________

▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Asset Securitization Group
79
APPENDIX A

DEFINITIONS

This is Appendix A to (i) the Purchase and Contribution Agreement (as
hereinafter defined) and (ii) the Receivables Purchase Agreement, dated as of
December 18, 1996, among FTL RECEIVABLES COMPANY, UNION UNDERWEAR COMPANY,
INC., ▇▇▇▇▇▇ CAPITAL CORPORATION and SOCIETE GENERALE, as Agent (as amended,
supplemented or otherwise modified from time to time, the "Receivables Purchase
Agreement").

A. Defined Terms. As used in the Purchase and Contribution
Agreement or the Receivables Purchase Agreement, as the case may be (unless the
context requires a different meaning), the following terms have the following
meanings (such meanings to be equally applicable to the singular and plural
forms thereof):

"Account Agreement" means the Liquidation Account Agreement and the
Collection Account Agreement.

"Account Banks" means the Collection Account Bank and the Liquidation
Account Bank.

"Acquiring Person" means any Person who or which, together with all
Affiliates of such Person, shall acquire, directly or indirectly, the right to
vote, or dispose of, or "beneficial ownership" (as defined in Rule 13d-3 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended) of, more than fifty percent (50%) of the shares of the voting stock of
FTL then outstanding, but shall not include any Exempt Person.

"Adjusted Average Maturity" means, on any day, the sum of (i) 10 (or
such greater number not exceeding 30 chosen by the Agent in its reasonable
discretion) days plus (ii) the Average Maturity for such day.

"Adverse Claim" means a lien, security interest, charge, encumbrance,
or similar claim of any Person.

"Affected Party" means each of Purchaser, the Agent, each Bank, any
permitted assignee of Purchaser or any Bank, and Enhancement Bank, and any
assignee of any of Enhancement Bank or SG.

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80
"Affiliate" when used with respect to a Person means any other Person
controlling, controlled by, or under common control with, such Person.

"Agent" has the meaning set forth in the preamble to the Receivables
Purchase Agreement.

"Agent's Account" means that certain account #700800 maintained at
Societe Generale, Chicago, Illinois which account shall be in the name and
under the exclusive dominion and control of the Agent.

"Aggregate Investment" at any time means the aggregate Dollar amount
of all Investments outstanding at such time.

"Aggregate Undivided Interest" means, at any time, the sum of all of
the Undivided Interests owned by Purchaser at such time.

"Aggregate Undivided Interest Amount" means, at any time, the sum of
all of the numerators used in the calculation of all Undivided Interests at
such time.

"Aggregate Undivided Interest Limit" has the meaning set forth in
Section 1.02(b) of the Receivables Purchase Agreement.

"Alternate Base Rate" means, on any date, a fluctuating rate of
interest per annum equal to the higher of

(a) the rate of interest most recently announced by SG at its
branch office in New York, New York as its reference rate; and

(b) the Federal Funds Rate (as defined below) most recently
determined by SG plus 1.0% per annum.

For purposes of this definition, "Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal (for each day during such period) to

(i) the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York; or

(ii) if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by SG from three federal funds brokers of
recognized standing selected by it.

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The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by SG in connection with extensions of credit.

"Anniversary Date" means the anniversary of date of the Receivables
Purchase Agreement.

"Average Maturity" means, on any day, that time period (expressed in
days) equal to the weighted average maturity of the Receivables as shall be
calculated by Servicer, as set forth in the most recent Periodic Report in
accordance with the provisions thereof. If the Agent shall disagree with any
such calculation, the Agent may recalculate the Average Maturity for such day,
which calculation shall, absent manifest error, be binding upon Servicer,
Seller and Purchaser.

"Bank" means any one of, and "Banks" means all of, SG and the other
commercial lending institutions that are at any time parties to the Stand-by
Purchase Agreement.

"Bank Accounts" means the Collection Account and the Liquidation
Account.

"Bank Rate" for any Yield Period for the related Undivided Interest
means an interest rate per annum equal to the sum of (a) .50% per annum, plus
(b) the Eurodollar Rate (Reserve Adjusted) for such Yield Period; provided,
however, that if (i) it shall become unlawful for the Agent, any Bank or
Enhancement Bank to obtain funds in the offshore interbank eurodollar market in
order to fund any Purchase or to maintain any Undivided Interest, or if such
funds shall not be reasonably available to the Agent, any Bank or Enhancement
Bank, or (ii) there shall not be time prior to commencement of an applicable
Yield Period to determine a Eurodollar Rate in accordance with its terms, or
(iii) the Seller shall have so requested, then the "Bank Rate" for any Yield
Period for such Undivided Interest shall be equal to the Alternate Base Rate.

"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Capital Corporation, a Delaware corporation.

"Business Day" means a day on which both (a) the Agent is open for
business at its principal office in Chicago, Illinois and (b) commercial banks
in New York City or Chicago, Illinois are not authorized or required to be
closed for business.

"Capital Lease" means any lease that, in accordance with GAAP, would
be deemed a capital lease.

"Capital Stock" means with respect to any Person, any and all shares,
interests, participations, rights in or other

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equivalents (however designated) of such Person's capital stock and any rights
(other than debt securities convertible into or exchangeable for capital
stock), warrants or options exchangeable for or convertible into such capital
stock.

"Certificate" means a certificate of assignment, by Seller to the
Agent, in the form of Exhibit 5.01(a) to the Receivables Purchase Agreement,
evidencing each Undivided Interest owned by Purchaser or an assignee thereof,
as the same may be amended, supplemented, amended and restated or otherwise
modified from time to time in accordance with the Receivables Purchase
Agreement.

"Change in Control" means

(i) Union or any of its Affiliates shall fail to own,
collectively, one hundred percent (100%) of the issued and outstanding
shares of capital stock (including all warrants, options, conversion
rights, and other rights to purchase or convert into such stock) of
Seller; or

(ii) any Person shall become an Acquiring Person.

"Charged-Off Receivable" means a Receivable which has been written off
as uncollectible by Servicer, any Originator or Seller or which, consistent
with the Credit and Collection Policy, should be written off as uncollectible
by Servicer, any Originator or Seller.

"Collateral Agent" means SG in its capacity as collateral agent under
the Security Agreement, dated as of December 6, 1991, as amended as of August
1, 1993, as the same may be further amended, supplemented, amended and restated
or otherwise modified from time to time between SG and ▇▇▇▇▇▇.

"Collections" means, with respect to any Receivable, all funds which
either (a) are received by an Originator, Seller, Servicer from or on behalf of
the related Obligors in payment of any amounts owed (including, without
limitation, invoice prices, finance charges, interest and all other charges) in
respect of such Receivable, or applied to such amounts owed by such Obligors
(including, without limitation, insurance payments that an Originator or
Servicer applies in the ordinary course of its business to amounts owed in
respect of such Receivable and net proceeds of sale or other disposition of
repossessed goods or other collateral or property of the Obligor or any other
party directly or indirectly liable for payment of such Receivable), or (b) are
deemed to have been received by any Person as a Collection pursuant to Section
3.04 of the Receivables Purchase Agreement.

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83
"Collection Account" means that certain bank account with the number,
and maintained at the location, set forth on Schedule 7.03(d) to the
Receivables Purchase Agreement, which is (i) in Seller's name, and (ii) pledged
on a first-priority basis to Purchaser pursuant to Section 9.01 of the
Receivables Purchase Agreement.

"Collection Account Agreement" means a letter agreement, substantially
in the form of Exhibit 5.01(h)(ii) to the Receivables Purchase Agreement, among
Seller, Union, the Agent and the Collection Account Bank, as the same may be
amended, supplemented, amended and restated, or otherwise modified from time to
time in accordance with the Receivables Purchase Agreement.

"Collection Account Bank" means the bank holding the Collection
Account.

"Commercial Paper Notes" means short-term promissory notes issued or
to be issued by Purchaser to fund its investments in accounts receivable or
other financial assets.

"Commercial Paper Rate" for any Yield Period for the related Undivided
Interest means a rate per annum equal to the sum of (i) the rate or, if more
than one rate, the weighted average of the rates per annum (determined by
converting to an interest-bearing equivalent rate per annum the discount rate
(or rates)) at which Commercial Paper Notes having a term equal to such Yield
Period and to be issued to fund the Purchase of or to maintain such Undivided
Interest (or portion thereof) by ▇▇▇▇▇▇ (including, without limitation,
Investment and accrued and unpaid Earned Return) may be sold by any placement
agent or commercial paper dealer selected by the Agent, as agreed between each
such agent or dealer and the Agent, plus (ii) the commissions and other charges
charged by such placement agent or commercial paper dealer with respect to such
Commercial Paper Notes expressed as a percentage of the face amount of such
Commercial Paper Notes and converted to an interest-bearing equivalent rate per
annum.

"Commitment" has the meaning set forth in Section 1.01 of the
Receivables Purchase Agreement.

"Commitment Fee" has the meaning set forth in the Fee Letter.

"Commitment Termination Date" has the meaning set forth in Section
1.05(a) of the Receivables Purchase Agreement.

"Concentration Limit" has the meaning set forth in Section 2.03(b) of
the Receivables Purchase Agreement.

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"Conditions Precedent" and "Condition Precedent" have the meanings set
forth in Section 5.02 of the Receivables Purchase Agreement.

"Consolidated Net Worth" means with respect to any Person, the total
amount shown on the balance sheet of such Person and its consolidated
Subsidiaries, determined on a consolidated basis in accordance with GAAP, as of
the end of the most recent fiscal quarter of such Person ending at least 45
days prior to the taking of any action for the purpose of which the
determination is being made, as (i) the par or stated value of all outstanding
Capital Stock of such Person plus (ii) paid-in capital or capital surplus
relating to such Capital Stock plus (iii) any retained earnings or earned
surplus less (A) any accumulated deficit, (B) any amounts attributable to
Redeemable Stock and (C) any amounts attributable to Exchangeable Stock,
excluding, where applicable, any adjustments in respect of foreign currency
translation.

"Contract" means with respect to a Receivable, any and all contracts,
understandings, instruments, agreements, invoices or other writings pursuant to
which such Receivable arises or which evidences such Receivable or under which
an Obligor becomes or is obligated to make payment in respect of such
Receivable.

"Contractual Obligation" means as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

"Credit Advance" means a drawing under a letter of credit issued
pursuant to the Enhancement Agreement for the account of Purchaser, a loan to
Purchaser under the Enhancement Agreement or any other advance or disbursement
of funds to Purchaser or for Purchaser's account pursuant to the Enhancement
Agreement or any such letter of credit, in each case to the extent such
drawing, loan, advance or disbursement has not been repaid or reimbursed to
Enhancement Bank in accordance with the Enhancement Agreement.

"Credit and Collection Policy" means those credit and collection
policies and practices relating to Contracts and Receivables of the Originators
described in Schedule 7.01(f) to the Receivables Purchase Agreement, as
modified without violating Section 7.03(c) of the Receivables Purchase
Agreement.

"Debts" means all liabilities, whether matured or unmatured,
liquidated or unliquidated, absolute, fixed or contingent.

"Default Rate" means the Alternate Base Rate, plus two percent (2%) per
annum.

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"Default Ratio" means the ratio (expressed as a percentage) computed
as of the last day of each month by dividing (x) the aggregate Unpaid Balance
of all Receivables that became Defaulted Receivables during such month by (y)
the Total Revenues for the third preceding month.

"Defaulted Receivable" means a Receivable: (a) as to which any
payment, or part thereof, remains unpaid for more than 60 days from the
original due date for such payment, (b) with regard to the Obligor of which a
matured or unmatured Event of Bankruptcy has occurred or (c) which has been
written off as uncollectible by Servicer or which, consistent with the Credit
and Collection Policy, should be written off as uncollectible by Servicer.

"Delinquency Ratio" means the ratio (expressed as a percentage)
computed as of the last day of each month by dividing (x) the aggregate Unpaid
Balance of all Receivables that became Delinquent Receivables during such month
by (y) the Total Revenues with respect to the second preceding month.

"Delinquent Receivable" means a Receivable (i) (other than a Defaulted
Receivable) as to which any payment, or part thereof, remains unpaid for more
than 30 days from the original due date for such payment, or (ii) that would be
classified as delinquent by the Servicer pursuant to the Credit and Collection
Policy.

"Designated Obligor" means, at any time, all Obligors of the
Originators except any such Obligor as to which the Agent, in its reasonable
business judgment based upon the Agent's reasonable estimation of the credit
quality of such Obligor, has given notice to Seller that such Obligor shall not
be considered a Designated Obligor, such notice to become effective three
Business Days following the giving of such notice.

"Dilution Ratio" means, on any date, the ratio (expressed as a
percentage) computed as of the last day of each month by dividing (i) an amount
equal to the net reductions in the Unpaid Balance of the Receivables Pool on
account of any defective, rejected or returned goods or services, any cash
discounts, incorrect ▇▇▇▇▇▇▇▇ or other adjustments, and any reductions or
cancellations, whether by reason of setoff, dispute, rebate or refund, for the
month then ended by (ii) the aggregate Unpaid Balance of the Receivables in the
Receivables Pool as of the last day of the preceding month.

"Dividend" means any dividend or distribution (in cash, property or
obligations) on any shares of any class of Seller's capital stock or any
warrants, options or other rights with respect to shares of any class of
Seller's capital stock.

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"Dollars" means dollars in lawful money of the United States of
America.

"Earned Return" has the meaning set forth in Section 2.05 of the
Receivables Purchase Agreement.

"Eligible Receivable" means, at any time, a Receivable:

(a) which represents a bona fide obligation resulting from
a sale of goods and services in the ordinary course of business of an
Originator as conducted on the date of the initial Purchase;

(b) which, (i) if the perfection of Purchaser's undivided
ownership interest therein is governed by the laws of a jurisdiction
where the Uniform Commercial Code -- Secured Transactions is in force,
constitutes an "account," "general intangible" or "chattel paper" as
defined in the Uniform Commercial Code as in effect in such
jurisdiction, and (ii) if the perfection of Purchaser's undivided
ownership interest therein is governed by the law of any jurisdiction
where the Uniform Commercial Code -- Secured Transactions is not in
force, Seller has furnished to the Agent such opinions of counsel and
other evidence as has reasonably been requested, establishing to the
reasonable satisfaction of the Agent that Purchaser's undivided
ownership interest and other rights with respect thereto are not
significantly less protected and favorable than such rights under the
Uniform Commercial Code;

(d) that is not of an Obligor with regard to which a
matured or unmatured Event of Bankruptcy has occurred;

(e) as to which no more than 25% of the Unpaid Balance of
all the Receivables owed by such Receivable's Obligor are, at any
time, Defaulted Receivables; provided, however, this clause (e) shall
not apply if the aggregate Unpaid Balance of all Receivables owed by
such Obligor does not exceed $100,000;

(f) is not a Defaulted Receivable;

(g) with regard to which the warranty of Seller in
Section 6.01(k) of the Receivables Purchase Agreement is true and
correct;

(h) the assignment of which (including, without
limitation, the sale of which to Seller and the sale of an

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Undivided Interest in which to Purchaser) does not contravene
or conflict with any law, rule or regulation or any contractual or
other restriction, limitation or encumbrance, and the sale or
assignment of which does not require the consent of the Obligor
thereof;

(i) which is denominated and payable only in Dollars in
the United States;

(j) which arises under a Contract that has been duly
authorized and that, together with such Receivable, is in full force
and effect and constitutes the legal, valid and binding obligation of
the Obligor of such Receivable enforceable against such Obligor in
accordance with its terms and is not subject to a reduction,
cancellation, rebate or refund or any dispute, offset, counterclaim or
defense whatsoever (except the discharge in bankruptcy of such Obligor
prior to the occurrence thereof);

(k) which, together with the Contract related thereto,
conforms in all material respects with any laws, rules or regulations
applicable thereto (including, without limitation, laws, rules and
regulations relating to usury, truth in lending, fair credit billing,
fair credit reporting, equal credit opportunity, fair debt collection
practices and privacy) and with respect to which no party to the
Contract related thereto is in violation of any such law, rule or
regulation in any material respect if such violation would impair the
collectibility of such Receivable;

(l) which satisfies all applicable requirements of the
Credit and Collection Policy;

(m) which arises under a Contract (i) the performance of
which has been completed by the related Originator and by all other
parties thereto other than the Obligor, to the extent of the amount of
the related Receivable, (ii) which has been invoiced by Union or the
related Originator and (iii) which requires such Receivable to be paid
in full within 30 days or less of the original billing date therefor;
provided, however, that with respect to this clause (iii), a
Receivable, the Contract with respect to which requires such
Receivable, to be paid in full within not less than 31 days nor more
than 180 days shall also be an Eligible Receivable, if, when the
Unpaid Balance of such Receivable is added to the aggregate Unpaid
Balance of all other Eligible Receivables payable in full within not
less than 31 days nor more than 180 days, the aggregate Unpaid Balance
of all such Eligible Receivables does not exceed

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fifty (50%) percent of the aggregate Unpaid Balance of all
Eligible Receivables;

(n) as to which each of Seller's and Purchaser's first
priority interest, respectively, has been perfected under the
applicable UCC; and

(o) the Obligor of which is a United States resident, is
not an Affiliate of Seller or the Originator and is not a government
or a governmental subdivision or agency.

"Enhancement Agreement" means and includes (a) the Enhancement
Agreement, dated as of December 6, 1991, as amended as of August 1, 1993,
between ▇▇▇▇▇▇ and SG and (b) any other agreement (other than the Stand-by
Purchase Agreement) hereafter entered into by ▇▇▇▇▇▇ providing for the issuance
of one or more letters of credit for the account of ▇▇▇▇▇▇, the making of loans
to ▇▇▇▇▇▇ or any other extensions of credit to or for the account of ▇▇▇▇▇▇ to
support all or any part of ▇▇▇▇▇▇'▇ payment obligations under its Commercial
Paper Notes or to provide an alternate means of funding ▇▇▇▇▇▇'▇ investments in
accounts receivable or other financial assets, in each case as amended,
supplemented or otherwise modified from time to time.

"Enhancement Bank" means and includes SG, as lender to ▇▇▇▇▇▇ and as
issuer of a letter of credit for ▇▇▇▇▇▇'▇ account, under the Enhancement
Agreement, and any other or additional bank or other financial institution now
or hereafter extending credit or having a commitment to extend credit to or for
the account of ▇▇▇▇▇▇ under the Enhancement Agreement.

"Environmental Laws" means any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of
Law regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or may at any
time hereafter be in effect.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with any
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.

"Eurodollar Rate (Reserve Adjusted)" means, with respect to any Yield
Period for any related Undivided Interest (or portion thereof), a rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined
pursuant to the following formula:

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Eurodollar Rate = Eurodollar Rate
(Reserve Adjusted) 1-Eurodollar
Reserve Percentage

where:

"Eurodollar Rate" means, with respect to any Yield Period for
any related Undivided Interest (or portion thereof), the rate per
annum at which Dollar deposits in immediately available funds are
offered to the Eurodollar Office of the Agent two Eurodollar Business
Days prior to the beginning of such period by prime banks in the
interbank eurodollar market at or about 10:00 a.m., London time for
delivery on the first day of such Yield Period, for the number of days
comprised therein and in an amount equal or comparable to the amount
of the related Investment in such Undivided Interest (or such portion)
for such Yield Period.

"Eurodollar Business Day" means a day (i) on which dealings in Dollars
are carried on in the eurodollar interbank market of the Agent's
Eurodollar Office and (ii) which is neither a Saturday or Sunday nor a
legal holiday on which banks are required or authorized to be closed
in New York.

"Eurodollar Office" shall mean such office or offices through which
the Agent determines the Eurodollar Rate. A Eurodollar Office of the
Agent may be, at the option of the Agent, either a domestic or foreign
office.

"Eurodollar Reserve Percentage" means, with respect to any Yield
Period, the then applicable percentage (expressed as a decimal)
prescribed by the Federal Reserve Board for determining reserve
requirements applicable to "Eurocurrency Liabilities" pursuant to
Regulation D.

"Event of Bankruptcy" shall be deemed to have occurred with respect to
a Person if either:

(a) a case or other proceeding shall be commenced, without
the application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding
up, or composition or readjustment of debts of such Person, the
appointment of a trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or all or any substantial
part of its assets, or any similar action with respect to such Person
under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or
proceeding shall continue undismissed, or unstayed and in effect, for
a period of 30 consecutive days; or an order for relief in

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respect of such Person shall be entered in an involuntary case
under the federal bankruptcy laws or other similar laws now or
hereafter in effect; or

(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency,
reorganization, debt arrangement, dissolution or other similar law now
or hereafter in effect, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) for, such Person
or for any substantial part of its property, or shall make any general
assignment for the benefit of creditors, or shall fail to, or admit in
writing its inability to, pay its debts generally as they become due,
or, if a corporation or similar entity, its board of directors shall
vote to implement any of the foregoing.

"Exchangeable Stock" means any Capital Stock which is exchangeable or
convertible into another security (other than Capital Stock of FTL which is
neither Exchangeable Stock nor Redeemable Stock).

"Exempt Person" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, a resident of the State of
Illinois, and any person that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ controls. For the purposes of
this definition, "Controls" shall mean the ownership, directly or indirectly,
of more than fifty percent (50%) of the voting rights associated with a
Person's outstanding securities.

"Facility" has the meaning set forth in Section 1.1 of the Purchase
and Contribution Agreement.

"Facility Limit" has the meaning set forth in Section 1.02(a) of the
Receivables Purchase Agreement.

"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto or to the functions thereof.

"Fee Letter" has the meaning set forth in Section 4.01(a) of the
Receivables Purchase Agreement.

"Financial Officer" has the meaning set forth in Section 7.02(a) of
the Receivables Purchase Agreement.

"FTL" means Fruit of the Loom, Inc., a Delaware corporation.

"FTL Group Information" has the meaning set forth in Section 14.07 of
the Receivables Purchase Agreement.

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"FTL Note" has the meaning set forth in Section 3.1 of the Purchase
and Contribution Agreement.

"GAAP" means generally accepted accounting principles in the United
States.

"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of government.

"Guaranty" means any agreement, undertaking or arrangement by which
any Person guarantees, endorses, agrees to purchase or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
indebtedness, obligation or any other liability of any other Person (other than
by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other
Person.

"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of FTL, any qualification or exception to such opinion or
certification:

(i) which is of a "going concern" or similar nature; or

(ii) which relates to the limited scope of examination of
matters relevant to such financial statement (other than any standard
qualification of such nature).

"Indebtedness" means, with respect to any Person, at the time any
determination is to be made, without duplication (i) all Indebtedness for Money
Borrowed of that Person, (ii) that portion of obligations with respect to
Capital Leases which is properly classified as a liability on a balance sheet
of that Person in conformity with GAAP, (iii) notes payable of that Person and
drafts accepted by that Person representing extensions of credit whether or not
representing obligations for borrowed money (other than such notes or drafts
for the deferred purchase price of assets or services which does not constitute
Indebtedness pursuant to clause (vi) below), (iv) all indebtedness secured by
any Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person, (v) all Guaranties of that
Person not paid when due or no longer contingent, other than commercial or
stand by letters of credit or the functional equivalent thereof issued in

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connection with performance, bid or advance payment incurred in the ordinary
course of business, including, without limitation, performance requirements
under workers compensation or similar laws and (vi) the deferred and unpaid
balance of the purchase price of assets or services which purchase price is (y)
due more than six months from the date of incurrence of the obligation in
respect thereof or (z) evidenced by a note or similar written instrument;
provided, however, that Indebtedness shall not include trade payables, accrued
expenses, accrued income taxes, in each case arising in the ordinary course of
business.

"Indebtedness for Money Borrowed" means, with respect to any Person,
at the time any determination is to be made (i) all Indebtedness of such
Person, current or funded, secured or unsecured, incurred in connection with
borrowings (including the sale of debt securities) or the making available of
credit or funds to or on behalf of another Person, (ii) all Indebtedness of
such Person issued, incurred or assumed in respect of the purchase price of
property and (iii) all Capital Leases of such Person.

"Indemnified Amounts" has the meaning set forth in Section 13.01 of
the Receivables Purchase Agreement.

"Indemnified Party" has the meaning set forth in Section 13.01 of the
Receivables Purchase Agreement.

"Independent Director" has the meaning set forth in Section 7.01(h) of
the Receivables Purchase Agreement.

"Initial Closing Date" means the date on which the first purchases
under the Purchase and Contribution Agreement shall occur.

"Insolvent" means with respect to any Person, that the present
saleable value of the assets of such Person is less than the amount that will
be required to pay the probable liability on existing Debts of such Person or
such Person is unable to pay its Debts, as such Debts become absolute and
unmatured.

"Investment" has the meaning set forth in Section 2.02 of the
Receivables Purchase Agreement.

"Involuntary Federal Proceeding" has the meaning set forth in Section
10.02(b) of the Receivables Purchase Agreement.

"Lien" means, with respect to any Person, any mortgage, pledge,
security interest, encumbrance, lien, option or charge of any kind (including,
without limitation, any conditional sale or other title retention agreement or
lease in the nature thereof, any sale of receivables with recourse (in whole or
in part)

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against the seller or any other Person except the account debtors, any filing
or agreement to file a financing statement as debtor under the UCC or any
similar statute other than to reflect the ownership by a third party of
property leased to such Person or any of its Subsidiaries under a lease which
is not in the nature of a conditional sale or title retention agreement, or any
subordination agreement in favor of another Person).

"Liquidation Account" means that certain bank account with the number,
and maintained at the location, set forth on Schedule 7.03(d) to the
Receivables Purchase Agreement, which is (i) in Seller's and Agent's name, and
(ii) pledged on a first-priority basis to Purchaser pursuant to Section 9.01 of
the Receivables Purchase Agreement.

"Liquidation Account Agreement" means a letter agreement,
substantially in the form of Exhibit 5.01(h)(iii) to the Receivables Purchase
Agreement, among Seller, Union, the Agent and the Liquidation Account Bank, as
the same may be amended, supplemented, amended and restated, or otherwise
modified from time to time in accordance with the Receivables Purchase
Agreement.

"Liquidation Account Bank" means the Bank holding the Liquidation
Account.

"Liquidation Commencement Date" means, in the event a Condition
Precedent is not satisfied, the date designated by notice from the Agent to
Seller.

"Liquidation Day" for any Undivided Interest means any of (a) each day
which occurs on or after the Liquidation Commencement Date and on or before the
Liquidation Termination Date, if any, (b) each day which occurs on or after the
Commitment Termination Date, or (c) each day which occurs on or after the day
Seller shall have given written notice to the Agent that it no longer wishes to
sell Undivided Interests to Purchaser.

"Liquidation Event" has the meaning set forth in Section 10.01 of the
Receivables Purchase Agreement.

"Liquidation Period" means one or more successive Liquidation Days.

"Liquidation Return" has the meaning set forth in Section 2.05(c) of
the Receivables Purchase Agreement.

"Liquidation Servicer's Fee" has the meaning set forth in Section
2.06(c) of the Receivables Purchase Agreement.

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"Liquidation Termination Date" means the date, if any, that occurs
after a Liquidation Commencement Date and is designated as the "Liquidation
Termination Date" by the Agent (in its sole discretion) on at least one
Business Day's notice to Seller.

"Lockbox Accounts" means those certain bank accounts with the numbers,
and maintained at those certain locations, set forth on Schedule 6.01(n) to the
Receivables Purchase Agreement, each of which is pledged on a first-priority
basis to Purchaser pursuant to Section 9.01 of the Receivables Purchase
Agreement; and any bank account that is hereafter created in accordance with,
and to perform the function contemplated for "Lockbox Accounts" in, the
Receivables Purchase Agreement.

"Lockbox Agreement" means a letter agreement, in substantially the
form of Exhibit 5.01(h) to the Receivables Purchase Agreement, among Seller,
Union, the Agent and any Lockbox Bank.

"Lockbox Bank" means any of the banks holding one or more Lockbox
Accounts for receiving Collections from Receivables.

"Loss Horizon Ratio" means, on any date the ratio (expressed as a
percentage) computed as of the last day of each month by dividing (i) the sum
of the aggregate Unpaid Balance of the Receivables generated during each of the
preceding four months then ended (without regard to any Collections with
respect thereto) by (ii) the Net Pool Balance on such day.

"Loss Ratio" means the highest of the three month rolling averages of
the Default Ratios for the prior 12 months.

"Material Adverse Effect" means, with respect to any event or
circumstance, a material adverse effect on:

(i) the assets, operations, business or financial
condition of Seller or FTL and its Subsidiaries, taken as a whole; or

(ii) the ability of Servicer, Seller or an Originator to
perform its obligations under the Receivables Purchase Agreement or
any other Transaction Document or the performance of any such
obligations; or

(iii) the validity or enforceability of, or collectibility
of amounts payable under, the Receivables Purchase Agreement or any
other Transaction Document; or

(iv) the status, existence, perfection or priority of
Purchaser's interest in the Receivables, including Purchaser's
unencumbered first priority interest therein; or

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(v) the validity, enforceability or collectibility of any
material portion of the Receivables or Contracts.

"Merger" means Seller shall:

(i) be a party to any merger or consolidation, or directly or
indirectly purchase or otherwise acquire, whether in one or a series
of transactions, all or substantially all of the assets or any stock
of any class of, or any partnership or joint venture interest in, any
other Person, or sell, transfer, assign, convey or lease any of its
property and assets (including, without limitation, any Receivable or
any interest therein) other than pursuant to the Receivables Purchase
Agreement;

(ii) make, incur or suffer to exist an investment in, equity
contribution to, loan, credit or advance to, or payment obligation in
respect of the deferred purchase price of property from, any other
Person, except for Permitted Investments; or

(iii) create any direct or indirect Subsidiary or otherwise
acquire direct or indirect ownership of any equity interests in any
other Person.

"Month End Date" means the last day of each calendar month.

"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.

"Net Liquidation Account Balance" means, at any time, the amount then
on deposit in the Liquidation Account minus all amounts on deposit therein with
respect to Earned Return deposited therein pursuant to Section 3.02 and 3.03.

"Net Pool Balance" has the meaning set forth in Section 2.03(a) of the
Receivables Purchase Agreement.

"Normal Concentration Percentage" has the meaning set forth in Section
2.03(b) of the Receivables Purchase Agreement.

"Obligations" means (i) all obligations of Seller, Servicer and the
Originators to Purchaser, the Agent, and their respective successors, permitted
transferees and assigns, arising in connection with the Transaction Documents,
and (ii) all obligations of Seller, Servicer and the Originators to any
Indemnified Party arising out of Section 13.01 of the Receivables Purchase
Agreement, in each case howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent, now or hereafter existing, or due or to
become due.

▇-▇▇
▇▇
"▇▇▇▇▇▇▇" means with respect to any Receivable, the Person obligated
to make payments pursuant to the Contract relating to such Receivable.

"Officer's Certificate" means a certificate from a Person signed by
the President, any Vice President, the Chief Accounting Officer, Chief
Executive Officer, Secretary, Assistant Secretary, Treasurer or Assistant
Treasurer of such Person.

"Originator" means Union, Pro Player, Inc., a New York corporation,
and Salem Sportswear, Inc., a New Hampshire corporation, together with their
respective successors as permitted under the Purchase and Contribution
Agreement.

"Originator Assignment Certificate" means each assignment, in
substantially the form of Exhibit D to the Purchase and Contribution Agreement,
evidencing Seller's ownership of the Receivables generated by an Originator, as
the same may be amended, supplemented, amended and restated, or otherwise
modified from time to time in accordance with the Purchase and Contribution
Agreement.

"Payment Date" has the meaning set forth in Section 1.4 of the
Purchase and Contribution Agreement.

"Payment Terms Multiplier" means, as of any day of determination, a
ratio (expressed as a percentage) computed by dividing (i) the sum of (a) 90
days plus (b) the Weighted Average Payment Terms by (ii) 120 days.

"Periodic Report" means a report in substantially the form of Exhibit
3.05(a) to the Receivables Purchase Agreement.

"Permitted Investments" means any one or more of the following types
of investments:

(a) marketable obligations of the United States having a
maturity of not more than 30 days from the date of acquisition;

(b) marketable obligations directly and fully guaranteed by the
United States having a maturity of not more than 30 days from the date
of acquisition;

(c) bankers' acceptances and certificates of deposit and other
interest-bearing obligations denominated in Dollars and issued by any
bank with capital, surplus and undivided profits aggregating at least
$100,000,000, the short-term securities of which are rated at least as
highly as those of the Enhancement Bank by Moody's and S&P, in each

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case having a maturity of not more than 30 days from the date of
acquisition;

(d) repurchase obligations with a term of not more than ten days
for underlying securities of the types described in clauses (a), (b)
and (c) above entered into with any bank of the type described in
clause (c) above; and

(e) commercial paper having a maturity of not more than 30 days
(except for commercial paper issued by the Purchaser or any of its
Affiliates provided that the Agent (or any branch agency thereof)
shall not be deemed an Affiliate of the Purchaser) rated at least as
highly as the short-term securities of the Enhancement Bank by S&P and
by Moody's.

"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, government or any agency or political subdivision thereof or any other
entity.

"Pool Receivable" means a Receivable in the Receivables Pool. If,
with respect to any Undivided Interest, a Receivable is a Pool Receivable on or
prior to the Commitment Termination Date, such Receivable shall continue to be
considered a Pool Receivable with respect to such Undivided Interest at all
times thereafter.

"Program Fee" has the meaning set forth in the Fee Letter.

"Purchase" has the meaning set forth in Section 1.01(a) of the
Receivables Purchase Agreement.

"Purchase and Contribution Agreement" means that certain Purchase and
Contribution Agreement, dated as of December 18, 1996, among Seller, the
Originators and Servicer, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time in accordance with the terms
thereof and with the Receivables Purchase Agreement.

"Purchase and Sale Indemnified Party" has the meaning set forth in
Section 10.1 of the Purchase and Contribution Agreement.

"Purchase and Sale Indemnified Amounts" has the meaning set forth in
Section 10.1 of the Purchase and Contribution Agreement.

"Purchase and Sale Termination Date" has the meaning set forth in
Section 1.4 of the Purchase and Contribution Agreement.

"Purchase Facility" has the meaning set forth in Section 1.1 of the
Purchase and Contribution Agreement.

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"Purchase Price" has the meaning set forth in Section 2.1 of the
Purchase and Contribution Agreement.

"Purchase Report" has the meaning set forth in Section 2.1 of the
Purchase and Contribution Agreement.

"Purchase Report Date" means (i) the Initial Closing Date and (ii) the
fifteenth Business Day of each calendar month following thereafter.

"Purchaser" has the meaning set forth in the preamble to the
Receivables Purchase Agreement.

"Purchaser Rate" for any Yield Period for any related Undivided
Interest (or portion thereof) means:

(a) in the case of an Undivided Interest (or portion
thereof) other than one referred to in clause (b), (c) or (d) of this
definition, the Commercial Paper Rate for such Undivided Interest (or
such portion) for such Yield Period;

(b) in the case of an Undivided Interest (or portion
thereof) funded pursuant to the Stand-by Purchase Agreement, the Bank
Rate for such Undivided Interest;

(c) in the case of an Undivided Interest (or portion
thereof) funded by a Credit Advance during the occurrence and
continuation of a Liquidation Event, a rate per annum equal for each
day during such Yield Period to the Alternate Base Rate in effect on
such day plus 2% per annum; and

(d) in the case of any Undivided Interest funded during
the continuance of a Liquidation Event, the Default Rate.

"Purchaser's Share" has the meaning set forth in Section 2.04 of the
Receivables Purchase Agreement.

"Receivable" means any right to payment from an Obligor that is a
United States resident and is not an Affiliate of the Seller, whether
constituting an account, chattel paper, instrument or a general intangible,
arising from the sale by an Originator of goods and services and includes the
right to payment of any interest or finance charges and other obligations of
such Obligor with respect thereto.

"Receivables Pool" means at any time all then outstanding Receivables
that existed and were owing on the Initial Closing Date and all Receivables
created from the Initial Closing Date to and including the Commitment
Termination Date.

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"Redeemable Stock" means any Capital Stock that by its terms or
otherwise is required to be redeemed on or prior to the first anniversary of
the applicable Purchase and Sale Termination Date (as the same may be extended
pursuant to the terms of the Purchase and Contribution Agreement) or is
redeemable at the option of the holder thereof at any time on or prior to the
first anniversary of such applicable Purchase and Sale Termination Date.

"Regulation D" means Regulation D of the Federal Reserve Board, or any
other regulation of the Federal Reserve Board that prescribes reserve
requirements applicable to nonpersonal time deposits or "Eurocurrency
Liabilities" as presently defined in Regulation D, as in effect from time to
time.

"Regulatory Change" means, relative to any Affected Party

(a) any change in (or the adoption, implementation,
change in, phase-in or commencement of effectiveness of) any

(i) United States federal or state law or foreign
law applicable to such Affected Party;

(ii) regulation, interpretation, directive,
requirement or request (whether or not having the force of
law) applicable to such Affected Party of (A) any court,
government authority charged with the interpretation or
administration of any law referred to in clause (a)(i) or of
(B) any fiscal, monetary or other authority having
jurisdiction over such Affected Party; or

(iii) GAAP or regulatory accounting principles
applicable to such Affected Party and affecting the
application to such Affected Party of any law, regulation,
interpretation, directive, requirement or request referred to
in clause (a)(i) or (a)(ii) above; or

(b) any change in the application to such Affected Party
of any existing law, regulation, interpretation, directive,
requirement, request or accounting principles referred to in clause
(a)(i), (a)(ii) or (a)(iii) above.

"Reinvestment" has the meaning set forth in Section 1.01(b) of the
Receivables Purchase Agreement.

"Related Rights" has the meaning set forth in Section 1.1 of the
Purchase and Contribution Agreement.

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"Related Assets" means, with respect to any Receivable: (a) all of
Seller's (or, in the case of the Purchase and Contribution Agreement, the
applicable Originator's) interest in goods, including returned goods, if any,
relating to the sale which gave rise to such Receivable; (b) all other security
interests or liens and property subject thereto (including any rights arising
out of any financing statements related thereto) from time to time purporting
to secure payment of such Receivable, whether pursuant to the Contract related
to such Receivable or otherwise; and (c) all guarantees and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Receivable whether pursuant to the Contract related to such
Receivable or otherwise.

"Related Security" means with respect to any Receivable: (a) all of
Seller's interest in the Related Rights with respect thereto; and (b) all of
Seller's rights and remedies with respect to such Receivable pursuant to the
Purchase and Contribution Agreement.

"Required Reserve" shall have the meaning set forth in Section 2.07 of
the Receivables Purchase Agreement.

"Requirement of Law" means as to any Person, any law (including common
law), treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, including without limitation, any
Environmental Law, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is subject.

"Reserve Percentage" has the meaning set forth in Section 2.07 of the
Receivables Purchase Agreement.

"Reserves" for any Undivided Interest means, at any time, the sum of
(i) the Servicer's Fee Reserve, (ii) the Required Reserve and (iii) the Yield
Reserve.

"Restricted Payment" has the meaning set forth in Section 7.03(f) of
the Receivables Purchase Agreement.

"S&P" means Standard & Poor's Ratings Services.

"Scheduled Commitment Termination Date" has the meaning set forth in
Section 1.05 of the Receivables Purchase Agreement.

"Seller" has the meaning set forth in the preamble to the Receivables
Purchase Agreement.

"Seller Common Stock" has the meaning set forth in Section 6.01(o) of
the Receivables Purchase Agreement.

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"Servicer" has the meaning set forth in Section 8.01(a) of the
Receivables Purchase Agreement.

"Servicer Transfer Event" has the meaning set forth in Section 8.01(b)
of the Receivables Purchase Agreement.

"Servicer's Fee" has the meaning set forth in Section 8.01(c) of the
Receivables Purchase Agreement.

"Servicer's Fee Reserve" has the meaning set forth in Section 2.06 of
the Receivables Purchase Agreement.

"Settlement Date" means the last day of each Settlement Period.

"Settlement Period" for any Undivided Interest means

(a) each period commencing on the first day of each Yield
Period for such Undivided Interest and ending on the last day of such
Yield Period; and

(b) on and after the Commitment Termination Date for such
Undivided Interest, such period (including, without limitation, a
daily period) as shall be selected from time to time by the Agent or,
in absence of any such selection, each period of 30 days from the next
preceding Settlement Date;

provided, however, that

(i) with respect to any Yield Period of one day (as
described in clause (ii) of the proviso of the definition of "Yield
Period"), the related Settlement Period shall be the first day
following such Yield Period;

(ii) any Settlement Period which would otherwise end on a
day which is not a Business Day shall be extended to the next
succeeding Business Day; and

(iii) the last Settlement Period shall end on the date on
which all Undivided Interests have been reduced to zero.

"SG" has the meaning set forth in the preamble of the Receivables
Purchase Agreement.

"SG Information" has the meaning set forth in Section 14.07 of the
Receivables Purchase Agreement.

"Specific Concentration Limit" has the meaning set forth in Section
2.03(b) of the Receivables Purchase Agreement.

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"Stand-by Purchase Agreement" means and includes (a) the Stand-by
Purchase Agreement among ▇▇▇▇▇▇, as borrower, SG, as Servicing Agent for ▇▇▇▇▇▇
and as Liquidity Agent, and the Banks supporting ▇▇▇▇▇▇'▇ payment obligations
with respect to the Commercial Paper Notes issued to fund the purchase of
Undivided Interests hereunder, and (b) any other agreement hereafter entered
into by ▇▇▇▇▇▇ providing for the sale by ▇▇▇▇▇▇ of Undivided Interests (or
portions thereof), or the making of loans or other extensions of credit to
▇▇▇▇▇▇ secured by a security interest in specified Undivided Interests (or
portions thereof), to support all or part of ▇▇▇▇▇▇'▇ payment obligations under
the Commercial Paper Notes or to provide an alternate means of funding ▇▇▇▇▇▇'▇
investments in accounts receivable or other financial assets, and under which
the amount available from such sale or such extension of credit is limited to
an amount calculated by reference to the value or eligible unpaid balance of
such accounts receivable or other financial assets or any portion thereof or
the level of credit enhancement available with respect thereto, in each case as
amended, supplemented or otherwise modified from time to time.

"Subscription Agreement" means the Subscription and Shareholder
Agreement dated as of December 18, 1996 between Union and Seller, as the same
may be amended, supplemented or otherwise modified from time to time.

"Subsidiary" means, with respect to any Person, any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person; provided, however, that
for so long as it is not a consolidated Subsidiary in accordance with GAAP,
neither ▇▇▇▇▇▇ Metals Aviation, Inc. nor any of its Subsidiaries shall be
considered a subsidiary of FTL.

"Successor Notice" has the meaning set forth in Section 8.01(a) of the
Receivables Purchase Agreement.

"Tangible Net Worth" means, with respect to any Person, the net worth
of such Person after subtracting therefrom the aggregate amount of such
Person's intangible assets (other than Receivables), including, without
limitation, good will, franchises, licenses, patents, trademarks, trade names,
copyrights, service marks and brand names.

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"Total Revenues" means with respect to any month, the aggregate
amounts payable by the Obligors with respect to the Receivables generated
during such month.

"Transaction Documents" means the Receivables Purchase Agreement, the
Fee Letter, the Certificate, the Originator Assignment Certificates, the
Purchase and Contribution Agreement, the FTL Notes, the Collection Account
Agreements, the Liquidation Account Agreement, the Lockbox Agreements, the
Subservicing Agreements and all other instruments, certificates, agreements,
reports or documents delivered under or in connection with the Receivables
Purchase Agreement or the Purchase and Contribution Agreement (except the
Enhancement Agreement and the Stand-by Purchase Agreement), as any of the
foregoing may be amended, supplemented, amended and restated, or otherwise
modified from time to time in accordance with the Purchase and Contribution
Agreement and the Receivables Purchase Agreement.

"UCC" means the Uniform Commercial Code as from time to time in effect
in the applicable jurisdiction or jurisdictions.

"Undivided Interest" has the meaning set forth in Section 2.01 of the
Receivables Purchase Agreement.

"Union" has the meaning set forth in the preamble to the Receivables
Purchase Agreement and includes any successors to Union.

"Unmatured Liquidation Event" means any event which, with the giving
of notice or lapse of time, or both, would become a Liquidation Event.

"Unpaid Balance" means (i) with respect to any Receivable at any time
the unpaid principal amount thereof and (ii) with respect to the Receivables
Pool means at any time the aggregate unpaid principal amount of all
Receivables in the Receivables Pool.

"Variance Factor" has the meaning set forth in Section 2.05(d) of the
Receivables Purchase Agreement.

"Wal-Mart Stores" means Wal-Mart Stores, Inc., including Sam's Clubs.

"Weighted Average Payment Terms" means, as of any day of
determination, the sum of the following calculation made with respect to each
Receivable:

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PT X UB
AUB

PT = the difference between the invoice date and the
payment date for such Receivable, expressed in number
of days.

UB = the Unpaid Balance of such Receivable at the time of
such computation.

AUB = the aggregate UB for all Receivables in the
Receivables Pool at the time of such computation.

"Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person, all of the outstanding shares of capital stock of
which (other than qualifying shares required to be owned by directors) are at
the time owned directly or indirectly by such Person and/or are or more
Wholly-Owned Subsidiaries of such Person.

"Yield Period" means with respect to any Undivided Interest (or
portion thereof):

(a) the period from (and including) the date of the
initial Purchase of such Undivided Interest (or such portion) to (but
excluding) the number of days (not to exceed 90 days) thereafter as
the Agent shall approve, pursuant and subject to Section 1.03 or of
the Receivables Purchase Agreement; and

(b) thereafter, each period from (and including) the last
day of the immediately preceding Yield Period for such Undivided
Interest (or such portion) to (but excluding) the day falling below
such number of days (not to exceed 90 days) thereafter as the Agent
shall approve pursuant and subject to Section 1.03 of the Receivables
Purchase Agreement.

provided, however, that

(i) any such Yield Period (other than a Yield Period
consisting of one day) which would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day
(unless the related Undivided Interest shall be accruing Earned Return
at a rate determined by reference to the Eurodollar Rate (Reserve
Adjusted), in which case if such succeeding Business Day is in a
different calendar month, such Yield Period shall instead be shortened
to the next preceding Business Day);

▇-▇▇
▇▇▇
(▇▇) in the case of Yield Periods of one day for any
Undivided Interest, (A) the initial Yield Period shall be the day of
the related Purchase; and (B) any subsequently occurring Yield Period
which is one day shall, if the immediately preceding Yield Period is
more than one day, be the last day of such immediately preceding Yield
Period, and if the immediately preceding Yield Period is one day,
shall be the next day following such immediately preceding Yield
Period; and

(iii) any Yield Period for any Undivided Interest which
commences before the Commitment Termination Date for such Undivided
Interest and would otherwise end on a date occurring after such
Commitment Termination Date, such Yield Period shall end on such
Commitment Termination Date and the duration of each such Yield Period
which commences on or after the Commitment Termination Date for such
Undivided Interest shall be of such duration as shall be selected by
the Agent.

The "related" Yield Period for any Undivided Interest at any time means the
Yield Period pursuant to which Earned Return is then accruing for such
Undivided Interest.

"Yield Reserve" has the meaning set forth in Section 2.05(a) of the
Receivables Purchase Agreement.

B. Other Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. All terms used in Article 9
of the UCC in the State of Illinois, and not specifically defined herein, are
used herein as defined in such Article 9.

C. Computation of Time Periods. Unless otherwise stated in the
Purchase and Contribution Agreement or the Receivables Purchase Agreement, as
the case may be, 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 means "to but excluding".

A-27

Exhibit 10(u) RECEIVABLES PURCHASE AGREEMENT dated as of December 18, 1996

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