EXHIBIT 10.A
FINGERHUT RECEIVABLES, INC.
Transferor
FINGERHUT NATIONAL BANK
Servicer
and
THE BANK OF NEW YORK (DELAWARE)
Trustee
on behalf of Certificateholders
of the Fingerhut Master Trust
AMENDED AND RESTATED
POOLING AND SERVICING AGREEMENT
Dated as of January 12, 1997
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS 2
Section 1.1 Definitions. . . . . . . . . . . . . . . . 2
Section 1.2 Other Definitional Provisions . . . . . . . 22
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES 24
Section 2.1 Conveyance of Receivables . . . . . . . . . 24
Section 2.2 Acceptance by Trustee . . . . . . . . . . . 25
Section 2.3 Representations and Warranties of the
Transferor . . . . . . . . . . . . . . . . 26
Section 2.4 Representations and Warranties of the
Transferor Relating to the Agreement and
the Receivables . . . . . . . . . . . . . . 29
Section 2.5 Covenants of the Transferor . . . . . . . . 35
Section 2.6 Addition of Receivables . . . . . . . . . . 38
Section 2.7 Defaulted Receivables . . . . . . . . . . . 38
Section 2.8 Covenants of the Transferor with Respect
to the Purchase Agreements . . . . . . . . 40
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES 41
Section 3.1 Acceptance of Appointment and Other
Matters Relating to the Servicer . . . . . 41
Section 3.2 Servicing Compensation . . . . . . . . . . 42
Section 3.3 Representations and Warranties of the
Servicer . . . . . . . . . . . . . . . . . 44
Section 3.4 Reports and Records for the Trustee . . . . 46
Section 3.5 Annual Servicer's Certificate . . . . . . . 49
Section 3.6 Annual Independent Accountants' Servicing
Report . . . . . . . . . . . . . . . . . . 49
Section 3.7 Tax Treatment . . . . . . . . . . . . . . . 50
Section 3.8 Adjustments . . . . . . . . . . . . . . . . 51
Section 3.9 Notices to Fingerhut . . . . . . . . . . . 52
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS 53
Section 4.1 Rights of Certificateholders . . . . . . . 53
Section 4.2 Establishment of Accounts . . . . . . . . . 53
Section 4.3 Collections and Allocations . . . . . . . . 57
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES] 61
ARTICLE VI
THE CERTIFICATES 62
Section 6.1 The Certificates . . . . . . . . . . . . . 62
Section 6.2 Authentication of Certificates . . . . . . 63
Section 6.3 Registration of Transfer and Exchange of
Certificates . . . . . . . . . . . . . . . 63
Section 6.4 Mutilated, Destroyed, Lost or Stolen
Certificates . . . . . . . . . . . . . . . 68
Section 6.5 Persons Deemed Owners . . . . . . . . . . . 68
Section 6.6 Appointment of Paying Agent . . . . . . . . 69
Section 6.7 Access to List of Certificate-holders'
Names and Addresses . . . . . . . . . . . . 71
Section 6.8 Authenticating Agent . . . . . . . . . . . 71
Section 6.9 Tender of Exchangeable Transferor
Certificate . . . . . . . . . . . . . . . . 73
Section 6.10 Book-Entry Certificates . . . . . . . . . . 77
Section 6.11 Notices to Clearing Agency . . . . . . . . 79
Section 6.12 Definitive Certificates . . . . . . . . . . 79
Section 6.13 Global Certificate; Euro-Certificate
Exchange Date . . . . . . . . . . . . . . . 80
Section 6.14 Meetings of Certificateholders . . . . . . 80
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR 81
Section 7.1 Liability of the Transferor . . . . . . . . 81
Section 7.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Transferor . . . 81
Section 7.3 Limitation on Liability . . . . . . . . . . 82
Section 7.4 Liabilities . . . . . . . . . . . . . . . . 83
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER 85
Section 8.1 Liability of the Servicer . . . . . . . . . 85
Section 8.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Servicer . . . . 85
Section 8.3 Limitation on Liability of the Servicer
and Others . . . . . . . . . . . . . . . . 86
Section 8.4 Servicer Indemnification of the
Transferor, the Trust and the Trustee . . . 87
Section 8.5 The Servicer Not to Resign . . . . . . . . 88
Section 8.6 Access to Certain Documentation and
Information Regarding the Receivables . . . 89
Section 8.7 Delegation of Duties . . . . . . . . . . . 89
ARTICLE IX
PAY OUT EVENTS 91
Section 9.1 Pay Out Events . . . . . . . . . . . . . . 91
Section 9.2 Additional Rights Upon the Occurrence of
Certain Events . . . . . . . . . . . . . . 92
ARTICLE X
SERVICER DEFAULTS 95
Section 10.1 Servicer Defaults . . . . . . . . . . . . . 95
Section 10.2 Trustee to Act; Appointment of Successor . 98
Section 10.3 Notification to Certificateholders . . . . 101
Section 10.4 Waiver of Past Defaults . . . . . . . . . . 101
ARTICLE XI
THE TRUSTEE 102
Section 11.1 Duties of Trustee . . . . . . . . . . . . . 102
Section 11.2 Certain Matters Affecting the Trustee . . . 104
Section 11.3 Trustee Not Liable for Recitals in
Certificates . . . . . . . . . . . . . . . 106
Section 11.4 Trustee May Own Certificates . . . . . . . 107
Section 11.5 The Servicer to Pay Trustee's Fees and
Expenses. . . . . . . . . . . . . . . . . . 107
Section 11.6 Eligibility Requirements for Trustee . . . 108
Section 11.7 Resignation or Removal of Trustee. . . . . 108
Section 11.8 Successor Trustee . . . . . . . . . . . . . 110
Section 11.9 Merger or Consolidation of Trustee . . . . 110
Section 11.10 Appointment of Co-Trustee or Separate
Trustee . . . . . . . . . . . . . . . . . . 111
Section 11.11 Tax Returns . . . . . . . . . . . . . . . . 112
Section 11.12 Trustee May Enforce Claims Without
Possession of Certificates . . . . . . . . 113
Section 11.13 Suits for Enforcement . . . . . . . . . . . 113
Section 11.14 Rights of Certificateholders to Direct
Trustee . . . . . . . . . . . . . . . . . . 114
Section 11.15 Representations and Warranties of Trustee . 114
Section 11.16 Maintenance of Office or Agency . . . . . . 115
ARTICLE XII
TERMINATION 116
Section 12.1 Termination of Trust . . . . . . . . . . . 116
Section 12.2 Optional Termination . . . . . . . . . . . 118
Section 12.3 Final Payment with Respect to any Series. . 119
Section 12.4 Termination Rights of Holder of
Exchangeable Transferor Certificate . . . . 121
ARTICLE XIII
MISCELLANEOUS PROVISIONS 122
Section 13.1 Amendment . . . . . . . . . . . . . . . . . 122
Section 13.2 Protection of Right, Title and Interest to
Trust . . . . . . . . . . . . . . . . . . . 125
Section 13.3 Limitation on Rights of Certificateholders 126
Section 13.4 Governing Law . . . . . . . . . . . . . . . 127
Section 13.5 Notices . . . . . . . . . . . . . . . . . . 127
Section 13.6 Severability of Provisions . . . . . . . . 128
Section 13.7 Assignment . . . . . . . . . . . . . . . . 128
Section 13.8 Certificates Non-Assessable and Fully Paid 128
Section 13.9 Further Assurances . . . . . . . . . . . . 129
Section 13.10 No Waiver; Cumulative Remedies . . . . . . 129
Section 13.11 Counterparts . . . . . . . . . . . . . . . 129
Section 13.12 Third-Party Beneficiaries . . . . . . . . . 129
Section 13.13 Actions by Certificateholders . . . . . . . 130
Section 13.14 Rule 144A Information . . . . . . . . . . . 130
Section 13.15 Merger and Integration . . . . . . . . . . 131
Section 13.16 Heading . . . . . . . . . . . . . . . . . . 131
Schedule 1 Tax Returns and Payments
Exhibit A Form of Exchangeable Transferor Certificate
Exhibit B Form of Daily Report
Exhibit C Form of Settlement Statement
Exhibit D Form of Annual Servicer's Certificate
Exhibit E Form of Annual Opinion of Counsel
Exhibit F Form of Reconveyance of Receivables
Exhibit G Form of Agreed-Upon Procedures
AMENDED AND RESTATED POOLING AND SERVICING
AGREEMENT, dated as of January 12, 1997 by and among
FINGERHUT RECEIVABLES INC., a corporation organized and
existing under the laws of the State of Delaware, as
Transferor, FINGERHUT NATIONAL BANK, a national banking
association organized and existing under the laws of the
United States, as Servicer, and THE BANK OF NEW YORK
(DELAWARE), a banking corporation organized and existing
under the laws of the State of Delaware, as Trustee.
WHEREAS, Fingerhut Receivables, Inc., as
Transferor, Fingerhut Corporation, as Servicer, and The
Bank of New York (Delaware), as Trustee, are parties to a
Pooling and Servicing Agreement, dated as of June 29,
1994 (the "Original Pooling and Servicing Agreement") as
amended by the First Amendment to the Original Pooling
and Servicing Agreement, dated as of November 15, 1994
(the "First Amendment") and the Second Amendment to the
Original Pooling and Servicing Agreement, dated as of
September 27, 1996 (the "Second Amendment," and together
with the Original Pooling and Servicing Agreement and the
First Amendment thereto, the "Amended Pooling and
Servicing Agreement"), in each case by and among the
parties to the Original Pooling and Servicing Agreement;
WHEREAS, in accordance with the provisions of
subsection 3.1(a) of the Amended Pooling and Servicing
Agreement, and pursuant to an assumption agreement among
Fingerhut Corporation, as predecessor Servicer, Fingerhut
Receivables, Inc., as Transferor, The Bank of New York
(Delaware), as Trustee, and Fingerhut National Bank, as
successor Servicer, dated as of January 12, 1997 (the
"Servicing Assumption Agreement"), Fingerhut Corporation
has appointed its Affiliate, Fingerhut National Bank, to
act as Servicer in full substitution for Fingerhut
Corporation and Fingerhut National Bank has expressly
assumed the performance of every covenant and obligation
of the Servicer hereunder and Fingerhut Corporation has
agreed to remain jointly and severally liable with
Fingerhut National Bank with respect to the performance
of Fingerhut National Bank as Servicer; and
WHEREAS, Fingerhut Receivables, Inc., as
Transferor, Fingerhut National Bank, as Servicer and The
Bank of New York (Delaware), as Trustee desire to amend
and restate the Amended Pooling and Servicing Agreement
to read in its entirety as set forth below;
NOW, THEREFORE, pursuant to the second
paragraph of Section 13.1(a) of the Amended Pooling and
Servicing Agreement, including the third proviso thereto,
the parties hereto hereby agree that effective on and as
of the date hereof, the Amended Pooling and Servicing
Agreement is hereby amended to read in its entirety as
follows:
In consideration of the mutual agreements
herein contained, each party agrees as follows for the
benefit of the other parties and the Certificateholders:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in
this Agreement, the following words and phrases shall
have the following meanings:
"Adjustment Payment" shall have the meaning
specified in subsection 3.8(a).
"Affiliate" means, with respect to a particular
Person, any Person that, directly or indirectly, is in
control of, is controlled by, or is under common control
with, such Person.
"Aggregate Invested Amount" shall mean, as of
any date of determination, the sum of the Invested
Amounts of all Series of Certificates issued and
outstanding on such date of determination.
"Aggregate Investor Percentage" with respect to
Principal Collections, Imputed Yield Collections and
Defaulted Receivables, as the case may be, shall mean, as
of any date of determination, the sum of such Investor
Percentages of all Series of Certificates issued and
outstanding on such date of determination; provided,
however, that the Aggregate Investor Percentage shall not
exceed 100%.
"Aggregate Principal Receivables" shall mean,
for any day, the aggregate amount of Principal
Receivables at the end of such day.
"Agreement" shall mean this Amended and
Restated Pooling and Servicing Agreement and all
amendments hereof and supplements hereto, including any
Supplement.
"Amended Pooling and Servicing Agreement" shall
have the meaning assigned in the Preamble hereto.
"Amortization Period" shall mean, with respect
to any Series, the period following the Revolving Period
for such Series, which shall be the Amortization Period,
the Early Amortization Period, or other amortization or
accumulation period, in each case as defined with respect
to such Series in the related Supplement.
"Amortization Period Commencement Date" shall
mean with respect to any Series, the date on which the
Amortization Period with respect thereto commences.
"Applicants" shall have the meaning specified
in Section 6.7.
"Appointment Day" shall have the meaning
specified in subsection 9.2(a).
"Authentication Agent" shall have the meaning
specified in Section 6.8.
"Authorized Newspaper" shall mean a newspaper
of general circulation in the Borough of Manhattan, The
City of New York printed in the English language and
customarily published on each Business Day, whether or
not published on Saturdays, Sundays and holidays.
"Back End Customer" means with respect to any
date of determination a customer who has purchased at
least one previous product from Fingerhut and has either
paid for or on such date of determination is current on
payments for the initial purchase or the related
installment loan.
"Bank Receivables Purchase Agreement" shall
mean the receivables purchase agreement dated as of
January 12, 1997 between FCI, as purchaser of such
Receivables, and FNB, as seller of Receivables, as
amended from time to time and any other receivables
purchase agreement between FCI, as purchaser of
Receivables, and an Originator, as seller of such
Receivables.
"Bearer Certificates" shall have the meaning
specified in Section 6.1.
"Bearer Rules" shall mean the provisions of the
Internal Revenue Code, in effect from time to time,
governing the treatment of bearer obligations, including
sections 163(f), 871, 881, 1441, 1442 and 4701, and any
regulations thereunder including, to the extent
applicable to any Series, proposed or temporary
regulations of the Internal Revenue Service.
"Book-Entry Certificates" shall mean
certificates evidencing a beneficial interest in the
Investor Certificates, ownership and transfers of which
shall be made through book entries by a Clearing Agency
as described in Section 6.10; provided, that after the
occurrence of a condition whereupon book-entry
registration and transfer are no longer authorized and
Definitive Certificates are to be issued to the
Certificate Owners, such certificates shall no longer be
"Book-Entry Certificates".
"Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions
in New York, New York or Delaware (or, with respect to
any Series, any additional city specified in the related
Supplement) are authorized or obligated by law or
executive order to be closed, and such other days in each
year designated by the Servicer in writing to the Trustee
by the first day of December in the preceding year.
"Cash Equivalents" shall mean, unless otherwise
provided in the Supplement with respect to any Series,
(a) negotiable instruments or securities represented by
instruments in bearer or registered form which evidence
(i) obligations of or fully guaranteed by the United
States of America; (ii) time deposits, promissory notes,
or certificates of deposit of any depositary institution
or trust company; provided, however, that at the time of
the Trust's investment or contractual commitment to
invest therein, the certificates of deposit or short-term
deposits of such depositary institution or trust company
shall have a credit rating from Standard & Poor's of A-1+
and from Moody's of P-1; (iii) commercial paper having,
at the time of the Trust's investment or contractual
commitment to invest therein, a rating from Standard &
Poor's of A-1+ and from Moody's of P-1; (iv) bankers
acceptances issued by any depositary institution or trust
company described in clause (a)(ii) above; and (v)
investments in money market funds rated AAA-m or AAA-mg
by Standard & Poor's and Aaa by Moody's or otherwise
approved in writing by Moody's and Standard & Poor's; (b)
time deposits and demand deposits in the name of the
Trust or the Trustee in any depositary institution or
trust company referred to in clause (a)(ii) above; (c)
securities not represented by an instrument that are
registered in the name of the Trustee or its nominee
(which may not be Fingerhut or an Affiliate) upon books
maintained for that purpose by or on behalf of the issuer
thereof and identified on books maintained for that
purpose by the Trustee as held for the benefit of the
Trust or the Certificateholders, and consisting of (x)
shares of an open end diversified investment company
which is registered under the Investment Company Act
which (i) invests its assets exclusively in obligations
of or guaranteed by the United States of America or any
instrumentality or agency thereof having in each instance
a final maturity date of less than one year from their
date of purchase or other Cash Equivalents, (ii) seeks to
maintain a constant net asset value per share, (iii) has
aggregate net assets of not less than $100,000,000 on the
date of purchase of such shares and (iv) which the Rating
Agency designates in writing will not result in a
withdrawal or downgrading of its then current rating of
any Series rated by it or (y) Eurodollar time deposits of
a depository institution or trust company that are rated
A-1+ by Standard & Poor's and P-1 by Moody's; provided,
however, that at the time of the Trust's investment or
contractual commitment to invest therein, the Eurodollar
deposits of such depositary institution or trust company
shall have a credit rating from Standard & Poor's of A-1+
and P-1 by Moody's; and (d) any other investment if the
Rating Agency confirms in writing that such investment
will not adversely affect its then current rating of the
Investor Certificates.
"CEDEL" shall mean Cedel S.A.
"Certificate" shall mean any one of the
Investor Certificates of any Series or the Exchangeable
Transferor Certificate.
"Certificateholder" or "Holder" shall mean the
Person in whose name a Certificate is registered in the
Certificate Register and, if applicable, the holder of
any Bearer Certificate or Coupon, as the case may be.
"Certificate Interest" shall mean interest
payable in respect of the Investor Certificates of any
Series pursuant to Article IV of the Agreement as
supplemented by the Supplement for such Series.
"Certificate Owner" shall mean, with respect to
a Book-Entry Certificate, the Person who is the
beneficial owner of such Book-Entry Certificate, as may
be reflected on the books of the Clearing Agency, or on
the books of a Person maintaining an account with such
Clearing Agency (directly or as an indirect participant,
in accordance with the rules of such Clearing Agency).
"Certificate Principal" shall mean principal
payable in respect of the Investor Certificates of any
Series pursuant to Article IV of this Agreement.
"Certificate Rate" shall mean, with respect to
any Series of Certificates (or, for any Series with more
than one Class, for each Class of such Series), the
percentage (or formula on the basis of which such rate
shall be determined) stated in the related Supplement.
"Certificate Register" shall mean the register
maintained pursuant to Section 6.3, providing for the
registration of the Certificates and transfers and
exchanges thereof.
"Class" shall mean, with respect to any Series,
any one of the classes of Certificates of that Series as
specified in the related Supplement.
"Clearing Agency" shall mean an organization
registered as a "clearing agency" pursuant to Section 17A
of the Securities Exchange Act of 1934, as amended.
"Clearing Agency Participant" shall mean a
broker, dealer, bank, other financial institution or
other Person for whom from time to time a Clearing Agency
or Foreign Clearing Agency effects book-entry transfers
and pledges of securities deposited with the Clearing
Agency or Foreign Clearing Agency.
"Closing Date" shall mean, with respect to any
Series, the date of issuance of such Series of
Certificates, as specified in the related Supplement.
"Collection Account" shall have the meaning
specified in subsection 4.2(a).
"Collections" shall mean all payments received
by the Servicer in respect of the Eligible Receivables in
the form of cash, checks or any other form of payment in
accordance with the Contract in effect from time to time
on any Eligible Receivables, other than pre-paid
insurance premiums.
"Contract" means an agreement between an
Originator and another person for the extension of
closed-end credit, including pursuant to a credit card,
in the form of a written contract, invoice or closed-end
agreement, in each case pursuant to or under which such
other person shall be obligated to either pay for, or to
pay a loan made to finance the purchase of, merchandise,
financial service products or services or return any such
merchandise to Fingerhut.
"Corporate Trust Office" shall mean the
principal office of the Trustee at which at any
particular time its corporate trust business shall be
administered, which office at the date of the execution
of this Agreement is located at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Specialized Agency Services.
"Coupon" shall have the meaning specified in
Section 6.1.
"Credit and Collection Policy" means those
credit, collection, customer relations and service
policies and practices in effect on the date hereof
relating to the Contracts and the Receivables as such may
be modified from time to time.
"Daily Report" shall mean a report in the form
specified in subsection 1.2(e) as may be supplemented
pursuant to any Supplement.
"Date of Processing" shall mean, with respect
to any transaction, the date on which such transaction is
first recorded on the Servicer's computer master file of
installment sale contracts (without regard to the
effective date of such recordation).
"Default Amount" shall mean, on any Business
Day, the product of (i) the aggregate Outstanding
Balances of Defaulted Receivables on such Business Day
and (ii) one minus the Discount Factor.
"Defaulted Receivable" shall mean each Eligible
Receivable which, in accordance with the Credit and
Collection Policy or the Servicer's customary and usual
servicing procedures, the Servicer has charged off as
uncollectible; a Receivable shall become a Defaulted
Receivable on the day on which such Receivable is
recorded as charged off as uncollectible on the
Servicer's computer master file of installment sale
contracts. Notwithstanding any other provision hereof,
any Defaulted Receivables that are Ineligible Receivables
shall be treated as Ineligible Receivables rather than
Defaulted Receivables.
"Defeasance Account" shall have the meaning
specified in the applicable Supplement.
"Definitive Certificate" shall have the meaning
specified in Section 6.10.
"Depositary" shall have the meaning specified
in Section 6.10.
"Depositary Agreement" shall mean, with respect
to each Series, the agreement among the Transferor, the
Trustee and the Clearing Agency, or as otherwise provided
in the related Supplement.
"Determination Date" shall mean the second
Business Day prior to each Distribution Date.
"Discount Factor" shall mean 25%; provided,
however, that such percentage may be changed from time to
time by the Transferor if such change will not cause a
Pay Out Event to occur and the Rating Agencies will have
confirmed that the change will not result in any of the
Rating Agencies reducing or withdrawing its original
rating on any then outstanding Series rated by it.
"Disposition" shall have the meaning specified
in Section 9.2(a).
"Distribution Account" shall have the meaning
specified in subsection 4.2(c).
"Distribution Date" shall mean, unless
otherwise specified in any Supplement for the related
Series, the twentieth day of each month or, if such
twentieth day is not a Business Day, the next succeeding
Business Day.
"Dollars", "$" or "U.S. $" shall mean United
States dollars.
"Eligible Receivable" shall mean each
Receivable that satisfies each of the following criteria:
(a) it is payable in United States dollars, (b) it has
not been sold or pledged to any other party, (c) it
constitutes an "account" or a "general intangible" as
defined in Article 9 of the UCC as then in effect in the
Relevant UCC State, (d) it is at the time of its transfer
to the Trust the legal, valid, and binding obligation of,
or is guaranteed by, a person who is competent to enter
into a contract and incur debt, and is enforceable
against such person in accordance with its terms, (e) it
and the related Contract do not contravene in any
material respect, and the Originator with respect to such
Receivable is not in violation of, any material laws,
rules, or regulations applicable thereto (including,
without limitation, laws, rules and regulations relating
to truth in lending, usury, fair credit billing, time
price plan billing, fair credit reporting, equal credit
opportunity and fair debt collection practices) that
could reasonably be expected to have an adverse impact on
the amount of collections thereunder, (f) all material
consents, licenses, or authorizations of, or
registrations with, any governmental authority required
to be obtained or given in connection with the creation
of such Receivable or the execution, delivery, creation,
and performance of the related Contract have been duly
obtained or given and are in full force and effect as of
the date of the creation of such Receivables, (g) at the
time of its transfer to the Trust, the Transferor or the
Trust will have good and marketable title free and clear
of all liens and security interests arising under or
through the Transferor (other than Permitted Liens), and
(h) it is not a Receivable which, during the period
specified in subsection 2.6(b), is in excess of the
percentage test specified in subsection 2.6(b).
"Enhancement" shall mean, with respect to any
Series, any cash collateral account, cash collateral
guaranty, collateral invested amount, letter of credit,
guaranteed rate agreement, maturity guaranty facility,
tax protection agreement, interest rate cap, interest
rate swap, subordination of the rights of one class to
another, or any other contract, agreement or arrangement
for the benefit of the Certificateholders of such Series
(or Certificateholders of a Class within such Series) as
designated in the applicable Supplement.
"Enhancement Provider" shall mean, with respect
to any Series, the Person, if any, designated as such in
the related Supplement.
"ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended from time to
time.
"Euroclear Operator" shall mean ▇▇▇▇▇▇ Guaranty
Trust Company of New York, Brussels, Belgium office, as
operator of the Euroclear System.
"Excess Funding Account" shall have the meaning
specified in subsection 4.2(d).
"Exchange" shall mean either of the procedures
described in Section 6.9(b).
"Exchangeable Transferor Certificate" shall
mean the certificate executed by the Transferor and
authenticated by the Trustee, substantially in the form
of Exhibit A and exchangeable as provided in Section 6.9;
provided, that at any time there shall be only one
Exchangeable Transferor Certificate.
"Exchange Date" shall have the meaning, with
respect to any Series issued pursuant to an Exchange,
specified in subsection 6.9(b).
"Exchange Notice" shall have the meaning, with
respect to any Series issued pursuant to an Exchange,
specified in subsection 6.9(b).
"Extended Trust Termination Date" shall have
the meaning specified in subsection 12.1(a).
"FCI" shall mean Fingerhut Companies, Inc., a
corporation organized and existing under the laws of the
State of Minnesota.
"FDIC" shall mean the Federal Deposit Insurance
Corporation, or any successor thereto.
"Fingerhut" shall mean Fingerhut Corporation, a
corporation organized and existing under the laws of the
State of Minnesota.
"Fixed/Floating Allocation Percentage" shall
mean for a Series for any Business Day or Distribution
Date, as applicable, the percentage equivalent of a
fraction, the numerator of which is the Invested Amount
of such Series at the end of the Revolving Period of
such Series and the denominator of which is the greater
of (a) the total amount of Principal Receivables in the
Trust and amounts on deposit in the Excess Funding
Account as of the end of the preceding Business Day and
(b) the sum of the numerators used to calculate the
allocation percentages with respect to Principal
Collections for all Series.
"Floating Allocation Percentage" shall mean
for a Series on any Business Day the sum of the
percentage equivalents of fractions, the numerator of
each of which is the Invested Amount (or adjusted
Invested Amount as specified in the applicable
Supplement) for each Class of such Series as of the end
of the preceding Business Day and the denominator of
which is the greater of (a) the sum of the amount of
Principal Receivables in the Trust and the amount on
deposit in the Excess Funding Account as of the end of
the preceding Business Day and (b) with respect to
Principal Collections only, the sum of the numerators for
all classes of all Series then outstanding used to
calculate the applicable allocation percentage.
"FNB" shall mean Fingerhut National Bank, a
national banking association.
"Foreign Clearing Agency" shall mean CEDEL and
the Euroclear Operator.
"FRI" shall mean Fingerhut Receivables, Inc., a
Delaware corporation.
"Global Certificate" shall have the meaning
specified in Section 6.13.
"Governmental Authority" shall mean the United
States of America, any state or other political
subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Holder" or "Certificateholder" shall mean the
Person in whose name a Certificate is registered in the
Certificate Register, and if applicable, the holder of
any Bearer Certificate or Coupon, as the case may be.
"Imputed Yield Collections" shall mean the sum
of (A) the product of (x) the aggregate amount of
Collections (other than Recoveries) and (y) the Discount
Factor, (B) investment earnings on amounts on deposit in
the Excess Funding Account on such business day, (C)
Recoveries and (D) collections on Receivables which are
not Eligible Receivables.
"Imputed Yield Receivables" shall mean the
product of the aggregate unpaid balance of the Eligible
Receivables and the Discount Factor.
"Ineligible Receivable" means any Receivable
that does not satisfy the definition of Eligible
Receivable.
"Initial Closing Date" shall mean June 29,
1994.
"Initial Invested Amount" shall mean, with
respect to any Series of Certificates, the amount stated
in the related Supplement.
"Insolvency Event" shall have the meaning
specified in subsection 9.2(a).
"Interest Funding Account" shall have the
meaning specified in subsection 4.2(b).
"Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended from time to time.
"Invested Amount" shall have, with respect to
any Series of Certificates, the meaning stated in the
related Supplement.
"Investment Company Act" shall mean the
Investment Company Act of 1940, as amended from time to
time.
"Investor Account" shall mean each of the
Interest Funding Account, any Principal Account, the
Excess Funding Account, any Distribution Account and any
Series Account.
"Investor Certificate" shall mean any one of
the certificates (including, without limitation, the
Bearer Certificates or the Registered Certificates)
executed by the Transferor and authenticated by the
Trustee substantially in the form (or forms in the case
of a Series with multiple classes) of the investor
certificate or variable funding certificate attached to
the related Supplement.
"Investor Certificateholder" shall mean the
Holder of an Investor Certificate.
"Investor Charge Off" shall have, with respect
to each Series, the meaning specified in the applicable
Supplement.
"Investor Default Amount" shall have, with
respect to any Series of Certificates, the meaning stated
in the related Supplement.
"Investor Exchange" shall have the meaning
specified in subsection 6.9(b).
"Investor Percentage" shall mean, with respect
to Principal Collections, Imputed Yield Collections and
Defaulted Receivables, and any Series of Certificates,
the Floating Allocation Percentage or the Fixed/Floating
Allocation Percentage, as applicable.
"Lien" shall mean any lien, security interest
or other encumbrance; provided, however, that any
assignment pursuant to Section 7.2 shall not be deemed to
constitute a Lien.
"Minimum Aggregate Principal Receivables" shall
mean, as of any date of determination, an amount equal to
the sum of (a) the Initial Invested Amounts for all
outstanding Series on such date except a Series created
pursuant to a Variable Funding Supplement at any time
and (b) with respect to a Series created pursuant to a
Variable Funding Supplement, during the Revolving Period
for such Series, the Invested Amount of such Series on
such date of determination or, during the Amortization
Period for such Series, the Invested Amount of such
Series on the last day of the Revolving Period for such
Series.
"Minimum Retained Interest" shall mean the
product of the weighted average Minimum Retained
Percentages for all Series and the sum of the outstanding
principal amounts of all classes of all Series.
"Minimum Retained Percentage" shall mean the
highest Minimum Retained Percentage specified in any
Supplement.
"Minimum Transferor Interest" shall mean, as of
any date of determination, the product of (i) the sum of
(a) the aggregate Principal Receivables and (b) the
amounts on deposit in the Excess Funding Account and (ii)
the highest Minimum Transferor Percentage for any Series.
"Minimum Transferor Percentage" shall mean the
highest Minimum Transferor Percentage specified in any
Supplement for an outstanding Series.
"Monthly Investor Servicing Fee" shall mean the
Servicing Fee payable to the Servicer with respect to a
Monthly Period.
"Monthly Period" shall mean, unless otherwise
defined with respect to a Series in the related
Supplement, the period from and including the first day
of each fiscal month of the Transferor to and including
the last day of such fiscal month.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service,
Inc. or its successor.
"Obligor" shall mean a Person obligated to make
payments with respect to a Receivable pursuant to a
Contract.
"Officer's Certificate" shall mean a
certificate signed by any Vice President, Treasurer,
Assistant Treasurer or more senior officer of the
Transferor or Servicer and delivered to the Trustee.
"Opinion of Counsel" shall mean a written
opinion of counsel, who may be counsel for or an employee
of the Person providing the opinion, and who shall be
reasonably acceptable to the Trustee.
"Originator" shall mean (i) each of Fingerhut
and FNB and any of their respective successors or
assigns, (ii) any of their Affiliates, or (iii) any other
originator of Receivables that is a party to a Purchase
Agreement so long as the Transferor shall have received
prior written notice from each Rating Agency that the
addition of such Originator will not result in the
reduction or withdrawal of its then existing rating of
any Class of Investor Certificates then issued and
outstanding and shall have delivered such notice to the
Trustee.
"Outstanding Balance" shall mean, with respect
to a Receivable on any day, the aggregate amount owed by
the Obligor thereunder as of the close of business on the
prior Business Day (net of returns and adjustments)
assuming that the related Obligor has selected the
installment credit terms with respect to such Receivable.
"Paying Agent" shall mean any paying agent
appointed pursuant to Section 6.6 and shall initially be
The Bank of New York.
"Pay Out Commencement Date" shall mean, with
respect to each Series, the date on which (a) a Trust Pay
Out Event is deemed to occur pursuant to Section 9.1 or
(b) a Series Pay Out Event is deemed to occur pursuant to
the Supplement for such Series.
"Pay Out Event" shall mean, with respect to
each Series, a Trust Pay Out Event or a Series Pay Out
Event.
"Permitted Lien" shall mean with respect to the
Receivables: (i) Liens in favor of the Transferor
created pursuant to the Purchase Agreement assigned to
the Trustee pursuant to this Agreement; (ii) Liens in
favor of the Trustee pursuant to this Agreement; and
(iii) Liens which secure the payment of taxes,
assessments and governmental charges or levies, if such
taxes are either (a) not delinquent or (b) being
contested in good faith by appropriate legal or
administrative proceedings and as to which adequate
reserves in accordance with generally accepted accounting
principles shall have been established.
"Person" shall mean any legal person, including
any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated
organization, governmental entity or other entity of
similar nature.
"Pool Factor" shall mean, as of any Record
Date, a number carried out to seven decimals representing
the ratio of the applicable Invested Amount as of such
Record Date (determined after taking into account any
reduction in the Invested Amount which will occur on the
following Distribution Date) to the applicable Initial
Invested Amount unless otherwise specified with respect
to a Series in the related Supplement.
"Principal Account" shall have the meaning
specified in subsection 4.2(b).
"Principal Collections" shall mean, with
respect to any Business Day, the Collections received
with respect to Principal Receivables on such Business
Day.
"Principal Receivables" shall mean amounts
shown on the Servicer's records as amounts payable by
Obligors with respect to Eligible Receivables other than
such amounts that are Imputed Yield Receivables or
Defaulted Receivables.
"Principal Shortfalls" shall mean, with respect
to any Business Day and any outstanding Series, the
amount which the related Supplement specifies as the
"Principal Shortfall" for such Business Day.
"Principal Terms" shall have the meaning, with
respect to any Series issued pursuant to an Exchange,
specified in subsection 6.9(c).
"Prospective Pay Out Event" shall have the
meaning specified in subsection 2.3(m).
"Publication Date" shall have the meaning
specified in subsection 9.2(a).
"Purchase Agreement" shall mean (i) the
receivables purchase agreement dated as of June 29, 1994
between the Transferor, as purchaser of such Receivables,
and Fingerhut, as seller of such Receivables, as amended
from time to time, (ii) the receivables purchase
agreement to be dated as of January 12, 1997 between the
Transferor, as purchaser of such Receivables and FCI, as
seller of such Receivables, as amended from time to time,
and (iii) any receivables purchase agreement between a
seller of Receivables and the Transferor, substantially
in the form of the receivables purchase agreement
referred to in clause (i) above.
"Qualified Institution" shall have the meaning
specified in subsection 4.2(a).
"Rating Agency" shall mean, with respect to
each Series, the rating agency or agencies, if any,
specified in the related Supplement.
"Reassignment Date" shall have the meaning
specified in subsection 2.4(e).
"Receivable" shall mean with respect to any
Obligor, any right to payment of amounts owed by that
Obligor created at a time that such Obligor was a Back
End Customer under a closed end installment sale, or
closed end installment loan, Contract relating to the
sale, or financing of the sale, of merchandise, financial
service products or services, including, without
limitation, all rights of each Originator and obligations
of the Obligor under the applicable Contract, other than
insurance premiums.
"Record Date" shall mean, with respect to any
Distribution Date, unless otherwise specified in the
applicable Supplement, the Business Day preceding such
Distribution Date, except that, with respect to any
Definitive Certificates, Record Date shall mean the fifth
day of the then current Monthly Period.
"Recoveries" shall mean any amounts received by
the Servicer with respect to Receivables that previously
were charged off as uncollectible in accordance with the
Servicer's customary and usual servicing procedures.
"Registered Certificates" shall have the
meaning specified in Section 6.1.
"Related Person" shall mean a Person that is an
Affiliate of Fingerhut, any Investor Certificateholder,
any Enhancement Provider, or any Person whose status
would violate the conditions for a trustee contained in
Section (4)(i) of Rule 3a-7 under the Investment Company
Act of 1940, as amended.
"Relevant UCC State" shall mean each
jurisdictions in which the filing of a UCC financing
statement is necessary to perfect the ownership interest
and security interest of the Transferor pursuant to the
Purchase Agreement or the ownership or security interest
of the Trustee established under this Agreement.
"Requirements of Law" for any Person shall mean
the certificate of incorporation or articles of
association and by-laws or other organizational or
governing documents of such Person, and any material law,
treaty, rule or regulation, or determination of an
arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which
such Person is subject.
"Responsible Officer" shall mean any officer
within the Corporate Trust Office (or any successor group
of the Trustee), including the President, any Vice
President or any other officer of the Trustee customarily
performing functions similar to those performed by any
person who at the time shall be an above-designated
officer and who shall have direct responsibility for the
administration of this Agreement.
"Retained Interest" shall mean, on any date of
determination, the sum of the Transferor Interest and the
Invested Amount represented by any Transferor Retained
Certificate.
"Retained Percentage" shall mean, on any date
of determination, the percentage equivalent of a fraction
the numerator of which is the Retained Interest and the
denominator of which is the aggregate amount of Principal
Receivables at the end of the day immediately prior to
such date of determination plus all amounts on deposit in
the Excess Funding Account (but not including investment
earnings on such amounts).
"Revolving Period" shall have, with respect to
each Series, the meaning specified in the related
Supplement.
"Secured Obligations" shall have the meaning
specified in Section 2.1.
"Securities Act" shall mean the Securities Act
of 1933, as amended from time to time.
"Series" shall mean any series of Investor
Certificates, which may include within any such Series a
Class or Classes of Investor Certificates subordinate to
another such Class or Classes of Investor Certificates.
"Series Account" shall mean any account or
accounts established pursuant to a Supplement for the
benefit of the related Series.
"Series Allocation Percentage" shall mean with
respect to any Series, on any date of determination, the
percentage equivalent of a fraction the numerator of
which is the Invested Amount of such Series and the
denominator of which is the sum of the Invested Amounts
of all Series then outstanding.
"Series Pay Out Event" shall have, with respect
to any Series, the meaning specified in the related
Supplement.
"Series Servicing Fee Percentage" shall mean,
with respect to any Series, the amount specified as such
in the related Supplement.
"Series Termination Date" shall mean, with
respect to any Series of Certificates, the date stated as
such in the related Supplement.
"Servicer" shall mean Fingerhut National Bank
or any Person appointed as successor as herein provided
to service the Receivables.
"Servicer Default" shall have the meaning
specified in Section 10.1.
"Servicing Fee" shall have the meaning
specified in the related Supplements.
"Settlement Statement" shall mean a report in
the form specified in subsection 1.2(e) as may be
supplemented pursuant to any Supplement.
"Shared Principal Collections" shall mean, with
respect to any Business Day, for all outstanding Series
the aggregate amount of Principal Collections which the
related Supplements specify are to be treated as "Shared
Principal Collections" available to be allocated to other
Series for such Business Day.
"Standard & Poor's" shall mean Standard &
Poor's Ratings Group or its successor.
"Successor Servicer" shall have the meaning
specified in subsection 10.2(a).
"Supplement" shall mean, with respect to any
Series, a supplement to this Agreement complying with the
terms of Section 6.9 of this Agreement, executed in
conjunction with any issuance of Certificates of such
Series (or, in the case of the issuance of Certificates
on the Initial Closing Date, the supplements executed in
connection with the issuance of such Certificates).
"Termination Notice" shall have, with respect
to any Series, the meaning specified in Section 10.1.
"Transfer" shall mean transfer, sell, exchange,
pledge, hypothecate, participate, or otherwise assign, in
whole or in part.
"Transfer Agent and Registrar" shall have the
meaning specified in Section 6.3 and shall initially be
The Bank of New York.
"Transfer Date" shall mean, with respect to any
Series, the Business Day immediately prior to each
Distribution Date.
"Transferor" shall mean Fingerhut Receivables,
Inc., a corporation organized and existing under the laws
of the State of Delaware, and any successor thereto.
"Transferor Exchange" shall have the meaning
specified in subsection 6.9(b).
"Transferor Interest" shall mean, on any date
of determination, the aggregate amount of Principal
Receivables at the end of the day immediately prior to
such date of determination plus all amounts on deposit in
the Excess Funding Account (but not including investment
earnings on such amounts) at the end of such immediately
preceding day, minus the Aggregate Invested Amount at the
end of such immediately preceding day.
"Transferor Percentage" shall mean, on any date
of determination, when used with respect to Principal
Collections, Imputed Yield Collections and Defaulted
Receivables, a percentage equal to 100% minus the
Aggregate Investor Percentage with respect to such
categories of Receivables.
"Transferor Retained Certificates" shall mean
Investor Certificates of any Series which the Transferor
is required to retain pursuant to the terms of any
Supplement.
"Transferor Retained Class" shall mean any
Class of Investor Certificates of any Series which the
Transferor retained pursuant to the terms of any
Supplement.
"Trigger Event" shall have the meaning
specified in subsection 9.2(a).
"Trust" shall mean the trust created by this
Agreement, the corpus of which shall consist of the Trust
Property.
"Trust Extension" shall have the meaning
specified in subsection 12.1(a).
"Trust Pay Out Event" shall have, with respect
to each Series, the meaning specified in Section 9.1.
"Trust Property" shall have the meaning
assigned in Section 2.1.
"Trust Termination Date" shall mean the
earliest to occur of (i) unless a Trust Extension shall
have occurred, the day after the Distribution Date with
respect to any Series following the date on which funds
shall have been deposited in the Distribution Account or
the applicable Series Account for the payment of Investor
Certificateholders of each Series then issued and
outstanding sufficient to pay in full the Aggregate
Invested Amount plus interest accrued at the applicable
Certificate Rate through the end of the day prior to the
Distribution Date with respect to each such Series and
certain other amounts as may be specified in any Series
Supplement, (ii) if a Trust Extension shall have
occurred, the Extended Trust Termination Date, and (iii)
the date specified in Section 12.1.
"Trustee" shall mean The Bank of New York
(Delaware), a Delaware banking corporation, and its
successors and any Person resulting from or surviving any
consolidation or merger to which it or its successors may
be a party and any successor trustee appointed as herein
provided.
"UCC" shall mean the Uniform Commercial Code,
as amended from time to time, as in effect in the
applicable jurisdiction.
"Undivided Interest" shall mean the undivided
interest in the Trust evidenced by an Investor
Certificate.
"Variable Funding Certificates" shall mean a
Series of Investor Certificates, in one or more Classes,
issued pursuant to Section 6.9 and a Variable Funding
Supplement.
"Variable Funding Supplement" shall mean a
Supplement executed in connection with the issuance of
Variable Funding Certificates.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in any Supplement or
this Agreement shall have the defined meanings when used
in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or
other document made or delivered pursuant hereto or
thereto, accounting terms not defined in Section 1.1, and
accounting terms partially defined in Section 1.1 to the
extent not defined, shall have the respective meanings
given to them under generally accepted accounting
principles. To the extent that the definitions of
accounting terms herein are inconsistent with the
meanings of such terms under generally accepted
accounting principles, the definitions contained herein
shall control.
(c) The agreements, representations and
warranties of FNB in this Agreement and in any Supplement
in its capacity as Servicer and of FRI in its capacity as
Transferor shall be deemed to be the agreements,
representations and warranties of FNB and FRI solely in
each such capacity for so long as either of them acts in
each such capacity under this Agreement.
(d) The words "hereof," "herein" and
"hereunder" and words of similar import when used in this
Agreement shall refer to any Supplement or this Agreement
as a whole and not to any particular provision of this
Agreement or any Supplement; and Section, subsection,
Schedule and Exhibit references contained in this
Agreement or any Supplement are references to Sections,
subsections, Schedules and Exhibits in or to this
Agreement or any Supplement unless otherwise specified.
(e) The Daily Report and Settlement Statement
shall be in substantially the forms of Exhibits B and C,
with such changes as the Servicer may determine to be
necessary or desirable; provided, however, that no such
change shall serve to exclude information required by
this Agreement or any Supplement and each such change
shall be reasonably acceptable to the Trustee. The
Servicer shall, upon making such determination and
receiving the consent of the Trustee to such change,
deliver to the Trustee and each Rating Agency an
Officer's Certificate to which shall be annexed the form
of the related Exhibit, as so changed. Upon the delivery
of such Officer's Certificate to the Trustee, the related
Exhibit, as so changed, shall for all purposes of this
Agreement constitute such Exhibit. The Trustee may
conclusively rely upon such Officer's Certificate in
determining whether the related Exhibit, as changed,
conforms to the requirements of this Agreement.
[End of Article I]
ARTICLE II
CONVEYANCE OF RECEIVABLES;
ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Receivables. The
Transferor does hereby transfer, assign, set-over, and
otherwise convey to the Trust for the benefit of the
Certificateholders, without recourse, all of its right,
title and interest in, to and under (i) the Receivables
now existing and hereafter created, in each case,
immediately upon the Seller's acquisition of rights
therein, and all monies due or to become due with respect
thereto, (ii) the Purchase Agreement and the Bank
Receivables Purchase Agreement (with respect to closed-
end installment loan contract receivables of Back-End
Customers), (iii) Recoveries and (iv) all proceeds of the
foregoing. Such property, together with all monies as
are from time to time deposited in the Collection
Account, any Interest Funding Account, any Principal
Account, any Distribution Account, any Series Account and
the Excess Funding Account and all amounts on deposit in
or credited to such accounts (excluding any investment
earnings on any such deposited amount except for such
amounts as are on deposit in the Excess Funding Account)
and any other account and all monies as are from time to
time available under any Enhancement for any Series for
payment to Certificateholders shall constitute the
property of the Trust (the "Trust Property"). The
foregoing transfer, assignment, set-over and conveyance
does not constitute and is not intended to result in a
creation or an assumption by the Trust, the Trustee or
any Investor Certificateholder of any obligation of the
Transferor, the Servicer or any other Person in
connection with the Receivables or any agreement or
instrument relating thereto, including, without
limitation, any obligation to any Obligors or insurers,
or in connection with the Purchase Agreement or the Bank
Receivables Purchase Agreement.
In connection with such transfer, assignment,
set-over and conveyance, the Transferor agrees to record
and file, at its own expense, one or more financing
statements (including any continuation statements with
respect to such financing statements when applicable)
with respect to the Receivables now existing and
hereafter created for the transfer of "accounts" and
"general intangibles" (each as defined in Section 9-106
of the UCC as in effect in the Relevant UCC State)
meeting the requirements of applicable state law in such
manner and in such jurisdictions as are necessary to
perfect the assignment of the Receivables to the Trust,
and to deliver file-stamped copies of such financing
statements or continuation statements or other evidence
of such filing (which may, for purposes of this Section
2.1, consist of facsimile confirmation of such filing) to
the Trustee on or prior to the date of issuance of the
Certificates, and in the case of any continuation
statements filed pursuant to this Section 2.1, as soon as
practicable after receipt thereof by the Transferor. The
foregoing transfer, assignment, set-over and conveyance
to the Trust shall be made to the Trustee, on behalf of
the Trust, and each reference in this Agreement to such
transfer, assignment, set-over and conveyance shall be
construed accordingly.
To the extent that the transfer of the
Receivables from the Transferor to the Trust hereunder
may be characterized as a pledge rather than as a sale,
the Transferor hereby grants and transfers to the Trustee
for the benefit of the Certificateholders a first
priority perfected security interest in all of the
Transferor's right, title and interest in, to and under
the Trust Property to secure a loan in an amount equal to
the unpaid principal amount of the Investor Certificates
issued hereunder or to be issued pursuant to this
Agreement and the interest accrued thereon at the related
Certificate Rate and to secure all of the Transferor's
and Servicer's obligations hereunder, including, without
limitation, the Transferor's obligation to transfer
Receivables hereafter created to the Trust (the "Secured
Obligations"), and agrees that this Agreement shall
constitute a security agreement under applicable law.
Section 2.2 Acceptance by Trustee.
(a) The Trustee hereby acknowledges its
acceptance, on behalf of the Trust, of all right, title
and interest previously held by the Transferor in, to and
under the Trust Property and declares that it shall
maintain such right, title and interest, upon the Trust
herein set forth, for the benefit of all
Certificateholders.
(b) The Trustee shall have no power to create,
assume or incur indebtedness or other liabilities in the
name of the Trust other than as contemplated in this
Agreement.
Section 2.3 Representations and Warranties of
the Transferor. The Transferor hereby represents and
warrants to the Trustee, on behalf of the Trust, as of
the Initial Closing Date and, with respect to any Series
of Certificates, as of the date of the related Supplement
and the related Closing Date for such Series:
(a) Organization and Good Standing. The
Transferor is a corporation duly organized and validly
existing in good standing under the laws of the State of
Delaware and has the corporate power and authority and
legal right to own its properties and conduct its
business as such properties are presently owned and such
business is presently conducted, and to execute, deliver
and perform its obligations under this Agreement and the
Purchase Agreement and to execute and deliver to the
Trustee the Certificates pursuant hereto.
(b) Due Qualification. The Transferor is duly
qualified to do business and is in good standing (or is
exempt from such requirements) as a foreign corporation
in any state required in order to conduct business, and
has obtained all necessary licenses and approvals with
respect to the Transferor required under federal and
Delaware law.
(c) Due Authorization. The execution and
delivery of this Agreement and the Purchase Agreement and
the consummation of the transactions provided for herein
and therein, have been duly authorized by the Transferor
by all necessary corporate action on its part.
(d) Binding Obligation. Each of this
Agreement and the Purchase Agreement, and the
consummation of the transactions provided for herein and
therein, constitutes a legal, valid, and binding
obligation of the Transferor, enforceable in accordance
with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereinafter in
effect, affecting the enforcement of creditors' rights in
general and as such enforceability may be limited by
general principles of equity (whether considered in a
proceeding at law or in equity).
(e) No Conflicts. The execution and delivery
of this Agreement and the Purchase Agreement and the
performance of the transactions contemplated hereby and
thereby, do not (i) contravene the Transferor's charter
or by-Laws, (ii) violate any material provision of law
applicable to it or require any filing (except for the
filings under the UCC), registration, consent or approval
under, any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in
effect having applicability to the Transferor, except for
such filings, registrations, consents or approvals as
have already been obtained and are in full force and
effect.
(f) Taxes. Except as specified on Schedule 1,
the Transferor and each prior owner of the Receivables
has filed all tax returns required to be filed and has
paid or made adequate provision for the payment of all
taxes, assessments and other governmental charges due
from the Transferor or such prior owner or is contesting
any such tax, assessment or other governmental charge in
good faith through appropriate proceedings.
(g) No Violation. The execution and delivery
of this Agreement and the Purchase Agreement and the
execution and delivery to the Trustee of the
Certificates, the performance of the transactions
contemplated by this Agreement and the Purchase Agreement
and the fulfillment of the terms hereof and thereof will
not violate any Requirements of Law applicable to the
Transferor, will not violate, result in any breach of any
of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a
default under any Requirement of Law applicable to the
Transferor or any material indenture, contract,
agreement, mortgage, deed of trust or other material
instrument to which the Transferor is a party or by which
it or its properties are bound.
(h) No Proceedings. There are no proceedings
or investigations pending or, to the best knowledge of
the Transferor, threatened against the Transferor, before
any Governmental Authority (i) asserting the invalidity
of this Agreement and the Purchase Agreement, (ii)
seeking to prevent the consummation of any of the
transactions contemplated hereby or thereby, (iii)
seeking any determination or ruling that would materially
and adversely affect the performance by the Transferor of
its obligations thereunder, (iv) seeking any
determination or ruling that would materially and
adversely affect the validity or enforceability thereof
or (v) seeking to affect adversely the tax attributes of
the Trust.
(i) All Consents Required. All approvals,
authorizations, consents, orders or other actions of any
Governmental Authority required in connection with the
execution and delivery of this Agreement, the Purchase
Agreement and the Certificates, the performance of the
transactions contemplated by this Agreement and the
Purchase Agreement and the fulfillment of the terms
hereof and thereof, have been obtained.
(j) Bona Fide Receivables. Each Receivable is
or will be an account receivable arising out of the
performance by the applicable Originator in accordance
with the terms of the Contract giving rise to such
Receivables. The Transferor has no knowledge of any fact
which should have led it to expect at the time of the
classification of any Receivable as an Eligible
Receivable that such Receivable would not be paid in full
when due, and each Receivable classified as an Eligible
Receivable by the Transferor in any document or report
delivered under this Agreement satisfies the requirements
of eligibility contained in the definition of Eligible
Receivable set forth in this Agreement.
(k) Place of Business. The principal
executive offices of the Transferor are in Minnetonka,
Minnesota, and the offices where the Transferor keeps its
records concerning the Receivables and related Contracts
are in ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and
Hennepin County, Minnesota.
(l) Use of Proceeds. No proceeds of the
issuance of any Certificate will be used by the
Transferor to purchase or carry any margin security.
(m) Pay Out Event. As of the Initial Closing
Date, no Pay Out Event and no condition that with the
giving of notice and/or the passage of time would
constitute a Pay Out Event (a "Prospective Pay Out
Event"), has occurred and is continuing.
(n) Not an Investment Company. The Transferor
is not an "investment company" within the meaning of the
Investment Company Act, or is exempt from all provisions
of such Act.
For the purposes of the representations and
warranties contained in this Section 2.3 and made by the
Transferor on the Initial Closing Date, "Certificates"
shall mean the Certificates issued on the Initial Closing
Date. The representations and warranties set forth in
this Section 2.3 shall survive the transfer and
assignment of the respective Receivables to the Trust,
and termination of the rights and obligations of the
Servicer pursuant to Section 10.1. The Transferor hereby
represents and warrants to the Trust, with respect to any
Series of Certificates, as of its Closing Date, unless
otherwise stated in the related Supplement, that the
representations and warranties of the Transferor set
forth in Section 2.3, are true and correct as of such
date (and for the purposes of such representations and
warranties, "Certificates" shall mean the Certificates
issued on the related Closing Date) and that each
representation and warranty set forth in this Section 2.3
and in Section 2.4(a)(i) with respect to the Agreement
shall be made at such time with respect to the applicable
Supplement. Upon discovery by the Transferor, the
Servicer or a Responsible Officer of the Trustee of a
breach of any of the foregoing representations and
warranties, the party discovering such breach shall give
prompt written notice to the others.
Section 2.4 Representations and Warranties of
the Transferor Relating to the Agreement and the
Receivables.
(a) Binding Obligation; Valid Transfer and
Assignment. The Transferor hereby represents and
warrants to the Trustee, on behalf of the Trust, that, as
of the Initial Closing Date and with respect to any
Series of Certificates, as of the date of its related
Supplement and Closing Date:
(i) The Purchase Agreement and this
Agreement each constitutes the legal, valid and
binding obligation of the Transferor, enforceable
against the Transferor in accordance with its terms,
except (A) as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in
effect, affecting the enforcement of creditors'
rights in general, and (B) as such enforceability
may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(ii) The transfer of Receivables by the
Transferor to the Trust under this Agreement
constitutes either (A) a valid transfer, assignment,
set-over and conveyance to the Trust of all right,
title and interest of the Transferor in and to the
Trust Property, and such Trust Property will be held
by the Trust free and clear of any Lien of any
Person claiming through or under the Transferor or
any of its Affiliates except for (x) Permitted
Liens, (y) the interest of the Transferor as Holder
of the Exchangeable Transferor Certificate and any
other Class of Certificates held by the Transferor
from time to time and (z) the Transferor's right, if
any, to interest accruing on, and investment
earnings, if any, in respect of any Interest Funding
Account, any Principal Account, the Excess Funding
Account, or any Series Account, as provided in this
Agreement or the related Supplement, or (B) a grant
of a first priority security interest (as defined in
the UCC as in effect in the Relevant UCC State) in,
to and under the Trust Property, which grant is
enforceable with respect to the existing Receivables
and the proceeds thereof upon execution and delivery
of this Agreement, and which will be enforceable
with respect to such Receivables hereafter created
and the proceeds thereof, upon such creation. If
this Agreement constitutes the grant of a security
interest to the Trust in such property, upon the
filing of the financing statement described in
Section 2.1 and in the case of the Receivables
hereafter created and proceeds thereof, upon such
creation, the Trust shall have a first priority
perfected security interest in such property, except
for Permitted Liens. Except as contemplated in this
Agreement or any Supplement, neither the Transferor
nor any Person claiming through or under the
Transferor shall have any claim to or interest in
the Collection Account, any Principal Account, any
Interest Funding Account, the Distribution Account,
the Excess Funding Account, any principal funding
account for any Series or any other Series Account,
except for the Transferor's rights to receive
interest accruing on, and investment earnings in
respect of, any such account as provided in this
Agreement (or, if applicable, any Series Account as
provided in any Supplement) and, if this Agreement
constitutes the grant of a security interest in such
property, except for the interest of the Transferor
in such property as a debtor for purposes of the UCC
as in effect in the Relevant UCC State. The
Purchase Agreement constitutes a valid transfer,
assignment, set-over and conveyance to the
Transferor of all right, title and interest of the
seller which is a party thereto in and to the
Receivables purported to be sold thereunder, whether
then existing or thereafter created in the
applicable Accounts and the proceeds thereof.
(iii) The Transferor is not insolvent and
will not be rendered insolvent upon the transfer of
the Receivables to the Trust.
(iv) The Transferor is (or, with respect
to Receivables arising after the date hereof, will
be) the legal and beneficial owner of all right,
title and interest in and to each Receivable and
each Receivable has been or will be transferred to
the Trust free and clear of any Lien other than
Permitted Liens.
(v) All consents, licenses, approvals or
authorizations of or registrations or declarations
with any Governmental Authority required in
connection with the transfer of Trust Property to
the Trust have been obtained.
(vi) Each Receivable classified as an
"Eligible Receivable" by the Transferor in any
document or report delivered hereunder will satisfy
the requirements contained in the definition of
Eligible Receivable as of the time of such document
or report.
(vii) Each Receivable then existing has
been conveyed to the Trust free and clear of any
Lien of any Person claiming through or under the
Transferor or any of its Affiliates (other than
Permitted Liens) and in compliance, in all material
respects, with all Requirements of Law applicable to
the Transferor.
(b) Daily Representations and Warranties. On
each day on which any new Receivable is purchased by the
Transferor, the Transferor shall be deemed to represent
and warrant to the Trust that (A) each Receivable
purchased by the Transferor on such day has been conveyed
to the Trust in compliance, in all material respects,
with all Requirements of Law applicable to the Transferor
and free and clear of any Lien of any Person claiming
through or under the Transferor or any of its Affiliates
(other than Permitted Liens) and (B) with respect to each
such Receivable, all consents, licenses, approvals or
authorizations of or registrations or declarations with,
any Governmental Authority required to be obtained,
effected or given by the Transferor in connection with
the conveyance of such Receivable to the Trust have been
duly obtained, effected or given and are in full force
and effect.
(c) Notice of Breach. The representations and
warranties set forth in this Section 2.4 shall survive
the transfer and assignment of the respective Receivables
to the Trust. Upon discovery by the Transferor, the
Servicer or a Responsible Officer of the Trustee of a
breach of any of the representations and warranties set
forth in this Section 2.4, the party discovering such
breach shall give prompt written notice to the other
parties mentioned above. The Transferor agrees to
cooperate with the Servicer and the Trustee in attempting
to cure any such breach.
(d) Designation of Ineligible Receivables. In
the event of a breach with respect to a Receivable of any
representations and warranties set forth in subsection
2.3(j) or subsections 2.4(a)(iii) through (vii) or
subsection 2.4(b), or in the event that a Receivable is
not an Eligible Receivable on the date of its transfer to
the Trust as a result of the failure to satisfy the
conditions set forth in the definition of Eligible
Receivable, such Receivable shall be designated an
"Ineligible Receivable" and shall be assigned an
Outstanding Balance of zero for the purpose of
determining the aggregate amount of Principal Receivables
on any day; provided, however, that if such
representations and warranties with respect to such
Receivable shall subsequently be true and correct in all
material respects as if such Receivable had been created
on such day or such Receivable shall subsequently satisfy
the conditions set forth in the definition of Eligible
Receivable, such Receivable shall be designated an
Eligible Receivable, and the Outstanding Balance of such
Receivable shall be included in determining the aggregate
amount of Principal Receivables on such day. On and
after the date of its designation as an Ineligible
Receivable, each Ineligible Receivable shall not be given
credit in determining the aggregate amount of Principal
Receivables used in the calculation of any Investor
Percentage, the Transferor Percentage or the Transferor
Interest. In the event that on any Business Day the
exclusion of an Ineligible Receivable from the
calculation of the Transferor Interest would cause the
Transferor Interest to be reduced below the Minimum
Transferor Interest, the Transferor shall immediately
make a deposit in the Excess Funding Account (for
allocation as a Principal Receivable) in immediately
available funds prior to the next succeeding Business Day
in an amount equal to the amount by which the Transferor
Interest would be reduced below the Minimum Transferor
Interest as a result of the exclusion of such Ineligible
Receivable. The portion of such deposit allocated to the
Investor Certificates of each Series shall be distributed
to the Investor Certificateholders of each Series in the
manner specified in Article IV.
(e) Reassignment of Trust Portfolio. In the
event of a breach of any of the representations and
warranties set forth in subsections 2.3(a), (b) and (c)
and 2.4(a)(i) and (ii) with respect to any Series, either
the Trustee or the Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50%
of the Invested Amount of such Series, by notice then
given in writing to the Transferor (and to the Trustee
and the Servicer, if given by the Investor
Certificateholders of such Series), may direct the
Transferor to accept reassignment of an amount of
Principal Receivables equal to the face amount of the
Invested Amount to be repurchased (as specified below)
within 60 days of such notice (or within such longer
period as may be specified in such notice), and the
Transferor shall be obligated to accept reassignment of
such Receivables on a Distribution Date specified by the
Transferor (such Distribution Date, the "Reassignment
Date") occurring within such applicable period on the
terms and conditions set forth below; provided, however,
that no such reassignment shall be required to be made,
and no notice of such reassignment may be given, if, at
any time during such applicable period, the
representations and warranties contained in subsections
2.3(a), (b) and (c) and subsections 2.4(a)(i) and (ii)
shall then be true and correct in all material respects.
The Transferor shall, on the Transfer Date (in next day
funds) preceding the Reassignment Date, deposit an amount
equal to the reassignment deposit amount for such Series
in the related Distribution Account or Series Account, as
provided in the related Supplement, for distribution to
the Investor Certificateholders pursuant to Article XII.
The reassignment deposit amount with respect to any
Series, unless otherwise stated in the related
Supplement, shall be equal to (i) the Invested Amount of
such Series at the end of the day on the last day of the
Monthly Period preceding the Reassignment Date (provided,
however, that with respect to any Series issued pursuant
to a Variable Funding Supplement such amount shall be the
Invested Amount of such Series as of the Reassignment
Date, less the amount, if any, previously allocated for
payment of principal to such Certificateholders on the
related Reassignment Date, in the Monthly Period in which
the Reassignment Date occurs), plus (ii) an amount equal
to all interest accrued but unpaid on the Investor
Certificates of such Series at the applicable Certificate
Rate through such last day, less the amount, if any,
previously allocated for payment of interest to the
Certificateholders of such Series on the related
Distribution Date in the Monthly Period in which the
Reassignment Date occurs plus any other amounts accrued
and owing as specified in the applicable Supplement.
Payment of the reassignment deposit amount with respect
to any Series, and all other amounts in the Distribution
Account or the applicable Series Account in respect of
the preceding Monthly Period, shall be considered a
prepayment in full of the Receivables represented by the
Investor Certificates of such Series. On the
Distribution Date following the Transfer Date on which
such amount has been deposited in full into the
Distribution Account or the applicable Series Account,
the Receivables and all monies due or to become due with
respect thereto and all proceeds of the Receivables shall
be released to the Transferor after payment of all
amounts otherwise due hereunder on or prior to such dates
and the Trustee shall execute and deliver such
instruments of transfer or assignment, in each case
without recourse, representation or warranty, as shall be
prepared by and as are reasonably requested by the
Transferor to vest in the Transferor, or its designee or
assignee, all right, title and interest of the Trust in
and to such Receivables, all monies due or to become due
with respect thereto and all proceeds of such Receivables
allocated to such Receivables pursuant to the related
Supplement. If the Trustee or the Investor
Certificateholders of any Series give notice directing
the Transferor to accept reassignment as provided above,
the obligation of the Transferor to accept reassignment
of the applicable Receivables and pay the reassignment
deposit amount pursuant to this subsection 2.4(e) shall
constitute the sole remedy respecting a breach of the
representations and warranties contained in subsections
2.3(a), (b) and (c) and 2.4(a)(i) and (ii) available to
the Investor Certificateholders of such Series or the
Trustee on behalf of the Investor Certificateholders of
such Series. The Trustee shall have no duty to conduct
any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable by
the Transferor pursuant to this Agreement or any
Supplement or the eligibility of any Receivable for
purposes of this Agreement or any Supplement.
Section 2.5 Covenants of the Transferor. The
Transferor hereby covenants that:
(a) Receivables to be Accounts or General
Intangibles. The Transferor will take no action to cause
any Receivable to be evidenced by any instrument (as
defined in the UCC as in effect in the Relevant UCC
State), except in connection with the enforcement or
collection of a Receivable. Except in such
circumstances, the Transferor will take no action to
cause any Receivable to be anything other than an
"account" or a "general intangible" (each as defined in
the UCC as in effect in the Relevant UCC State).
(b) Security Interests. Except for the
conveyances hereunder, the Transferor will not sell,
pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien, on any
Receivable, whether now existing or hereafter created, or
any interest therein; the Transferor will immediately
notify the Trustee of the existence of any Lien on any
Receivable; and the Transferor shall defend the right,
title and interest of the Trust in, to and under the
Receivables, whether now existing or hereafter created,
against all claims of third parties claiming through or
under the Transferor; provided, however, that nothing in
this subsection 2.5(b) shall prevent or be deemed to
prohibit the Transferor from suffering to exist upon any
of the Receivables any Permitted Lien.
(c) Contracts and Credit and Collection
Policies. The Transferor shall take all actions
reasonably within its control to cause each Originator to
comply with and perform its obligations under the
Contracts relating to the Receivables and the Credit and
Collection Policy except insofar as any failure to comply
or perform would not materially and adversely affect the
rights of the Trust or the Certificateholders hereunder
or under the Certificates. The Transferor may change,
and permit an Originator to change, the terms and
provisions of the Contracts or the Credit and Collection
Policy in any respect (i) if it would not, in the
reasonable belief of the Transferor, materially impair
the collectibility of any Receivable or cause,
immediately or with the passage of time, a Pay Out Event
to occur and (ii) if such change (A) (if it owns a
comparable segment of receivables) is made applicable to
the comparable segment of the receivables owned by the
Transferor or such Originator, if any, which have
characteristics the same as, or substantially similar to,
the Receivables that are the subject of such change and
(B) (if it does not own such a comparable segment of
receivables) will not be made with the intent to
materially benefit the Transferor over the Investor
Certificateholders or to materially adversely affect the
Investor Certificateholders, except as otherwise
restricted by an endorsement, sponsorship, or other
agreement between the Transferor and an unrelated third
party or by the terms of the Contracts.
(d) [Reserved]
(e) Delivery of Collections. In the event
that the Transferor receives Collections, the Transferor
agrees to deposit such Collections into the Collection
Account as soon as practicable after the receipt thereof,
but in no event later than two Business Days following
the Date of Processing thereof.
(f) Conveyance of Receivables. The Transferor
covenants and agrees that it will not permit any
Originator to convey, assign, exchange or otherwise
transfer any Receivable, to any Person other than the
Transferor prior to the termination of this Agreement
pursuant to Article XII except for transfers to FCI;
provided, however, that the Transferor shall not be
prohibited hereby from permitting an Originator to
convey, assign, exchange or otherwise transfer a
Receivable in connection with a transaction in which such
Originator and its successor agree to comply with
provisions substantially similar to those of Section 7.2.
(g) Notice of Liens. The Transferor shall
notify the Trustee promptly after becoming aware of any
Lien on any Receivable other than Permitted Liens.
(h) Enforcement of Purchase Agreement. The
Transferor agrees to take all action necessary and
appropriate to enforce its rights and claims under the
Purchase Agreement and the Bank Receivables Purchase
Agreement.
(i) Separate Business. The Transferor shall
at all times (i) to the extent the Transferor's office is
located in the offices of any Affiliate of the
Transferor, pay fair market rent for its office space
located in the offices of such affiliate and a fair share
of any overhead costs, (ii) maintain the Transferor's
books, financial statements, accounting records and other
corporate documents and records separate from those of
its Affiliates or any other entity, (iii) not commingle
the Transferor's assets with those of any Affiliate or
any other entity, (iv) maintain the Transferor's books or
account and payroll (if any) separate from those of any
affiliate of the Transferor, (v) act solely in its
corporate name and through its own authorized officers
and agents, invoices and letterhead, (vi) separately
manage the Transferor's liabilities from those of any of
its Affiliates and pay its own material liabilities,
including all material administrative expenses, from its
own separate assets, provided that the Transferor's
stockholder or other Affiliates may pay certain of the
organizational expenses of the Transferor and expenses
relating to the preparation, negotiation, execution and
delivery of the documentation with respect to the
issuance of Certificates from time to time, and the
Transferor shall reimburse any Affiliate for its
allocable portion of shared expenses paid by such
Affiliate, and (vii) pay from the Transferor's assets all
obligations and indebtedness of any kind incurred by the
Transferor except as otherwise provided in clause (vi).
The Transferor shall abide by all corporate formalities,
including the maintenance of current minute books, and
the Transferor shall cause its financial statements to be
prepared in accordance with generally accepted accounting
principles in a manner that indicates the separate
existence of the Transferor and its assets and
liabilities. The Transferor shall not assume the
liabilities of any Affiliate, and shall not guarantee the
liabilities of any Affiliate. The officers and directors
of the Transferor (as appropriate) shall make decisions
with respect to the business and daily operations of
Transferor independent of and not dictated by any
Affiliate of the Transferor.
(j) Purchase Agreement Notices. The
Transferor (i) shall promptly give the Trustee copies of
any notices, reports or certificates given or delivered
to the Transferor under the Purchase Agreement, (ii)
shall not, without the consents, approvals and opinions,
if any, required by Section 13.1, as if Section 13.1
related to the Purchase Agreement rather than this
Agreement, enter into any amendment, supplement or other
modification to, or waiver of any provision of, the
Purchase Agreement and (iii) shall not permit the
addition or removal of a Receivable to or from the
operation of the Purchase Agreement unless there is a
corresponding right or obligation of the Transferor to
add or remove such Receivable to or from the Trust.
Section 2.6 Addition of Receivables.
(a) All receivables which meet the definition
of Receivables shall be included as Receivables from and
after the date upon which such Receivables are created
and all such Receivables, whether such Receivables are
then existing or thereafter created, shall be transferred
automatically to the Trust upon purchase by the
Transferor.
(b) Receivables shall be transferred to the
Trust as Eligible Receivables if, in addition to
satisfying the requirements of clauses (a) through (g) of
the definition of Eligible Receivables, the following
condition is met: unless ▇▇▇▇▇'▇ otherwise consents,
with respect to any Monthly Period the number of new
obligors on Fingerhut and FNB receivables (which shall
include any obligors who, prior to the relevant measuring
period, did not have a relationship with Fingerhut or
FNB) since the first day of the eleventh preceding
Monthly Period (or, in the case of any date on or before
the last day of the June 1995 Monthly Period, the last
day of the June 1994 Monthly Period) that are Back End
Customers on Receivables minus the number of new obligors
on Fingerhut and FNB receivables that are Back End
Customers on Receivables who have previously been
approved by ▇▇▇▇▇'▇ since the first day of such eleventh
preceding Monthly Period (or the last day of the June
1994 Monthly Period, as the case may be) shall not exceed
25% of the number of Back End Customers on Receivables at
the close of business on the last day of such Monthly
Period.
Section 2.7. Defaulted Receivables. On the date
on which a Receivable becomes a Defaulted Receivable, the
Trust shall automatically and without further action or
consideration be deemed to transfer, set over, and
otherwise convey to the Transferor, without recourse,
representation or warranty, all the right, title and
interest of the Trust in and to such Defaulted
Receivable, all monies due or to become due with respect
thereto and all proceeds of such Defaulted Receivable
allocable to the Trust with respect to such Defaulted
Receivable, excluding Recoveries relating thereto, which
shall remain a part of the Trust Property. On each
Determination Date, the Servicer shall calculate the
aggregate Investor Default Amount for the preceding
Monthly Period with respect to each Series.
Section 2.8 Covenants of the Transferor with
Respect to the Purchase Agreement. The Transferor, in
its capacity as purchaser of the Receivables from FCI or
any Originator pursuant to a Purchase Agreement, hereby
covenants that the Transferor will at all times enforce
the covenants and agreements of FCI and each Originator
in a Purchase Agreement and of FNB in the Bank
Receivables Purchase Agreement, including, without
limitation, the covenant to the effect set forth below.
Contracts and Credit and Collection
Policies. Each Originator shall take all
actions reasonably within its control to comply
with and perform its obligations under the
Contracts relating to the Receivables and the
Credit and Collection Policy except insofar as
any failure to comply or perform would not
materially and adversely affect the rights of
the Trust or the Certificateholders hereunder
or under the Certificates. Each Originator may
change the terms and provisions of the
Contracts or the Credit and Collection Policy
in any respect (i) if it would not, in the
reasonable belief of such Originator,
materially impair the collectibility of any
Receivable or cause, immediately or with the
passage of time, a Pay Out Event to occur and
(ii) if such change (A) (if it owns a
comparable segment of receivables) is made
applicable to the comparable segment of the
receivables owned by such Originator, if any,
which have characteristics the same as, or
substantially similar to, the Receivables that
are the subject of such change and (B) (if it
does not own such a comparable segment of
receivables) will not be made with the intent
to materially benefit such Originator over the
Trust or the Investor Certificateholders or to
materially adversely affect the Trust or the
Investor Certificateholders, except as
otherwise restricted by an endorsement,
sponsorship, or other agreement between such
Originator and an unrelated third party or by
the terms of the Contracts.
[End of Article II]
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.1 Acceptance of Appointment and
Other Matters Relating to the Servicer.
(a) FNB agrees to act as the Servicer under
this Agreement. The Investor Certificateholders of each
Series by their acceptance of the related Certificates
and pursuant to subsection 3.1(a) of the Amended Pooling
and Servicing Agreement consent to FNB acting as
Servicer. Notwithstanding the foregoing or any other
provisions of this Agreement or any Supplement, the
Investor Certificateholders consent to Fingerhut or an
Affiliate of Fingerhut acting as Servicer hereunder, in
full substitution for FNB; provided that Fingerhut or any
such Affiliate acting as Servicer shall expressly assume
in writing (unless such assumption occurs by operation of
law), by an agreement supplemental hereto, executed and
delivered to the Trustee, the performance of every
covenant and obligation of the Servicer, as applicable
hereunder, and shall in all respects be designated the
Servicer under this Agreement; provided, further, that,
with respect to any Affiliate of Fingerhut acting as
Servicer hereunder, Fingerhut will remain jointly and
severally liable with such Affiliate.
(b) The Servicer shall service and administer
the Receivables and shall collect payments due under the
Receivables in accordance with its customary and usual
servicing procedures and the Credit and Collection
Policies and shall have full power and authority, acting
alone or through any party properly designated by it
hereunder, to do any and all things in connection with
such servicing and administration that it may deem
necessary or desirable. Without limiting the generality
of the foregoing and subject to Section 10.1, the
Servicer is hereby authorized and empowered (i) to make
withdrawals from the Collection Account as set forth in
this Agreement, (ii) unless such power and authority is
revoked by the Trustee on account of the occurrence of a
Servicer Default pursuant to Section 10.1, to instruct
the Trustee in writing to make withdrawals and payments,
from any Interest Funding Account, the Excess Funding
Account, any Principal Account and any Series Account, in
accordance with such instructions as set forth in this
Agreement, (iii) unless such power and authority is
revoked by the Trustee on account of the occurrence of a
Servicer Default pursuant to Section 10.1, to instruct
the Trustee in writing to take any action permitted or
required under any Enhancement at such time as set forth
in this Agreement and any Supplement, (iv) to execute and
deliver, on behalf of the Trust for the benefit of the
Certificateholders, any and all instruments of
satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable
instruments, with respect to the Receivables and, after
the delinquency of any Receivable and to the extent
permitted under and in compliance with applicable law and
regulations, to commence enforcement proceedings with
respect to such Receivables, (v) to make any filings,
reports, notices, applications, registrations with, and
to seek any consents or authorizations from, the
Securities and Exchange Commission and any state
securities authority on behalf of the Trust as may be
necessary or advisable to comply with any federal or
state securities or reporting requirements and (vi) to
delegate certain of its service, collection, enforcement
and administrative duties hereunder with respect to the
Receivables to any Person who agrees to conduct such
duties in accordance with the Credit and Collection
Policies; provided, however, that the Servicer shall
notify the Trustee in writing of any such delegation; and
provided further that the Servicer shall remain jointly
and severally liable with such Person. The Trustee
agrees that it shall promptly follow the instructions of
the Servicer to withdraw funds from the Collection
Account, any Principal Account, any Interest Funding
Account, the Excess Funding Account, or any Series
Account and to take any action required under any
Enhancement at such time as required under this
Agreement. The Trustee shall execute at the Servicer's
written request such documents prepared by the Transferor
and acceptable to the Trustee as the Servicer certifies
are necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties
hereunder.
(c) [Reserved]
(d) The Servicer shall not be obligated to use
separate servicing procedures, offices or employees for
servicing the Receivables from the procedures, offices
and employees used by the Servicer in connection with
servicing other receivables.
Section 3.2 Servicing Compensation. As
compensation for its servicing activities hereunder and
reimbursement for its expenses as set forth in the
immediately following paragraph, the Servicer shall be
entitled to receive a servicing fee in respect of each
day prior to the termination of the Trust pursuant to
Section 12.1 (the "Servicing Fee"), payable in arrears on
each date and in the manner specified in the applicable
Supplement, equal to the product of (i) a fraction, the
numerator of which is the actual number of days in the
measuring period specified in the applicable Supplement
and the denominator of which is the actual number of days
in the year, (ii) the weighted average Series Servicing
Fee Percentage for all Outstanding Series (based upon the
Series Servicing Fee Percentage for each Series and the
Invested Amount of such Series) and (iii) the daily
average aggregate Outstanding Balance of all Principal
Receivables over the term of such measuring period. The
share of the Servicing Fee allocable to each Series with
respect to any date of payment shall be equal to the
product of (i) a fraction, the numerator of which is the
actual number of days in the measuring period specified
in the applicable Supplement and the denominator of which
is the actual number of days in the year, (ii) the
applicable Series Servicing Fee Percentage for such
Series and (iii) the Invested Amount of such Series, as
appropriate, as of the date of determination for such
payment as specified in the applicable Supplement. The
remainder of the Servicing Fee shall be paid by the
Transferor, or retained by the Servicer as provided in
Article IV, and in no event shall the Trust, the Trustee,
any Enhancement Provider, or the Investor
Certificateholders be liable for the share of the
Servicing Fee to be paid by the Transferor.
The Servicer shall be responsible for its own
expenses, which shall include the amounts due to the
Trustee pursuant to Section 11.5 and the reasonable fees
and disbursements of independent public accountants and
all other expenses incurred by the Servicer in connection
with its activities hereunder; provided, that the
Servicer shall not be liable for any liabilities, costs
or expenses of the Trust, the Investor Certificateholders
or the Certificate Owners arising under any tax law,
including without limitation any federal, state or local
income or franchise taxes or any other tax imposed on or
measured by income (or any interest, penalties or
additions with respect thereto or arising from a failure
to comply therewith). In the event that the Servicer
fails to pay any amounts due to the Trustee pursuant to
Section 11.5, the Trustee shall be entitled to deduct and
receive such amounts from the Servicing Fee prior to the
payment thereof to the Servicer and the obligations of
the Trust to pay any such amounts shall thereby be fully
satisfied. The Servicer shall be required to pay such
expenses for its own account and shall not be entitled to
any payment therefor other than the Servicing Fee.
Section 3.3 Representations and Warranties of
the Servicer. FNB hereby makes, and any Successor
Servicer by its appointment hereunder shall make, the
following representations and warranties on which the
Trustee has relied in accepting the Receivables in trust
and in authenticating the Certificates issued on the
Initial Closing Date:
(a) Organization and Good Standing. The
Servicer is either (i) a national banking association
duly organized, validly existing and in good standing
under the laws of the United States or (ii) a corporation
duly organized, validly existing and in good standing
under the laws of its state of incorporation and has the
corporate power, authority and legal right to own its
properties and conduct its business as such properties
are presently owned and such business is presently
conducted, and to execute, deliver and perform its
obligations under this Agreement.
(b) Due Qualification. The Servicer is duly
qualified to do business and is in good standing (or is
exempt from such requirements) as a foreign corporation
in any state where such qualification is necessary in
order to service the Receivables as required by this
Agreement and has obtained all necessary licenses and
approvals as required under Federal and state law in
order to service the Receivables as required by this
Agreement, and if the Servicer shall be required by any
Requirement of Law to so qualify or register or obtain
such license or approval, then it shall do so except
where the failure to obtain such license or approval does
not materially affect the Servicer's ability to perform
its obligations hereunder or the enforceability of the
Receivables.
(c) Due Authorization. The execution and
delivery of this Agreement and the consummation of the
transactions provided for herein, have been duly
authorized by the Servicer by all necessary corporate
action on the part of the Servicer.
(d) Binding Obligation. This Agreement and
the consummation of the transactions provided for herein,
constitutes a legal, valid and binding obligation of the
Servicer, enforceable in accordance with its terms,
except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereinafter in effect,
affecting the enforcement of creditors' rights in general
and as such enforceability may be limited by general
principles of equity (whether considered in a proceeding
at law or in equity).
(e) No Violation. The execution and delivery
of this Agreement by the Servicer, and the performance of
the transactions contemplated by this Agreement and the
fulfillment of the terms hereof applicable to the
Servicer, will not violate, result in any breach of any
of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a
default under, any Requirement of Law applicable to the
Servicer or any material indenture, contract, agreement,
mortgage, deed of trust or other material instrument to
which the Servicer is a party or by which it is bound.
(f) No Proceedings. There are no proceedings
or investigations pending or, to the best knowledge of
the Servicer, threatened against the Servicer before any
Governmental Authority (i) asserting the invalidity of
this Agreement, (ii) seeking to prevent the issuance of
the Certificates or the consummation of any of the
transactions contemplated by this Agreement, (iii)
seeking any determination or ruling that would materially
and adversely affect the performance by the Servicer of
its obligations under this Agreement, (iv) seeking any
determination or ruling that would materially and
adversely affect the validity or enforceability of this
Agreement or (v) seeking to affect adversely the tax
attributes of the Trust.
(g) Compliance with Requirements of Law. The
Servicer shall duly satisfy all obligations on its part
to be fulfilled under or in connection with each
Receivable, will maintain in effect all qualifications
required under Requirements of Law in order to service
properly each Receivable and will comply in all material
respects with all other Requirements of Law in connection
with servicing each Receivable the failure to comply with
which would have a material adverse effect on the
Certificateholders or any Enhancement Provider.
(h) Protection of Certificateholders' Rights.
The Servicer shall take no action which, nor omit to take
any action the omission of which, would impair the rights
of Certificateholders in any Receivable or the rights of
any Enhancement Provider, nor shall it reschedule, revise
or defer payments due on any Receivable except in
accordance with the Credit and Collection Policies.
(i) All Consents Required. All approvals,
authorizations, consents, orders or other actions of any
Governmental Authority required in connection with the
execution and delivery of this Agreement and the
performance of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof, have
been obtained; provided, however, that the Servicer makes
no representation or warranty regarding State securities
or "Blue Sky" laws in connection with the distribution of
the Certificates.
(j) Rescission or Cancellation. The Servicer
shall not permit any rescission or cancellation of any
Receivable except as ordered by a court of competent
jurisdiction or other Governmental Authority or in
accordance with the Credit and Collection Policy or the
normal operating procedures of the Servicer.
(k) Receivables Not To Be Evidenced by
Promissory Notes. Except in connection with its
enforcement or collection of a Receivable (in which case
any such promissory note would be made in the name of the
Trust on behalf of the Certificateholders), the Servicer
will take no action to cause any Receivable to be
evidenced by an instrument (as defined in the UCC as in
effect in the Relevant UCC State).
(l) Principal Place of Business. The Servicer
shall at all times maintain its principal executive
offices within the United States.
Section 3.4 Reports and Records for the
Trustee.
(a) Daily Records. Upon reasonable prior
notice by the Trustee, the Servicer shall make available
at an office of the Servicer (or other location
designated by the Servicer if such records are not
accessible by the Servicer at an office of the Servicer)
selected by the Servicer for inspection by the Trustee or
its agent (reasonably acceptable to the Servicer) on a
Business Day during the Servicer's normal business hours
a record setting forth (i) the Collections on the
Receivables and (ii) the amount of Receivables for the
Business Day preceding the date of the inspection. The
Servicer shall, at all times, maintain its computer files
with respect to the Receivables in such a manner so that
the Receivables may be specifically identified and, upon
reasonable prior request of the Trustee, shall make
available to the Trustee, at an office of the Servicer
(or other location designated by the Servicer if such
computer files are not located at an office of the
Servicer) selected by the Servicer, on any Business Day
of the Servicer during the Servicer's normal business
hours any computer programs necessary to make such
identification. (b) Daily Report.
(i) On each Business Day the Servicer
shall prepare a completed Daily Report.
(ii) The Servicer shall deliver to the
Trustee and the Paying Agent the Daily Report by
3:00 p.m. (New York City time) on each Business Day
with respect to activity in the Receivables for the
prior Business Day (or, in the case of a Daily
Report delivered on the second Business Day
following a Saturday, Sunday or other non-Business
Day, the aggregate activity for the preceding
Business Day and such preceding non-Business Days).
(iii) Upon discovery of any error or
receipt of notice of any error in any Daily Report,
the Servicer, the Transferor and the Trustee shall
arrange to confer and shall agree upon any
adjustments necessary to correct any such errors.
If any such error is material, the Servicer or the
Trustee, as the case may be, shall retain all
Collections which would otherwise be paid from the
Trust (or such lesser amount as the Trustee and the
Servicer shall agree to be necessary to cover any
such error) in the Collection Account until such
material error is corrected. Unless the Trustee has
received written notice of any error or discrepancy,
the Trustee may rely on each Daily Report delivered
to it for all purposes hereunder.
(c) Settlement Statement. On the second
Business Day prior to each Distribution Date, the
Servicer shall, prior to 3:00 p.m. (New York City time)
on such day, deliver to the Trustee and the Paying Agent
the Settlement Statement for the related Monthly Period
substantially in the form of Exhibit C hereto, including
the following information (which, in the case of clauses
(iii), (iv) and (v) below, will be stated on the basis of
an original principal amount of $1,000 per Certificate):
(i) the aggregate amount of Collections received in the
Collection Account for the Monthly Period preceding such
Determination Date and the aggregate amount of Imputed
Yield Collections and the aggregate amount of Principal
Collections processed during such Monthly Period; (ii)
with respect to the preceding Monthly Period for each
Series of Certificates the aggregate amount of the
applicable Investor Percentage of Principal Collections,
and the aggregate amount of the applicable Investor
Percentage of Imputed Yield Collections; (iii) for each
Series and for each Class within any such Series, the
total amount to be distributed to Investor
Certificateholders on the next succeeding Distribution
Date; (iv) for each Series and for each Class within any
such Series, the amount of such distribution to
Certificateholders allocable to principal; (v) for each
Series and for each Class within any such Series, the
amount of such distribution to Certificateholders
allocable to interest; (vi) for each Series and each
Class within a Series, the Investor Default Amount for
the immediately preceding Monthly Period; (vii) for each
Series and each Class within a Series, the amount of the
Investor Charge-Offs and the amount of the reimbursements
of Investor Charge-Offs for such Distribution Date;
(viii) for each Series, the Servicing Fee for such
Distribution Date; (ix) for each Series, the existing
deficit controlled amortization amount, if applicable;
(x) the Aggregate Principal Receivables in the Trust at
the close of business on the last day of the Monthly
Period preceding such Distribution Date; (xi) for each
Series, the Invested Amount at the close of business on
the last day of the Monthly Period immediately preceding
such Distribution Date; (xii) the available amount of any
Enhancement for each Class of each Series, if any; (xiii)
for each Series and each Class within a Series, the Pool
Factor as of the end of the related Monthly Period; (xiv)
whether a Pay Out Event or a Prospective Pay Out Event
with respect to any Series shall have occurred during or
with respect to the related Monthly Period; (xv) the
amount of any Adjustment Payments for the Related Monthly
Period; and (xvi) such other calculations as may be
required by any Supplement. The Trustee shall be under
no duty to recalculate, verify or recompute the
information supplied to it under this Section 3.4 or such
other matters as are set forth in any Settlement
Statement. The Servicer shall also provide a copy of the
Settlement Statement in a prompt manner to each Rating
Agency.
Section 3.5 Annual Servicer's Certificate.
The Servicer will deliver, in accordance with Section
13.5, to the Trustee, any Enhancement Provider and the
Rating Agencies, within 100 days of the end of each
fiscal year, beginning in 1994, an Officer's Certificate
substantially in the form of Exhibit D stating that (a) a
review of the activities of the Servicer during the
preceding fiscal year and of its performance under this
Agreement was made under the supervision of the officer
signing such certificate and (b) to such officer's
knowledge, based on such review, the Servicer has fully
performed all its obligations under this Agreement
throughout such period, or, if there has been a default
in the performance of any such obligation, specifying
each such default known to such officer and the nature
and status thereof. A copy of such certificate may be
obtained by any Investor Certificateholder by a request
in writing to the Trustee addressed to the Corporate
Trust Office.
Section 3.6 Annual Independent Accountants'
Servicing Report.
(a) Within 100 days of the end of each fiscal
year, the Servicer shall cause a firm of nationally
recognized independent public accountants (who may also
render other services to the Servicer or the Transferor)
to furnish a report with respect to the prior fiscal year
(or, in the case of the first such period, the period
beginning on the Initial Closing Date and ending on the
last day of the related fiscal year) to the Trustee, any
Enhancement Provider and each Rating Agency, to the
effect that such firm has applied certain procedures,
agreed upon with the Servicer and the Trustee and
substantially as set forth in Exhibit G hereto, which
would re-perform certain accounting procedures performed
by the Servicer pursuant to certain documents and records
relating to the servicing of the Receivables under this
Agreement. In addition, each report shall set forth the
agreed upon procedures performed and the results of such
procedures.
(b) Within 100 days of the end of each fiscal
year, the Servicer shall cause a firm of nationally
recognized independent certified public accountants (who
may also render other services to the Servicer or the
Transferor) to furnish a report to the Trustee, any
Enhancement Provider and the Rating Agency to the effect
that they have compared the mathematical calculations set
forth in each of the monthly certificates forwarded by
the Servicer pursuant to subsection 3.4(c) during the
period covered by such report with the computer reports
which were the source of such amounts and that on the
basis of such comparison, such amounts are in agreement,
except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set
forth in such report. A copy of such report will be sent
by the Trustee to each Investor Certificateholder.
Section 3.7 Tax Treatment. The Transferor has
structured this Agreement and the Investor Certificates
with the intention that the Investor Certificates will
qualify under applicable federal, state, local and
foreign tax law as indebtedness. Except to the extent
expressly specified to the contrary in any Supplement,
the Transferor, the Servicer, the Holder of the
Exchangeable Transferor Certificate, each Investor
Certificateholder, Holder of a Variable Funding
Certificate, and each Certificate Owner agree to treat
and to take no action inconsistent with the treatment of
the Investor Certificates (or beneficial interest
therein) as indebtedness for purposes of federal, state,
local and foreign income or franchise taxes and any other
tax imposed on or measured by income. Each Investor
Certificateholder, Holder of a Variable Funding
Certificate and the Holder of the Exchangeable Transferor
Certificate, by acceptance of its Certificate and each
Certificate Owner, by acquisition of a beneficial
interest in a Certificate, agree to be bound by the
provisions of this Section 3.7. Each Certificateholder
agrees that it will cause any Certificate Owner acquiring
an interest in a Certificate through it to comply with
this Agreement as to treatment as indebtedness under
applicable tax law, as described in this Section 3.7.
Furthermore, subject to Section 11.11, the Trustee shall
treat the Trust as a security device only, and shall not
file tax returns or obtain an employer identification
number on behalf of the Trust.
Section 3.8 Adjustments. (a) If the Servicer
adjusts downward the amount of any Receivable because of
a rebate, refund, unauthorized charge or billing error to
an Obligor, because such Receivable was created in
respect of merchandise which was refused or returned by
an Obligor, or if the Servicer otherwise adjusts downward
the amount of any Receivable without receiving
Collections therefor or without charging off such amount
as uncollectible, then, in any such case, the Transferor
Interest will be reduced and the aggregate amount of the
Principal Receivables used to calculate the Investor
Percentages applicable to any Series will be reduced by
the principal amount of any such adjustment. Similarly,
the aggregate amount of the Principal Receivables used to
calculate the Investor Percentages applicable to any
Series will be reduced by the amount of any Principal
Receivable which was discovered as having been created
through a fraudulent or counterfeit charge or with
respect to which the covenant contained in subsection
2.5(b) was breached. Any adjustment required pursuant to
either of the two preceding sentences shall be made on or
prior to the end of the Monthly Period in which such
adjustment obligation arises. In the event that,
following any such exclusion, the Transferor Interest
(excluding the interest represented by any Supplemental
Certificate) would be less than the Minimum Transferor
Interest, within two Business Days of the date on which
such adjustment obligation arises, the Transferor shall
pay to the Servicer, for deposit into the Excess Funding
Account, in immediately available funds an amount equal
to the amount by which the Transferor Interest (excluding
the interest represented by any Supplemental Certificate)
would be reduced below the Minimum Transferor Interest as
a result of such adjustment or exclusion. Any amount
deposited into the Excess Funding Account in connection
with the adjustment of a Receivable (an "Adjustment
Payment") shall be applied in accordance with Article IV
and the terms of each Supplement.
(b) If (i) the Servicer makes a deposit into
the Collection Account in respect of a Collection of a
Receivable and such Collection was received in the form
of a check which is not honored for any reason or (ii)
the Servicer makes a mistake with respect to the amount
of any Collection and deposits an amount that is less
than or more than the actual amount of such Collection,
the Servicer shall appropriately adjust the amount
subsequently deposited into the Collection Account to
reflect such dishonored check or mistake. Any Receivable
in respect of which a dishonored check is received shall
be deemed not to have been paid. Notwithstanding the
first two sentences of this paragraph, any adjustments
made pursuant to this paragraph will be reflected in a
current report but will not change any amount of
Collections previously reported pursuant to subsection
3.4(b).
Section 3.9 Notices to Fingerhut. In the
event that FNB or any Affiliate thereof is no longer
acting as Servicer, any Successor Servicer appointed
pursuant to Section 10.2 shall deliver or make available
to FNB and Fingerhut each certificate and report required
to be prepared, forwarded or delivered thereafter
pursuant to Sections 3.4, 3.5 and 3.6.
[End of Article III]
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Certificateholders.
Each Series of Investor Certificates shall represent
Undivided Interests in the Trust, including the benefits
of any Enhancement issued with respect to such Series and
the right to receive the Collections and other amounts at
the times and in the amounts specified in this Article IV
to be deposited in the Investor Accounts or to be paid to
the Investor Certificateholders of such Series; provided,
however, that the aggregate interest represented by such
Certificates at any time in the Principal Receivables
shall not exceed an amount equal to the Invested Amount
of such Certificates. The Exchangeable Transferor
Certificate shall represent the remaining undivided
interest in the Trust, including the right to receive the
Collections and other amounts at the times and in the
amounts specified in this Article IV to be paid to the
Holder of the Exchangeable Transferor Certificate;
provided, however, that the aggregate interest
represented by such Certificate at any time in the
Principal Receivables shall not exceed the Transferor
Interest at such time and such Certificate shall not
represent any interest in the Investor Accounts, except
as provided in this Agreement, or the benefits of any
Enhancement issued with respect to any Series.
Section 4.2 Establishment of Accounts.
(a) The Collection Account. The Servicer, for
the benefit of the Certificateholders, shall establish in
the name of the Trustee, on behalf of the Trust, a non-
interest bearing segregated account (the "Collection
Account") bearing a designation clearly indicating that
the funds deposited therein are held in trust for the
benefit of the Certificateholders, and shall cause such
Collection Account to be established and maintained, (i)
in a segregated trust account with the corporate trust
department of a depositary institution or trust company
(which may include the Trustee) organized under the laws
of the United States of America or any one of the states
thereof or the District of Columbia which has a long-term
unsecured debt rating of at least Baa3 by Moody's and
whose deposits are insured to the limits provided by law
by the FDIC having corporate trust powers and acting as
trustee for funds deposited therein (provided, however,
that such account need not be maintained as a segregated
trust account with the corporate trust department of such
institution if at all times the certificates of deposit,
short-term deposits or commercial paper or the long-term
unsecured debt obligations (other than such obligation
whose rating is based on collateral or on the credit of a
Person other than such institution or trust company) of
such depositary institution or trust company shall have a
credit rating from Standard & Poor's of at least A-1+ and
P-1 from Moody's in the case of the certificates of
deposit, short-term deposits or commercial paper, or a
rating from Standard & Poor's of AAA and from Moody's of
Aaa in the case of the long-term unsecured debt
obligations) or (ii) with a depositary institution, which
may include the Trustee, which is acceptable to the
Rating Agency (in the case of (i) and (ii), a "Qualified
Institution"). If, at any time, the institution holding
the Collection Account ceases to be a Qualified
Institution, the Transferor shall direct the Servicer to
establish within 10 Business Days a new Collection
Account with a Qualified Institution, transfer any cash
and/or any investments to such new Collection Account and
from the date such new Collection Account is established,
it shall be the "Collection Account." The Servicer shall
give written notice to the Trustee of the location and
account number of the Collection Account and shall notify
the Trustee in writing prior to any subsequent change
thereof. Pursuant to authority granted to it pursuant to
subsection 3.1(b), the Servicer shall have the power
revocable by the Trustee to withdraw funds from the
Collection Account for the purposes of carrying out its
duties hereunder.
The Collection Account shall be under the sole
dominion and control of the Trustee and the Trustee shall
possess all right, title and interest in all funds from
time to time on deposit in such account.
(b) The Interest Funding and Principal
Accounts. The Trustee, for the benefit of the Investor
Certificateholders, shall establish and maintain with a
Qualified Institution in the name of the Trust two
segregated trust accounts for each Series (an "Interest
Funding Account" and a "Principal Account,"
respectively), each bearing a designation clearly
indicating that the funds therein are held for the
benefit of the Investor Certificateholders of such
Series. Except as provided in subsection 4.2(e), each
Interest Funding Account and each Principal Account shall
be under the sole dominion and control of the Trustee for
the benefit of the Investor Certificateholders. Pursuant
to authority granted to it hereunder, the Servicer shall
have the revocable power to instruct the Trustee to
withdraw funds from the Interest Funding Account and any
Principal Account for any purpose of carrying out the
Servicer's or the Trustee's duties hereunder. The
Trustee at all times shall maintain accurate records
reflecting each transaction in each Principal Account and
each Interest Funding Account and that funds held therein
shall at all times be held in trust for the benefit of
the Investor Certificateholders of such Series. If, at
any time, the institution holding the Interest Funding
Account ceases to be a Qualified Institution, the
Servicer shall direct the Trustee to establish within 10
Business Days a new Interest Funding Account meeting the
conditions specified above with a Qualified Institution,
transfer any cash and/or any investments to such new
Interest Funding Account and from the date such new
Interest Funding Account is established, it shall be the
"Interest Funding Account." Similarly, if, at any time,
the institution holding any Principal Account ceases to
be a Qualified Institution, the Servicer shall direct the
Trustee to establish within 10 Business Days a new
Principal Account meeting the conditions specified above
with a Qualified Institution, transfer any cash and/or
any investments to such new Principal Account and from
the date such new Principal Account is established, it
shall be a "Principal Account."
(c) Distribution Accounts. The Trustee, for
the benefit of the Investor Certificateholders of each
Series, shall cause to be established and maintained in
the name of the Trust, with an office or branch of a
Qualified Institution a non-interest-bearing segregated
demand deposit account for each Series (a "Distribution
Account") bearing a designation clearly indicating that
the funds deposited therein are held in trust for the
benefit of the Investor Certificateholders of such
Series. Each Distribution Account shall be under the
sole dominion and control of the Trustee for the benefit
of the Investor Certificateholders of the related Series.
Pursuant to the authority granted to the Paying Agent
herein, the Paying Agent shall have the power, revocable
by the Trustee, to make withdrawals and payments from the
Distribution Account for the purpose of carrying out the
Paying Agent's duties hereunder. If, at any time, the
institution holding a Distribution Account ceases to be a
Qualified Institution, the Servicer shall direct the
Trustee to establish within 10 Business Days a new
Distribution Account meeting the conditions specified
above with a Qualified Institution, transfer any cash
and/or any investments to such new Distribution Account
and from the date such new Distribution Account is
established, it shall be a "Distribution Account."
(d) The Excess Funding Account. The Trustee,
for the benefit of the Certificateholders, shall cause to
be established in the name of the Trustee, on behalf of
the Certificateholders, with a Qualified Institution, a
segregated trust account (the "Excess Funding Account")
bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the
Certificateholders. Except as provided in subsection
4.3(f), the Excess Funding Account shall, except as
otherwise provided herein, be under the sole dominion and
control of the Trustee for the benefit of the
Certificateholders. Pursuant to the authority granted to
the Servicer herein, the Servicer shall have the power,
revocable by the Trustee, to make withdrawals and
payments from the Excess Funding Account for the purpose
of carrying out the Servicer's or Trustee's duties
hereunder. If, at any time, the institution holding the
Excess Funding Account ceases to be a Qualified
Institution, the Servicer shall direct the Trustee to
establish within 10 Business Days a new Excess Funding
Account meeting the conditions specified above with a
Qualified Institution, transfer any cash and/or any
investments to such new Excess Funding Account and from
the date such new Excess Funding Account is established,
it shall be the "Excess Funding Account."
(e) Administration of the Principal Accounts
and the Interest Funding Accounts. Funds on deposit in
each Principal Account and each Interest Funding Account
shall at all times be invested by the Servicer (or, at
the written direction of the Transferor, by the Trustee)
on behalf of the Transferor in Cash Equivalents. Any
such investment shall mature and such funds shall be
available for withdrawal on the Transfer Date following
the Monthly Period in which such funds were processed for
collection. No such investments shall be liquidated
prior to maturity. At the end of each month, all
interest and earnings (net of losses and investment
expenses) on funds on deposit in each Principal Account
and each Interest Funding Account (unless otherwise
specified in the applicable Supplement) shall be
deposited by the Trustee in a separate deposit account
with a Qualified Institution in the name of the Servicer,
or a Person designated in writing by the Servicer, which
shall not constitute a part of the Trust, or shall
otherwise be turned over by the Trustee to the Servicer
not less frequently than monthly. Subject to the
restrictions set forth above, the Servicer, or a Person
designated in writing by the Servicer, of which the
Trustee shall have received written notification, shall
have the authority to instruct the Trustee with respect
to the investment of funds on deposit in any Principal
Account and any Interest Funding Account. Any investment
instructions to the Trustee shall be in writing, shall be
given no later than 10:00 a.m. New York City time on a
Business Day that such investment is proposed to be made
and shall include a certification that the proposed
investment is a Cash Equivalent that matures at or prior
to the time required by this Agreement. For purposes of
determining the availability of funds or the balances in
any Interest Funding Account and any Principal Account
for any reason under this Agreement, all investment
earnings on such funds shall be deemed not to be
available or on deposit.
Section 4.3 Collections and Allocations.
(a) Collections. Obligors shall make payments
on the Receivables to the Servicer who shall deposit all
such payments in the Collection Account no later than the
second Business Day following the Date of Processing
thereof.
The Servicer shall allocate such amounts to
each Series of Investor Certificates and to the Holder of
the Exchangeable Transferor Certificate in accordance
with this Article IV and shall cause the Trustee to
withdraw the required amounts from the Collection Account
or pay such amounts to the Holder of the Exchangeable
Transferor Certificate in accordance with this Article
IV. The Servicer shall make such deposits or payments on
the date indicated herein by wire transfer or as
otherwise provided in the Supplement for any Series of
Certificates with respect to such Series.
Notwithstanding anything in this Agreement to
the contrary, but subject to the terms of any Supplement,
for so long as, and only so long as, Fingerhut (or any
successors to Fingerhut) or an Affiliate of Fingerhut
shall remain the Servicer hereunder, and (a)(i) Fingerhut
(or any successors to Fingerhut) or an Affiliate of
Fingerhut provides to the Trustee a letter of credit or
other form of Enhancement rated at least A-1 by Standard
& Poor's and P-1 by Moody's (as certified to the Trustee
by the Servicer), and (ii) after notifying each Rating
Agency of the proposed use of such letter of credit or
other form of Enhancement the Transferor shall have
received a notice from each Rating Agency that making
payments monthly rather than daily would not result in a
downgrading or withdrawal of any of such Rating Agency's
then-existing ratings of the Investor Certificates, or
(b) FCI (or any successors to FCI) shall have and
maintain a short-term credit rating of at least A-1 by
Standard & Poor's and P-1 by Moody's (as certified to the
Trustee by the Servicer), the Servicer need not deposit
Collections from the Collection Account into the
Principal Account or the Interest Funding Account or any
Series Account, or make payments to the Holder of the
Exchangeable Transferor Certificate, prior to the close
of business on the day any Collections are deposited in
the Collection Account as otherwise provided in this
Article IV, but may instead make such deposits, payments
and withdrawals on each Transfer Date in an amount equal
to the net amount of such deposits, payments and
withdrawals which would have been made but for the
provisions of this paragraph.
(b) Allocations for the Exchangeable
Transferor Certificate. Throughout the existence of the
Trust, unless otherwise stated in any Supplement, on each
Business Day the Servicer shall allocate to the Holder of
the Exchangeable Transferor Certificate an amount equal
to the product of (A) the Transferor Percentage as of the
end of the preceding Business Day and (B) the aggregate
amount of Principal Collections and Imputed Yield
Collections available in the Collection Account. The
Servicer shall pay such amount to the Holder of the
Exchangeable Transferor Certificate on each Business Day;
provided, however, that amounts payable to the Holder of
the Exchangeable Transferor Certificate pursuant to this
clause (b) shall instead be deposited in the Excess
Funding Account to the extent necessary to prevent the
Transferor Interest from being less than the Minimum
Transferor Interest.
(c) [Reserved]
(d) Allocation for Series. On each Business
Day, (i) the amount of Imputed Yield Collections
available in the Collection Account allocable to each
Series shall be determined by multiplying the aggregate
amount of such Imputed Yield Collections by the Floating
Allocation Percentage for such Series, (ii) the amount of
Principal Collections available in the Collection Account
allocable to each Series shall be determined by
multiplying the aggregate amount of such Principal
Collections by (x) during the Revolving Period for a
Series, the Floating Allocation Percentage for such
Series and (y) during any Amortization Period for a
Series, the Fixed/Floating Allocation Percentage for such
Series, and (iii) the Defaulted Receivables allocable to
each Series shall be determined by multiplying the
aggregate amount of such Defaulted Receivables by the
Floating Allocation Percentage for such Series. The
Servicer shall, prior to the close of business on the day
any Collections are deposited in the Collection Account,
cause the Trustee to withdraw the required amounts from
the Collection Account and cause the Trustee to deposit
such amounts into the applicable Principal Account, the
applicable Interest Funding Account, the Excess Funding
Account, or any Series Account or pay such amounts to the
Holder of the Exchangeable Transferor Certificate in
accordance with the provisions of this Article IV.
(e) Unallocated Principal Collections; Excess
Funding Account. On each Business Day, Shared Principal
Collections shall be allocated to each outstanding Series
pro rata based on the Principal Shortfall, if any, for
each such Series, and then, at the option of the
Transferor, any remainder may be applied as principal
with respect to the Variable Funding Certificates. The
Servicer shall pay any remaining Shared Principal
Collections on such Business Day to the Transferor;
provided, that if the Transferor Interest as determined
on such Business Day does not exceed the Minimum
Transferor Interest, then such remaining Shared Principal
Collections shall be deposited in the Excess Funding
Account to the extent necessary to increase the
Transferor Interest above the Minimum Transferor
Interest; provided, further, that if an Amortization
Period has commenced and is continuing with respect to
more than one outstanding Series, such remaining Shared
Principal Collections shall be allocated to such Series
pro rata based on the Investor Percentage for Principal
Receivables applicable for such Series.
(f) Amounts in Excess Funding Account. Amounts
on deposit in the Excess Funding Account on any Business
Day will be invested by the Servicer (or, at the
direction of the Transferor, by the Trustee) on behalf of
the Transferor in Cash Equivalents which shall mature and
be available on or before the next Business Day on which
amounts may be released from the Excess Funding Account.
Earnings from such investments received shall be
deposited in the Collection Account and treated as
Imputed Yield Collections. Any investment instructions
to the Trustee shall be in writing and shall include a
certification that the proposed investment is a Cash
Equivalent that matures at or prior to the date required
by this Agreement. If on any Business Day other than a
Business Day on which a Prospective Pay Out Event has
occurred and is continuing, the Transferor Interest is
greater than the Minimum Transferor Interest, amounts on
deposit in the Excess Funding Account may, at the option
of the Transferor, be released to the Holder of the
Exchangeable Transferor Certificate. On the first
Business Day of the Amortization Period for any Series,
funds on deposit in the Excess Funding Account will be
deposited in the Principal Account for such Series to the
extent of the lesser of (x) the Invested Amount of such
Series and (y) the amount then on deposit in the Excess
Funding Account.
[THE REMAINDER OF ARTICLE IV IS RESERVED
AND SHALL BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
[End of Article IV]
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL BE
SPECIFIED IN ANY SUPPLEMENT WITH RESPECT
TO ANY SERIES]
[End of Article V]
ARTICLE VI
THE CERTIFICATES
Section 6.1 The Certificates. Subject to
Sections 6.10 and 6.13, the Investor Certificates of each
Series and any Class thereof may be issued in bearer form
(the "Bearer Certificates") with attached interest
coupons and, if applicable, a special coupon
(collectively, the "Coupons") or in fully registered form
(the "Registered Certificates"), and shall be
substantially in the form of the exhibits with respect
thereto attached to the related Supplement. The
Exchangeable Transferor Certificate shall be
substantially in the form of Exhibit A. The Investor
Certificates and the Exchangeable Transferor Certificate
shall, upon issue pursuant hereto or to Section 6.9 or
Section 6.10, be executed and delivered by the Transferor
to the Trustee for authentication and redelivery as
provided in Sections 2.1 and 6.2. Any Investor
Certificate shall be issuable in a minimum denomination
of $1,000 Undivided Interest and integral multiples
thereof, unless otherwise specified in any Supplement,
and shall be issued upon original issuance in an original
aggregate principal amount equal to the Initial Invested
Amount. The Exchangeable Transferor Certificate shall be
issued as a single certificate. Each Certificate shall
be executed by manual or facsimile signature on behalf of
the Transferor by its President or any Vice President.
Certificates bearing the manual or facsimile signature of
the individual who was, at the time when such signature
was affixed, authorized to sign on behalf of the
Transferor or the Trustee shall not be rendered invalid,
notwithstanding that such individual has ceased to be so
authorized prior to the authentication and delivery of
such Certificates or does not hold such office at the
date of such Certificates. No Certificate shall be
entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form
provided for herein, executed by or on behalf of the
Trustee by the manual signature of a duly authorized
signatory, and such certificate upon any Certificate
shall be conclusive evidence, and the only evidence, that
such Certificate has been validly issued and duly
authenticated and delivered hereunder. All Certificates
shall be dated the date of their authentication except
Bearer Certificates which shall be dated the applicable
Issuance Date as provided in the related Supplement.
Section 6.2 Authentication of Certificates.
Contemporaneously with the initial assignment and
transfer of the Receivables, whether now existing or
hereafter created and the other components to the Trust,
the Trustee shall authenticate and deliver the initial
Series of Investor Certificates, upon the written order
of the Transferor. Upon the issuance of such Investor
Certificates, such Investor Certificates shall be validly
issued, fully paid and non-assessable. The Trustee shall
authenticate and deliver the Exchangeable Transferor
Certificate to the Transferor simultaneously with its
delivery of the initial Series of Investor Certificates.
Upon an Exchange as provided in Section 6.9 and the
satisfaction of certain other conditions specified
therein, the Trustee shall authenticate and deliver the
Investor Certificates of additional Series (with the
designation provided in the related Supplement), upon the
written order of the Transferor. Upon the written order
of the Transferor, the Certificates of any Series shall
be duly authenticated by or on behalf of the Trustee, in
authorized denominations equal to (in the aggregate) the
Initial Invested Amount of such Series of Investor
Certificates. If specified in the related Supplement for
any Series, the Trustee shall authenticate and deliver
outside the United States the Global Certificate that is
issued upon original issuance thereof, upon the written
order of the Transferor, to the Depositary. If specified
in the related Supplement for any Series, the Trustee
shall authenticate Book-Entry Certificates that are
issued upon original issuance thereof, upon the written
order of the Transferor, to a Clearing Agency or its
nominee as provided in Section 6.10.
Section 6.3 Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall cause to be kept at the
office or agency to be maintained by a transfer agent and
registrar (the "Transfer Agent and Registrar") in
accordance with the provisions of Section 11.16, a
register (the "Certificate Register") in which, subject
to such reasonable regulations as it may prescribe, the
Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates of each Series
(unless otherwise provided in the related Supplement) and
of transfers and exchanges of the Investor Certificates
as herein provided. Whenever reference is made in this
Agreement to the transfer or exchange of the Certificates
by the Trustee, such reference shall be deemed to include
the transfer or exchange on behalf of the Trustee by a
Transfer Agent and Registrar. The Bank of New York is
hereby initially appointed Transfer Agent and Registrar
for the purposes of registering the Investor Certificates
and transfers and exchanges of the Investor Certificates
as herein provided. If any form of Investor Certificate
is issued as a Global Certificate, The Bank of New York
may, or if and so long as any Series of Investor
Certificates are listed on a stock exchange and such
exchange shall so require, The Bank of New York shall
appoint a co-transfer agent and co-registrar, which will
also be a co-paying agent, in such city as the Transferor
may specify. Any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-
transfer agent and co-registrar unless the context
otherwise requires. The Bank of New York shall be
permitted to resign as Transfer Agent and Registrar upon
30 days' written notice to the Servicer. In the event
that The Bank of New York shall no longer be the Transfer
Agent and Registrar, the Transferor shall appoint a
successor Transfer Agent and Registrar. If any Series
with respect to which Book Entry Certificates were
originally issued is no longer issued as Book-Entry
Certificates, then the Servicer may appoint a successor
Transfer Agent and Registrar.
Upon surrender for registration of transfer of
any Certificate at any office or agency of the Transfer
Agent and Registrar maintained for such purpose, the
Transferor shall execute, subject to the provisions of
subsection 6.3(c), and the Trustee shall (unless the
Transfer Agent and Registrar is different than the
Trustee, in which case the Transfer Agent and Registrar
shall) authenticate and deliver, in the name of the
designated transferee or transferees, one or more new
Certificates in authorized denominations of like
aggregate Undivided Interests; provided, that the
provisions of this paragraph shall not apply to Bearer
Certificates.
At the option of any Holder of Registered
Certificates, Registered Certificates may be exchanged
for other Registered Certificates of the same Series in
authorized denominations of like aggregate Undivided
Interests in the Trust, upon surrender of the Registered
Certificates to be exchanged at any office or agency of
the Transfer Agent and Registrar maintained for such
purpose. At the option of a Bearer Certificateholder,
subject to applicable laws and regulations (including
without limitation, the Bearer Rules), Bearer
Certificates may be exchanged for other Bearer
Certificates or Registered Certificates of the same
Series in authorized denominations of like aggregate
Undivided Interests in the Trust, in the manner specified
in the Supplement for such Series, upon surrender of the
Bearer Certificates to be exchanged at an office or
agency of the Transfer Agent and Registrar located
outside the United States. Each Bearer Certificate
surrendered pursuant to this Section 6.3 shall have
attached thereto (or be accompanied by) all unmatured
Coupons, provided that any Bearer Certificate so
surrendered after the close of business on the Record
Date preceding the relevant Distribution Date after the
related Series Termination Date need not have attached
the Coupons relating to such Distribution Date.
Whenever any Investor Certificates of any
Series are so surrendered for exchange, the Transferor
shall execute, and the Trustee shall (unless the Transfer
Agent and Registrar is different than the Trustee, in
which case the Transfer Agent and Registrar shall)
authenticate and deliver, the Investor Certificates of
such Series which the Certificateholder making the
exchange is entitled to receive. Every Investor
Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written
instrument of transfer in a form satisfactory to the
Trustee and the Transfer Agent and Registrar duly
executed by the Certificateholder thereof or his
attorney-in-fact duly authorized in writing.
The preceding provisions of this Section 6.3
notwithstanding, the Trustee or the Transfer Agent and
Registrar, as the case may be, shall not be required to
register the transfer of or exchange any Investor
Certificate of any Series for the period from the Record
Date preceding the due date for any payment to the
Distribution Date with respect to the Investor
Certificates of such Series.
Unless otherwise provided in the related
Supplement, no service charge shall be made for any
registration of transfer or exchange of Certificates, but
the Transfer Agent and Registrar may require payment of a
sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or
exchange of Certificates.
All Investor Certificates (together with any
Coupons attached to Bearer Certificates) surrendered for
registration of transfer or exchange shall be canceled by
the Transfer Agent and Registrar and disposed of in a
manner satisfactory to the Trustee. The Trustee shall
cancel and dispose of any Global Certificate upon its
exchange in full for Definitive Certificates, but shall
not be required to destroy such Global Certificates.
Such certificate shall also state that a certificate or
certificates of each Foreign Clearing Agency to the
effect referred to in Section 6.13 was received with
respect to each portion of the Global Certificate
exchanged for Definitive Certificates.
The Transferor shall execute and deliver to the
Trustee or the Transfer Agent and Registrar, as
applicable, Bearer Certificates and Registered
Certificates in such amounts and at such times as are
necessary to enable the Trustee to fulfill its
responsibilities under this Agreement and the
Certificates.
(b) Except as provided in Section 6.9 or 7.2
or in any Supplement, in no event shall the Exchangeable
Transferor Certificate or any interest therein be
transferred, sold, exchanged, pledged, participated or
otherwise assigned hereunder, in whole or in part, unless
the Transferor shall have consented in writing to such
transfer and unless the Trustee shall have received (1)
confirmation in writing from each Rating Agency that such
transfer will not result in a lowering or withdrawal of
its then-existing rating of any Series of Investor
Certificates and (2) an Opinion of Counsel that such
transfer does not (i) adversely affect the conclusions
reached in any of the federal income tax opinions issued
in connection with the original issuance of any Series of
Investor Certificates or (ii) result in a taxable event
to the holders of any such Series.
(c) Unless otherwise provided in the related
Supplement, registration of transfer of Registered
Certificates containing a legend relating to the
restrictions on transfer of such Registered Certificates
(which legend shall be set forth in the Supplement
relating to such Investor Certificates) shall be effected
only if the conditions set forth in such related
Supplement are satisfied.
Whenever a Registered Certificate containing
the legend set forth in the related Supplement is
presented to the Transfer Agent and Registrar for
registration of transfer, the Transfer Agent and
Registrar shall promptly seek instructions from the
Servicer regarding such transfer. The Transfer Agent and
Registrar and the Trustee shall be entitled to receive
written instructions signed by an officer of the Trustee
prior to registering any such transfer or authenticating
new Registered Certificates, as the case may be. The
Servicer hereby agrees to indemnify the Transfer Agent
and Registrar and the Trustee and to hold each of them
harmless against any loss, liability or expense incurred
without negligence or bad faith on their part arising out
of or in connection with actions taken or omitted by them
in reliance on any such written instructions furnished
pursuant to this subsection 6.3(c).
(d) The Transfer Agent and Registrar will
maintain at its expense in the Borough of Manhattan, The
City of New York, an office or offices or an agency or
agencies where Investor Certificates of such Series may
be surrendered for registration of transfer or exchange.
(e) Prior to the Transfer of any portion of a
Transferor Retained Class, the Trustee shall have
received (i) an Officer's Certificate of the Transferor
that on the date of the proposed Transfer, taking into
account the certificates whose Transfer is proposed, more
than 20% (by Invested Amount and by value) of the
outstanding certificates issued by the Trust with respect
to which no Opinion of Counsel was issued that the
applicable class would be treated as debt for federal
income tax purposes (including the Transferor Certificate
and each Transferor Retained Class) shall be owned by the
Transferor and (ii) an Opinion of Counsel to the effect
that such proposed Transfer will not adversely affect the
Federal, Minnesota or Delaware income tax
characterization of any outstanding Series of Investor
Certificates or the taxability (or tax characterization)
of the Trust under Federal, Minnesota or Delaware income
tax laws. The Transferor shall provide to ▇▇▇▇▇'▇ notice
of any such Transfer and a copy of the Opinion of Counsel
described in clause (ii) above.
Section 6.4 Mutilated, Destroyed, Lost or
Stolen Certificates. If (a) any mutilated Certificate
(together, in the case of Bearer Certificates, with all
unmatured Coupons, if any, appertaining thereto) is
surrendered to the Transfer Agent and Registrar, or the
Transfer Agent and Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer
Agent and Registrar and the Trustee such security or
indemnity as may be required by them to hold each of them
and the Trust harmless, then, in the absence of notice to
the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Trustee shall (unless the
Transfer Agent and Registrar is different from the
Trustee, in which case the Transfer Agent and Registrar
shall) authenticate and deliver (in compliance with
applicable law), in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and aggregate Undivided
Interest. In connection with the issuance of any new
Certificate under this Section 6.4, the Trustee or the
Transfer Agent and Registrar may require the payment of a
sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the
Trustee and the Transfer Agent and Registrar) connected
therewith. Any duplicate Certificate issued pursuant to
this Section 6.4 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 6.5 Persons Deemed Owners. Prior to
due presentation of a Certificate for registration of
transfer, the Trustee, the Paying Agent, the Transfer
Agent and Registrar and any agent of any of them may
treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the
purpose of receiving distributions pursuant to Article V
(as described in any Supplement) and Article XII and for
all other purposes whatsoever, and neither the Trustee,
the Paying Agent, the Transfer Agent and Registrar nor
any agent of any of them shall be affected by any notice
to the contrary; provided, however, that in determining
whether the holders of Investor Certificates evidencing
the requisite Undivided Interests have given any request,
demand, authorization, direction, notice, consent or
waiver hereunder, Investor Certificates owned by the
Transferor, the Servicer or any Affiliate thereof shall
be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be
protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only
Investor Certificates which a Responsible Officer in the
Corporate Trust Office of the Trustee knows to be so
owned shall be so disregarded. Investor Certificates so
owned that have been pledged in good faith shall not be
disregarded as outstanding if the pledgee establishes to
the satisfaction of the Trustee the pledgee's right so to
act with respect to such Investor Certificates and that
the pledgee is not the Transferor, the Servicer or an
Affiliate thereof.
In the case of a Bearer Certificate, the
Trustee, the Paying Agent, the Transfer Agent and
Registrar and any agent of any of them may treat the
holder of a Bearer Certificate or Coupon as the owner of
such Bearer Certificate or Coupon for the purpose of
receiving distributions pursuant to Article V (as
described in any Supplement) and Article XII and for all
other purposes whatsoever, and neither the Trustee, the
Paying Agent, the Transfer Agent and Registrar nor any
agent of any of them shall be affected by any notice to
the contrary. Certificates so owned that have been
pledged in good faith shall not be disregarded and may be
regarded as outstanding, if the pledgee establishes to
the satisfaction of the Trustee the pledgee's right so to
act with respect to such Investor Certificates and that
the pledgee is not the Transferor, the Servicer or an
Affiliate thereof.
Section 6.6 Appointment of Paying Agent.
(a) The Paying Agent shall make distributions
to Investor Certificateholders from the appropriate
account or accounts maintained for the benefit of
Certificateholders as specified in this Agreement or the
related Supplement for any Series pursuant to Articles IV
and V hereof. Any Paying Agent shall have the revocable
power to withdraw funds from such appropriate account or
accounts for the purpose of making distributions referred
to above. The Trustee (or the Servicer if the Trustee is
the Paying Agent) may revoke such power and remove the
Paying Agent, if the Trustee (or the Servicer if the
Trustee is the Paying Agent) determines in its sole
discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement in any
material respect or for other good cause. The Paying
Agent, unless the Supplement with respect to any Series
states otherwise, shall initially be The Bank of New
York. The Bank of New York shall be permitted to resign
as Paying Agent upon 30 days' written notice to the
Servicer. Upon the resignation of the Paying Agent, if
the Paying Agent was not the Trustee, the Trustee shall
be the successor Paying Agent unless and until another
successor has been appointed as Paying Agent. In the
event that the Trustee, shall no longer be the Paying
Agent, the Transferor shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company).
Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires
otherwise.
If specified in the related Supplement for any
Series, so long as the Investor Certificates of such
Series are outstanding and the Paying Agent is not
located in New York City, the Transferor shall maintain a
co-paying agent in New York City (for Registered
Certificates only) or any other city designated in such
Supplement.
(b) The Trustee shall cause each Paying Agent
(other than itself) to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with
the Trustee that such Paying Agent will hold all sums, if
any, held by it for payment to the Certificateholders in
trust for the benefit of the Certificateholders entitled
thereto and waive all rights of set off the Paying Agent
may have against any sums held by it until such sums
shall be paid to such Certificateholders and shall agree,
and if the Trustee is the Paying Agent it hereby agrees,
that it shall comply with all requirements of the
Internal Revenue Code regarding the withholding by the
Trustee of payments in respect of federal income taxes
due from Certificate Owners.
Section 6.7 Access to List of Certificate-
holders' Names and Addresses. The Trustee will furnish
or cause to be furnished by the Transfer Agent and
Registrar to the Servicer or the Paying Agent, within
five Business Days after receipt by the Trustee of a
request therefor from the Servicer or the Paying Agent,
respectively, in writing, a list in such form as the
Servicer or the Paying Agent may reasonably require, of
the names and addresses of the Investor Certificate-
holders as of the most recent Record Date for pay-
ment of distributions to Investor Certificateholders.
Unless otherwise provided in the related Supplement,
holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 25% of the Invested
Amount of the Investor Certificates of any Series (the
"Applicants") may apply in writing to the Trustee, and if
such application states that the Applicants desire to
communicate with other Investor Certificateholders of any
Series with respect to their rights under this Agreement
or under the Investor Certificates and is accompanied by
a copy of the communication which such Applicants propose
to transmit, then the Trustee, after having been
adequately indemnified by such Applicants for its costs
and expenses, shall afford or shall cause the Transfer
Agent and Registrar to afford such Applicants access
during normal business hours to the most recent list of
Certificateholders held by the Trustee and shall give the
Servicer notice that such request has been made, within
five Business Days after the receipt of such application.
Such list shall be as of a date no more than 45 days
prior to the date of receipt of such Applicants' request.
Every Certificateholder, by receiving and holding a
Certificate, agrees with the Trustee that neither the
Trustee, the Transfer Agent and Registrar, nor any of
their respective agents shall be held accountable by
reason of the disclosure of any such information as to
the names and addresses of the Certificateholders
hereunder, regardless of the source from which such
information was obtained.
Section 6.8 Authenticating Agent.
(a) The Trustee may appoint one or more
authenticating agents (each, an "Authenticating Agent")
with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in
authenticating the Certificates in connection with the
issuance, delivery, registration of transfer, exchange or
repayment of the Certificates. The Trustee will appoint
any Transfer Agent and Registrar to be an Authentication
Agent. Whenever reference is made in this Agreement to
the authentication of Certificates by the Trustee or the
Trustee's certificate of authentication, such reference
shall be deemed to include authentication on behalf of
the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be
acceptable to the Transferor. The Trustee hereby
initially appoints The Bank of New York as its
Authenticating Agent.
(b) Any institution succeeding to the
corporate agency business of an Authenticating Agent
shall continue to be an Authenticating Agent without the
execution or filing of any paper or any further act on
the part of the Trustee or such Authenticating Agent.
(c) An Authenticating Agent may at any time
resign by giving written notice of resignation to the
Trustee and to the Transferor. The Trustee may at any
time terminate the agency of an Authenticating Agent by
giving notice of termination to such Authenticating Agent
and to the Transferor. Upon receiving such a notice of
resignation or upon such a termination, or in case at any
time an Authenticating Agent shall cease to be acceptable
to the Trustee or the Transferor, the Trustee promptly
may appoint a successor Authenticating Agent. Any
successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent
shall be appointed unless acceptable to the Trustee and
the Transferor.
(d) The Servicer agrees to pay each
Authenticating Agent from time to time reasonable
compensation for its services under this Section 6.8.
(e) The provisions of Sections 11.1, 11.2 and
11.3 shall be applicable to any Authenticating Agent.
(f) Pursuant to an appointment made under this
Section 6.8, the Certificates may have endorsed thereon,
in lieu of the Trustee's certificate of authentication,
an alternate certificate of authentication in
substantially the following form:
Trustee's Certificate of Authentication
This is one of the certificates described in
the Pooling and Servicing Agreement.
--------------------------
as Authenticating Agent
for the Trustee,
By:-----------------------
Authorized Signatory
Dated:
Section 6.9 Tender of Exchangeable Transferor
Certificate.
(a) Upon any Exchange, the Transferor shall
deliver to the Trustee for authentication under Section
6.2, one or more new Series of Investor Certificates.
Any such Series of Investor Certificates shall be
substantially in the form specified in the related
Supplement and shall bear, upon its face, the designation
for such Series to which it belongs, as selected by the
Transferor. Except as specified in any Supplement for a
related Series, all Investor Certificates of any Series
shall rank pari passu and be equally and ratably entitled
as provided herein to the benefits hereof (except that
the Enhancement provided for any Series shall not be
available for any other Series) without preference,
priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance
with the terms and provisions of this Agreement and the
related Supplement.
(b) The Holder of the Exchangeable Transferor
Certificate may (i) tender the Exchangeable Transferor
Certificate to the Trustee in exchange for (A) one or
more newly issued Series of Investor Certificates or,
with respect to any pre-funded Series, interests therein
and (B) a reissued Exchangeable Transferor Certificate,
(ii) request the Trustee to issue to it one or more
Classes of any newly issued Series of Investor
Certificates which upon payment by the purchaser thereof
of the Initial Invested Amount of such Certificates to a
Defeasance Account, will represent an interest in the
Trust equal to such Initial Invested Amount (an "Unfunded
Certificate") or (iii) take a combination of the actions
specified in clauses (i) and (ii) provided that the sum
of the amount of Transferor Interest which is tendered
under clause (i) and the amount to be paid to the
Defeasance Account under clause (ii) equals the Initial
Invested Amount of the Investor Certificates delivered to
the Holder of the Exchangeable Transferor Certificate
(any such event under clauses (i), (ii) or (iii), a
"Transferor Exchange"). In addition, to the extent
permitted for any Series of Investor Certificates as
specified in the related Supplement, the Investor
Certificateholders of such Series may tender their
Investor Certificates and the Holder of the Exchangeable
Transferor Certificate may tender the Exchangeable
Transferor Certificate to the Trustee pursuant to the
terms and conditions set forth in such Supplement in
exchange for (i) one or more newly issued Series of
Investor Certificates and (ii) a reissued Exchangeable
Transferor Certificate (an "Investor Exchange").
Notwithstanding anything to the contrary herein, the
Transferor shall not be permitted to deposit money into
any Defeasance Account. The Transferor Exchange and
Investor Exchange are referred to collectively herein as
an "Exchange." The Holder of the Exchangeable Transferor
Certificate may perform an Exchange by notifying the
Trustee, in writing, at least five Business Days in
advance (an "Exchange Notice") of the date upon which the
Exchange is to occur (an "Exchange Date"). Any Exchange
Notice shall state the designation of any Series to be
issued on the Exchange Date and, with respect to each
such Class or Series: (a) its Initial Invested Amount
(or the method for calculating such Initial Invested
Amount), which at any time may not be greater than the
current principal amount of the Exchangeable Transferor
Certificate at such time (or in the case of an Investor
Exchange, the sum of the Invested Amount of any Class or
Series of Investor Certificates to be exchanged plus the
current principal amount of the Exchangeable Transferor
Certificate) taking into account any Receivables
transferred to the Trust simultaneous with such Exchange,
(b) its Certificate Rate (or the method for allocating
interest payments or other cash flows to such Series), if
any, and (c) the Enhancement Provider, if any, with
respect to such Series. On the Exchange Date, the
Trustee shall authenticate and deliver any such Class or
Classes of Series of Investor Certificates only upon
delivery to it of the following: (a) a Supplement
satisfying the criteria set forth in subsection 6.9(c)
and in form reasonably satisfactory to the Trustee
executed by the Transferor and the Servicer and
specifying the Principal Terms of such Series, (b) the
applicable Enhancement, if any, (c) the agreement, if
any, pursuant to which the Enhancement Provider agrees to
provide the Enhancement, if any, (d) an Opinion of
Counsel to the effect that (i) any Class of the newly
issued Series of Investor Certificates sold to third
parties will be characterized as either indebtedness or
partnership interests for Federal and applicable state
income tax purposes or (ii) that the issuance of the
newly issued Series of Investor Certificates will not
adversely affect the Federal, Minnesota or Delaware
income tax characterization of any outstanding Series of
Investor Certificates or the taxability of the Trust
under Federal, Minnesota or Delaware income tax laws, (e)
written confirmation from each Rating Agency that the
Exchange will not result in such Rating Agency's reducing
or withdrawing its rating on any then outstanding Series
as to which it is a Rating Agency, (f) an Officer's
Certificate of the Transferor, that on the Exchange Date
(i) after giving effect to such Exchange, the Transferor
Interest would be at least equal to the Minimum
Transferor Interest and (ii) the Retained Interest would
be at least equal to the Minimum Retained Interest, (g)
the existing Exchangeable Transferor Certificate or
applicable Investor Certificates, as the case may be and
(h) such other documents, certificates and Opinions of
Counsel as may be required by the applicable Supplement.
Upon satisfaction of such conditions, the Trustee shall
cancel the existing Exchangeable Transferor Certificate
or applicable Investor Certificates, as the case may be,
and issue, as provided above, such Series of Investor
Certificates and a new Exchangeable Transferor
Certificate, dated the Exchange Date. There is no limit
to the number of Exchanges that may be performed under
this Agreement.
(c) In conjunction with an Exchange, the
parties hereto shall execute a Supplement, which shall
specify the relevant terms with respect to any newly
issued Series of Investor Certificates, which may include
without limitation: (i) its name or designation, (ii)
the Initial Invested Amount or the method of calculating
the Initial Invested Amount, (iii) the Certificate Rate
(or formula for the determination thereof), (iv) the
Closing Date, (v) the rating agency or agencies rating
such Series, (vi) the name of the Clearing Agency, if
any, (vii) the rights of the Holder of the Exchangeable
Transferor Certificate that have been transferred to the
Holders of such Series pursuant to such Exchange
(including any rights to allocations of Collections of
Imputed Yield Receivables and Principal Receivables),
(viii) the interest payment date or dates and the date or
dates from which interest shall accrue, (ix) the method
of allocating Principal Collections for such Series and
the method by which the principal amount of Investor
Certificates of such Series shall amortize or accrete and
the method for allocating Imputed Yield Collections and
Defaulted Receivables, (x) the names of any accounts to
be used by such Series and the terms governing the
operation of any such account, (xi) the Series Servicing
Fee Percentage, (xii) the Minimum Transferor Interest,
(xiii) the Series Termination Date, (xiv) the terms of
any Enhancement with respect to such Series, (xv) the
Enhancement Provider, if applicable, (xvi) the base rate
applicable to such Series, (xvii) the terms on which the
Certificates of such Series may be repurchased or
remarketed to other investors, (xviii) any deposit into
any account provided for such Series, (xix) the number of
Classes of such Series and, if more than one Class, the
rights and priorities of each such Class, (xx) whether
any fees will be included in the funds available to be
paid for such Series, (xxi) the subordination of such
Series to any other Series, (xxii) the Pool Factor,
(xxiii) the Minimum Aggregate Principal Receivables,
(xxiv) whether such Series will be a part of a group or
subject to being paired with any other Series, (xxv)
whether such Series will be pre-funded, and (xxvi) any
other relevant terms of such Series (including whether or
not such Series will be pledged as collateral for an
issuance of any other securities, including commercial
paper) (all such terms, the "Principal Terms" of such
Series). The terms of such Supplement may modify or
amend the terms of this Agreement solely as applied to
such new Series. If on the date of the issuance of such
Series there is issued and outstanding one or more Series
of Investor Certificates and no Series of Investor
Certificates is currently rated by a Rating Agency, then
as a condition to such Exchange a nationally recognized
investment banking firm or commercial bank shall also
deliver to the Trustee an officer's certificate stating,
in substance, that the Exchange will not have an adverse
effect on the timing or distribution of payments to such
other Series of Investor Certificates then issued and
outstanding.
(d) The Transferor may surrender the
Exchangeable Transferor Certificate to the Trustee in
exchange for a newly issued Exchangeable Transferor
Certificate and a second certificate (a "Supplemental
Certificate"), the terms of which shall be defined in a
supplement to this Agreement (which supplement shall be
subject to Section 13.01 hereof to the extent that it
amends any of the terms of this Agreement), to be
delivered to or upon the order of the Transferor (or a
Person designated by the Transferor, in the case of the
transfer or exchange thereof, as provided below), upon
satisfaction of the following conditions: (i) following
such exchange, the Transferor Interest (less any interest
therein represented by any Supplemental Certificates) in
the Principal Receivables in the Trust equals or exceeds
the greater of the Minimum Transferor Interest and the
Minimum Retained Interest following such exchange and
(ii) the Trustee received prior to such exchange (A) a
letter from the Rating Agency stating that the then
current ratings on the Investor Certificates of each
rated class of each Series then outstanding will not be
reduced or withdrawn because of the issuance of such
Supplemental Certificate and (B) an Opinion of Counsel to
the effect that (x) such Supplemental Certificate will be
characterized as either indebtedness or a partnership
interest for Federal and applicable state income tax
purposes or (y) that such Supplemental Certificate will
not adversely affect the Federal, Minnesota or Delaware
income tax characterization of any outstanding Series of
Investor Certificates or the taxability of the Trust
under Federal, Minnesota or Delaware income tax laws.
Section 6.10 Book-Entry Certificates. Unless
otherwise provided in any related Supplement, the
Investor Certificates, upon original issuance, shall be
issued in the form of typewritten Certificates
representing the Book-Entry Certificates, to be delivered
to the depositary specified in such Supplement (the
"Depositary") which shall be the Clearing Agency or
Foreign Clearing Agency, by or on behalf of such Series.
The Investor Certificates of each Series shall, unless
otherwise provided in the related Supplement, initially
be registered on the Certificate Register in the name of
the nominee of the Clearing Agency or Foreign Clearing
Agency. No Certificate Owner will receive a definitive
certificate representing such Certificate Owner's
interest in the related Series of Investor Certificates,
except as provided in Section 6.12. Unless and until
definitive, fully registered Investor Certificates of any
Series ("Definitive Certificates") have been issued to
Certificate Owners pursuant to Section 6.12:
(i) the provisions of this Section 6.10
shall be in full force and effect with respect to
each such Series;
(ii) the Transferor, the Servicer, the
Paying Agent, the Transfer Agent and Registrar and
the Trustee may deal with the Clearing Agency and
the Clearing Agency Participants for all purposes
(including the making of distributions on the
Investor Certificates of each such Series) as the
authorized representatives of the Certificate
Owners;
(iii) to the extent that the provisions
of this Section 6.10 conflict with any other
provisions of this Agreement, the provisions of this
Section 6.10 shall control with respect to each such
Series; and
(iv) the rights of Certificate Owners of
Investor Certificates of each such Series shall be
exercised only through the Clearing Agency or
Foreign Clearing Agency and the applicable Clearing
Agency Participants and shall be limited to those
established by law and agreements between such
Certificate Owners and the Clearing Agency or
Foreign Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Depositary Agreement
applicable to a Series, unless and until Definitive
Certificates of such Series are issued pursuant to
Section 6.12, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions
of principal and interest on the Investor
Certificates to such Clearing Agency Participants.
Section 6.11 Notices to Clearing Agency.
Whenever notice or other communication to the
Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been
issued to Certificate Owners pursuant to Section 6.12,
the Trustee shall give all such notices and
communications specified herein to be given to Holders of
the Investor Certificates to the Clearing Agency or
Foreign Clearing Agency.
Section 6.12 Definitive Certificates. If (i)
(A) the Transferor advises the Trustee in writing that
the Clearing Agency or Foreign Clearing Agency is no
longer willing or able to discharge properly its
responsibilities under the applicable Depositary
Agreement, and (B) the Transferor is unable to locate a
qualified successor, (ii) the Transferor, at its option,
advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing
Agency or Foreign Clearing Agency with respect to any
Series of Certificates or (iii) after the occurrence of a
Servicer Default, Certificate Owners of a Series
representing beneficial interests aggregating not less
than 50% of the Invested Amount of such Series advise the
Trustee and the applicable Clearing Agency or Foreign
Clearing Agency through the applicable Clearing Agency
Participants in writing that the continuation of a book-
entry system through the applicable Clearing Agency or
Foreign Clearing Agency is no longer in the best
interests of the Certificate Owners, the Trustee shall
notify all Certificate Owners of such Series, through the
applicable Clearing Agency Participants, of the
occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners of such
Series requesting the same. Upon surrender to the
Trustee of the Investor Certificates of such Series by
the applicable Clearing Agency or Foreign Clearing Agency
for registration, accompanied by registration
instructions from the applicable Clearing Agency or
Foreign Clearing Agency, the Trustee shall issue the
Definitive Certificates of such Series. Neither the
Transferor nor the Trustee shall be liable for any delay
in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive
Certificates of such Series, all references herein to
obligations imposed upon or to be performed by the
applicable Clearing Agency or Foreign Clearing Agency
shall be deemed to be imposed upon and performed by the
Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize
the Holders of the Definitive Certificates of such Series
as Certificateholders of such Series hereunder.
Section 6.13 Global Certificate; Euro-
Certificate Exchange Date. If specified in the related
Supplement for any Series, the Investor Certificates may
be initially issued in the form of a single temporary
Global Certificate (the "Global Certificate") in bearer
form, without interest coupons, in the denomination of
the Initial Invested Amount of such Series and
substantially in the form attached to the related
Supplement. Unless otherwise specified in the related
Supplement, the provisions of this Section 6.13 shall
apply to such Global Certificate. The Global Certificate
will be authenticated by the Trustee upon the same
conditions, in substantially the same manner and with the
same effect as the Definitive Certificates. The Global
Certificate may be exchanged in the manner described in
the related Supplement for Registered Certificates or
Bearer Certificates in definitive form.
Section 6.14 Meetings of Certificateholders.
To the extent provided by the Supplement for
any Series issued in whole or in part in Bearer
Certificates, the Servicer or the Trustee may at any time
call a meeting of the Certificateholders of such Series,
to be held at such time and at such place as the Servicer
or the Trustee, as the case may be, shall determine, for
the purpose of approving a modification of or amendment
to, or obtaining a waiver of, any covenant or condition
set forth in this Agreement with respect to such Series
or in the Certificates of such Series, subject to Section
13.1 of this Agreement.
[End of Article VI]
ARTICLE VII
OTHER MATTERS RELATING TO THE TRANSFEROR
Section 7.1 Liability of the Transferor. The
Transferor shall be liable in accordance herewith solely
to the extent of the obligations specifically undertaken
by the Transferor.
Section 7.2 Merger or Consolidation of, or
Assumption of the Obligations of, the Transferor.
(a) The Transferor shall not consolidate with
or merge into any other business entity or convey or
transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the business entity formed by such
consolidation or into which the Transferor is merged
or the Person which acquires by conveyance or
transfer the properties and assets of the Transferor
substantially as an entirety shall be, if the
Transferor is not the surviving entity, organized
and existing under the laws of the United States of
America or any State or the District of Columbia and
shall expressly assume, by an agreement supplemental
hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the performance of
every covenant and obligation of the Transferor, as
applicable hereunder and shall benefit from all the
rights granted to the Transferor, as applicable
hereunder. To the extent that any right, covenant
or obligation of the Transferor, as applicable
hereunder, is inapplicable to the successor entity,
such successor entity shall be subject to such
covenant or obligation, or benefit from such right,
as would apply, to the extent practicable, to such
successor entity. In furtherance hereof, in
applying this Section 7.2 to a successor entity,
Section 9.2 hereof shall be applied by reference to
events of involuntary liquidation, receivership or
conservatorship applicable to such successor entity
as shall be set forth in the officer's certificate
described in subsection 7.2(a)(ii);
(ii) the Transferor shall have delivered
to the Trustee an Officer's Certificate signed by a
Vice President (or any more senior officer) of the
Transferor stating that such consolidation, merger,
conveyance or transfer and such supplemental
agreement comply with this Section 7.2 and that all
conditions precedent herein provided for relating to
such transaction have been complied with and an
Opinion of Counsel that such supplemental agreement
is legal, valid and binding and that the entity
surviving such consolidation, conveyance or transfer
is organized and existing under the laws of the
United States of America or any State or the
District of Columbia and, subject to customary
limitations and qualifications, such entity will not
be substantively consolidated with Fingerhut, FCI,
any Originator or the Servicer;
(iii) the Transferor shall have delivered
notice to the Rating Agency of such consolidation,
merger, conveyance or transfer and the Rating Agency
shall have provided written confirmation that such
consolidation, merger, conveyance or transfer will
not result in the Rating Agency reducing or
withdrawing its rating on any then outstanding
Series as to which it is a Rating Agency;
(iv) the successor entity shall be a
special purpose bankruptcy remote entity; and
(v) if the Transferor is not the
surviving entity, the surviving entity shall file
new UCC-1 financing statements with respect to the
interest of the Trust in the Receivables.
(b) The obligations of the Transferor
hereunder shall not be assignable nor shall any Person
succeed to the obligations of the Transferor hereunder
except for mergers, consolidations, assumptions or
transfers in accordance with the provisions of the
foregoing paragraph.
Section 7.3 Limitation on Liability. The
directors, officers, employees or agents of the
Transferor shall not be under any liability to the Trust,
the Trustee, the Certificateholders, any Enhancement
Provider or any other Person hereunder or pursuant to any
document delivered hereunder, it being expressly
understood that all such liability is expressly waived
and released as a condition of, and as consideration for,
the execution of this Agreement and any Supplement and
the issuance of the Certificates; provided, however, that
this provision shall not protect the officers, directors,
employees, or agents of the Transferor against any
liability which would otherwise be imposed upon them by
reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder.
Except as provided in Sections 7.1 and 7.4 with respect
to the Trust and the Trustee and its officers, directors,
employees and agents, the Transferor shall not be under
any liability to the Trust, the Trustee, its officers,
directors, employees and agents, the Certificateholders,
any Enhancement Provider or any other Person for any
action taken or for refraining from the taking of any
action in its capacity as Transferor pursuant to this
Agreement or any Supplement whether arising from express
or implied duties under this Agreement or any Supplement
or otherwise; provided, however, that this provision
shall not protect the Transferor against any liability
which would otherwise be imposed upon it by reason of
willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard
of obligations and duties hereunder. The Transferor and
any director, officer, employee or agent may rely in good
faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any
matters arising hereunder.
Section 7.4 Liabilities. Notwithstanding
Section 7.3, by entering into this Agreement, the
Transferor agrees to be liable, directly to the injured
party, for the entire amount of any losses, claims,
damages, penalties or liabilities (other than those
incurred by a Certificateholder in the capacity of an
investor in the Investor Certificates as a result of the
performance of the Receivables, market fluctuations, a
shortfall or failure by the Enhancement Provider to make
payment under any Enhancement or other similar market or
investment risks associated with ownership of the
Investor Certificates) arising out of or based on the
arrangement created by this Agreement and the actions of
the Servicer taken pursuant hereto as though this
Agreement created a partnership under the Delaware
Uniform Partnership Law, in which the Transferor is a
general partner. The Transferor agrees to pay, indemnify
and hold harmless each Investor Certificateholder against
and from any and all such loses, claims, damages and
liabilities (other than those incurred by a
Certificateholder in the capacity of an investor in the
Investor Certificates as a result of the performance of
the Receivables, market fluctuations, a shortfall or
failure by an Enhancement Provider to make payment under
an Enhancement or other similar market or investment
risks) except to the extent that they arise from any
action by such Investor Certificateholder. Subject to
Sections 8.3 and 8.4, in the event of a Service Transfer,
the Successor Servicer will indemnify and hold harmless
the Transferor for any losses, claims, damages and
liabilities of the Transferor as described in this
Section 7.4 arising from the actions or omissions of such
Successor Servicer.
[End of Article VII]
ARTICLE VIII
OTHER MATTERS RELATING
TO THE SERVICER
Section 8.1 Liability of the Servicer. The
Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by
the Servicer in such capacity herein.
Section 8.2 Merger or Consolidation of, or
Assumption of the Obligations of, the Servicer. Subject
to subsection 3.1(a), the Servicer shall not consolidate
with or merge into any other corporation or convey or
transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the corporation formed by such
consolidation or into which the Servicer is merged
or the Person which acquires by conveyance or
transfer the properties and assets of the Servicer
substantially as an entirety shall be a corporation
organized and existing under the laws of the United
States of America or any State or the District of
Columbia and, if the Servicer is not the surviving
entity, shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the
Trustee in form satisfactory to the Trustee, the
performance of every covenant and obligation of the
Servicer hereunder (to the extent that any right,
covenant or obligation of the Servicer, as
applicable hereunder, is inapplicable to the
successor entity, such successor entity shall be
subject to such covenant or obligation, or benefit
from such right, as would apply, to the extent
practicable, to such successor entity); and
(ii) the Servicer shall have delivered to
the Trustee an Officer's Certificate that such
consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section
8.2 and that all conditions precedent herein
provided for relating to such transaction have been
complied with and an Opinion of Counsel that such
supplemental agreement is legal, valid and binding
with respect to the Servicer and that the entity
surviving such consolidation, conveyance or transfer
is organized and existing under the laws of the
United States of America or any State or the
District of Columbia; and
(iii) the Servicer shall have delivered
notice to the Rating Agency of such consolidation,
merger, conveyance or transfer.
Section 8.3 Limitation on Liability of the
Servicer and Others. The directors, officers, employees
or agents of the Servicer shall not be under any
liability to the Trust, the Trustee, the
Certificateholders, any Enhancement Provider or any other
Person hereunder or pursuant to any document delivered
hereunder, it being expressly understood that all such
liability is expressly waived and released as a condition
of, and as consideration for, the execution of this
Agreement and any Supplement and the issuance of the
Certificates; provided, however, that this provision
shall not protect the directors, officers, employees and
agents of the Servicer against any liability which would
otherwise be imposed upon them by reason of willful
misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard
of obligations and duties hereunder. Except as provided
in Sections 8.1 and 8.4 with respect to the Trustee, its
officers, directors, employees and agents, the Servicer
shall not be under any liability to the Trust, the
Trustee, its officers, directors, employees and agents,
the Certificateholders, any Enhancement Provider or any
other Person for any action taken or for refraining from
the taking of any action in its capacity as Servicer
pursuant to this Agreement or any Supplement; provided,
however, that this provision shall not protect the
Servicer against any liability which would otherwise be
imposed upon it by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or
by reason of its reckless disregard of its obligations
and duties hereunder or under any Supplement. The
Servicer may rely in good faith on any document of any
kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The
Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not
incidental to its duties to service the Receivables in
accordance with this Agreement which in its reasonable
opinion may involve it in any expense or liability.
Section 8.4 Servicer Indemnification of the
Transferor, the Trust and the Trustee. Subject to the
limitations on liability set forth in Section 8.3, the
Servicer shall indemnify and hold harmless the
Transferor, the Trustee and the Trust (each, an
"Indemnified Party") from and against any loss,
liability, reasonable expense, damage or injury,
including, but not limited to, any judgment, award,
settlement, reasonable attorneys' fees and other costs or
expenses incurred in connection with the defense of any
actual or threatened action, proceeding or claim,
suffered or sustained by reason of any acts or omissions
or alleged acts or omissions of the Servicer with respect
to activities of the Trust or the Trustee for which the
Servicer is responsible pursuant to this Agreement;
provided, however, that the Servicer shall not indemnify
or hold harmless an Indemnified Party if such acts,
omissions or alleged acts or omissions constitute or are
caused by fraud, gross negligence, or willful misconduct
by such Indemnified Party (or any of such Indemnified
Party's officers, directors, employees or agents) or the
Investor Certificateholders; provided, further, that the
Servicer shall not indemnify or hold harmless the Trust,
the Investor Certificateholders or the Certificate Owners
for any losses, liabilities, expenses, damages or
injuries suffered or sustained by any of them with
respect to any action taken by the Trustee at the request
of the Investor Certificateholders; provided further,
that the Servicer shall not indemnify or hold harmless
the Trust, the Investor Certificateholders or the
Certificate Owners as to any losses, liabilities,
expenses, damages or injuries suffered or sustained by
any of them in their capacities as investors, including
without limitation losses incurred as a result of
Defaulted Receivables; provided further, that the
Servicer shall not indemnify or hold harmless the
Transferor, the Trust, the Investor Certificateholders or
the Certificate Owners for any losses, liabilities,
expenses, damages or injuries suffered or sustained by
the Trust, the Investor Certificateholders or the
Certificate Owners arising under any tax law, including
without limitation, any federal, state, local or foreign
income or franchise taxes or any other tax imposed on or
measured by income (or any interest, penalties or
additions with respect thereto or arising from a failure
to comply therewith) required to be paid by the Trust,
the Investor Certificateholders or the Certificate Owners
in connection herewith to any taxing authority; and,
provided, further, that in no event will the Servicer be
liable, directly or indirectly, for or in respect of any
indebtedness or obligation evidenced or created by any
Certificate, recourse as to which shall be limited solely
to the assets of the Trust allocated for the payment
thereof as provided in this Agreement and any applicable
Supplement. Any such indemnification shall not be
payable from the assets of the Trust, but the Servicer
shall be subrogated to the rights of the Trust with
respect to the foregoing matters if and to the extent
that the Servicer shall have indemnified the Trust with
respect thereto. The Servicer shall indemnify and hold
harmless the Trustee and its officers, directors,
employees or agents from and against any loss, liability,
reasonable expense, damage or injury suffered or
sustained by reason of the acceptance of this Trust by
the Trustee, the issuance by the Trust of the
Certificates or any of the other matters contemplated
herein or in any Supplement; provided, however, that the
Servicer shall not indemnify the Trustee or its officers,
directors, employees or agents for any loss, liability,
expense, damage or injury caused by the fraud, negligence
or willful misconduct of any of them. The provisions of
this indemnity shall run directly to and be enforceable
by an injured party subject to the limitations hereof and
shall survive the resignation or removal of the Servicer,
the resignation or removal of the Trustee and/or the
termination of the Trust and shall survive the
termination of the Agreement.
Section 8.5 The Servicer Not to Resign.
Subject to subsection 3.1(a), the Servicer shall not
resign from the obligations and duties hereby imposed on
it except upon determination that (i) the performance of
its duties hereunder is no longer permissible under
applicable law and (ii) there is no reasonable action
which the Servicer could take to make the performance of
its duties hereunder permissible under applicable law.
Any such determination permitting the resignation of the
Servicer shall be evidenced as to clause (i) above by an
Opinion of Counsel to such effect delivered to the
Trustee. No such resignation shall become effective
until the Trustee or a Successor Servicer shall have
assumed the responsibilities and obligations of the
Servicer in accordance with Section 10.2 hereof. If the
Trustee is unable within 120 days of the date of delivery
to it of such Opinion of Counsel to appoint a Successor
Servicer, the Trustee shall serve as Successor Servicer
hereunder (but shall have continued authority to appoint
another Person as Successor Servicer).
Section 8.6 Access to Certain Documentation
and Information Regarding the Receivables. The Servicer
shall provide to the Trustee and its agents (who shall be
reasonably acceptable to the Servicer) access to the
documentation regarding the Receivables in such cases
where the Trustee is required in connection with the
enforcement of the rights of the Investor
Certificateholders, or by applicable statutes or
regulations, to review such documentation, such access
being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours,
(iii) subject to the Servicer's normal security and
confidentiality procedures and (iv) at offices designated
by the Servicer. Nothing in this Section 8.6 shall
derogate from the obligation of the Transferor, the
Trustee or the Servicer to observe any applicable law
prohibiting disclosure of information regarding the
Obligors and the failure of the Servicer to provide
access as provided in this Section 8.6 as a result of
such obligations shall not constitute a breach of this
Section 8.6.
Section 8.7 Delegation of Duties. In the
ordinary course of business, the Servicer may at any time
delegate any duties hereunder to any Person who agrees to
conduct such duties in accordance with the Credit and
Collection Policies. Any such delegations shall not
relieve the Servicer of its liability and responsibility
with respect to such duties, and shall not constitute a
resignation within the meaning of Section 8.5 hereof and
the Servicer will remain jointly and severally liable
with such Person for any amounts which would otherwise be
payable pursuant to this Article VIII as if the Servicer
had performed such duty; provided, however, that in the
case of any significant delegation to a Person other than
an Affiliate of FNB (i) written notice shall be given to
the Trustee and to each Rating Agency of such delegation,
(ii) ▇▇▇▇▇'▇ shall have notified the Transferor and the
Trustee in writing that such delegation will not result
in the lowering or withdrawal of its then existing rating
of any Series or Class of Investor Certificates and (iii)
the Transferor shall not have received written notice
from Standard & Poor's that such delegation would result
in the lowering or withdrawal of its then existing rating
of any Series or Class of Investor Certificates.
[End of Article VIII]
ARTICLE IX
PAY OUT EVENTS
Section 9.1 Pay Out Events. If any one of the
following events (each, a "Trust Pay Out Event") shall
occur:
(a) the Transferor or Fingerhut shall consent
to the appointment of a bankruptcy trustee or receiver or
liquidator in any bankruptcy proceeding or any other
insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to
all or substantially all of its property; or a decree or
order of a court or agency or supervisory authority
having jurisdiction in the premises for the appointment
of a bankruptcy trustee or receiver or liquidator in any
bankruptcy proceeding or any other insolvency,
readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up
or liquidation of its affairs, shall have been entered
against the Transferor, or Fingerhut; or the Transferor,
or Fingerhut shall admit in writing its inability to pay
its debts generally as they become due, file a petition
to take advantage of any applicable insolvency or
reorganization statute including the U.S. bankruptcy
code, make an assignment for the benefit of its creditors
or voluntarily suspend payment of its obligations; or the
Transferor shall become unable for any reason to transfer
Receivables to the Trust in accordance with the
provisions of this Agreement; or
(b) the Trust shall become subject to
regulation by the Securities and Exchange Commission as
an "investment company" within the meaning of the
Investment Company Act;
then a Pay Out Event with respect to all Series of
Certificates shall occur without any notice or other
action on the part of the Trustee or the Investor
Certificateholders immediately upon the occurrence of
such event. The Trustee shall provide notice of a Pay
Out Event in a prompt manner to each Rating Agency.
Section 9.2 Additional Rights Upon the
Occurrence of Certain Events.
(a) If (x) the Transferor shall consent to the
appointment of a bankruptcy trustee or receiver or
liquidator for the winding-up or liquidation of its
affairs, or a decree or order of a court or agency or
supervisory authority having jurisdiction in the premises
for the appointment of a bankruptcy trustee or receiver
or liquidator for the winding-up or liquidation of its
affairs shall have been entered against the Transferor
(an "Insolvency Event"), on the day of such Insolvency
Event (the "Appointment Day") or (y) the Retained
Percentage shall at any time be equal to or less than 2%
(a "Trigger Event"), the following actions shall be taken
and processes begun:
(i) If an Insolvency Event shall have
occurred, the Transferor shall immediately cease to
transfer Receivables to the Trust and shall promptly give
written notice to the Trustee of such Insolvency Event.
Notwithstanding any cessation of the transfer to the
Trust of additional Receivables, Collections with respect
thereto shall continue to be allocated and paid in
accordance with Article IV.
(ii) If an Insolvency Event or a Trigger Event
shall have occurred this Agreement and the Trust shall be
deemed to have terminated, subject to the liquidation,
winding-up and dissolution procedures described below;
provided, however, that within 15 days of the date of
written notice to the Trustee, the Trustee shall (i)
publish a notice in an Authorized Newspaper that an
Insolvency Event or a Trigger Event has occurred, that
the Trust has terminated, and that the Trustee intends to
sell, dispose of or otherwise liquidate the Receivables
pursuant to this Agreement in a commercially reasonable
manner and on commercially reasonable terms, which shall
include the solicitation of competitive bids (a
"Disposition"), and (ii) send written notice to the
Investor Certificateholders describing the provisions of
this Section 9.2 and requesting each Investor
Certificateholder to advise the Trustee in writing that
it elects one of the following options: (A) the Investor
Certificateholder wishes the Trustee to instruct the
Servicer not to effectuate a Disposition, or (B) the
Investor Certificateholder refuses to advise the Trustee
as to the specific action the Trustee shall instruct the
Servicer to take or (C) the Investor Certificateholder
wishes the Servicer to effect a Disposition. If after 90
days from the day notice pursuant to clause (i) above is
first published (the "Publication Date"), the Trustee
shall not have received the written instruction described
in clause (A) above from Holders of Investor Certificates
representing Undivided Interests aggregating in excess of
50% of the related Invested Amount of each Series (or, in
the case of a Series having more than one Class, each
Class of such Series) and the holders of any Supplemental
Certificates or any other interest in the Exchangeable
Transferor Certificate other than the Transferor as
provided in Section 6.3(b) for each Series, a "Holders'
Majority"), the Trustee shall instruct the Servicer to
effectuate a Disposition, and the Servicer shall proceed
to consummate a Disposition. If, however, with respect
to the portion of the Receivables allocable to any
outstanding Series, a Holders' Majority instruct the
Trustee not to effectuate a Disposition of the portion of
the Receivables allocable to such Series, the Trust shall
be reconstituted and continue with respect to such Series
pursuant to the terms of this Agreement and the
applicable Supplement (as amended in connection with such
reconstitution). The portion of the Receivables
allocable to any Series shall be equal to the sum of (1)
the product of (A) the Transferor Percentage, (B) the
aggregate outstanding Principal Receivables and (C) a
fraction the numerator of which is the related Investor
Percentage of Imputed Yield Collections and the
denominator of which is the sum of all Investor
Percentages with respect to Imputed Yield Collections for
all Series outstanding and (2) the Invested Amount of
such Series. The Transferor or any of its Affiliates
shall be permitted to bid for the Receivables. In
addition, the Transferor or any of its Affiliates shall
have the right to match any bid by a third person and be
granted the right to purchase the Receivables at such
matched bid price. The Trustee may obtain a prior
determination from any such bankruptcy trustee, receiver
or liquidator that the terms and manner of any proposed
Distribution are commercially reasonable. The provisions
of Sections 9.1 and 9.2 shall not be deemed to be
mutually exclusive.
(b) The proceeds from the Disposition pursuant
to subsection (a) above shall be treated as Collections
on the Receivables and shall be allocated and deposited
in accordance with the provisions of Article IV;
provided, however, that the proceeds from a Disposition
with respect to any Series shall be applied solely to
make payments to such Series; provided further, that the
Trustee shall determine conclusively in its sole
discretion the amount of such proceeds that are allocable
to Imputed Yield Collections and the amount of such
proceeds that are allocable to Collections of Principal
Receivables. Unless the Trustee receives written
instructions from Investor Certificateholders of one or
more Series to continue the Trust with respect to such
Series as provided in subsection 9.2(a) above, on the day
following the last Distribution Date in the Monthly
Period during which such proceeds are distributed to the
Investor Certificateholders of each Series, the Trust
shall terminate.
(c) The Trustee may appoint an agent or agents
to assist with its responsibilities pursuant to this
Article IX with respect to competitive bids.
[End of Article IX]
ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults. If any one of
the following events (a "Servicer Default") shall occur
and be continuing:
(a) any failure by the Servicer to make any
payment, transfer or deposit or to give instructions or
notice to the Trustee pursuant to Article IV or to
instruct the Trustee to make any required drawing,
withdrawal, or payment under any Enhancement on or before
the date occurring five Business Days after the date such
payment, transfer, deposit, withdrawal or drawing or such
instruction or notice is required to be made or given, as
the case may be, under the terms of this Agreement;
provided, however, that any such failure caused by a non-
willful act of the Servicer shall not constitute a
Servicer Default if the Servicer promptly remedies such
failure within five Business Days after receiving notice
of such failure or otherwise becoming aware of such
failure;
(b) failure on the part of the Servicer duly
to observe or perform in any respect any other covenants
or agreements of the Servicer set forth in this
Agreement, which has a material adverse effect on the
Investor Certificateholders of any Series and which
continues unremedied for a period of 60 days after the
date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the
Servicer by the Trustee, or to the Servicer and the
Trustee by the Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than
50% of the Invested Amount of any Series materially
adversely affected thereby and continues to materially
adversely affect such Investor Certificateholders for
such period; or the Servicer shall delegate its duties
under this Agreement, except as permitted by Section 8.7;
(c) any representation, warranty or
certification made by the Servicer in this Agreement or
in any certificate delivered pursuant to this Agreement
shall prove to have been incorrect when made, which has a
material adverse effect on the Investor
Certificateholders of any Series and which continues to
be incorrect in any material respect for a period of 60
days after the date on which written notice of such
failure, requiring the same to be remedied, shall have
been given to the Servicer by the Trustee, or to the
Servicer and the Trustee by the Holders of Investor
Certificates evidencing Undivided Interests aggregating
not less than 50% of the Invested Amount of any Series
materially adversely affected thereby and continues to
materially adversely affect such Investor
Certificateholders for such period; or
(d) the Servicer shall consent to the
appointment of a bankruptcy trustee or receiver or
liquidator in any bankruptcy proceeding or any other
insolvency, readjustment of debt, marshalling of assets
and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially
all of its property; or a decree or order of a court or
agency or supervisory authority having jurisdiction in
the premises for the appointment of a bankruptcy trustee
or receiver or liquidator in any bankruptcy proceeding or
any other insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have
been entered against the Servicer, and such decree or
order shall have remained in force undischarged or
unstayed for a period of 60 days; or the Servicer shall
admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make
any assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations;
then, so long as such Servicer Default shall not have
been remedied, either the Trustee, or the Holders of
Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Aggregate Invested
Amount, by notice then given in writing to the Servicer
(and to the Trustee if given by the Investor
Certificateholders) (a "Termination Notice"), may
terminate all of the rights and obligations of the
Servicer as Servicer under this Agreement. After receipt
by the Servicer of such Termination Notice, and on the
date that a Successor Servicer shall have been appointed
by the Trustee pursuant to Section 10.2, all authority
and power of the Servicer under this Agreement shall pass
to and be vested in a Successor Servicer; and, without
limitation, the Trustee is hereby authorized and
empowered (upon the failure of the Servicer to cooperate)
to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other
instruments upon the failure of the Servicer to execute
or deliver such documents or instruments, and to do and
accomplish all other acts or things necessary or
appropriate to effect the purposes of such transfer of
servicing rights and obligations. The Servicer agrees to
cooperate with the Trustee and such Successor Servicer in
effecting the termination of the responsibilities and
rights of the Servicer to conduct servicing hereunder
including, without limitation, the transfer to such
Successor Servicer of all authority of the Servicer to
service the Receivables provided for under this
Agreement, including, without limitation, all authority
over all Collections which shall on the date of transfer
be held by the Servicer for deposit, or which have been
deposited by the Servicer, in the Collection Account, the
Excess Funding Account, the Interest Funding Account or
the Principal Account, and any Series Account, or which
shall thereafter be received with respect to the
Receivables. The Servicer shall promptly transfer its
electronic records or electronic copies thereof relating
to the Receivables to the Successor Servicer in such
electronic form as the Successor Servicer may reasonably
request and shall promptly transfer to the Successor
Servicer all other records, correspondence and documents
necessary for the continued servicing of the Receivables
in the manner and at such times as the Successor Servicer
shall reasonably request. To the extent that compliance
with this Section 10.1 shall require the Servicer to
disclose to the Successor Servicer information of any
kind which the Servicer deems to be confidential, the
Successor Servicer shall be required to enter into such
customary licensing and confidentiality agreements as the
Servicer shall deem necessary to protect its interests.
The Servicer shall, on the date of any servicing
transfer, transfer all of its rights and obligations
under the Enhancement with respect to any Series to the
Successor Servicer. In connection with any service
transfer, all reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring
the records, correspondence and other documents with
respect to the Receivables and the other Trust Property
to the Successor Servicer and amending this Agreement to
reflect such succession as Successor Servicer pursuant to
this Section 10.1 and Section 10.2 shall be paid by the
Servicer (unless the Trustee is acting as the Servicer on
a temporary basis, in which case the original Servicer
shall be responsible therefor) upon presentation of
reasonable documentation of such costs and expenses.
Notwithstanding the foregoing, a delay in or
failure of performance referred to in subsection 10.1(a)
for a period of five Business Days or under subsection
10.1(b) or (c) for a period of 60 days, shall not
constitute a Servicer Default if such delay or failure
could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was
caused by an act of God or the public enemy, acts of
declared or undeclared war, public disorder, rebellion,
riot or sabotage, epidemics, landslides, lightning, fire,
hurricanes, tornadoes, earthquakes, nuclear disasters or
meltdowns, floods, power outages, bank closings,
communications outages, computer failure or similar
causes. The preceding sentence shall not relieve the
Servicer from using its best efforts to perform its
obligations in a timely manner in accordance with the
terms of this Agreement and the Servicer shall provide
the Trustee, any Enhancement Provider, the Transferor and
the Holders of Investor Certificates with an Officer's
Certificate giving prompt notice of such failure or delay
by it, together with a description of the cause of such
failure or delay and its efforts so to perform its
obligations.
Section 10.2 Trustee to Act; Appointment of
Successor.
(a) On and after the receipt by the Servicer
of a Termination Notice pursuant to Section 10.1, the
Servicer shall continue to perform all servicing
functions under this Agreement until the date specified
in the Termination Notice or as otherwise specified by
the Trustee in writing or, if no such date is specified
in such Termination Notice, or otherwise specified by the
Trustee, until a date mutually agreed upon by the
Servicer and Trustee. The Trustee shall notify each
Rating Agency of such removal of the Servicer. The
Trustee shall, as promptly as possible after the giving
of a Termination Notice, appoint a successor servicer
(the "Successor Servicer"), and such Successor Servicer
shall accept its appointment by a written assumption in a
form acceptable to the Trustee. If such Successor
Servicer is unable to accept such appointment, the
Trustee may obtain bids from any potential successor
servicer. If the Trustee is unable to obtain any bids
from any potential successor servicer and the Servicer
delivers an Officer's Certificate to the effect that it
cannot in good faith cure the Servicer Default which gave
rise to a transfer of servicing, and if the Trustee is
legally unable to act as Successor Servicer, then the
Trustee shall offer the Transferor the right to accept
reassignment of all of the Receivables for an amount
equal to the Aggregate Invested Amount on the date of
such purchase plus all interest accrued but unpaid on all
of the outstanding Investor Certificates at the
applicable Certificate Rate through the date of such
purchase; provided, however, that no such purchase by the
Transferor shall occur unless the Transferor shall
deliver an Opinion of Counsel reasonably acceptable to
the Trustee that such purchase would not constitute a
fraudulent conveyance of the Transferor. The proceeds of
such sale shall be deposited in the Distribution Account
or any Series Account, as provided in the related
Supplement, for distribution to the Investor
Certificateholders of each outstanding Series pursuant to
Section 12.3 of the Agreement. In the event that a
Successor Servicer has not been appointed and has not
accepted its appointment at the time when the Servicer
ceases to act as Servicer, the Trustee without further
action shall automatically be appointed the Successor
Servicer (but shall have continued authority to appoint
another Person as Successor Servicer). The Trustee may
delegate any of its servicing obligations to an affiliate
or agent of the Trustee in accordance with Article III
hereof. Any such delegations shall not relieve the
Trustee of its liability and responsibility with respect
to such duties. Notwithstanding the above, the Trustee
shall, if it is legally unable to act, petition a court
of competent jurisdiction to appoint any established
financial institution having, in the case of an entity
that is subject to risk-based capital adequacy
requirements, risk-based capital of at least $50,000,000
or, in the case of an entity that is not subject to risk-
based capital requirements, having a net worth of not
less than $50,000,000 and whose regular business includes
the servicing of receivables similar to the Receivables
as the Successor Servicer hereunder.
(b) Upon its appointment, the Successor
Servicer shall be the successor in all respects to the
Servicer with respect to servicing functions under this
Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions
hereof, and all references in this Agreement to the
Servicer shall be deemed to refer to the Successor
Servicer. Any Successor Servicer, by its acceptance of
its appointment, will automatically agree to be bound by
the terms and provisions of each Enhancement.
(c) In connection with such appointment and
assumption, the Trustee shall be entitled to such
compensation, or may make such arrangements for the
compensation of the Successor Servicer out of
Collections, as it and such Successor Servicer shall
agree; provided, however, that no such compensation shall
be in excess of the Servicing Fee permitted to the
Servicer pursuant to Section 3.2. The Transferor agrees
that if the Servicer is terminated hereunder, it will
agree to deposit a portion of the Collections in respect
of Imputed Yield Receivables that it is entitled to
receive pursuant to Article IV to pay its ratable share
of the compensation of the Successor Servicer.
(d) All authority and power granted to the
Successor Servicer under this Agreement shall
automatically cease and terminate upon termination of the
Trust pursuant to Section 12.1 and shall pass to and be
vested in the Transferor and, without limitation, the
Transferor is hereby authorized and empowered to execute
and deliver, on behalf of the Successor Servicer, as
attorney-in-fact or otherwise, all documents and other
instruments, and to do and accomplish all other acts or
things necessary or appropriate to effect the purposes of
such transfer of servicing rights. The Successor
Servicer agrees to cooperate with the Transferor in
effecting the termination of the responsibilities and
rights of the Successor Servicer to conduct servicing on
the Receivables. The Successor Servicer shall transfer
its electronic records relating to the Receivables to the
Transferor in such electronic form as the Transferor may
reasonably request and shall transfer all other records,
correspondence and documents to the Transferor in the
manner and at such times as the Transferor shall
reasonably request. To the extent that compliance with
this Section 10.2 shall require the Successor Servicer to
disclose to the Transferor information of any kind which
the Successor Servicer deems to be confidential, the
Transferor shall be required to enter into such customary
licensing and confidentiality agreements as the Successor
Servicer shall deem necessary to protect its interests.
Section 10.3 Notification to Certificate-
holders. Upon the Servicer becoming aware of
any Servicer Default, the Servicer shall give prompt
written notice thereof to the Trustee and any Enhancement
Provider and, upon receipt of such written notice, the
Trustee shall give notice to the Investor
Certificateholders at their respective addresses
appearing in the Certificate Register. Upon any
termination or appointment of a Successor Servicer
pursuant to this Article X, the Trustee shall give prompt
written notice thereof to Investor Certificateholders at
their respective addresses appearing in the Certificate
Register.
Section 10.4 Waiver of Past Defaults. The
Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 66-2/3% of the
Invested Amount of each Series materially adversely
affected by any default by the Servicer or Transferor
may, on behalf of all Certificateholders of such Series,
waive any default by the Servicer or Transferor in the
performance of its obligations hereunder and its
consequences, except a default in the failure to make any
required deposits or payments of interest or principal
relating to such Series pursuant to Article IV, which
default does not result from the failure of the Paying
Agent to perform its obligations to make any required
deposits or payments of interest and principal in
accordance with Article IV. Upon any such waiver of a
past default, such default shall cease to exist, and any
default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent
expressly so waived.
[End of Article X]
ARTICLE XI
THE TRUSTEE
Section 11.1 Duties of Trustee.
(a) The Trustee, prior to the occurrence of
any Servicer Default of which a Responsible Officer of
the Trustee has actual knowledge and after the curing of
all Servicer Defaults which may have occurred, undertakes
to perform such duties and only such duties as are
specifically set forth in this Agreement, and no implied
covenants or duties shall be read into this Agreement
against the Trustee. If a Responsible Officer has
received written notice that a Servicer Default has
occurred (and such Servicer Default has not been cured or
waived), the Trustee shall exercise such of the rights
and powers vested in it by this Agreement, and use the
same degree of care and skill in its exercise, as a
prudent person would exercise or use under the
circumstances in the conduct of such person's own
affairs; provided, however, that if the Trustee shall
assume the duties of the Servicer pursuant to Section 8.5
or 10.2, the Trustee in performing such duties shall use
the degree of skill and attention customarily exercised
by a servicer with respect to comparable receivables that
it services for itself or others.
(b) The Trustee, upon receipt of all
resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished
pursuant to any provision of this Agreement, shall
examine them to determine whether they substantially
conform to the requirements of this Agreement. The
Trustee shall retain all such items for at least one year
after receipt and shall make such items available for
inspection by any Investor Certificateholder at the
Corporate Trust Office, such inspection to be made during
regular business hours and upon reasonable prior notice
to the Trustee.
(c) Subject to subsection 11.1(a), no
provision of this Agreement shall be construed to relieve
the Trustee from liability for its own negligent action,
its own negligent failure to act or its own misconduct;
provided, however, that:
(i) the Trustee shall not be personally
liable for an error of judgment made in good faith
by a Responsible Officer or Responsible Officers of
the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent
facts;
(ii) the Trustee shall not be personally
liable with respect to any action taken, suffered or
omitted to be taken by it in good faith in
accordance with the direction of the Holders of
Investor Certificates evidencing Undivided Interests
aggregating more than 50% of the Invested Amount of
any Series relating to the time, method and place of
conducting any proceeding for any remedy available
to the Trustee with respect to such Series, or
exercising any trust or power conferred upon the
Trustee with respect to such Series, under this
Agreement; and
(iii) the Trustee shall not be charged
with knowledge of any failure by the Servicer
referred to in clauses (a) and (b) of Section 10.1
or of any breach by the Servicer contemplated by
clause (c) of Section 10.1 or any Pay Out Event
unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure, breach or Pay-Out
Event or the Trustee receives written notice of such
failure, breach or Pay Out Event from the Servicer
or any Holders of Investor Certificates evidencing
Undivided Interests aggregating not less than 10% of
the Invested Amount of any Series adversely affected
thereby.
(d) The Trustee shall not be required to
expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that
the repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it,
and none of the provisions contained in this Agreement
shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the
obligations of the Servicer under this Agreement except
during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties,
powers and privileges of, the Servicer in accordance with
the terms of this Agreement.
(e) Except for actions expressly authorized by
this Agreement, the Trustee shall take no action
reasonably likely to impair the interests of the Trust in
any Receivable now existing or hereafter created or to
impair the value of any Receivable now existing or
hereafter created.
(f) Except as provided in this Agreement, the
Trustee shall have no power to vary the corpus of the
Trust.
(g) If a Responsible Officer of the Trustee,
has received written notice that the Paying Agent or the
Transfer Agent and Registrar shall fail to perform any
obligation, duty or agreement in the manner or on the day
required to be performed by the Paying Agent or the
Transfer Agent and Registrar, as the case may be, under
this Agreement, the Trustee shall be obligated promptly
upon its obtaining knowledge thereof by a Responsible
Officer of the Trustee to perform such obligation, duty
or agreement in the manner so required.
(h) If the Transferor has agreed to transfer
any of its accounts receivable (other than the
Receivables) to another Person, upon the written request
of the Transferor, the Trustee on behalf of the Trust
will enter into such intercreditor agreements with the
transferee of such receivables as are customary and
necessary to identify separately the rights, if any, of
the Trust and such other Person in the Transferor's
accounts receivable; provided, however, that the Trust
shall not be required to enter into any intercreditor
agreement that could adversely affect the interests of
the Certificateholders or the Trustee and, upon the
request of the Trustee, the Transferor will deliver an
Opinion of Counsel on any matters relating to such
intercreditor agreement, reasonably requested by the
Trustee.
Section 11.2 Certain Matters Affecting the
Trustee. Except as otherwise provided in Section 11.1:
(a) the Trustee may rely on and shall be
protected in acting on, or in refraining from acting in
accordance with, the initial report, the Daily Report,
the Settlement Statement, the annual Servicer's
certificate, the monthly payment instructions and
notification to the Trustee, the monthly
Certificateholder's statement, any resolution, Officer's
Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to
have been signed or presented to it pursuant to this
Agreement by the proper party or parties;
(b) the Trustee may consult with counsel, and
the advice or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or Opinion
of Counsel;
(c) the Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by
this Agreement or any Enhancement, or to institute,
conduct or defend any litigation hereunder or in relation
hereto, at the request, order or direction of any of the
Certificateholders or any Enhancement Provider, pursuant
to the provisions of this Agreement, unless such
Certificateholders or Enhancement Provider shall have
offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which may be
incurred therein or thereby; nothing contained herein
shall, however, relieve the Trustee of the obligations,
upon the occurrence of any Servicer Default (which has
not been cured or waived) of which a Responsible Officer
of the Trustee has knowledge, to exercise such of the
rights and powers vested in it by this Agreement and any
Enhancement, and to use the same degree of care and skill
in its exercise as a prudent person would exercise or use
under the circumstances in the conduct of his own
affairs;
(d) the Trustee shall not be personally liable
for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Agreement;
(e) the Trustee shall not be bound to make any
investigation into the facts of matters stated in the
initial report, the Daily Report, the Settlement
Statement, the annual Servicer's certificate, the monthly
payment instructions and notification to the Trustee, the
monthly Certificateholders statement, any resolution,
certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do
by Holders of Investor Certificates evidencing Undivided
Interests aggregating more than 50% of the Invested
Amount of any Series which could be adversely affected if
the Trustee does not perform such acts;
(f) the Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys or a
custodian, and the Trustee shall not be responsible for
any misconduct or negligence on the part of any such
agent, attorney or custodian appointed with due care by
it hereunder;
(g) except as may be required by subsection
11.1(a), the Trustee shall not be required to make any
initial or periodic examination of any documents or
records related to the Receivables for the purpose of
establishing the presence or absence of defects, the
compliance by the Transferor with its representations and
warranties or for any other purpose;
(h) whenever in the administration of this
Agreement the Trustee shall deem it desirable that a
matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon
an Officer's Certificate; and
(i) the right of the Trustee to perform any
discretionary act enumerated in this Agreement or any
Supplement shall not be construed as a duty, and the
Trustee shall not be answerable for performance of any
such act.
Section 11.3 Trustee Not Liable for Recitals
in Certificates. The Trustee assumes no responsibility
for the correctness of the recitals contained herein and
in the Certificates (other than the certificate of
authentication on the Certificates). Except as set forth
in Section 11.15, the Trustee makes no representations as
to the validity or sufficiency of this Agreement or of
the Certificates (other than the certificate of
authentication on the Certificates) or of any Receivable
or related document. The Trustee shall not be
accountable for the use or application by the Transferor
of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds
paid to the Transferor in respect of the Receivables or
deposited in or withdrawn from the Collection Account,
the Excess Funding Account, the Principal Account or the
Interest Funding Account, or any Series Account or other
accounts now or hereafter established to effectuate the
transactions contemplated herein and in accordance with
the terms hereof. The Trustee shall have no
responsibility for filing any financing or continuation
statement in any public office at any time or to
otherwise perfect or maintain the perfection of any
security interest or Lien granted to it hereunder (unless
the Trustee shall have become the Successor Servicer) or
to prepare or file any Securities and Exchange Commission
filing for the Trust or to record this Agreement or any
Supplement.
Section 11.4 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Investor Certificates and
may deal with the Transferor, the Servicer or any
Enhancement Provider with the same rights as it would
have if it were not the Trustee. The Trustee in its
capacity as Trustee shall exercise its duties and
responsibilities hereunder independent of and without
reference to its investment, if any, in Investor
Certificates.
Section 11.5 The Servicer to Pay Trustee's
Fees and Expenses. The Servicer covenants and agrees to
pay to the Trustee from time to time, and the Trustee
shall be entitled to receive, reasonable compensation
(which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express
trust) for all services rendered by the Trustee in the
execution of the trust hereby created and in the exercise
and performance of any of the powers and duties hereunder
of the Trustee, and, subject to Section 8.4, the Servicer
will pay or reimburse the Trustee (without reimbursement
from any Investor Account, any Series Account or
otherwise) upon its request for all reasonable expenses,
disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this
Agreement (including the reasonable fees and expenses of
its agents and counsel) except any such expense,
disbursement or advance as may arise from its own
negligence or bad faith and except as provided in the
following sentence. If the Trustee is appointed
Successor Servicer pursuant to Section 10.2, the
provisions of this Section 11.5 shall not apply to
expenses, disbursements and advances made or incurred by
the Trustee in its capacity as Successor Servicer (which
shall be covered out of the Servicing Fee).
The obligations of the Servicer under this
Section 11.5 shall survive the termination of the Trust
and the resignation or removal of the Trustee.
Section 11.6 Eligibility Requirements for
Trustee. The Trustee hereunder shall at all times (a) be
a corporation organized and doing business under the laws
of the United States of America or any state thereof
authorized under such laws to exercise corporate trust
powers, having a long-term unsecured debt rating of at
least Baa3 by ▇▇▇▇▇'▇, having, in the case of an entity
that is subject to risk-based capital adequacy
requirements, risk-based capital of at least $50,000,000
or, in the case of an entity that is not subject to risk-
based capital adequacy requirements, having a combined
capital and surplus of at least $50,000,000 and subject
to supervision or examination by federal or state
authority and (b) not be a Related Person. If such
corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for
the purpose of this Section 11.6, the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published. In case at any
time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 11.6, the Trustee
shall resign immediately in the manner and with the
effect specified in Section 11.7.
Section 11.7 Resignation or Removal of
Trustee.
(a) The Trustee may at any time resign and be
discharged from the Trust hereby created by giving
written notice thereof to the Servicer. Upon receiving
such notice of resignation, the Servicer shall promptly
appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the
successor trustee. If no successor trustee shall have
been so appointed and have accepted such appointment
within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court
of competent jurisdiction for the appointment of a
successor trustee.
(b) If at any time the Trustee shall cease to
be eligible in accordance with the provisions of Section
11.6 hereof and shall fail to resign after written
request therefor by the Transferor, or if at any time the
Trustee shall be legally unable to act, or shall be
adjudged bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the
Transferor may, but shall not be required to, remove the
Trustee and promptly appoint a successor trustee by
written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed
and one copy to the successor trustee.
(c) If (i) the Trustee shall fail to perform
any of its obligations hereunder, (ii) a
Certificateholder shall deliver written notice of such
failure to the Trustee, and (iii) the Trustee shall not
have corrected such failure for 60 days thereafter, then
the Holders of Investor Certificates representing more
than 50% of the Invested Amount (including related
commitments of holders of Variable Funding Certificates)
shall have the right to remove the Trustee and (with the
consent of the Transferor, which shall not be
unreasonably withheld) promptly appoint a successor
trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
(d) Any resignation or removal of the Trustee
and appointment of a successor trustee pursuant to any of
the provisions of this Section 11.7 shall not become
effective until acceptance of appointment by the
successor trustee as provided in Section 11.8 hereof and
any liability of the Trustee arising hereunder shall
survive such appointment of a successor trustee. Notice
of any resignation or removal of the Trustee and
appointment of a successor trustee shall be provided to
▇▇▇▇▇'▇ and Standard & Poor's by the Servicer in a prompt
manner.
Section 11.8 Successor Trustee.
(a) Any successor trustee appointed as
provided in Section 11.7 hereof shall execute,
acknowledge and deliver to the Transferor and to its
predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or
removal of the predecessor Trustee shall become effective
and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as
Trustee herein. The predecessor Trustee shall deliver to
the successor trustee all documents and statements held
by it hereunder, and the Transferor and the predecessor
Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept
appointment as provided in this Section 11.8 unless at
the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 11.6 hereof.
(c) Upon acceptance of appointment by a
successor trustee as provided in this Section 11.8, such
successor trustee shall mail notice of such succession
hereunder to all Certificateholders at their addresses as
shown in the Certificate Register.
Section 11.9 Merger or Consolidation of
Trustee. Any Person into which the Trustee may be merged
or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or
any Person succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such
corporation shall be eligible under the provisions of
Section 11.6 hereof, without the execution or filing of
any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary
notwithstanding.
Section 11.10 Appointment of Co-Trustee or
Separate Trustee.
(a) Notwithstanding any other provisions of
this Agreement, at any time, for the purpose of meeting
any legal requirements of any jurisdiction in which any
part of the Trust may at the time be located, the Trustee
shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and
to vest in such Person or Persons, in such capacity and
for the benefit of the Certificateholders, such title to
the trust, or any part thereof, and, subject to the other
provisions of this Section 11.10, such powers, duties,
obligations, rights and trusts as the Trustee may
consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section
11.6 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall
be required under Section 11.8 hereof.
(b) Every separate trustee and co-trustee
shall, to the extent permitted by law, be appointed and
act subject to the following provisions and conditions:
(i) all rights, powers, duties and
obligations conferred or imposed upon the Trustee
shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee
or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to
act separately without the Trustee joining in such
act), except to the extent that under any laws of
any jurisdiction in which any particular act or acts
are to be performed (whether as Trustee hereunder or
as successor to the Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers,
duties and obligations (including the holding of
title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) no trustee hereunder shall be
personally liable by reason of any act or omission
of any other trustee hereunder; and
(iii) the Trustee may at any time accept
the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given
to the Trustee shall be deemed to have been given to each
of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee
shall refer to this Agreement and the conditions of this
Article XI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested
with the estates or property specified in its instrument
of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all
the provisions of this Agreement, specifically including
every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed
with the Trustee and a copy thereof given to the
Servicer.
(d) Any separate trustee or co-trustee may at
any time constitute the Trustee as its agent or attorney-
in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in
respect to this Agreement on its behalf and in its name.
If any separate trustee or co-trustee shall die, become
incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or
successor trustee.
Section 11.11 Tax Returns. Consistent with
Section 3.7, the Trustee shall not file any Federal tax
returns on behalf of the Trust; provided, however, that
if a class of Certificates is issued that will be
characterized as a partnership for federal income tax
purposes, partnership information returns shall be
prepared and signed by the Transferor, as general
partner. In the event the Trust shall be required to
file tax returns, the Servicer shall at its expense
prepare or cause to be prepared any tax returns required
to be filed by the Trust and, to the extent possible,
shall remit such returns to the Trustee for signature at
least five days before such returns are due to be filed.
The Trustee is hereby authorized to sign any such return
on behalf of the Trust. The Servicer shall prepare or
shall cause to be prepared all tax information required
by law to be distributed to Certificateholders and shall
deliver such information to the Trustee at least five
days prior to the date it is required by law to be
distributed to Certificateholders. The Trustee, upon
request, will furnish the Servicer with all such
information known to the Trustee as may be reasonably
required in connection with the preparation of all tax
returns of the Trust and shall, upon request, execute
such return. In no event shall the Trustee be liable for
any liabilities, costs or expenses of the Trust, the
Investor Certificateholders or the Certificate Owners
arising under any tax law, including without limitation
federal, state, local or foreign income or excise taxes
or any other tax imposed on or measured by income (or any
interest or penalty or addition with respect thereto or
arising from a failure to comply therewith).
Section 11.12 Trustee May Enforce Claims
Without Possession of Certificates. All rights of action
and claims under this Agreement or any Series of
Certificates may be prosecuted and enforced by the
Trustee without the possession of any of the Certificates
or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee. Any
recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of any Series of
Certificateholders in respect of which such judgment has
been obtained.
Section 11.13 Suits for Enforcement. If a
Servicer Default of which a Responsible Officer of the
Trustee has knowledge shall occur and be continuing, the
Trustee, in its discretion may, subject to the provisions
of Section 10.1, proceed to protect and enforce its
rights and the rights of any Series of Certificateholders
under this Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in
this Agreement or in aid of the execution of any power
granted in this Agreement or for the enforcement of any
other legal, equitable or other remedy as the Trustee,
being advised by counsel, shall deem most effectual to
protect and enforce any of the rights of the Trustee or
any Series of Certificateholders.
Section 11.14 Rights of Certificateholders to
Direct Trustee. Holders of Investor Certificates
evidencing Undivided Interests aggregating more than 50%
of the Aggregate Invested Amount (or, with respect to any
remedy, trust or power that does not relate to all
Series, 50% of the aggregate Invested Amount of the
Investor Certificates of all Series to which such remedy,
trust or power relates) shall have the right to direct
the time, method, and place of conducting any proceeding
for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee; provided,
however, that Holders of Investor Certificates
aggregating more than 50% of the aggregate Invested
Amount of any Class may direct the Trustee to exercise
its rights under Section 8.6; provided, further, that,
subject to Section 11.1, the Trustee shall have the right
to decline to follow any such direction if the Trustee
being advised by counsel determines that the action so
directed may not lawfully be taken, or if the Trustee in
good faith shall, by a Responsible Officer or Responsible
Officers of the Trustee, determine that the proceedings
so directed would be illegal or involve it in personal
liability or be unduly prejudicial to the rights of
Certificateholders not parties to such direction; and
provided, further that nothing in this Agreement shall
impair the right of the Trustee to take any action deemed
proper by the Trustee and which is not inconsistent with
such direction of such Holders of Investor Certificates.
Section 11.15 Representations and Warranties
of Trustee. The Trustee represents and warrants that:
(i) the Trustee is a corporation
organized, existing and authorized to engage in the
business of banking under the laws of the State of
its incorporation;
(ii) the Trustee is an entity that
satisfies the eligibility requirements of Section
11.6;
(iii) the Trustee has full power,
authority and right to execute, deliver and perform
this Agreement, and has taken all necessary action
to authorize the execution, delivery and performance
by it of this Agreement; and
(iv) this Agreement has been duly
executed and delivered by the Trustee.
Section 11.16 Maintenance of Office or Agency.
The Trustee will maintain at its expense an office or
offices, or agency or agencies, where notices and demands
to or upon the Trustee in respect of the Certificates and
this Agreement may be served. The Trustee initially
appoints its Corporate Trust Office as its office for
such purposes. The Trustee will give prompt written
notice to the Servicer and to Certificateholders (or in
the case of Holders of Bearer Certificates, in the manner
provided for in the related Supplement) of any change in
the location of the Certificate Register or any such
office or agency.
[End of Article XI]
ARTICLE XII
TERMINATION
Section 12.1 Termination of Trust.
(a) The respective obligations and
responsibilities of the Transferor, the Servicer and the
Trustee created hereby (other than the obligation of the
Trustee to make payments to Certificateholders as
hereafter set forth) shall terminate, except with respect
to the duties described in Section 8.4 and 11.5 and
subsection 12.3(b), on the Trust Termination Date;
provided, however, that the Trust shall not terminate on
the date specified in clause (i) of the definition of
"Trust Termination Date" if each of the Servicer and the
Holder of the Exchangeable Transferor Certificate notify
the Trustee in writing, not later than five Business Days
preceding such date, that they desire that the Trust not
terminate on such date, which notice (such notice, a
"Trust Extension") shall specify the date on which the
Trust shall terminate (such date, the "Extended Trust
Termination Date"); provided, however, that the Extended
Trust Termination Date shall be not later than June 29,
2034. The Servicer and the Holder of the Exchangeable
Transferor Certificate may, on any date following the
Trust Extension, so long as no Series of Certificates is
outstanding, deliver a notice in writing to the Trustee
changing the Extended Trust Termination Date.
(b) In the event that (i) the Trust has not
terminated by the Distribution Date occurring in the
second month preceding the Trust Termination Date, and
(ii) the Invested Amount of any Series, exclusive of any
Transferor Retained Class (after giving effect to all
transfers, withdrawals, deposits and drawings to occur on
such date and the payment of principal on any Series of
Certificates to be made on the related Distribution Date
during such month pursuant to Article IV), would be
greater than zero, the Servicer shall sell within 30 days
after such Transfer Date an amount of Receivables up to
the remaining Invested Amount if it can do so in a
commercially reasonable manner. The Servicer shall
notify each Enhancement Provider of the proposed sale of
the Receivables and shall provide each Enhancement
Provider an opportunity to bid on the Receivables. The
Transferor shall have the right of first refusal to
purchase the Receivables on terms equivalent to the best
purchase offer as determined by the Trustee in its sole
discretion. The proceeds of any such sale shall be
treated as Collections on the Receivables and shall be
allocated and deposited in accordance with Article IV;
provided, however, that the Trustee shall determine
conclusively in its sole discretion the amount of such
proceeds which are allocable to Imputed Yield Collections
and the amount of such proceeds which are allocable to
Principal Collections. During such thirty-day period,
the Servicer shall continue to collect payments on the
Receivables and allocate and deposit such payments in
accordance with the provisions of Article IV.
(c) All principal or interest with respect to
any Series of Investor Certificates shall be due and
payable no later than the Series Termination Date with
respect to such Series. Unless otherwise provided in a
Supplement, in the event that the Invested Amount of any
Series of Certificates is greater than zero, exclusive of
any Class held by the Transferor, on its Series
Termination Date (the "Affected Series"), after giving
effect to all transfers, withdrawals, deposits and
drawings to occur on such date and the payment of
principal to be made on such Series on such date, and the
Trustee will sell or cause to be sold, and the Trustee
will pay the proceeds to all Certificateholders of such
Series pro rata in final payment of all principal of and
accrued interest on such Series of Certificates or, if
any Class of such Series is subordinated, in order of
their respective seniorities, an amount of Principal
Receivables and the related Imputed Yield Receivables (or
interests therein) up to 110% of the Invested Amount of
such Series at the close of business on such date (but
the amount of such Principal Receivables not to be more
than an amount of Receivables equal to the sum of (1) the
product of (A) the Transferor Percentage, (B) the
aggregate outstanding Principal Receivables and (C) a
fraction the numerator of which is the Invested Amount
of such Series on such date and the denominator of which
is the sum of the Invested Amounts of all Series on such
Date and (2) the Invested Amount of such Series).
Receivables on which the Obligor has not made the full
monthly payment for the prior months shall be deemed to
be in default for purposes of this Section 12.1(c) to the
extent that the cash allocated to any Class of Transferor
Retained Certificates of such Series pursuant to a sale
under Section 12.1(c) is less than the amount that would
have been allocated to the Exchangeable Transferor
Certificate and the Transferor Retained Certificates had
the proceeds from such sale been allocated pursuant to
Section 4.3. The Servicer shall notify each Enhancement
Provider of the proposed sale of such Receivables and
shall provide each Enhancement Provider an opportunity to
bid on such Receivables. The Transferor shall be
permitted to purchase such Receivables in such case and
shall have a right of first refusal with respect thereto
to the extent of a bona fide offer by an unrelated third
party or to the extent the Receivables represent
Defaulted Receivables. Any proceeds of such sale in
excess of such principal and interest paid shall be paid
to the Holder of the Exchangeable Transferor Certificate.
Upon such Series Termination Date with respect to the
applicable Series of Certificates, final payment of all
amounts allocable to any Investor Certificates of such
Series shall be made in the manner provided in Section
12.3.
Section 12.2 Optional Termination. (a) If so
provided in any Supplement, the Transferor may, but shall
not be obligated to, cause a final distribution to be
made in respect of the related Series of Certificates on
a Distribution Date specified in such Supplement by
depositing into the Distribution Account or the
applicable Series Account, not later than the Transfer
Date preceding such Distribution Date, for application in
accordance with Section 12.3, the amount specified in
such Supplement; provided, however that if the short-term
deposits or long-term unsecured debt obligations of the
Transferor are not rated at the time of such purchase of
Receivables at least P-3 or Baa3, respectively, by
▇▇▇▇▇'▇, no such event shall occur unless the Transferor
shall deliver to the Trustee, with a copy to ▇▇▇▇▇'▇, an
Opinion of Counsel that such deposit into the
Distribution Account or any Series Account as provided in
the related Supplement would not constitute a fraudulent
conveyance of the Transferor.
(b) The amount deposited pursuant to
subsection 12.2(a) shall be paid to the Investor
Certificateholders of the related Series pursuant to
Section 12.3 on the related Distribution Date following
the date of such deposit. All Certificates of a Series
with respect to which a final distribution has been made
pursuant to subsection 12.2(a) shall be delivered by the
Holder to, and be canceled by, the Transfer Agent and
Registrar and be disposed of in a manner satisfactory to
the Trustee and the Transferor. The Invested Amount of
each Series with respect to which a final distribution
has been made pursuant to subsection 12.2(a) shall, for
the purposes of the definition of "Transferor Interest,"
be deemed to be equal to zero on the Distribution Date
following the making of the deposit, and the Transferor
Interest shall thereupon be deemed to have been increased
by the Invested Amount of such Series.
Section 12.3 Final Payment with Respect to any
Series.
(a) Written notice of any termination,
specifying the Distribution Date upon which the Investor
Certificateholders of any Series may surrender their
Certificates for payment of the final distribution with
respect to such Series and cancellation, shall be given
(subject to at least four Business Days' prior notice
from the Servicer to the Trustee) by the Trustee to
Investor Certificateholders of such Series mailed not
later than the fifth day of the month of such final
distribution (or in the manner provided by the Supplement
relating to such Series) specifying (i) the Distribution
Date (which shall be the Distribution Date in the month
(x) in which the deposit is made pursuant to subsection
2.4(e), 9.2(a), 10.2(a), or 12.2(a) of the Agreement or
such other section as may be specified in the related
Supplement, or (y) in which the related Series
Termination Date occurs) upon which final payment of such
Investor Certificates will be made upon presentation and
surrender of such Investor Certificates at the office or
offices therein designated (which, in the case of Bearer
Certificates, shall be outside the United States), (ii)
the amount of any such final payment and (iii) that the
Record Date otherwise applicable to such Distribution
Date is not applicable, payments being made only upon
presentation and surrender of the Investor Certificates
at the office or offices therein specified. The
Servicer's notice to the Trustee in accordance with the
preceding sentence shall be accompanied by an Officers'
Certificate setting forth the information specified in
Article V of this Agreement covering the period during
the then current calendar year through the date of such
notice and setting forth the date of such final
distribution. The Trustee shall give such notice to the
Transfer Agent and Registrar and the Paying Agent at the
time such notice is given to such Investor
Certificateholders.
(b) Notwithstanding the termination of the
Trust pursuant to subsection 12.1(a) or the occurrence of
the Series Termination Date with respect to any Series,
all funds then on deposit in the Excess Funding Account,
the Interest Funding Account, the Principal Account, the
Distribution Account or any Series Account applicable to
the related Series shall continue to be held in trust for
the benefit of the Certificateholders of the related
Series and the Paying Agent or the Trustee shall pay such
funds to the Certificateholders of the related Series
upon surrender of their Certificates (which surrenders
and payments, in the case of Bearer Certificates, shall
be made only outside the United States). In the event
that all of the Investor Certificateholders of any Series
shall not surrender their Certificates for cancellation
within six months after the date specified in the above-
mentioned written notice, the Trustee shall give a second
written notice (or, in the case of Bearer Certificates,
publication notice) to the remaining Investor
Certificateholders of such Series upon receipt of the
appropriate records from the Transfer Agent and Registrar
to surrender their Certificates for cancellation and
receive the final distribution with respect thereto. If
within one and one half years after the second notice
with respect to a Series, all the Investor Certificates
of such Series shall not have been surrendered for
cancellation, the Trustee may take appropriate steps or
may appoint an agent to take appropriate steps, to
contact the remaining Investor Certificateholders of such
Series concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds in the
Distribution Account or any Series Account held for the
benefit of such Investor Certificateholders. The Trustee
and the Paying Agent shall pay to the Transferor upon
request any monies held by them for the payment of
principal or interest which remains unclaimed for two
years. After payment to the Transferor, Investor
Certificateholders entitled to the money must look to the
Transferor for payment as general creditors unless an
applicable abandoned property law designates another
Person.
(c) All Certificates surrendered for payment
of the final distribution with respect to such
Certificates and cancellation shall be canceled by the
Transfer Agent and Registrar and be disposed of in a
manner satisfactory to the Trustee and the Transferor.
Section 12.4 Termination Rights of Holder of
Exchangeable Transferor Certificate. Upon the
termination of the Trust pursuant to Section 12.1, and
after payment of all amounts due hereunder on or prior to
such termination and the surrender of the Exchangeable
Transferor Certificate, the Trustee shall execute a
written reconveyance substantially in the form of Exhibit
F pursuant to which it shall reconvey to the Holder of
the Exchangeable Transferor Certificate (without
recourse, representation or warranty) all right, title
and interest of the Trust in the Receivables, whether
then existing or thereafter created, all moneys due or to
become due with respect thereto (including all amounts
theretofore posted as Imputed Yield Receivables)
allocable to the Trust pursuant to any Supplement, except
for amounts held by the Trustee pursuant to subsection
12.3(b). The Trustee shall execute and deliver such
instruments of transfer and assignment, in each case
prepared by the Transferor and without recourse,
representation or warranty (other than a warranty that
such property is conveyed free and clear of any Lien of
any Person claiming by or through the Trustee) as shall
be reasonably requested by the Holder of the Exchangeable
Transferor Certificate to vest in such Holder all right,
title and interest which the Trust had in the Receivables
and other Trust Property.
[End of Article XII]
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Amendment.
(a) This Agreement (including any Supplement)
may be amended from time to time by the Servicer, the
Transferor and the Trustee, without the consent of any of
the Certificateholders, (i) to cure any ambiguity, to
revise any exhibits or Schedules (other than Schedule 1),
to correct or supplement any provisions herein or thereon
which may be inconsistent with any other provisions
herein or thereon or (ii) to add any other provisions
with respect to matters or questions raised under this
Agreement which shall not be inconsistent with the
provisions of this Agreement; provided, however, that
such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the
interests of any of the Investor Certificateholders.
Additionally, this Agreement may be amended from time to
time by the Servicer, the Transferor and the Trustee,
without the consent of any of the Certificateholders, to
add to or change any of the provisions of this Agreement
to provide that Bearer Certificates may be registrable as
to principal, to change or eliminate any restrictions on
the payment of principal of (or premium, if any) or any
interest on Bearer Certificates to comply with the Bearer
Rules, to permit Bearer Certificates to be issued in
exchange for Registered Certificates (if then permitted
by the Bearer Rules), to permit Bearer Certificates to be
issued in exchange for Bearer Certificates of other
authorized denominations or to permit the issuance of
Certificates in uncertificated form.
This Agreement (including any Supplement), and
any schedule or exhibit thereto may also be amended from
time to time by the Servicer, the Transferor and the
Trustee, without the consent of any of the
Certificateholders, for the purpose of adding any
provisions to or changing in any manner or eliminating
any of the provisions of this Agreement, or of modifying
in any manner the rights of the Holders of Certificates;
provided, however, that (i) the Servicer shall have
provided an Officer's Certificate to the Trustee to the
effect that such amendment will not materially and
adversely affect the interests of the Certificateholders,
(ii) such amendment shall not, as evidenced by an Opinion
of Counsel, cause the Trust to be characterized for
Federal income tax purposes as an association taxable as
a corporation or otherwise have any material adverse
impact on the Federal income taxation of any outstanding
Series of Investor Certificates or any Certificate Owner
and (iii) the Servicer shall have provided at least ten
Business Days prior written notice to each Rating Agency
of such amendment and shall have received written
confirmation from each Rating Agency to the effect that
the rating of any Series or any class of any Series will
not be reduced or withdrawn as a result of such
amendment; provided, further, that such amendment shall
not reduce in any manner the amount of, or delay the
timing of, distributions which are required to be made on
any Investor Certificate of such Series without the
consent of the related Investor Certificateholder, change
the definition of or the manner of calculating the
interest of any Investor Certificateholder of such Series
without the consent of the related Investor
Certificateholder or reduce the percentage pursuant to
Subsection 13.1(b) required to consent to any such
amendment, in each case without the consent of all such
Investor Certificateholders; provided, further, that the
transfer of the Receivables to and the generation of new
Receivables by, a credit card bank established by
Fingerhut or any Affiliate thereof and/or the appointment
of a credit card bank established by Fingerhut as
Servicer hereunder in connection with such transfer and
any other transactions related, supplemental or
incidental thereto shall be deemed not to materially and
adversely affect the interests of the Certificateholders.
(b) This Agreement and any Supplement may also
be amended from time to time by the Servicer, the
Transferor and the Trustee with the consent of the
Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 66-2/3% of the
Invested Amount of each and every Series adversely
affected, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any
manner the rights of the Investor Certificateholders of
any Series then issued and outstanding; provided,
however, that no such amendment under this subsection
shall (i) reduce in any manner the amount of, or delay
the timing of, distributions which are required to be
made on any Investor Certificate of such Series without
the consent of all of the related Investor
Certificateholders; (ii) change the definition of or the
manner of calculating the interest of any Investor
Certificateholder of such Series without the consent of
the related Investor Certificateholder or (iii) reduce
the aforesaid percentage required to consent to any such
amendment, in each case without the consent of all such
Investor Certificateholders.
(c) Notwithstanding anything in this Section
13.1 to the contrary, the Supplement with respect to any
Series may be amended on the items and in accordance with
the procedures provided in such Supplement.
(d) Promptly after the execution of any such
amendment (other than an amendment pursuant to paragraph
(a)), the Trustee shall furnish notification of the
substance of such amendment to each Investor
Certificateholder of each Series adversely affected and
ten Business Days prior to the proposed effective date
for such amendment the Servicer shall furnish
notification of the substance of such amendment to each
Rating Agency providing a rating for such Series.
(e) It shall not be necessary to obtain the
consent of Investor Certificateholders under this Section
13.1 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the
authorization of the execution thereof by Investor
Certificateholders shall be subject to such reasonable
requirements as the Trustee may prescribe.
(f) Any Supplement executed and delivered
pursuant to Section 6.9, executed in accordance with the
provisions hereof, shall not be considered amendments to
this Agreement for the purpose of subsections 13.1(a) and
(b).
(g) In connection with any amendment, the
Trustee may request an Opinion of Counsel from the
Transferor or Servicer to the effect that the amendment
complies with all requirements of this Agreement. The
Trustee may, but shall not be obligated to, enter into
any amendment which affects the Trustee's rights, duties
or immunities under this Agreement or otherwise.
Section 13.2 Protection of Right, Title and
Interest to Trust.
(a) The Servicer shall cause this Agreement,
all amendments hereto and/or all financing statements and
continuation statements and any other necessary documents
covering the Certificateholders and the Trustee's right,
title and interest to the Trust to be promptly recorded,
registered and filed, and at all times to be kept
recorded, registered and filed, all in such manner and in
such places as may be required by law fully to preserve
and protect the right, title and interest of the
Certificateholders or the Trustee, as the case may be,
hereunder to all property comprising the Trust. The
Servicer shall deliver to the Trustee file-stamped copies
of, or filing receipts for, any document recorded,
registered or filed as provided above, as soon as
available following such recording, registration or
filing. The Transferor shall cooperate fully with the
Servicer in connection with the obligations set forth
above and will execute any and all documents reasonably
required to fulfill the intent of this subsection
13.2(a).
(b) Within 30 days after the Transferor makes
any change in its name, identity or corporate structure
which would make any financing statement or continuation
statement filed in accordance with paragraph (a) above
materially misleading within the meaning of Section 9-
402(7) of the UCC as in effect in the Relevant UCC State,
the Transferor shall give the Trustee written notice of
any such change and shall file such financing statements
or amendments as may be necessary to continue the
perfection of the Trust's security interest in the
Receivables and the proceeds thereof.
(c) Each of the Transferor and the Servicer
will give the Trustee prompt written notice of any
relocation of any office from which it services
Receivables or keeps records concerning the Receivables
or of its principal executive office and whether, as a
result of such relocation, the applicable provisions of
the UCC would require the filing of any amendment of any
previously filed financing or continuation statement or
of any new financing statement and shall file such
financing statements or amendments as may be necessary to
continue the perfection of the Trust's security interest
in the Receivables and the proceeds thereof. Each of the
Transferor and the Servicer will at all times maintain
each office from which it services Receivables and its
principal executive office within the United States of
America.
(d) The Servicer will deliver to the Trustee
on or before March 31 of each year, beginning with March
31, 1995, an Opinion of Counsel, substantially in the
form of Exhibit E.
Section 13.3 Limitation on Rights of
Certificateholders.
(a) The death or incapacity of any Investor
Certificateholder shall not operate to terminate this
Agreement or the Trust, nor shall such death or
incapacity entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to
take any action or commence any proceeding in any court
for a partition or winding up of the Trust, nor otherwise
affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) No Investor Certificateholder shall have
any right to vote (except with respect to the Investor
Certificateholders as provided in Section 13.1 hereof) or
in any manner otherwise control the operation and
management of the Trust, or the obligations of the
parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed
so as to constitute the Certificateholders from time to
time as members of an association; nor shall any Investor
Certificateholder be under any liability to any third
person by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right
by virtue of any provisions of this Agreement to
institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement,
unless such Certificateholder previously shall have given
written notice to the Trustee, and unless the Holders of
Certificates evidencing Undivided Interests aggregating
more than 50% of the Invested Amount of any Series which
may be adversely affected but for the institution of such
suit, action or proceeding, shall have made written
request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and
the Trustee, for 60 days after its receipt of such
notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit
or proceeding; it being understood and intended, and
being expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no
one or more Certificateholders shall have the right in
any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Certificateholders
of any other of the Certificates, or to obtain or seek to
obtain priority over or preference to any other such
Certificateholder, or to enforce any right under this
Agreement, except in the manner herein provided and for
the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement
of the provisions of this Section 13.3, each and every
Certificateholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
Section 13.4 Governing Law. THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE WITHOUT REFERENCE TO ITS CONFLICT OF
LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 13.5 Notices. All demands, notices
and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally
delivered at, sent by facsimile to, sent by courier at or
mailed by registered mail, return receipt requested, to
(a) in the case of the Transferor, to ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention:
Chief Financial Officer, with a copy to the Servicer as
provided below, (b) in the case of the Servicer, to ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, with a copy to
Fingerhut, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Treasurer, (c) in the case of the Trustee, to
the Corporate Trust Office, (d) in the case of the
Enhancement Provider for a particular Series, the
address, if any, specified in the Supplement relating to
such Series and (e) in the case of the Rating Agency for
a particular Series, the address, if any, specified in
the Supplement relating to such Series; or, as to each
party, at such other address as shall be designated by
such party in a written notice to each other party.
Unless otherwise provided with respect to any Series in
the related Supplement any notice required or permitted
to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register,
or with respect to any notice required or permitted to be
made to the Holders of Bearer Certificates, by
publication in the manner provided in the related
Supplement. If and so long as any Series or Class is
listed on the Luxembourg Stock Exchange and such Exchange
shall so require, any Notice to Investor
Certificateholders shall be published in an authorized
newspaper of general circulation in Luxembourg within the
time period prescribed in this Agreement. Any notice so
mailed within the time prescribed in this Agreement shall
be conclusively presumed to have been duly given, whether
or not the Certificateholder receives such notice.
Section 13.6 Severability of Provisions. If
any one or more of the covenants, agreements, provisions
or terms of this Agreement shall for any reason
whatsoever be held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of
this Agreement or of the Certificates or rights of the
Certificateholders thereof.
Section 13.7 Assignment. Notwithstanding
anything to the contrary contained herein, except as
provided in Section 8.2, this Agreement may not be
assigned by the Servicer without the prior consent of
Holders of Investor Certificates evidencing Undivided
Interests aggregating not less than 66 2/3% of the
Invested Amount of each Series on a Series by Series
basis. Upon such assignment, the Trustee shall provide
notice to ▇▇▇▇▇'▇ in a prompt manner.
Section 13.8 Certificates Non-Assessable and
Fully Paid. Except to the extent otherwise expressly
provided in Section 7.4 with respect to the Transferor,
it is the intention of the parties to this Agreement that
the Investor Certificateholders shall not be personally
liable for obligations of the Trust, that the Undivided
Interests represented by the Certificates shall be non-
assessable for any losses or expenses of the Trust or for
any reason whatsoever, and that Certificates upon
authentication thereof by the Trustee pursuant to
Sections 2.1 and 6.2 are and shall be deemed fully paid.
Section 13.9 Further Assurances. The
Transferor and the Servicer agree to do and perform, from
time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by
the Trustee more fully to effect the purposes of this
Agreement, including, without limitation, the execution
of any financing statements or continuation statements
relating to the Receivables and the other Trust Property
for filing under the provisions of the UCC of any
applicable jurisdiction.
Section 13.10 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the
part of the Trustee, any Enhancement Provider or the
Investor Certificateholders, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and
not exhaustive of any rights, remedies, powers and
privileges provided by law.
Section 13.11 Counterparts. This Agreement
may be executed in two or more counterparts (and by
different parties on separate counterparts), each of
which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 13.12 Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding
upon the parties hereto, the Certificateholders and, to
the extent provided in the related Supplement, to the
Enhancement Provider named therein, and their respective
successors and permitted assigns. Except as otherwise
provided in this Article XIII, no other Person will have
any right or obligation hereunder.
Section 13.13 Actions by Certificateholders.
(a) Wherever in this Agreement a provision is
made that an action may be taken or a notice, demand or
instruction given by Investor Certificateholders, such
action, notice or instruction may be taken or given by
any Investor Certificateholder, unless such provision
requires a specific percentage of Investor
Certificateholders.
(b) Any request, demand, authorization,
direction, notice, consent, waiver or other act by a
Certificateholder shall bind such Certificateholder and
every subsequent holder of such Certificate issued upon
the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done
or omitted to be done by the Trustee or the Servicer in
reliance thereon, whether or not notation of such action
is made upon such Certificate.
(c) Any request, demand, authorization,
direction, notice, consent, waiver or other action
provided by this Agreement or any Supplement to be given
or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially
similar tenor signed by such Certificateholders in person
or by agent duly appointed in writing; and except as
herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are
delivered to the Trustee and, when required, to the
Transferor or the Servicer. Proof of execution of any
such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement or
any Supplement and conclusive in favor of the Trustee,
the Transferor and the Servicer, if made in the manner
provided in this Section.
(d) The fact and date of the execution by any
Certificateholder of any such instrument or writing may
be proved in any reasonable manner which the Trustee
deems sufficient.
Section 13.14 Rule 144A Information. For so
long as any of the Investor Certificates of any Series or
any Class are "restricted securities" within the meaning
of Rule 144(a)(3) under the Securities Act, each of the
Transferor, the Servicer, the Trustee and the Enhancement
Provider for such Series agree to cooperate with each
other to provide to any Investor Certificateholders of
such Series or Class and to any prospective purchaser of
Certificates designated by such an Investor
Certificateholder upon the request of such Investor
Certificateholder or prospective purchaser, any
information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth
in Rule 144A(d)(4) under the Securities Act.
Section 13.15 Merger and Integration. Except
as specifically stated otherwise herein, this Agreement
sets forth the entire understanding of the parties
relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this
Agreement. This Agreement may not be modified, amended,
waived or supplemented except as provided herein.
Section 13.16 Headings. The headings herein
are for purposes of reference only and shall not
otherwise affect the meaning or interpretation of any
provision hereof.
[End of Article XIII]
IN WITNESS WHEREOF, the Transferor, the
Servicer and the Trustee have caused this Agreement to be
duly executed by their respective officers as of the day
and year first above written.
FINGERHUT RECEIVABLES, INC.
Transferor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Assistant
Treasurer
FINGERHUT NATIONAL BANK
Servicer
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
THE BANK OF NEW YORK (DELAWARE)
Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
SCHEDULE 1
TAX RETURNS AND PAYMENTS
The Transferor, Fingerhut, FNB and FCI have filed all
applicable federal, state and material local tax returns
and have paid or caused to be paid all associated taxes
due and payable on such returns or on any assessments
received by them; except that the Transferor, Fingerhut,
FNB and FCI have not filed certain tax returns purported
to be required because they believe the requirements are
invalid and unenforceable under the commerce clause of
the United States Constitution as interpreted by the
Supreme Court in National Bellas ▇▇▇▇ v. Department of
Revenue of Illinois, 386 U.S. 753 (1967) and the
supporting lines of cases, including Quill Corp. v. North
Dakota, 112 S. Ct. 1904 (1992). The following are the
states in which the Transferor, Fingerhut, FNB and FCI
are currently collecting sales/use taxes:
California Ohio
Florida Pennsylvania
Illinois South Carolina
Iowa South Dakota
Minnesota Tennessee
New York
Notwithstanding the Supreme Court decisions, the
following states, to the best knowledge of the
Transferor, Fingerhut, FNB and FCI currently have
legislation in effect which purports to require the
Transferor, Fingerhut, FNB and FCI to collect sales or
use taxes: Alabama Missouri
Arizona Nebraska
Arkansas Nevada
California New Jersey
Colorado New Mexico
Connecticut New York
Florida North Carolina
Georgia North Dakota
Idaho Ohio
Illinois Oklahoma
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Kentucky South Dakota
Louisiana Tennessee
Massachusetts Texas
Michigan Utah
Minnesota Vermont
Mississippi ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
West Virginia
In addition, because FNB is a national banking entity
(established in 1996) which derives the majority of its
income from granting credit, it may be subject to special
financial institution rules in certain states. Such
rules attempt to impute state income tax nexus to a
company if it obtains finance revenue and/or has
receivables generated from customers in that state. Of
the states that have adopted such financial institution
rules, Minnesota is the only state where FNB is currently
filing income or franchise tax returns. States which
currently have rules pursuant to which they may attempt
to impose income tax nexus based upon such activity
include:
Arkansas Minnesota
California New Mexico
Hawaii Tennessee
Indiana West Virginia
Massachusetts
FNB has not filed in states implementing such rules other
than Minnesota because it believes the above-referenced
financial institution rules to be unconstitutional. Note
that FNB does file tax returns in South Dakota, its state
of domicile.
EXHIBIT A
FORM OF EXCHANGEABLE TRANSFEROR CERTIFICATE
No. 1 One Unit
FINGERHUT MASTER TRUST
ASSET BACKED CERTIFICATE
THIS CERTIFICATE WAS ISSUED PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND MAY BE SOLD ONLY PURSUANT TO A REGISTRATION STATEMENT
EFFECTIVE UNDER THE ACT OR AN EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE ACT. IN ADDITION, THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO RESTRICTIONS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN. A COPY OF THE POOLING AND
SERVICING AGREEMENT WILL BE FURNISHED TO THE HOLDER OF THIS
CERTIFICATE BY THE TRUSTEE UPON WRITTEN REQUEST.
This Certificate represents an
Undivided Interest in the Fingerhut Master Trust
Evidencing an undivided interest in a trust, the corpus of which
consists of receivables generated from time to time in the ordinary
course of business from a portfolio of installment sale contracts
generated or to be generated by certain customers of Fingerhut
Corporation ("Fingerhut") and other assets and interests
constituting the Trust under the Pooling and Servicing Agreement
described below.
(Not an interest in or a recourse obligation of
Fingerhut Receivables, Inc., Fingerhut Corporation,
Fingerhut National Bank, Fingerhut Companies, Inc.
or any Affiliate of either of them.)
This certifies that FINGERHUT RECEIVABLES, INC. ("FRI",
the "Holder" or the "Transferor," as the context requires) is the
registered owner of a fractional undivided interest in the
Fingerhut Master Trust (the "Trust") issued pursuant to the Pooling
and Servicing Agreement, dated as of June 29, 1994 (the "Pooling
and Servicing Agreement"; such term to include any amendment or
Supplement thereto) by and among FRI, as Transferor, Fingerhut
National Bank, as Servicer (the "Servicer"), and The Bank of New
York (Delaware), as Trustee (the "Trustee"), as supplemented by
each supplement thereto existing from time to time. The corpus of
the Trust will include (i) a portfolio of Receivables (the
"Receivables") generated from time to time by Fingerhut satisfying
certain criteria, (ii) all funds to be collected from Obligors in
respect of the Receivables, (iii) all right, title, and interest of
the Transferor in, to, and under the Purchase Agreement, (iv) the
benefit of funds on deposit in the Excess Funding Account, (v)
Recoveries, (vi) moneys on deposit in the Pre-Funding Account,
(vii) proceeds of the foregoing, (viii) all monies due or to become
due with respect thereto and all amounts received with respect to
the Receivables in existence on the Closing Date or generated
thereafter, all monies on deposit in the Collection Account, the
Interest Funding Account, the Principal Account, the Distribution
Account, the Pre-Funding Account and the Excess Funding Account
(excluding any investment earnings on such deposited amounts except
for such amounts as are on deposit in the Pre-Funding Account and
the Excess Funding Account), and all other assets and interests
constituting the Trust and (ix) all proceeds of the foregoing.
To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Pooling and Servicing
Agreement. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Pooling and Servicing
Agreement, to which Pooling and Servicing Agreement, as amended
from time to time, the Holder by virtue of the acceptance hereof
assents and by which the Holder is bound.
This Certificate has not been registered or qualified
under the Securities Act of 1933, as amended, or any state
securities law. No sale, transfer or other disposition of this
Certificate shall be permitted other than in accordance with the
provisions of Section 6.3, 6.9 or 7.2 of the Pooling and Servicing
Agreement.
The Receivables arise generally from amounts charged to
Obligors for consumer goods, services or financial service
products.
This Certificate is the Exchangeable Transferor
Certificate (the "Certificate"), which represents an undivided
interest in the Trust, including the right to receive the
Collections and other amounts at the times and in the amounts
specified in the Pooling and Servicing Agreement to be paid to the
Holder of the Exchangeable Transferor Certificate. The aggregate
interest represented by this Certificate at any time in the
Principal Receivables in the Trust shall not exceed the Transferor
Interest at such time. In addition to this Certificate, Series of
Investor Certificates will be issued to investors pursuant to the
Pooling and Servicing Agreement, each of which will represent an
Undivided Interest in the Trust. This Certificate shall not
represent any interest in any Enhancement, except to the extent
provided in the Pooling and Servicing Agreement. The Transferor
Interest on any date of determination will be an amount equal to
the aggregate amount of Principal Receivables at the end of the day
immediately prior to such date of determination plus amounts on
deposit in the Excess Funding Account and Pre-Funding Account (but
not including any investment earnings thereon) minus the Aggregate
Invested Amount at the end of such day.
The Servicer shall deposit all Collections in the
Collection Account as promptly as possible after the Date of
Processing of such Collections. Unless otherwise stated in any
Supplement, throughout the existence of the Trust, the Servicer
shall allocate to the Holder of the Certificate an amount equal to
the product of (A) the Transferor Percentage and (B) the aggregate
amount of such Principal Collections and Imputed Yield Collections,
respectively, in respect of each Monthly Period. Notwithstanding
the first sentence of this paragraph, the Servicer need not deposit
this amount or any other amounts so allocated to the Certificate
pursuant to the Pooling and Servicing Agreement into the Collection
Account and shall pay, or be deemed to pay, such amounts as
collected to the Holder of the Certificate.
FNB or any permitted successor or assignee, as Servicer,
is entitled to receive as servicing compensation a monthly
servicing fee. The portion of the servicing fee which will be
allocable to the Holder of the Certificate pursuant to the Pooling
and Servicing Agreement will be payable by the Holder of the
Certificate and neither the Trust nor the Trustee or the Investor
Certificateholders will have any obligation to pay such portion of
the servicing fee.
This Certificate does not represent a recourse obligation
of, or any interest in, the Transferor or the Servicer. This
Certificate is limited in right of payment to certain Collections
respecting the Receivables, all as more specifically set forth
hereinabove and in the Pooling and Servicing Agreement.
Upon the termination of the Trust pursuant to Section
12.1 of the Pooling and Servicing Agreement, the Trustee shall
assign and convey to the Holder of the Certificate (without
recourse, representation or warranty) all right, title and interest
of the Trust in the Receivables, whether then existing or
thereafter created, and all proceeds relating thereto. The Trustee
shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be reasonably
requested by the Holder of the Certificate to vest in such Holder
all right, title and interest which the Trustee had in the
Receivables.
Unless the certificate of authentication hereon has been
executed by or on behalf of the Trustee, by manual signature, this
Certificate shall not be entitled to any benefit under the Pooling
and Servicing Agreement, or be valid for any purpose.
IN WITNESS WHEREOF, the Transferor has caused this
Certificate to be duly executed.
FINGERHUT RECEIVABLES, INC.
By:__________________
Name:
Title:
Date:
CERTIFICATE OF AUTHENTICATION
This is the Exchangeable Transferor Certificate referred
to in the within-mentioned Pooling and Servicing Agreement.
THE BANK OF NEW YORK
Authenticating Agent
By:____________________________
Name:
Title:
EXHIBIT B
FORM OF DAILY REPORT
FINGERHUT RECEIVABLES, INC.
______________________________
FINGERHUT MASTER TRUST
______________________________
The undersigned, a duly authorized representative of
Fingerhut National Bank (the "Servicer"), as Servicer pursuant to
the Amended and Restated Pooling and Servicing Agreement dated as
of January 12, 1997 (the "Pooling and Servicing Agreement"; such
term to include any amendment or Supplement thereto) by and among
Fingerhut Receivables Inc. (the "Transferor"), the Servicer and The
Bank of New York (Delaware), as Trustee, does hereby certify as
follows:
[TO BE SUPPLIED]
[Will need to know: Beginning Total Receivables
Total Collections
Principal Collections
Imputed Yield Collections
New Receivables generated
Default Amount]
EXHIBIT C
FORM OF SETTLEMENT STATEMENT
[TO BE SUPPLIED]
EXHIBIT D
FORM OF ANNUAL SERVICER'S CERTIFICATE
______________________________
FINGERHUT MASTER TRUST
______________________________
The undersigned, a duly authorized representative of
Fingerhut National Bank ("FNB"), as Servicer pursuant to the
Amended and Restated Pooling and Servicing Agreement dated as of
January 12, 1997 (the "Pooling and Servicing Agreement"; such term
to include any amendment or Supplement thereto) by and among
Fingerhut Receivables, Inc. (the "Transferor"), FNB, as Servicer
and The Bank of New York (Delaware), as trustee (the "Trustee")
does hereby certify that:
1. FNB is Servicer under the Pooling and Servicing
Agreement.
2. The undersigned is duly authorized pursuant to
the Pooling and Servicing Agreement to execute and deliver
this Certificate to the Trustee.
3. This Certificate is delivered pursuant to
Section 3.5 of the Pooling and Servicing Agreement.
4. A review of the activities of the Servicer
during (the period from the Closing Date until) (the twelve
fiscal month period ended) ________, 19__ was conducted under
our supervision.
5. Based on such review, the Servicer has, to the
best of our knowledge, fully performed all its obligations
under the Pooling and Servicing Agreement throughout such
period and no default in the performance of such obligations
has occurred or is continuing except as set forth in paragraph
6 below.
6. The following is a description of each default
in the performance of the Servicer's obligations under the
provisions of the Pooling and Servicing Agreement, including
any Supplement, known to us to have been made during such
period which sets forth in detail (i) the nature of each such
default, (ii) the action taken by the Servicer, if any, to
remedy each such default and (iii) the current status of each
such default:
[If applicable, insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed
this certificate this ___ day of ________, ____.
FINGERHUT NATIONAL BANK
as Servicer
-------------------------------------
Name:
Title:
EXHIBIT E
FORM OF ANNUAL OPINION OF COUNSEL
The opinion set forth below, which is to be delivered
pursuant to subsection 13.2(d)(ii) of the Pooling and Servicing
Agreement, may be subject to certain qualifications, assumptions,
limitations and exceptions taken or made in the opinion of counsel
delivered on the Initial Closing Date with respect to similar
matters.
No filing or other action, other than such filing or
action described in such opinion, is necessary from the date of
such opinion through ________ of the following year to continue the
perfected status of the interest of the Trust in the collateral
described in the financing statements referred to in such opinion.
EXHIBIT F
FORM OF RECONVEYANCE OF RECEIVABLES
RECONVEYANCE OF RECEIVABLES, dated as of _____ __ , 19__
by and between FINGERHUT RECEIVABLES, INC., a corporation organized
and existing under the laws of the State of Delaware (the
"Transferor"), and THE BANK OF NEW YORK (DELAWARE), a banking
corporation organized and existing under the laws of the State of
Delaware (the "Trustee") pursuant to the Pooling and Servicing
Agreement referred to below.
W I T N E S S E T H:
WHEREAS, the Transferor and the Trustee are parties to
the Amended and Restated Pooling and Servicing Agreement dated as
of January 12, 1997 (hereinafter as such agreement may have been,
or may from time to time be, amended, supplemented or otherwise
modified, the "Pooling and Servicing Agreement") by and among the
Transferor, Fingerhut National Bank as Servicer, and the Trustee;
WHEREAS, pursuant to the Pooling and Servicing Agreement,
the Transferor wishes to cause the Trustee to reconvey all of the
Receivables and proceeds thereof, whether now existing or hereafter
created, from the Trust to the Transferor pursuant to the terms of
Section 12.4 of the Pooling and Servicing Agreement upon
termination of the Trust pursuant to subsection 12.1(a) of the
Pooling and Servicing Agreement (as each such term is defined in
the Pooling and Servicing Agreement);
WHEREAS, the Trustee is willing to reconvey the
Receivables subject to the terms and conditions hereof;
NOW THEREFORE, the Transferor and the Trustee hereby
agree as follows:
1. Defined Terms. All terms defined in the Pooling and
Servicing Agreement and used herein shall have such defined
meanings when used herein, unless otherwise defined herein.
"Reconveyance Date" shall mean _____ __, 19__.
2. Return of Lists of Receivables. The Trustee shall
deliver to the Transferor or the bailee of the Transferor, not
later than three Business Days after the Reconveyance Date, each
and every computer file or microfiche list of Receivables delivered
to the Trustee pursuant to the terms of the Pooling and Servicing
Agreement.
3. Conveyance of Receivables. (a) The Trustee does
hereby reconvey to the Transferor, without recourse, representation
or warranty, on and after the Reconveyance Date, all right, title
and interest of the Trust in and to each and every Receivable now
existing and hereafter created, all monies due or to become due
with respect thereto (including all Imputed Yield Receivables), all
proceeds (as defined in Section 9-306 of the UCC as in effect in
the Relevant UCC State) of such Receivables, except for amounts, if
any, held by the Trustee pursuant to subsection 12.3(b) of the
Pooling and Servicing Agreement.
(b) In connection with such transfer, the Trustee
agrees to execute and deliver to the Transferor on or prior to the
date of this Reconveyance, such UCC termination statements as the
Transferor may reasonably request, evidencing the release by the
Trust of its lien on the Receivables.
4. Counterparts. This Reconveyance may be executed in
two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
5. Governing Law. THIS RECONVEYANCE SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS.
IN WITNESS WHEREOF, the undersigned have caused this
Reconveyance of Receivables to be duly executed and delivered by
their respective duly authorized officers on the day and year first
above written.
FINGERHUT RECEIVABLES, INC.
By ____________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
Trustee
By ____________________________
Name:
Title:
EXHIBIT G
FORM OF AGREED-UPON PROCEDURES
The Servicer and Trustee will engage a firm of nationally
recognized independent public accountants (who may also render
other services to the Servicer or any of its subsidiaries) to
perform certain agreed-upon procedures substantially similar to the
following:
[Describe appropriate procedures]