FIRST AMENDMENT AGREEMENT
to
FINGERHUT RECEIVABLES, INC.
SECURITY PURCHASE AGREEMENT
This First Amendment Agreement (the "Amendment") is
executed as of the 29th day of July, 1999, by and among Fingerhut
Receivables, Inc. (the "Transferor"), Kitty Hawk Funding
Corporation ("Kitty Hawk"), Falcon Asset Securitization
Corporation ("Falcon"), Four Winds Funding Corporation ("Four
Winds" and, collectively with Kitty Hawk and Falcon, the "Conduit
Purchasers"), Bank of America, N.A. ("BofA" or the
"Administrative Agent"), The First National Bank of Chicago
("First Chicago"), Norddeutsche Landesbank Girozentrale, New York
Branch and/or Cayman Island Branch ("Norddeutsche"), and
Commerzbank Aktiengesellschaft, Chicago Branch ("Commerzbank" and
collectively with BofA, First Chicago and Norddeutsche, the
"Alternate Purchasers" and collectively with BofA and First
Chicago, the "Managing Agents").
W I T N E S S E T H:
WHEREAS, the Transferor, the Conduit Purchasers, the
Managing Agents, the Alternate Purchasers and the Administrative
Agent executed the Security Purchase Agreement dated as of July
30, 1998 (the "Security Purchase Agreement") Capitalized terms
used herein and not otherwise defined shall have the meanings
assigned to such terms in the Security Purchase Agreement.
WHEREAS, the parties hereto have agreed to amend the
Security Purchase Agreement on the terms and conditions
hereinafter set forth:
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Amendment of the Security Purchase
Agreement. The Security Purchase Agreement is, effective on the
date hereof and subject to the satisfaction of the condition
precedent set forth in Section 2 below, hereby amended as
follows:
1.1 The introductory paragraph and subsection (a) of
the definition of "Assignment Amount" contained in Section 1.01
of the Security Purchase Agreement shall be amended and restated
in its entirety to read as follows:
"Assignment Amount" shall mean, at any time
with respect to an Assignment:
(a) by a Conduit Purchaser in the Purchaser
Group with respect to which NationsBank is the
Managing Agent to an Alternate Purchaser in such
Purchaser Group, an amount equal to the sum of
(i) the lesser of (A) such Alternate Purchaser's
Pro Rata Share of the portion of the related
Purchaser Group Funded Portion of the Class A
Invested Amount, if any, being assigned at such
time and (B) such Alternate Purchaser's unused
Class A Commitment Amount, (ii) the lesser of (A)
such Alternate Purchaser's Pro Rata Share of the
portion of the related Purchaser Group Funded
Portion of the Class B Invested Amount, if any,
being assigned at such time and (B) such
Alternate Purchaser's unused Class B Commitment
Amount and (iii) the lesser of (A) such Alternate
Purchaser's Pro Rata Share of the portion of the
related Purchaser Group Funded Portion of the
Class C Invested Amount, if any, being assigned
at such time and (B) such Alternate Purchaser's
unused Class C Commitment Amount;"
1.2 The definitions of "Conduit Assignee," "Funding
Period," and "Specified Termination Date" contained in Section
1.01 of the Security Purchase Agreement shall be amended and
restated in their entirety to read as follows:
"`Conduit Assignee" shall mean, with respect
to any Purchaser Group, any commercial paper
conduit administered by the applicable Managing
Agent and designated from time to time to accept
an Assignment from the related Conduit Purchaser
(and thus becoming a Conduit Purchaser hereunder)
of all or a portion of the related Purchaser
Group Funded Portion of the Class A Invested
Amount, the Class B Invested Amount and the Class
C Invested Amount."
"`Funding Period" shall mean each period
determined pursuant to Section 2.03 to which all
or a portion of each Purchaser Group Funded
Portion of the Invested Amount is allocated for
the purposes of determining the Cost of Funds for
such Invested Amount."
"`Specified Termination Date" shall mean
July 27, 2000, or such later date to which the
Specified Termination Date may be extended in
accordance with Section 2.05 hereof."
1.3 The first sentence of Section 2.02 of the Security
Purchase Agreement is hereby amended and restated in its entirety
to read as follows:
"Each Conduit Purchaser, through its respective
Managing Agent, may (but is not committed to), prior to
the Increase Termination Date and subject to the
provisions of Section 6.15 of the Pooling and Servicing
Agreement (including the provisions permitting
allocation of Additional Invested Amounts other than by
Purchaser Group Percentage), purchase the related
Purchaser Group Percentage of any Additional Class A
Invested Amount, Additional Class B Invested Amount and
Additional Class C Invested Amount from time to time
requested by the Transferor from the Purchasers in
accordance with the procedures described in Section
6.15 of the Pooling and Servicing Agreement."
1.4 Section 2.03 of the Security Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
"Section 2.03 Selection of Funding Periods.
With respect to any portion of the Invested Amount
which is funded by a Conduit Purchaser through the
issuance of Commercial Paper, the Transferor may,
subject to the applicable Managing Agent's approval and
the limitations described below, request that the
Invested Amount so funded by a Conduit Purchaser be
allocated among one or more Funding Periods, so that
the aggregate amounts so allocated with respect to such
Conduit Purchaser at all times shall equal the Invested
Amount held by such Conduit Purchaser. No such Funding
Period applicable to Invested Amounts funded by the
issuance of Commercial Paper shall be longer than 270
days and no such Funding Period applicable to Invested
Amounts funded other than by the issuance of Commercial
Paper shall be longer than one month. The Transferor
shall give each Managing Agent irrevocable notice by
telephone of the new requested Funding Period(s) at
least one (1) Business Day prior to the expiration of
any then existing Funding Period; provided, however,
that the applicable Conduit Purchaser or the related
Managing Agent may select any such new Funding Period
if (1) the Transferor fails to provide such notice on a
timely basis or (ii) such Conduit Purchaser or the
related Managing Agent determines, in its sole
discretion, that the Funding Period requested by the
Transferor is unavailable or for any reason
commercially undesirable. Notwithstanding the
foregoing, if the Transferor requests that the Invested
Amount then held by any Conduit Purchaser be allocated
to more than one Funding Period during any calendar
week, the Transferor will pay to the Administrative
Agent, for distribution to such Conduit Purchaser, one
hundred dollars ($100.00) for the first additional
Funding Period requested from such Conduit Purchaser
during that week and two hundred fifty dollars
($250.00) for each additional Funding Period requested
from such Conduit Purchaser during that week, such
amount to be paid in accordance with the terms of the
Series Supplement."
1.5 The last sentence of Subsection 2.04(a) of the
Security Purchase Agreement is hereby amended and restated in its
entirety to read as follows:
"In the event that the Interest Payment received by the
Administrative Agent on any day is insufficient to
fully pay the accrued and unpaid interest described in
clauses (i), (ii) and (iii) above, such Interest
Payment shall be allocated pro rata among the
applicable Purchaser Groups (based upon the respective
Purchaser Group Funded Portions of the Class A Invested
Amount, the Class B Invested Amount and the Class C
Invested Amount, as applicable) and further allocated
pro rata among the Purchasers within each Purchaser
Group (based upon each Purchaser's funded portion of
the Class A Invested Amount, the Class B Invested
Amount and the Class C Invested Amount, as applicable)
unless otherwise agreed among the Purchasers in such
Purchaser Group."
1.6 Subsection 2.04(b) of the Security Purchase
Agreement is hereby amended and restated in its entirety to read
as follows:
"(b) On each day on which the Administrative
Agent receives a payment under the Pooling and
Servicing Agreement or Series Supplement in respect of
Program Fees, Class A Facility Usage Fees, Class B
Facility Usage Fees, Class C Facility Usage Fees or
Facility Unused Fees, the Administrative Agent shall
distribute such amounts to the applicable Managing
Agent, for the benefit of the applicable Purchaser(s)
in the related Purchaser Group, an amount equal to such
Purchaser Group's pro rata share of such fees (based
upon the respective Purchaser Group Funded Portions of
the Class A Invested Amount, the Class B Invested
Amount and the Class C Invested Amount, as
applicable)."
1.7 Subsections 2.04(d) and 2.04(e) of the Security
Purchase Agreement are hereby amended and restated in their
entirety to read as follows:
"(d) On each Business Day on which the
Administrative Agent receives a payment in respect of
the principal of the Senior Securities pursuant to the
Pooling and Servicing Agreement, the Administrative
Agent shall distribute, to each Managing Agent, for the
benefit of the applicable Purchaser(s) in the related
Purchaser Group, the related Purchaser Group's pro rata
share of the Class A Principal, the Class B Principal
and the Class C Principal (based upon the respective
Purchaser Group Funded Portions of the Class A Invested
Amount, the Class B Invested Amount and the Class C
Invested Amount, as applicable).
(e) All amounts to be paid or deposited by
the Transferor or the Servicer under this Agreement
shall be paid or deposited in accordance with the terms
hereof no later than 2:00 p.m. (New York City time) on
the day when due. All distributions by the
Administrative Agent to the Managing Agents hereunder
shall be made by wire transfer of immediately available
funds to such depository account as each such Managing
Agent directs the Administrative Agent in writing prior
to the applicable Distribution Date. Each Managing
Agent shall further distribute the amounts received by
it in accordance with subsection (a), (b), (c) and (d)
of this Section 2.04 to the applicable members of its
related Purchaser Group."
1.8 Section 7.06 of the Security Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
"Section 7.06 Payments by the Administrative
Agent. Unless specifically allocated to a Conduit
Purchaser or an Alternate Purchaser pursuant to Section
2.04 of this Agreement, all amounts received by the
Administrative Agent, if any, on behalf of the Conduit
Purchasers or Alternate Purchasers shall be paid by the
Administrative Agent to the applicable Managing Agent
(at the account specified in writing to Administrative
Agent) in accordance with the related Purchaser Group
Funded Portion on the Business Day received by the
Administrative Agent, unless such amounts are received
after 12:00 noon (New York time) on such Business Day,
in which case the Administrative Agent shall use its
reasonable efforts to pay such amounts to such Managing
Agent, on behalf of the related Purchaser, on such
Business Day, but, in any event, shall pay such amounts
to such Managing Agent, on behalf of the related
Purchaser, not later than 11:00 a.m. (New York time) on
the following Business Day."
1.9 Section 7.10 of the Security Purchase Agreement is
hereby amended and restated in its entirety to read as follows:
"Section 7.10 Indemnification of the
Managing Agent. Each Alternate Purchaser agrees to
indemnify the related Managing Agent (to the extent not
reimbursed by the Transferor), ratably in accordance
with its respective Pro Rata Share, from and against
any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the
Managing Agent (in its capacity as such) in any way
relating to or arising out of this Agreement and any of
the other Principal Agreements or such action taken or
omitted by the Managing Agent hereunder or thereunder;
provided, however, that such Alternate Purchaser shall
not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements
resulting from the Managing Agent's gross negligence or
willful misconduct. Without limitation of the
foregoing, each Alternate Purchaser agrees to reimburse
the Managing Agent, ratably in accordance with its
respective Pro Rata Share, promptly upon demand for any
out-of-pocket expenses (including counsel fees)
incurred by the Managing Agent in connection with the
administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and the other
Principal Agreements, to the extent that such expenses
are incurred in the interests of or otherwise in
respect of the Conduit Purchasers or the Alternate
Purchasers hereunder and/or thereunder and to the
extent that the Managing Agent is not reimbursed for
such expenses by the Transferor."
1.10 Subsection 8.01(a) of the Security Purchase
Agreement is hereby amended and restated in its entirety to read
as follows:
"(a) At any time prior to the Specified
Termination Date, in the event that any Conduit
Purchaser has elected in its discretion not to fund its
portion of the Class A Initial Invested Amount, the
Class B Initial Invested Amount and the Class C Initial
Invested Amount or any Additional Invested Amount as
requested under Section 2.02 hereof, then the
Transferor shall have the right to direct the related
Managing Agent to designate the Alternate Purchasers in
the related Purchaser Group to fund, and such Alternate
Purchasers shall fund, such Class A Initial Invested
Amount, Class B Initial Invested Amount and/or Class C
Initial Invested Amount or such Additional Invested
Amount, as applicable, subject to the conditions set
forth in Section 6.15 of the Pooling and Servicing
Agreement. In addition, at any time, a Conduit
Purchaser may elect to assign all or a portion of its
interest in any of the Senior Securities of its
Purchaser Group to the Alternate Purchasers in its
Purchaser Group pursuant to this Section 8.01. Upon
any such election by a Conduit Purchaser or any such
direction by the Transferor, such Conduit Purchaser
shall make an Assignment and the Alternate Purchasers
in the related Purchaser Group shall accept such
Assignment and shall assume all or a portion of the
obligations of such Conduit Purchaser hereunder. In
connection with an Assignment from any Conduit
Purchaser to the Alternate Purchasers in its Purchaser
Group pursuant to this Section 8.01, each Alternate
Purchaser shall, on the date of such Assignment, pay to
such Conduit Purchaser its Pro Rata Share of the
applicable Assignment Amount against delivery by such
Conduit Purchaser of an Assignment and Assumption
Agreement. In the event that the Assignment Amount
paid by the Alternate Purchasers is less than the sum
of the portion of the applicable Purchaser Group Funded
Portion of the Invested Amount subject to such
Assignment plus the interest component of all
outstanding Commercial Paper with respect thereto, then
to the extent payments made hereunder in respect of the
Invested Amount exceed the Assignment Amount, such
excess amounts shall be remitted by the applicable
Managing Agent to the Conduit Purchaser.
Without limiting the foregoing, any Conduit
Purchaser may, from time to time, with prior or
concurrent notice to the Transferor and the Servicer,
in one transaction or a series of transactions, assign
to a Conduit Assignee all or part of the related
Purchaser Group Funded Portion of the Class A Invested
Amount, the Class B Invested Amount or the Class C
Invested Amount and such Conduit Purchaser's rights and
obligations under this Agreement and any other
Principal Agreements to which it is a party. Upon and
to the extent of such assignment by a Conduit Purchaser
to a Conduit Assignee, (i) such Conduit Assignee shall
be the owner of the assigned portion of the related
Purchaser Group Funded Portion of the Class A Invested
Amount, the Class B Invested Amount or the Class C
Invested Amount, as applicable, (ii) the related
Managing Agent for such Conduit Purchaser will act as
the Managing Agent for such Conduit Assignee, with all
corresponding rights and powers, express or implied,
granted to the related Managing Agent hereunder or
under the other Principal Agreements, (iii) such
Conduit Assignee and its Liquidity Providers and
Program Support Providers and other related parties
shall have the benefit of all the rights and
protections provided to such Conduit Purchaser and its
Liquidity Providers and Program Support Providers and
other related parties, respectively, herein and in the
other Principal Agreements (including, without
limitation, any limitation on recourse against such
Conduit Purchaser or related parties, any agreement not
to file or join in the filing of a petition to commence
an insolvency proceeding against such Conduit
Purchaser, and the right to assign to another Conduit
Assignee as provided in this paragraph), (iv) such
Conduit Assignee shall assume such Conduit Purchaser's
right to fund the assigned portion of the related
Purchaser Group Percentage of any Additional Invested
Amount requested by the Transferor subsequent to the
date of such assignment and all other obligations, if
any, of such Conduit Purchaser under and in connection
with this Agreement or any other Principal Agreements,
and such Conduit Purchaser shall be released from such
obligations, in each case to the extent of such
assignment, and the obligations of such Conduit
Purchaser and Conduit Assignee shall be several and not
joint, (v) all distributions in respect of the related
Purchaser Group Funded Portion of the Class A Invested
Amount, the Class B Invested Amount or the Class C
Invested Amount, as applicable, shall be made to the
applicable Managing Agent, on behalf of such Conduit
Purchaser and such Conduit Assignee on a pro rata basis
according to their respective interests, (vi) the
defined terms and other terms and provisions of this
Agreement and the other Principal Agreements shall be
interpreted in accordance with the foregoing, and (vii)
if requested by the applicable Managing Agent, the
parties will execute and deliver such further
agreements and documents and take such other actions as
such Managing Agent may reasonably request to evidence
and give effect to the foregoing. No Assignment by a
Conduit Purchaser to a Conduit Assignee of all or any
portion of the related Purchaser Group Portion of the
Class A Invested Amount, the Class B Invested Amount or
the Class C Invested Amount, as applicable, shall in
any way diminish the related Alternate Purchaser's
obligation under Section 8.01(a) to fund any Additional
Invested Amount not funded by such Conduit Purchaser or
Conduit Assignee."
1.11 Section 8.01(d) of the Security Purchase Agreement
is hereby amended and restated in its entirety to read as
follows:
"(d) If at any time prior to any assignment by the
Conduit Purchaser in the Purchaser Group with respect to
which NationsBank is the Managing Agent to a related
Alternate Purchaser as contemplated pursuant to this Section
8.01, the short term debt rating of any Alternate Purchaser
shall be "A-2" or "P-2" from Standard & Poor's or Moody's,
respectively, with negative credit implications, such
Alternate Purchaser, upon request of the Managing Agent,
shall, within 30 days of such request, assign its rights and
obligations hereunder to another financial institution
(which institution's short term debt shall be rated at least
"A-2" and "P-2" from Standard & Poor's and Moody's,
respectively, and which shall not be so rated with negative
credit implications). If the short term debt rating of an
Alternate Purchaser shall be "A-3" or "P-3", or lower, from
Standard & Poor's or Moody's, respectively (or such rating
shall have been withdrawn by Standard & Poor's or Moody's),
such Alternate Purchaser, upon request of the Managing
Agent, shall, within five (5) Business Days of such request,
assign its rights and obligations hereunder to another
financial institution (which institution's short term debt
shall be rated at least "A-2" and "P-2" from Standard &
Poor's and Moody's, respectively, and which shall not be so
rated with negative credit implications). In either such
case, if any such Alternate Purchaser shall not have
assigned its rights and obligations under this Agreement
within the applicable time period described above, the
Conduit Purchaser shall have the right to require such
Alternate Purchaser to accept the assignment of such
Alternate Purchaser's Pro Rata Share of the Purchaser Group
Funded Portion of the Class A Invested Amount, the Class B
Invested Amount and/or the Class C Invested Amount; such
assignment shall occur in accordance with the applicable
provisions of this Section 8.01. Such Alternate Purchaser
shall be obligated to pay to the Conduit Purchaser, in
connection with such assignment, in addition to the Pro Rata
Share of the Purchaser Group Funded Portion of the Class A
Invested Amount, the Class B Invested Amount and/or the
Class C Invested Amount, an amount equal to the interest
component of the outstanding Commercial Paper issued to fund
the portion of the Class A Invested Amount, the Class B
Invested Amount and/or the Class C Invested Amount being
assigned to such Alternate Purchaser, as reasonably
determined by the Managing Agent. Notwithstanding anything
contained herein to the contrary, upon any such assignment
to a downgraded Alternate Purchaser as contemplated pursuant
to the immediately preceding sentence, the aggregate
available amount of the Facility Limit, solely as it relates
to new Additional Invested Amounts by the Conduit Purchaser,
shall be reduced by the amount of unused Class A Commitment
Amount, Class B Commitment Amount and/or Class C Commitment
Amount of such downgraded Alternate Purchaser; it being
understood and agreed, that nothing in this sentence or the
two preceding sentences shall affect or diminish in any way
any such downgraded Alternate Purchaser's commitment to the
Transferor or such downgraded Alternate Purchaser's other
obligations and liabilities hereunder and under the other
Principal Agreements."
1.12 Section 9.02 of the Security Purchase Agreement is
hereby amended by replacing the term "Required Securityholders"
contained therein with the term "Required Senior
Securityholders."
SECTION 2. Condition Precedent. This Amendment shall
become effective as of the date hereof upon the execution hereof
by all of the parties hereto.
SECTION 3. Miscellaneous.
3.1 Ratification. As amended hereby, the Security
Purchase Agreement is in all respects ratified and confirmed and
the Security Purchase Agreement as so amended by this Amendment
shall be read, taken and construed as one and the same
instrument.
3.2 Representation and Warranty. The Transferor
represents and warrants that this Amendment has been duly
authorized, executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights in general
and by general principles of equity (whether considered in a suit
at law or in equity).
3.3 Governing Law; Parties. THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Whenever in this Amendment there is a
reference made to any of the parties hereto, such reference shall
also be a reference to the successors and assigns of such party,
including, without limitation, any debtor-in-possession or
trustee. The provisions of this Amendment shall be binding upon
and shall inure to the benefit of the successors and assigns of
the parties hereto.
3.4 Counterparts; Severability. This Amendment may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement. In case
any provision in or obligation under this Amendment shall be
invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions
or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.
3.5 Expenses. The Transferor agrees to pay all
reasonable out-of-pocket expenses (including, without the fees
and expenses of Sidley & Austin, counsel to the Purchasers)
incurred by the Administrative Agent or the Purchasers in
connection with the negotiation, execution, delivery and
preparation of this Amendment.
IN WITNESS WHEREOF, the Transferor, the Purchasers, the
Managing Agents and the Administrative Agent have caused this
Amendment to be fully executed by their respective officers as of
the day and year first above written.
FINGERHUT RECEIVABLES, INC.,
as Transferor
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: President
KITTY HAWK FUNDING CORPORATION,
as Conduit Purchaser
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
FALCON ASSET SECURITIZATION CORPORATION,
as Conduit Purchaser
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Managing Director
FOUR WINDS FUNDING CORPORATION,
as Conduit Purchaser
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Vice President
BANK OF AMERICA, N.A.,
as Alternate Purchaser and Managing Agent
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
NORDDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH AND/OR CAYMAN ISLAND
BRANCH, as Alternate Purchaser
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Vice President
By: /s/ Xxxxxxxxx Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as Alternate Purchaser and Managing Agent
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: First Vice President
COMMERZBANK AKTIENGESELLSCHAFT, CHICAGO
BRANCH, as Alternate Purchaser and
Managing Agent
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
BANK OF AMERICA, N.A.,
as Administrative Agent for the Purchasers
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
