RECEIVABLES PURCHASE AGREEMENT

                         DATED AS OF SEPTEMBER 26, 2000

                                      AMONG

                     FERRELLGAS RECEIVABLES, LLC, AS SELLER,

                         FERRELLGAS, L.P., AS SERVICER,

                       JUPITER SECURITIZATION CORPORATION,

           THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,

                                       AND

                  BANK ONE, NA (MAIN OFFICE CHICAGO), AS AGENT





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                         RECEIVABLES PURCHASE AGREEMENT

                  This Receivables Purchase Agreement, dated as of September 26,
2000, is among Ferrellgas Receivables, LLC, a Delaware limited liability company
("Seller"),  Ferrellgas, L.P., a Delaware limited partnership ("Ferrellgas"), as
initial  Servicer (the Servicer  together with Seller,  the "Seller Parties" and
each a "Seller  Party"),  the  entities  listed on Schedule A to this  Agreement
(together with any of their  respective  successors and assigns  hereunder,  the
"Financial Institutions"),  Jupiter Securitization Corporation ("Conduit"),  and
Bank One, NA (Main Office Chicago), as agent for the Purchasers hereunder or any
successor agent hereunder  (together with its successors and assigns  hereunder,
the "Agent").  Unless defined elsewhere  herein,  capitalized terms used in this
Agreement  shall have the  meanings  assigned to such terms in Exhibit I and, if
not defined  therein,  the  meanings  assigned to such terms in the  Receivables
Interest Sale Agreement referenced therein.

                             PRELIMINARY STATEMENTS

                  Seller desires to transfer and assign  Purchaser  Interests to
         the Purchasers from time to time.

                  Conduit  may, in its absolute  and sole  discretion,  purchase
         Purchaser Interests from Seller from time to time.

                  In the event that Conduit  declines to make any purchase,  the
         Financial  Institutions  shall,  at the  request  of  Seller,  purchase
         Purchaser  Interests  from time to time.  In  addition,  the  Financial
         Institutions have agreed to provide a liquidity  facility to Conduit in
         accordance with the terms hereof.

                  Bank One, NA (Main Office  Chicago) has been  requested and is
         willing  to act as  Agent  on  behalf  of  Conduit  and  the  Financial
         Institutions in accordance with the terms hereof.


ARTICLE I.
                              PURCHASE ARRANGEMENTS

Section 1.1       Purchase Facility.

(a) Upon the terms and  subject to the  conditions  hereof,  Seller  may, at its
option,  sell and assign Purchaser Interests to the Agent for the benefit of one
or more of the Purchasers. In accordance with the terms and conditions set forth
herein, Conduit may, at its option,  instruct the Agent to purchase on behalf of
Conduit, or if Conduit shall decline to purchase,  the Agent shall purchase,  on
behalf of the Financial  Institutions,  Purchaser Interests from time to time in
an  aggregate  amount not to exceed at such time the lesser of (i) the  Purchase
Limit and (ii) the aggregate amount of the Commitments,  in either case,  during
the period from the date hereof to but not  including  the Facility  Termination
Date.

(b) Seller may, upon at least 5 Business Days' notice to the Agent, terminate in
whole or reduce in part,  ratably among the Financial  Institutions,  the unused
portion of the  Purchase  Limit;  provided  that each  partial  reduction of the
Purchase Limit shall be in an amount equal to $5,000,000 or an integral multiple
thereof.

Section  1.2  Increases.  Seller  shall  provide the Agent with at least two (2)
Business  Days'  prior  notice in a form set forth as  Exhibit II hereto of each
Incremental  Purchase (a  "Purchase  Notice").  Each  Purchase  Notice  shall be
subject  to  Section  6.2  hereof  and,  except  as set  forth  below,  shall be
irrevocable  and shall specify the requested  Purchase Price (which shall not be
less than  $1,000,000)  and date of purchase and, in the case of an  Incremental
Purchase to be funded by the Financial Institutions, the requested Discount Rate
and  Tranche  Period.  Following  receipt of a Purchase  Notice,  the Agent will
determine  whether Conduit agrees to make the purchase.  If Conduit  declines to
make a proposed  purchase,  Seller may  cancel  the  Purchase  Notice or, in the
absence  of such a  cancellation,  the  Incremental  Purchase  of the  Purchaser
Interest  will  be  made  by the  Financial  Institutions.  On the  date of each
Incremental  Purchase,  upon satisfaction of the applicable conditions precedent
set forth in Article VI, Conduit or the Financial  Institutions,  as applicable,
shall initiate a wire transfer to the Facility Account, of immediately available
funds, no later than 12:00 noon (Chicago time), in an amount equal to (i) in the
case of Conduit, the aggregate Purchase Price of the Purchaser Interests Conduit
is then  purchasing  or  (ii)  in the  case  of a  Financial  Institution,  such
Financial  Institution's  Pro Rata Share of the aggregate  Purchase Price of the
Purchaser Interests the Financial Institutions are purchasing.

Section 1.3 Decreases.  Seller shall provide the Agent with prior written notice
in conformity  with the Required  Notice  Period (a  "Reduction  Notice") of any
proposed  reduction of Aggregate Capital from Asset Interest  Collections.  Such
Reduction  Notice shall designate (i) the date (the "Proposed  Reduction  Date")
upon which any such reduction of Aggregate Capital shall occur (which date shall
give effect to the applicable  Required Notice  Period),  and (ii) the amount of
Aggregate  Capital to be reduced which shall be applied ratably to the Purchaser
Interests  of Conduit and the  Financial  Institutions  in  accordance  with the
amount of Capital (if any) owing to Conduit,  on the one hand, and the amount of
Capital (if any) owing to the Financial  Institutions  (ratably,  based on their
respective Pro Rata Shares), on the other hand (the "Aggregate Reduction"). Only
one (1) Reduction Notice shall be outstanding at any time.

Section 1.4 Payment  Requirements.  All amounts to be paid or  deposited  by any
Seller  Party  pursuant  to any  provision  of this  Agreement  shall be paid or
deposited in accordance  with the terms hereof no later than 12:00 noon (Chicago
time) on the day when due in immediately  available  funds,  and if not received
before  12:00 noon  (Chicago  time)  shall be deemed to be  received on the next
succeeding  Business Day. If such amounts are payable to a Purchaser  they shall
be paid to the Agent,  for the account of such  Purchaser,  at 1 Bank One Plaza,
Chicago,  Illinois 60670 until otherwise notified by the Agent. All computations
of Yield at the LIBO Rate,  per annum fees  calculated  as part of any CP Costs,
per annum fees  hereunder  and per annum fees under the Fee Letter shall be made
on the basis of a year of 360 days for the actual  number of days  elapsed.  All
computations  of Yield at the Prime Rate shall be made on the basis of a year of
365 (or, when appropriate,  366) days for the actual number of days elapsed.  If
any amount hereunder shall be payable on a day which is not a Business Day, such
amount shall be payable on the next succeeding Business Day.


ARTICLE II.
                     PAYMENTS AND ASSET INTEREST COLLECTIONS

Section 2.1 Payments.  Notwithstanding  any limitation on recourse  contained in
this  Agreement,  Seller  shall  immediately  pay to the Agent when due, for the
account of the relevant  Purchaser or Purchasers on a full recourse  basis:  (i)
such fees as are set forth in the Fee Letter  (which fees shall be sufficient to
pay all fees owing to the Financial Institutions),  (ii) all CP Costs, (iii) all
amounts payable as Yield, (iv) all amounts payable as Deemed  Collections (which
shall be immediately due and payable by Seller and applied to reduce outstanding
Aggregate Capital hereunder in accordance with Sections 2.2 and 2.3 hereof), (v)
all amounts required  pursuant to Section 2.6, (vi) all amounts payable pursuant
to Article X, if any,  (vii) all  Servicer  costs and  expenses,  including  the
Servicing Fee, in connection  with servicing,  administering  and collecting the
Pool  Receivables,  (viii) all Broken  Funding  Costs and (ix) all Default  Fees
(collectively,  the "Recourse  Obligations").  If Seller fails to pay any of the
Recourse  Obligations when due, Seller agrees to pay, on demand, the Default Fee
in respect thereof until paid.  Notwithstanding  the foregoing,  no provision of
this  Agreement  or the Fee  Letter  shall  require  the  payment  or permit the
collection  of any  amounts  hereunder  in excess of the  maximum  permitted  by
applicable law. If at any time Seller receives any Asset Interest Collections or
is deemed to receive any Asset Interest  Collections,  Seller shall  immediately
pay such Asset Interest  Collections  or Deemed  Collections to the Servicer for
application in accordance with the terms and conditions hereof and, at all times
prior to such payment,  such Asset Interest  Collections  or Deemed  Collections
shall be held in trust by Seller for the exclusive benefit of the Purchasers and
the Agent.


Section  2.2 Asset  Interest  Collections  Prior to  Amortization.  Prior to the
Amortization  Date,  any  Asset  Interest  Collections  and  Deemed  Collections
received by the  Servicer  and all Asset  Interest  Collections  received by the
Servicer shall be set aside and held in trust by the Servicer for the payment of
any accrued and unpaid  Aggregate  Unpaids or for a Reinvestment  as provided in
this Section 2.2. If at any time any Asset Interest  Collections are received by
the Servicer  prior to the  Amortization  Date, (i) the Servicer shall set aside
the Termination  Percentage  (hereinafter defined) of Asset Interest Collections
evidenced by the Purchaser Interests of each Terminating  Financial  Institution
and (ii) Seller hereby  requests and the Purchasers  (other than any Terminating
Financial Institutions) hereby agree to make,  simultaneously with such receipt,
a reinvestment (each, a "Reinvestment") with that portion of the balance of each
and every Asset Interest Collection received by the Servicer that is part of any
Purchaser Interest (other than any Purchaser Interests of Terminating  Financial
Institutions), such that after giving effect to such Reinvestment, the amount of
Capital  of  such  Purchaser   Interest   immediately  after  such  receipt  and
corresponding  Reinvestment shall be equal to the amount of Capital  immediately
prior to such receipt.  On each  Settlement  Date prior to the occurrence of the
Amortization  Date, the Servicer shall remit to the Agent's  account the amounts
set aside during the preceding Settlement Period that have not been subject to a
Reinvestment  and apply such amounts (if not previously  paid in accordance with
Section  2.1)  first,  to  reduce  unpaid CP  Costs,  Yield  and other  Recourse
Obligations  and second,  to reduce the Capital of all  Purchaser  Interests  of
Terminating  Financial   Institutions,   applied  ratably  to  each  Terminating
Financial Institution  according to its respective  Termination  Percentage.  If
such Capital, CP Costs, Yield and other Recourse Obligations shall be reduced to
zero, any additional Asset Interest  Collections received by the Servicer (i) if
applicable,  shall be remitted  to the Agent's  account no later than 12:00 noon
(Chicago  time) to the extent  required to fund any Aggregate  Reduction on such
Settlement Date and (ii) any balance remaining thereafter shall be remitted from
the  Servicer to Seller on such  Settlement  Date.  Each  Terminating  Financial
Institution  shall be allocated a ratable portion of Asset Interest  Collections
from the date of any  assignment  by  Conduit  pursuant  to  Section  13.6  (the
"Termination Date") until such Terminating Financing Institution's Capital shall
be paid in full.  This ratable  portion shall be  calculated on the  Termination
Date of each  Terminating  Financial  Institution  as a percentage  equal to (i)
Capital of such Terminating Financial Institution outstanding on its Termination
Date, divided by (ii) the Aggregate Capital outstanding on such Termination Date
(the  "Termination   Percentage").   Each  Terminating  Financial  Institution's
Termination  Percentage shall remain constant prior to the Amortization Date. On
and  after  the  Amortization   Date,  each  Termination   Percentage  shall  be
disregarded,  and each  Terminating  Financial  Institution's  Capital  shall be
reduced ratably with all Financial Institutions in accordance with Section 2.3.

Section  2.3  Asset  Interest  Collections   Following   Amortization.   On  the
Amortization  Date and on each day  thereafter,  Seller shall remain liable on a
full-recourse basis to pay the Recourse Obligations pursuant to Section 2.1, and
the Servicer shall set aside and hold in trust, for the holder of each Purchaser
Interest,  all Asset Interest Collections received on such day. On and after the
Amortization Date, the Servicer shall, at any time upon the request from time to
time by (or pursuant to standing  instructions  from) the Agent (i) remit to the
Agent's  account the amounts set aside pursuant to the preceding  sentence,  and
(ii) apply  such  amounts to reduce the  Aggregate  Unpaids in  accordance  with
Section 2.4.

Section  2.4  Application  of Asset  Interest  Collections.  If  there  shall be
insufficient funds on deposit for the Servicer to distribute funds in payment in
full  of  the  aforementioned  amounts  pursuant  to  Section  2.2  or  2.3  (as
applicable), the Servicer shall distribute funds:

                  first,   to  the   payment   of  the   Servicer's   reasonable
         out-of-pocket   costs  and  expenses  in  connection   with  servicing,
         administering  and  collecting  the Pool  Receivables  , including  the
         Servicing Fee, if Seller or one of its Affiliates is not then acting as
         the Servicer,

     second,  to the  reimbursement  of the  Agent's  costs  of  collection  and
enforcement of this Agreement,

     third,  ratably to the payment of all accrued and unpaid fees under the Fee
Letter, CP Costs and Yield,

     fourth,  (to  the  extent  applicable)  to  the  ratable  reduction  of the
Aggregate Capital (without regard to any Termination Percentage),

                  fifth,  for the ratable  payment of all other unpaid  Recourse
         Obligations,  provided  that to the extent  such  Recourse  Obligations
         relate to the payment of Servicer  costs and  expenses,  including  the
         Servicing  Fee,  when Seller or one of its  Affiliates is acting as the
         Servicer,  such costs and  expenses  will not be paid  until  after the
         payment in full of all other Recourse Obligations, and

                  sixth,  after the  Aggregate  Unpaids  have been  indefeasibly
reduced to zero, to Seller.

Asset Interest  Collections applied to the payment of Aggregate Unpaids shall be
distributed in accordance with the aforementioned provisions, and, giving effect
to each of the  priorities  set forth above in this Section 2.4, shall be shared
ratably  (within each priority) among the Agent and the Purchasers in accordance
with the amount of such  Aggregate  Unpaids  owing to each of them in respect of
each such priority.

Section 2.5 Payment Recission.  No payment of any of the Aggregate Unpaids shall
be considered paid or applied  hereunder to the extent that, at any time, all or
any portion of such payment or application is rescinded by application of law or
judicial  authority,  or must  otherwise be returned or refunded for any reason.
Seller shall remain  obligated for the amount of any payment or  application  so
rescinded,  returned  or  refunded,  and shall  promptly  pay to the Agent  (for
application  to the Person or Persons who  suffered  such  recission,  return or
refund) the full amount thereof,  plus the Default Fee from the date of any such
recission, return or refunding.

Section 2.6 Maximum Purchaser Interests.  Seller shall ensure that the Purchaser
Interests of the  Purchasers  shall at no time exceed in the aggregate  100%. If
the aggregate of the Purchaser  Interests of the Purchasers exceeds 100%, Seller
shall pay to the Agent  within one (1)  Business  Day an amount to be applied to
reduce the Aggregate Capital (as allocated by the Agent), such that after giving
effect to such payment the  aggregate of the  Purchaser  Interests  equals or is
less than 100%.

Section 2.7 Clean Up Call.  In addition to Seller's  rights  pursuant to Section
1.3, Seller shall have the right (after providing written notice to the Agent in
accordance with the Required Notice Period), at any time following the reduction
of the  Aggregate  Capital to a level  that is less than  10.0% of the  original
Purchase Limit, to repurchase from the Purchasers all, but not less than all, of
the then outstanding Purchaser Interests.  The purchase price in respect thereof
shall be an  amount  equal to the  Aggregate  Unpaids  through  the date of such
repurchase,  payable in immediately  available  funds.  Such repurchase shall be
without representation,  warranty or recourse of any kind by, on the part of, or
against any  Purchaser  or the Agent,  except that the Agent and the  Purchasers
shall represent and warrant that the Purchasers  Interests are free and clear of
any Adverse Claim created by any of them.


ARTICLE III.
                                 CONDUIT FUNDING

Section  3.1 CP Costs.  Seller  shall pay CP Costs with  respect to the  Capital
associated with each Purchaser Interest of Conduit for each day that any Capital
in respect of such Purchaser  Interest is outstanding.  Each Purchaser  Interest
funded  substantially with Pooled Commercial Paper will accrue CP Costs each day
on a pro rata basis,  based upon the percentage  share the Capital in respect of
such Purchaser Interest represents in relation to all assets held by Conduit and
funded substantially with related Pooled Commercial Paper.

Section 3.2 CP Costs Payments.  On each Settlement Date, Seller shall pay to the
Agent (for the benefit of Conduit) an aggregate  amount equal to all accrued and
unpaid  CP  Costs in  respect  of the  Capital  associated  with  all  Purchaser
Interests of Conduit for the immediately  preceding Accrual Period in accordance
with Article II.

Section 3.3  Calculation  of CP Costs.  On the 5th Business Day of each calendar
month  hereafter  while  Conduit  has any  outstanding  Capital,  Conduit  shall
calculate  the  aggregate  amount of CP Costs  allocated  to the  Capital of its
Purchaser Interests for the applicable Accrual Period and shall notify Seller of
such aggregate amount.


ARTICLE IV.
                          FINANCIAL INSTITUTION FUNDING

Section  4.1  Financial  Institution  Funding.  Each  Purchaser  Interest of the
Financial Institutions shall accrue Yield for each day during its Tranche Period
at  either  the LIBO  Rate or the Prime  Rate in  accordance  with the terms and
conditions  hereof.  Until Seller gives notice to the Agent of another  Discount
Rate in accordance with Section 4.4, the initial Discount Rate for any Purchaser
Interest  transferred to the Financial  Institutions by Conduit  pursuant to the
terms  and  conditions  hereof  shall  be  the  Prime  Rate.  If  the  Financial
Institutions  acquire by assignment from Conduit any Purchaser Interest pursuant
to Article XIII,  each  Purchaser  Interest so assigned  shall each be deemed to
have a new Tranche Period commencing on the date of any such assignment.

Section 4.2 Yield Payments.  On the Settlement Date for each Purchaser  Interest
of the Financial Institutions, Seller shall pay to the Agent (for the benefit of
the Financial  Institutions) an aggregate amount equal to the accrued and unpaid
Yield  for  the  entire  Tranche  Period  of each  such  Purchaser  Interest  in
accordance with Article II.

Section 4.3       Selection and Continuation of Tranche Periods.

(a) With consultation  from (and approval by) the Agent,  Seller shall from time
to time request  Tranche  Periods for the  Purchaser  Interests of the Financial
Institutions,  provided  that, if at any time the Financial  Institutions  shall
have a Purchaser Interest, Seller shall always request Tranche Periods such that
at least one Tranche Period shall end on the date specified in clause (A) of the
definition of Settlement Date.

(b) Seller or the Agent,  upon  notice to and  consent by the other  received at
least  three  (3)  Business  Days  prior  to the end of a  Tranche  Period  (the
"Terminating  Tranche") for any Purchaser  Interest,  may, effective on the last
day of the  Terminating  Tranche:  (i) divide any such  Purchaser  Interest into
multiple Purchaser Interests,  (ii) combine any such Purchaser Interest with one
or more other Purchaser  Interests that have a Terminating Tranche ending on the
same day as such  Terminating  Tranche  or  (iii)  combine  any  such  Purchaser
Interest  with  a new  Purchaser  Interests  to be  purchased  on the  day  such
Terminating Tranche ends, provided, that in no event may a Purchaser Interest of
Conduit be combined with a Purchaser Interest of the Financial Institutions.

Section 4.4 Financial  Institution  Discount  Rates.  Seller may select the LIBO
Rate  or  the  Prime  Rate  for  each   Purchaser   Interest  of  the  Financial
Institutions.  Seller shall by 12:00 noon (Chicago time): (i) at least three (3)
Business Days prior to the expiration of any Terminating Tranche with respect to
which the LIBO Rate is being  requested as a new Discount Rate and (ii) at least
one (1) Business Day prior to the  expiration  of any  Terminating  Tranche with
respect to which the Prime Rate is being  requested as a new Discount Rate, give
the Agent irrevocable notice of the new Discount Rate for the Purchaser Interest
associated with such Terminating Tranche. Until Seller gives notice to the Agent
of another Discount Rate, the initial  Discount Rate for any Purchaser  Interest
transferred to the Financial  Institutions  pursuant to the terms and conditions
hereof shall be the Prime Rate.

Section 4.5       Suspension of the LIBO Rate

                  (a) If any  Financial  Institution  notifies the Agent that it
has determined that funding its Pro Rata Share of the Purchaser Interests of the
Financial  Institutions  at a LIBO Rate would violate any applicable  law, rule,
regulation, or directive of any governmental or regulatory authority, whether or
not  having  the  force of law,  or that  (i)  deposits  of a type and  maturity
appropriate  to match  fund its  Purchaser  Interests  at such LIBO Rate are not
available  or (ii)  such  LIBO  Rate  does not  accurately  reflect  the cost of
acquiring or maintaining a Purchaser  Interest at such LIBO Rate, then the Agent
shall suspend the  availability  of such LIBO Rate and require  Seller to select
the Prime Rate for any Purchaser Interest accruing Yield at such LIBO Rate.

                  (b) If less  than  all of the  Financial  Institutions  give a
notice to the Agent pursuant to Section 4.5(a), each Financial Institution which
gave such a notice  shall be obliged,  at the request of Seller,  Conduit or the
Agent,  to assign all of its rights and  obligations  hereunder  to (i)  another
Financial  Institution or (ii) another funding entity nominated by Seller or the
Agent that is acceptable to Conduit and willing to participate in this Agreement
through the Liquidity  Termination Date in the place of such notifying Financial
Institution;  provided that (i) the  notifying  Financial  Institution  receives
payment in full, pursuant to an Assignment Agreement, of an amount equal to such
notifying Financial  Institution's Pro Rata Share of the Capital and Yield owing
to all of the Financial  Institutions  and all accrued but unpaid fees and other
costs and  expenses  payable in  respect of its Pro Rata Share of the  Purchaser
Interests of the  Financial  Institutions,  and (ii) the  replacement  Financial
Institution otherwise satisfies the requirements of Section 12.1(b).


ARTICLE V.
                         REPRESENTATIONS AND WARRANTIES

Section 5.1  Representations  and  Warranties  of the Seller.  Each Seller Party
hereby represents and warrants to the Agent and the Purchasers, as to itself, as
of the date hereof and as of the date of each Incremental  Purchase and the date
of each Reinvestment that:

(a) Existence and Power.  Such Seller Party is duly organized,  validly existing
and in good  standing  under the laws of Delaware,  and is duly  qualified to do
business  and is in good  standing  as a foreign  entity,  and has and holds all
organizational power and all governmental licenses, authorizations, consents and
approvals  required to carry on its business in each  jurisdiction  in which its
business is  conducted  except  where the failure to so qualify or so hold could
not reasonably be expected to have a Material Adverse Effect.

(b)  Power  and  Authority;  Due  Authorization,  Execution  and  Delivery.  The
execution  and  delivery by such Seller Party of this  Agreement  and each other
Transaction  Document  to  which  it is a  party,  and  the  performance  of its
obligations  hereunder and thereunder  and,  Seller's use of the proceeds of the
purchases made hereunder, are within its organizational powers and authority and
have been duly  authorized by all necessary  action on its part.  This Agreement
and each other  Transaction  Document to which such Seller  Party is a party has
been duly executed and delivered by such Seller Party.

(c) No  Conflict.  The  execution  and  delivery  by such  Seller  Party of this
Agreement and each other  Transaction  Document to which it is a party,  and the
performance  of its  obligations  hereunder and  thereunder do not contravene or
violate  (i) its  Organization  Documents,  (ii)  any  law,  rule or  regulation
applicable  to it,  (iii) any  restrictions  under any  agreement,  contract  or
instrument  to which it is a party  or by  which  it or any of its  property  is
bound, or (iv) any order, writ, judgment, award, injunction or decree binding on
or affecting it or its property, and do not result in the creation or imposition
of any Adverse Claim on assets of such Seller Party (except as created under the
Transaction  Documents)  except,  in each  case,  where  such  contravention  or
violation  could not reasonably be expected to have a Material  Adverse  Effect;
and no transaction  contemplated  hereby requires compliance with any bulk sales
act or similar law.

(d)  Governmental  Authorization.   Other  than  the  filing  of  the  financing
statements required hereunder and under the Receivables Interest Sale Agreement,
no  authorization  or  approval  or other  action by, and no notice to or filing
with,  any  governmental  authority or  regulatory  body is required for the due
execution  and  delivery by such Seller Party of this  Agreement  and each other
Transaction  Document  to  which  it is a  party  and  the  performance  of  its
obligations hereunder and thereunder.

(e) Actions,  Suits. There are no actions,  suits or proceedings  pending, or to
the best of such Seller Party's knowledge, threatened, against or affecting such
Seller Party, or any of its properties, in or before any Governmental Authority,
which  (a)  purport  to  affect  or  pertain  to  this  Agreement  or any  other
Transaction Document or any of the transactions  contemplated hereby or thereby;
or (b) if determined  adversely to Originator,  would  reasonably be expected to
have a Material Adverse Effect. No injunction, writ, temporary restraining order
or any order of any  nature has been  issued by any court or other  Governmental
Authority   purporting  to  enjoin  or  restrain  the  execution,   delivery  or
performance of this Agreement or any other  Transaction  Document,  or directing
that the  transactions  provided  for herein or therein  not be  consummated  as
herein or therein provided.

(f) Binding Effect. This Agreement and each other Transaction  Document to which
such Seller Party is a party constitute the legal, valid and binding obligations
of such Seller Party  enforceable  against such Seller Party in accordance  with
their respective terms,  except as such enforcement may be limited by applicable
bankruptcy,  insolvency,  reorganization  or other  similar laws  relating to or
limiting  creditors'  rights  generally  and by  general  principles  of  equity
(regardless  of whether  enforcement  is sought in a proceeding  in equity or at
law).

(g) Accuracy of Information. All information heretofore furnished by such Seller
Party or any of its  Affiliates to the Agent or any Purchaser for purposes of or
in connection with this Agreement, any of the other Transaction Documents or any
transaction  contemplated  hereby  or  thereby  is,  and  all  such  information
hereafter  furnished by such Seller Party or any of its  Affiliates to the Agent
or any  Purchaser  will be, true and accurate in every  material  respect on the
date such  information  is stated or certified and does not and will not contain
any untrue statement of a material fact or omit any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.

(h) Use of Proceeds.  No proceeds of any purchase hereunder will be used (i) for
a purpose that violates,  or would be  inconsistent  with,  Regulation T, U or X
promulgated by the Board of Governors of the Federal Reserve System from time to
time or (ii) to acquire  any  security  in any  transaction  which is subject to
Section 12, 13 or 14 of the Securities Exchange Act of 1934, as amended.

(i) Good Title.  Immediately prior to each purchase  hereunder,  Seller shall be
the legal and  beneficial  owner of the  Asset  Interest,  free and clear of any
Adverse Claim, except as created by the Transaction  Documents.  There have been
duly filed all financing  statements or other similar  instruments  or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Seller's ownership interest in the Asset Interest.

(j)  Perfection.  This  Agreement,  together  with the  filing of the  financing
statements  contemplated  hereby, is effective to, and shall, upon each purchase
hereunder,  transfer to the Agent for the benefit of the  relevant  Purchaser or
Purchasers (and the Agent for the benefit of such Purchaser or Purchasers  shall
acquire from Seller) a valid and perfected first priority  undivided  percentage
ownership  or  security  interest in the Asset  Interest,  free and clear of any
Adverse Claim, except as created by the Transactions Documents.  There have been
duly filed all financing  statements or other similar  instruments  or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect  the  Agent's  (on behalf of the  Purchasers)  ownership  or security
interest in the Asset Interest.

(k) Places of  Business  and  Locations  of  Records.  The  principal  places of
business and chief  executive  office of such Seller Party and the offices where
it keeps all of its records regarding the Purchaser Interests are located at the
address(es) listed on Exhibit III or such other locations of which the Agent has
been  notified in  accordance  with Section  7.2(a) in  jurisdictions  where all
action  required  by  Section  14.4(a)  has been taken and  completed.  Seller's
Federal Employer Identification Number is correctly set forth on Exhibit III.

(l) Asset Interest  Collections.  The conditions and  requirements  set forth in
Section 7.12 and in Section 5.12(a) of the  Receivables  Interest Sale Agreement
have at all times been satisfied and duly performed.  Seller has not granted any
Person,  other  than the  Servicer,  dominion  and  control of any  Lock-Box  or
Collection  Account,  or the  right to take  dominion  and  control  of any such
Lock-Box  or  Collection  Account at a future time or upon the  occurrence  of a
future  event.  Servicer  has not  granted  any  Person,  other  than the Agent,
dominion and control of the Servicer's  Concentration  Account,  or the right to
take dominion and control of the  Servicer's  Concentration  Account at a future
time or upon the  occurrence  of a future  event.  Seller  has not  granted  any
Person,  other than the Agent,  dominion and control of the Facility Account, or
the right to take dominion and control of the Facility  Account at a future time
or upon the occurrence of a future event.

(m) Material Adverse Effect.  (i) The initial  Servicer  represents and warrants
that since  April 30,  2000,  no event has  occurred  that would have a material
adverse effect on the financial  condition or operations of the initial Servicer
and its  Subsidiaries  or the  ability of the  initial  Servicer  to perform its
obligations  under this Agreement,  and (ii) Seller represents and warrants that
since  the date of this  Agreement,  no event has  occurred  that  would  have a
material adverse effect on (A) the financial  condition or operations of Seller,
(B) the  ability  of Seller to perform  its  obligations  under the  Transaction
Documents,  or (C) the  collectibility of the Pool Receivables  generally or any
material portion of the Pool Receivables.

(n)  Names.  In the past five (5) years,  Seller  has not used any legal  names,
trade names or assumed  names other than the name in which it has executed  this
Agreement.

(o) Ownership of Seller.  Originator owns,  directly or indirectly,  100% of the
issued and outstanding Equity Interests of Seller, free and clear of any Adverse
Claim. Such Equity Interests are validly issued,  fully paid and  nonassessable,
and there are no options,  warrants  or other  rights to acquire  securities  of
Seller.

(p) Not a Regulated  Entity.  Such Seller Party is not an  "investment  company"
within the meaning of the  Investment  Company Act of 1940,  as amended,  or any
successor  statute.  Such Seller  Party is not subject to  regulation  under the
Public  Utility  Holding  Company  Act of  1935,  the  Federal  Power  Act,  the
Interstate  Commerce Act, any state public  utilities code, or any other Federal
or state statute or regulation  limiting its ability to incur Indebtedness or to
sell interests in the Pool Receivables or the Asset Interest.

(q)  Compliance  with Law.  Such Seller Party has complied  with all  applicable
laws, rules,  regulations,  orders, writs,  judgments,  injunctions,  decrees or
awards to which it may be subject,  except  where the failure to so comply could
not  reasonably  be  expected  to have a  Material  Adverse  Effect.  Each  Pool
Receivable,  together with the Contract related thereto, does not contravene any
laws, rules or regulations  applicable thereto  (including,  without limitation,
laws, rules and regulations  relating to truth in lending,  fair credit billing,
fair credit reporting, equal credit opportunity,  fair debt collection practices
and privacy), and no part of such Contract is in violation of any such law, rule
or regulation, except where such contravention or violation could not reasonably
be expected to have a Material Adverse Effect.

(r) Compliance with Credit and Collection Policy. Such Seller Party has complied
in all material  respects with the Credit and  Collection  Policy with regard to
each Pool  Receivable and the related  Contract,  and has not made any change to
such Credit and Collection  Policy,  except such material change as to which the
Agent has been notified in accordance with Section 7.2(c) and has consented.

(s) Payments to  Originator.  Seller has given  reasonably  equivalent  value to
Originator  in  consideration  for the Asset  Interest and such transfer was not
made for or on account of an antecedent  debt. The transfer by Originator of the
Asset  Interest  under the  Receivables  Interest Sale Agreement is not voidable
under any section of the Bankruptcy Reform Act of 1978 (11 U.S.C.  ss.ss. 101 et
seq.), as amended.

(t)  Enforceability  of  Contracts.  Each  Contract  with  respect  to each Pool
Receivable is effective to create,  and has created,  a legal, valid and binding
obligation  of the related  Obligor to pay the  Outstanding  Balance of the Pool
Receivable  created  thereunder and any accrued  interest  thereon,  enforceable
against the Obligor in accordance with its terms, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization or other similar
laws  relating  to or  limiting  creditors'  rights  generally  and  by  general
principles  of  equity  (regardless  of  whether  enforcement  is  sought  in  a
proceeding in equity or at law).

(u)      Eligible Receivables.  Each Receivable included in the Asset Interest
 is an Eligible Receivable.

(v) Net Asset Interest  Balance.  Seller has determined that,  immediately after
giving effect to each purchase hereunder, the Net Asset Interest Balance will at
least equal 1.2 times the Aggregate Capital then outstanding.

(w)  Accounting.  The  manner  in  which  such  Seller  Party  accounts  for the
transactions  contemplated by this Agreement and the  Receivables  Interest Sale
Agreement does not jeopardize the true sale analysis.

     Section 5.2 Financial  Institution  Representations  and  Warranties.  Each
Financial  Institution  hereby  represents and warrants to the Agent and Conduit
that:

(a) Existence  and Power.  Such  Financial  Institution  is a  corporation  or a
banking association duly organized,  validly existing and in good standing under
the laws of its jurisdiction of incorporation or organization, and has all power
to perform its obligations hereunder.

(b) No Conflict.  The execution and delivery by such  Financial  Institution  of
this Agreement and the performance of its  obligations  hereunder are within its
powers,  have been duly authorized by all necessary action, do not contravene or
violate (i) its  certificate  or articles of  incorporation  or  association  or
by-laws,  (ii)  any  law,  rule  or  regulation  applicable  to  it,  (iii)  any
restrictions under any agreement,  contract or instrument to which it is a party
or any of its  property  is bound,  or (iv) any order,  writ,  judgment,  award,
injunction  or decree  binding on or  affecting it or its  property,  and do not
result in the creation or imposition  of any Adverse  Claim on its assets.  This
Agreement has been duly  authorized,  executed and  delivered by such  Financial
Institution.

(c) Governmental Authorization. No authorization or approval or other action by,
and no notice to or filing with, any  governmental  authority or regulatory body
is required for the due execution and delivery by such Financial  Institution of
this Agreement and the performance of its obligations hereunder.

(d) Binding  Effect.  This Agreement  constitutes  the legal,  valid and binding
obligation of such  Financial  Institution  enforceable  against such  Financial
Institution  in accordance  with its terms,  except as such  enforcement  may be
limited by applicable  bankruptcy,  insolvency,  reorganization or other similar
laws  relating  to or  limiting  creditors'  rights  generally  and  by  general
principles  of equity  (regardless  of whether such  enforcement  is sought in a
proceeding in equity or at law).


ARTICLE VI.
                             CONDITIONS OF PURCHASES

Section 6.1 Conditions  Precedent to Initial Incremental  Purchase.  The initial
Incremental  Purchase of a Purchaser Interest under this Agreement is subject to
the conditions precedent that (a) the Agent shall have received on or before the
date of such  purchase  those  documents  listed on Schedule B and (b) the Agent
shall  have  received  all fees and  expenses  required  to be paid on such date
pursuant to the terms of this Agreement and the Fee Letter.

Section 6.2  Conditions  Precedent  to All  Purchases  and  Reinvestments.  Each
purchase of a Purchaser  Interest (other than pursuant to Section 13.1) and each
Reinvestment shall be subject to the further  conditions  precedent that (a) the
Servicer  shall  have  delivered  to the  Agent  on or prior to the date of such
purchase or Reinvestment,  in form and substance  satisfactory to the Agent, all
Monthly  Reports and interim  reports as and when due under Section 8.5; (b) the
Facility  Termination  Date shall not have  occurred;  (c) the Agent  shall have
received  such other  approvals,  opinions  or  documents  as it may  reasonably
request and (d) on the date of each such  Incremental  Purchase or Reinvestment,
the following  statements  shall be true (and acceptance of the proceeds of such
Incremental  Purchase  or  Reinvestment  shall be  deemed a  representation  and
warranty by Seller that such statements are then true):

(i)      the  representations  and  warranties set forth in Section 5.1 are true
         and  correct  on and as of the  date of such  Incremental  Purchase  or
         Reinvestment as though made on and as of such date;

(ii)     no event has  occurred  and is  continuing,  or would  result from such
         Incremental   Purchase  or   Reinvestment,   that  will  constitute  an
         Amortization  Event,  and no event has occurred and is  continuing,  or
         would result from such Incremental Purchase or Reinvestment, that would
         constitute a Potential Amortization Event; and

(iii)    the  Aggregate  Capital  does not  exceed  the  Purchase  Limit and the
         aggregate Purchaser Interests do not exceed 100%.

It is  expressly  understood  that each  Reinvestment  shall,  unless  otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Asset Interest  Collections  without the  requirement
that any further  action be taken on the part of any Person and  notwithstanding
the failure of Seller to satisfy any of the  foregoing  conditions  precedent in
respect  of such  Reinvestment.  The  failure  of Seller to  satisfy  any of the
foregoing conditions precedent in respect of any Reinvestment shall give rise to
a right of the Agent,  which right may be exercised at any time on demand of the
Agent, to rescind the related purchase and direct Seller to pay to the Agent for
the benefit of the Purchasers an amount equal to the Asset Interest  Collections
prior to the  Amortization  Date that  shall have been  applied to the  affected
Reinvestment.

ARTICLE VII.
                                    COVENANTS

                  Until  the date on  which  the  Aggregate  Unpaids  have  been
indefeasibly  paid in full and this Agreement  terminates in accordance with its
terms, each Seller Party hereby covenants, as to itself, as set forth below:

     Section 7.1 Financial Reporting. Seller shall deliver to the Agent, in form
and detail satisfactory to the ------------------- Agent:

(a) Annual Financial  Statements.  As soon as available,  but not later than 100
days after the end of each fiscal year of Seller,  an unaudited balance sheet of
Seller  as at the end of such  year and the  related  statements  of  income  or
operations,  members' equity and cash flows for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, and certified
by a Responsible Officer as fairly presenting, in accordance with GAAP, applied,
if applicable,  on a basis consistent with prior years,  the financial  position
and the results of operations of Seller;

(b) Quarterly Financial Statements.  As soon as available, but not later than 45
days after the end of each of the first  three  fiscal  quarters  of each fiscal
year of Seller, a copy of the unaudited balance sheet of Seller as of the end of
such  quarter and the related  statements  of income,  members'  equity and cash
flows for the period  commencing  on the first day and ending on the last day of
such quarter,  and certified by a Responsible  Officer as fairly presenting,  in
accordance   with  GAAP  (subject  to  ordinary,   good  faith   year-end  audit
adjustments),  the  financial  position and the results of operations of Seller;
and

(c)  Receivables  Interest  Sale  Agreement  Financial  Statements.  When and as
required under the Receivables  Interest Sale  Agreement,  each of the financial
statements required to be delivered under Section 5.1 thereof.

     Section  7.2  Certificates;  Other  Information.  Such  Seller  Party shall
furnish to the Agent:

     (a) Receivables Interest Sale Agreement Certificates.  When and as required
under the Receivables  Interest Sale  Agreement,  each of the  certificates  and
other  reports  and  information  required  to be  delivered  under  Section 5.2
thereof; and

(b)  Compliance  Certificate.  Concurrently  with the delivery of the  financial
statements  referred to in  Sections  5.1(a) and (b), a  Compliance  Certificate
executed by a Responsible  Officer of Seller with respect to the periods covered
by such financial  statements  together with  supporting  calculations  and such
other supporting detail as the Agent shall require.

Section 7.3       Notices.  Such Seller Party shall promptly notify the Agent:

     (a) Of the occurrence of any Amortization  Event or Potential  Amortization
Event;

(b) Of any matter described in Section 5.3(a)-(d), (f) or (g) of the Receivables
Interest Sale Agreement;

(c) At least thirty (30) days prior to the  effectiveness of any material change
in or material  amendment  to the Credit and  Collection  Policy,  a copy of the
Credit and  Collection  Policy then in effect and a notice (A)  indicating  such
change or  amendment,  and (B) if such  proposed  change or  amendment  would be
reasonably likely to adversely affect the collectibility of the Pool Receivables
or decrease the credit quality of any newly created Pool Receivables, requesting
the Agent's consent thereto;

(d) Of any  material  change  in  accounting  policies  or  financial  reporting
practices by Originator or any of its consolidated Subsidiaries;

     (e) If any of the  representations and warranties in Article V ceases to be
true and correct;

(f) Of the  occurrence  of any  event  or  condition  that  has  had,  or  could
reasonably be expected to have, a Material Adverse Effect; and

(g) Of the  occurrence  of the  "Termination  Date"  under and as defined in the
Receivables Interest Sale Agreement.

Each notice under this Section shall be accompanied by a written  statement by a
Responsible Officer of such Seller Party setting forth details of the occurrence
referred to therein,  and stating  what action such Seller Party or any affected
Affiliate  proposes to take with respect  thereto and at what time.  Each notice
under Section  7.3(a) shall describe with  particularity  any and all clauses or
provisions  of this  Agreement  or other  Transaction  Document  that  have been
breached or violated.

Section  7.4  Compliance  with Laws.  Such Seller  Party  shall  comply with all
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business  (including the Federal Fair Labor Standards  Act),  except such as
may be  contested  in good faith or as to which a bona fide dispute may exist or
the failure of which to comply with could not  reasonably  be expected to have a
Material Adverse Effect.

Section 7.5       Preservation of Existence, Etc.  Such Seller Party shall:

(a) Preserve and maintain in full force and effect its legal  existence and good
standing under the laws of its state or jurisdiction  of organization  except in
connection with transactions permitted by the Credit Agreement;

(b)  Preserve  and  maintain in full force and effect all  governmental  rights,
privileges,  qualifications,  permits,  licenses  and  franchises  necessary  or
desirable  in the  normal  conduct of its  business  except in  connection  with
transactions  permitted by the Credit Agreement,  except where the failure to so
preserve or  maintain  such  governmental  rights,  privileges,  qualifications,
permits,  licenses and  franchises  could not  reasonably  be expected to have a
Material Adverse Effect;

(c) Preserve its business organization and goodwill, except where the failure to
so preserve  its  business  organization  or goodwill  could not  reasonably  be
expected to have a Material Adverse Effect; and

(d) Preserve or renew all of its registered patents, trademarks, trade names and
service marks,  the  non-preservation  of which could  reasonably be expected to
have a Material Adverse Effect.

Section 7.6 Payment of Obligations. Such Seller Party shall pay and discharge as
the same shall  become due and  payable  (except to the extent the failure to so
pay and discharge  could not  reasonably be expected to have a Material  Adverse
Effect), all of its obligations and liabilities, including:

(a) All tax liabilities,  assessments and governmental charges or levies upon it
or its properties or assets,  unless the same are being  contested in good faith
by appropriate  proceedings  and adequate  reserves in accordance  with GAAP are
being maintained by such Seller Party; and

(b) All lawful claims which, if unpaid, would by law become a Adverse Claim upon
its  property,  unless  such  claims  are  being  contested  in  good  faith  by
appropriate  proceedings and adequate reserves in accordance with GAAP are being
maintained by such Seller Party.

Section 7.7 Audits.  Such  Seller  Party will  furnish to the Agent from time to
time such  information  with respect to it and the Pool Receivables as the Agent
may reasonably request. Such Seller Party will, from time to time during regular
business hours as requested by Buyer (or its assigns),  upon  reasonable  notice
and at the sole cost of such Seller Party,  permit the Agent and the  Purchasers
or their respective agents or representatives  (i) to examine and make copies of
and  abstracts  from all Records in the  possession or under the control of such
Seller  Party  relating  to the  Pool  Receivables  and  the  Related  Security,
including,  without  limitation,  the related  Contracts,  and (ii) to visit the
offices and  properties  of such Seller Party for the purpose of examining  such
materials described in clause (i) above, and to discuss matters relating to such
Seller  Party's  financial  condition  or the Pool  Receivables  and the Related
Security  or  such  Seller  Party's  performance  under  any of the  Transaction
Documents or  Originator's  performance  under the Contracts  and, in each case,
with any of the officers or  employees of such Seller Party having  knowledge of
such matters.

Section  7.8  Keeping of Records  and Books.  The  Servicer  will  maintain  and
implement   administrative   and  operating   procedures   (including,   without
limitation,  an ability to recreate records evidencing  Receivables in the event
of the  destruction  of the  originals  thereof),  and  keep  and  maintain  all
documents,   books,  records  and  other  information  reasonably  necessary  or
advisable for the collection of all Receivables (including,  without limitation,
records adequate to permit the immediate  identification  of each new Receivable
and  all  Asset  Interest  Collections  of  and  adjustments  to  each  existing
Receivable).  The Servicer will give the Agent notice of any material  change in
the  administrative  and  operating  procedures  referred  to  in  the  previous
sentence. Such Seller Party will on or prior to the date hereof, mark its master
data  processing  records and other books and records  relating to the Purchaser
Interests  with a legend,  acceptable  to the Agent,  describing  the  Purchaser
Interests.

Section 7.9 Compliance  with Contracts and Credit and  Collection  Policy.  Such
Seller  Party will timely and fully (i) perform and comply with all  provisions,
covenants and other  promises  required to be observed by it under the Contracts
related to the Pool Receivables, except where the failure to so comply could not
reasonably  be  expected  to  have a  material  adverse  impact  on the  overall
collectibility of the Pool Receivables, and (ii) comply in all respects with the
Credit and Collection  Policy in regard to each Pool  Receivable and the related
Contract, except where the failure to so comply could not reasonably be expected
to have a material  adverse  impact on the  overall  collectibility  of the Pool
Receivables.

Section 7.10 Purchasers'  Reliance.  Seller acknowledges that the Purchasers are
entering into the  transactions  contemplated by this Agreement in reliance upon
Seller's identity as a legal entity that is separate from Originator. Therefore,
from and after the date of  execution  and  delivery of this  Agreement,  Seller
shall take all reasonable steps, including,  without limitation,  all steps that
the Agent or any Purchaser may from time to time reasonably request, to maintain
Seller's  identity as a separate  legal  entity and to make it manifest to third
parties that Seller is an entity with assets and liabilities distinct from those
of Originator and any  Affiliates  thereof and not just a division of Originator
or any such Affiliate.  Without  limiting the generality of the foregoing and in
addition to the other covenants set forth herein, Seller will:

(A) conduct its own  business  in its own name and  require  that all  full-time
employees of Seller, if any, identify themselves as such and not as employees of
Originator  (including,  without limitation,  by means of providing  appropriate
employees with business or  identification  cards  identifying such employees as
Seller's employees);

(B) compensate all employees, consultants and agents directly, from Seller's own
funds, for services provided to Seller by such employees, consultants and agents
and,  to the  extent  any  employee,  consultant  or agent of  Seller is also an
employee,  consultant or agent of Originator or any Affiliate thereof,  allocate
the  compensation  of such  employee,  consultant  or agent  between  Seller and
Originator  or such  Affiliate,  as  applicable,  on a basis that  reflects  the
services rendered to Seller and Originator or such Affiliate, as applicable;

(C) clearly  identify its offices (by signage or  otherwise)  as its offices and
allocate to Seller on a reasonable  basis the costs of any space shared with the
Originator;

(D) have a separate  telephone  number,  which will be answered only in its name
and separate stationery, invoices and checks in its own name;

(E)  conduct all  transactions  with  Originator  and the  Servicer  (including,
without  limitation,  any delegation of its  obligations  hereunder as Servicer)
strictly on an arm's-length  basis,  allocate all overhead expenses  (including,
without  limitation,  telephone  and other  utility  charges)  for items  shared
between  Seller  and  Originator  on the  basis  of  actual  use  to the  extent
practicable  and, to the extent such allocation is not  practicable,  on a basis
reasonably related to actual use;

(F) at all times have a Board of Directors consisting of at least three members,
at least one member of which is an Independent Director;

(G) observe all  formalities as a distinct  entity,  and ensure that all actions
relating to (A) the  dissolution  or liquidation of Seller or (B) the initiation
of, participation in, acquiescence in or consent to any bankruptcy,  insolvency,
reorganization or similar  proceeding  involving Seller,  are duly authorized by
unanimous vote of its Board of Directors (including the Independent Director);

(H) maintain  Seller's  books and records  separate from those of Originator and
any  Affiliate  thereof and  otherwise  readily  identifiable  as its own assets
rather than assets of Originator and any Affiliate thereof;

(I) prepare its financial  statements  separately  from those of Originator  and
insure that any consolidated financial statements of Originator or any Affiliate
thereof that include  Seller and that are filed with the Securities and Exchange
Commission  or any other  governmental  agency have notes  clearly  stating that
Seller is a  separate  entity and that its assets  will be  available  first and
foremost to satisfy the claims of the creditors of Seller;

(J) except as herein  specifically  otherwise  provided,  maintain  the funds or
other  assets  of  Seller  separate  from,  and not  commingled  with,  those of
Originator  or any  Affiliate  thereof and only  maintain bank accounts or other
depository  accounts  to which  Seller  alone is the account  party,  into which
Seller alone makes deposits and from which Seller alone (or the Agent hereunder)
has the power to make withdrawals;

(K) pay all of Seller's  operating expenses from Seller's own assets (except for
certain   payments  by  Originator  or  other  Persons  pursuant  to  allocation
arrangements that comply with the requirements of this Section 7.10);

(L) operate its business  and  activities  such that:  it does not engage in any
business or activity of any kind,  or enter into any  transaction  or indenture,
mortgage,  instrument,  agreement,  contract, lease or other undertaking,  other
than the  transactions  contemplated  and  authorized by this  Agreement and the
Receivables  Interest Sale  Agreement;  and does not create,  incur,  guarantee,
assume or suffer to exist any indebtedness or other liabilities,  whether direct
or  contingent,  other  than (1) as a result of the  endorsement  of  negotiable
instruments  for deposit or collection or similar  transactions  in the ordinary
course of business, (2) the incurrence of obligations under this Agreement,  (3)
the incurrence of  obligations,  as expressly  contemplated  in the  Receivables
Interest  Sale  Agreement,  to make  payment to  Originator  thereunder  for the
purchase of Receivables  from  Originator  under the  Receivables  Interest Sale
Agreement,  and (4) the incurrence of operating  expenses in the ordinary course
of business of the type otherwise contemplated by this Agreement;

(M) maintain its charter in conformity  with this  Agreement,  such that it does
not amend, restate, supplement or otherwise modify its Organization Documents in
any respect that would impair its ability to comply with the terms or provisions
of any of the Transaction Documents, including, without limitation, this Section
7.10;

(N) maintain the effectiveness of, and continue to perform under the Receivables
Interest  Sale  Agreement,  such that it does not  amend,  restate,  supplement,
cancel,  terminate or otherwise modify the Receivables  Interest Sale Agreement,
or give any  consent,  waiver,  directive  or approval  thereunder  or waive any
default,  action,  omission  or  breach  under  the  Receivables  Interest  Sale
Agreement or otherwise grant any indulgence  thereunder,  without (in each case)
the prior written consent of the Agent;

(O) maintain its legal  separateness  such that it does not merge or consolidate
with or into, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, and except as otherwise contemplated
herein) all or  substantially  all of its assets (whether now owned or hereafter
acquired) to, or acquire all or substantially  all of the assets of, any Person,
nor at any time  create,  have,  acquire,  maintain or hold any  interest in any
Subsidiary.

(P)  maintain at all times  adequate  capital with which to conduct its business
and to meet its obligations as they come due; and

(Q) take such other  actions  as are  necessary  on its part to ensure  that the
facts and  assumptions set forth in the opinion issued by Bracewell & Patterson,
L.L.P.  as counsel for the Seller  Parties,  in  connection  with the closing or
initial  Incremental  Purchase  under this Agreement and relating to substantive
consolidation issues, and in the certificates  accompanying such opinion, remain
true and correct in all material respects at all times.

Section 7.11 Performance and Enforcement of Receivables Interest Sale Agreement.
Seller will, and will require  Originator  to, perform each of their  respective
obligations and undertakings under and pursuant to the Receivables Interest Sale
Agreement,  will purchase  Receivables  thereunder in strict compliance with the
terms thereof and will  vigorously  enforce the rights and remedies  accorded to
Seller  under the  Receivables  Interest  Sale  Agreement.  Seller will take all
actions to perfect  and  enforce  its rights and  interests  (and the rights and
interests of the Agent and the  Purchasers  as  assignees  of Seller)  under the
Receivables  Interest  Sale  Agreement  as the  Agent  may  from  time  to  time
reasonably request, including, without limitation, making claims to which it may
be entitled under any indemnity, reimbursement or similar provision contained in
the Receivables Interest Sale Agreement.

Section 7.12  Collections.  Each Seller Party will cause all  Collections on the
Pool  Receivables  to be  concentrated  no  less  often  than  weekly  into  the
Servicer's Concentration Account. The Servicer will sweep the Buyer's Percentage
of all such Collections from the Servicer's  Concentration  Account no less than
daily into the Facility  Account and immediately  thereafter  transferred to the
Originator's Account; provided, however, that upon written request of the Agent,
each of the Seller Parties will cause all such  Collections  to be  concentrated
each  Business Day into the  Servicer's  Concentration  Account.  From and after
October 26, 2000: (a) Servicer will cause the Servicer's  Concentration  Account
to be subject at all times to a Blocked Account  Agreement that is in full force
and effect,  and (b) Seller will cause the Facility Account to be subject at all
times to a Blocked Account Agreement that is in full force and effect.

Section 7.13 Ownership.  Seller will take all necessary action to (i) vest legal
and equitable title to the Asset Interest  irrevocably in Seller, free and clear
of any Adverse  Claims other than  Adverse  Claims in favor of the Agent and the
Purchasers  (including,   without  limitation,   the  filing  of  all  financing
statements or other similar instruments or documents necessary under the UCC (or
any  comparable  law)  of all  appropriate  jurisdictions  to  perfect  Seller's
interest in the Asset Interest and such other action to perfect, protect or more
fully  evidence  the  interest  of Seller  therein  as the Agent may  reasonably
request),  and (ii)  establish  and  maintain,  in favor of the  Agent,  for the
benefit  of the  Purchasers,  a valid and  perfected  first  priority  undivided
percentage  ownership  interest  (and/or a valid and  perfected  first  priority
security interest) in the Asset Interest to the full extent contemplated herein,
free and clear of any Adverse  Claims other than Adverse  Claims in favor of the
Agent for the benefit of the  Purchasers  (including,  without  limitation,  the
filing of all financing  statements or other  similar  instruments  or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect the Agent's (for the benefit of the Purchasers) interest in the Asset
Interest  and such other action to perfect,  protect or more fully  evidence the
interest  of the  Agent  for the  benefit  of the  Purchasers  as the  Agent may
reasonably request).

Section  7.14  Taxes.  Such  Seller  Party will file all tax returns and reports
required  by  law  to be  filed  by it and  will  promptly  pay  all  taxes  and
governmental  charges at any time owing, except any such taxes which are not yet
delinquent  or are  being  diligently  contested  in good  faith by  appropriate
proceedings  and for which adequate  reserves in accordance with GAAP shall have
been set  aside on its  books.  Seller  will pay when due any taxes  payable  in
connection  with the Pool  Receivables,  exclusive  of taxes on or  measured  by
income or gross receipts of Conduit, the Agent or any Financial Institution.

Section 7.15 Negative  Covenants of the Seller Parties.  Until the date on which
the Aggregate  Unpaids have been  indefeasibly  paid in full and this  Agreement
terminates in accordance with its terms, each Seller Party hereby covenants,  as
to itself, that:

(a) Name  Change,  Offices and  Records.  Such Seller  Party will not change its
name,  identity  or legal  structure  (within  the  meaning  of Article 9 of any
applicable  enactment of the UCC) or relocate its chief executive  office or any
office where Records are kept unless it shall have: (i) given the Agent at least
15 days'  prior  written  notice  thereof  and (ii)  delivered  to the Agent all
financing statements,  instruments and other documents requested by the Agent in
connection with such change or relocation.

(b) Change in Payment  Instructions  to  Obligors.  Such  Seller  Party will not
authorize  any Obligor to make  payment to any  Lock-Box or  Collection  Account
other  than one which is swept  into the  Servicer's  Concentration  Account  in
accordance with Section 7.12.

(c)  Modifications  to Contracts and Credit and Collection  Policy.  Such Seller
Party will not make any change to the Credit and  Collection  Policy  that could
adversely  affect the  collectibility  of the Pool  Receivables  or decrease the
credit  quality  of any newly  created  Pool  Receivables.  Except as  otherwise
permitted  pursuant to Article VIII  hereof,  such Seller Party will not extend,
amend or  otherwise  modify  the terms of any Pool  Receivable  or any  Contract
related thereto other than in accordance with the Credit and Collection Policy.

(d) Sales, Adverse Claims. Such Seller Party will not sell, assign (by operation
of law or otherwise)  or otherwise  dispose of, or grant any option with respect
to, or create or suffer to exist any  Adverse  Claim  upon  (including,  without
limitation, the filing of any financing statement) or with respect to, the Asset
Interest,  the Facility  Account or the  Servicer's  Concentration  Account,  or
assign any right to receive  income with respect  thereto  (other than,  in each
case,  the  creation  of the  interests  therein in favor of the Agent,  for the
benefit of the  Purchasers,  provided  for  herein),  and such Seller Party will
defend the  right,  title and  interest  of the  Agent,  for the  benefit of the
Purchasers,  in, to and under any of the foregoing property,  against all claims
of third  parties  claiming  through or under such Seller  Party.  (e) Net Asset
Interest Balance.  At no time prior to the Amortization Date shall Seller permit
the Net Asset Interest  Balance to be less than 1.2 times the Aggregate  Capital
outstanding.

(f) Termination  Date  Determination.  Seller will not designate the Termination
Date (as  defined  in the  Receivables  Interest  Sale  Agreement),  or send any
written  notice to  Originator  in respect  thereof,  without the prior  written
consent of the Agent,  except with respect to the  automatic  occurrence of such
Termination  Date  arising in  accordance  with the proviso set forth in Section
7.2(i) of the Receivables Interest Sale Agreement.

(g)  Restricted   Junior  Payments.   From  and  after  the  occurrence  of  any
Amortization Event, Seller will not make any Restricted Junior Payment if, after
giving effect  thereto,  Seller would fail to meet its  obligations set forth in
Section 7.10(P).

ARTICLE VIII.
                          ADMINISTRATION AND COLLECTION

Section 8.1       Designation of Servicer.

(a) The servicing,  administration  and collection of the Pool Receivables shall
be conducted by such Person (the  "Servicer") so designated from time to time in
accordance with Article VI of the  Receivables  Interest Sale Agreement and this
Article VIII.  Ferrellgas is hereby  designated as, and hereby agrees to perform
the  duties  and  obligations  of, the  Servicer  pursuant  to the terms of this
Agreement. The Agent may at any time designate as Servicer any Person to succeed
Ferrellgas  or  any  successor  Servicer;  provided,  however,  that  unless  an
Amortization  Event (or another event of the type described in the definition of
"Amortization Date" has occurred),  replacement of the Servicer shall not result
in the occurrence of the Amortization Date.

Section 8.2       Certain Duties of Servicer.

(a) The Servicer shall  administer the Asset Interest  Collections in accordance
with the procedures  described  herein and in Article II. The Servicer shall set
aside  and hold in trust for the  account  of Seller  and the  Purchasers  their
respective  shares of the Asset Interest  Collections in accordance with Article
II. The Servicer shall,  upon the request of the Agent,  segregate,  in a manner
acceptable to the Agent, all cash, checks and other  instruments  received by it
from time to time constituting Asset Interest Collections from the general funds
of the Servicer or Seller prior to the  remittance  thereof in  accordance  with
Article  II. If the  Servicer  shall be  required to  segregate  Asset  Interest
Collections pursuant to the preceding sentence, the Servicer shall segregate and
deposit  with a bank  designated  by the  Agent  such  allocable  share of Asset
Interest  Collections of  Receivables  set aside for the Purchasers on the first
Business  Day  following   receipt  by  the  Servicer  of  such  Asset  Interest
Collections, duly endorsed or with duly executed instruments of transfer.

(b) The  Servicer  may, in  accordance  with the Credit and  Collection  Policy,
extend the maturity of any Receivable or adjust the  Outstanding  Balance of any
Receivable  as the  Servicer  determines  to be  appropriate  to maximize  Asset
Interest  Collections  thereof;  provided,   however,  that  such  extension  or
adjustment  shall not  alter  the  status  of such  Receivable  as a  Delinquent
Receivable,  Defaulted Receivable or Charged-Off  Receivable or limit the rights
of the Agent or the Purchasers under this Agreement. Notwithstanding anything to
the contrary contained herein,  from and after the occurrence of an Amortization
Event,  the Agent  shall have the  absolute  and  unlimited  right to direct the
Servicer  to  commence  or settle  any legal  action  with  respect  to any Pool
Receivable or to foreclose upon or repossess any Related Security.

(c) The Servicer  shall hold in trust for Seller and the  Purchasers all Records
that (i)  evidence  or  relate  to the  Asset  Interest  or (ii)  are  otherwise
necessary  or  desirable  to collect the Asset  Interest  and shall,  as soon as
practicable upon demand of the Agent following the occurrence of an Amortization
Event,  deliver  or make  available  to the Agent all such  Records,  at a place
selected by the Agent.  The Servicer shall,  from time to time at the request of
any  Purchaser,  furnish to the Purchasers  (promptly  after any such request) a
calculation of the amounts set aside for the Purchasers pursuant to Article II.

(d) Any  payment by an Obligor  in  respect  of any  indebtedness  owed by it to
Originator  or Seller  shall,  except as otherwise  specified by such Obligor or
otherwise  required by contract or law and unless  otherwise  instructed  by the
Agent,  be  applied  as a  Collection  of any Pool  Receivable  of such  Obligor
(starting  with the oldest  such Pool  Receivable)  to the extent of any amounts
then due and payable  thereunder before being applied to any other receivable or
other obligation of such Obligor.

Section 8.3 Collection Notices.  The Agent is authorized at any time to date and
to deliver to Wells Fargo Bank the Collection Notices;  provided,  however, that
nothing  herein shall be deemed to give the Agent any claim to, Adverse Claim on
or right to retain  any  amounts  deposited  into the  Servicer's  Concentration
Account  or  the  Facility  Account  which  do  not  constitute  Asset  Interest
Collections and provided, further, that unless an Amortization Event (or another
event of the  type  described  in the  definition  of  "Amortization  Date"  has
occurred), delivery of the Collection Notices shall not result in the occurrence
of the  Amortization  Date.  Effective  when the Agent  delivers  such  notices,
Servicer hereby  transfers to the Agent for the benefit of the  Purchasers,  the
exclusive  control of the Servicer's  Concentration  Account,  and Seller hereby
transfers  to the  Agent  for  the  benefit  of the  Purchasers,  the  exclusive
ownership and control of the Facility Account. Each of the Seller Parties hereby
authorizes  the Agent,  and agrees that the Agent shall be entitled:  (i) at any
time after delivery of the Collections  Notices,  to endorse such Seller Party's
name on checks and other instruments  representing  Asset Interest  Collections,
(ii) at any  time  after  the  earlier  to  occur  of an  Amortization  Event or
replacement  of the Servicer,  to enforce the Pool  Receivables  and the Related
Security,  and (iii) at any time after delivery of the Collections  Notices,  to
take such action as shall be necessary  or  desirable to cause all cash,  checks
and other instruments  constituting Asset Interest  Collections to come into the
possession of the Agent rather than such Seller Party.

Section  8.4  Responsibilities  of  Seller.  Anything  herein  to  the  contrary
notwithstanding,  the exercise by the Agent and the  Purchasers  of their rights
hereunder shall not release the Servicer, Originator or Seller from any of their
duties or  obligations  with  respect to any  Receivables  or under the  related
Contracts.  The Purchasers shall have no obligation or liability with respect to
any  Receivables  or related  Contracts,  nor shall any of them be  obligated to
perform the obligations of Seller.

Section 8.5 Reports.  The Servicer shall prepare and forward to the Agent (i) on
the 18th day of each month  hereafter or if any such day is not a Business  Day,
on the next  succeeding  Business  Day (each,  a "Monthly  Reporting  Date"),  a
Monthly Report and (ii) at such times as the Agent shall reasonably  request,  a
listing by Obligor of all Pool  Receivables  together  with an aging of all Pool
Receivables.  Additionally,  at such  more  frequent  times as the  Agent  shall
reasonably request,  upon five (5) days' notice, the Servicer will furnish (x) a
report  calculating the amount of Eligible  Receivables as of such date based on
the  information  available  to  determine  sales,   credits,   charge-offs  and
collections  since the most  recent  Monthly  Report,  or (y) such other form of
report in form and substance  reasonably  satisfactory to the Agent with respect
to the amount of Eligible  Receivables  based on available  information.  At any
time that the Agent shall request upon not less than five (5) days' notice,  the
Servicer  shall prepare and forward to the Agent an interim report setting forth
all of the items  covered in a Monthly  Report,  as of the date of such request,
and in the same format as a Monthly Report.

ARTICLE IX.
                               AMORTIZATION EVENTS

     Section 9.1 Amortization  Events.  The occurrence of any one or more of the
following events shall constitute an Amortization Event:

(a) Any  Seller  Party  shall fail (i) to make any  payment or deposit  required
hereunder  when due and, for any such payment or deposit which is not in respect
of Capital, such failure continues for two (2) Business Days, or (ii) to perform
or observe any term,  covenant or agreement hereunder (other than as referred to
in clause (i) of this paragraph (a) and paragraph 9.1(e)) and such failure shall
continue for five (5) consecutive Business Days.

(b) Any representation,  warranty, certification or statement made by any Seller
Party in this Agreement,  any other Transaction  Document to which it is a party
or in any other  document  delivered  pursuant  hereto or thereto shall prove to
have been incorrect when made or deemed made.

(c) Failure of Seller to pay any Indebtedness when due; or the default by Seller
in  the  performance  of any  term,  provision  or  condition  contained  in any
agreement  under which any such  Indebtedness  was created or is  governed,  the
effect  of which is to  cause,  or to  permit  the  holder  or  holders  of such
Indebtedness  to cause,  such  Indebtedness  to become  due prior to its  stated
maturity;  or any such  Indebtedness  of Seller  shall be declared to be due and
payable or required to be prepaid (other than by a regularly  scheduled payment)
prior to the date of maturity thereof.

(d) (i) Seller  shall  generally  not pay its debts as such debts  become due or
shall admit in writing its inability to pay its debts  generally or shall make a
general assignment for the benefit of creditors; or (ii) any proceeding shall be
instituted by or against any Seller Party or any of its Subsidiaries  seeking to
adjudicate  it  bankrupt  or  insolvent,  or seeking  liquidation,  winding  up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy,  insolvency or reorganization
or relief  of  debtors,  or  seeking  the  entry of an order  for  relief or the
appointment  of a  receiver,  trustee or other  similar  official  for it or any
substantial  part of its property or (iii) any Seller or any of its Subsidiaries
shall take any action to  authorize  any of the actions set forth in clauses (i)
or (ii) above in this subsection (d).

(e) Seller shall fail to comply with the terms of Section 2.6 hereof.

(f)      As of the last day of any Measurement Period:

                  (i) the  average  of the  Delinquency  Trigger  Ratios for the
         three Measurement Periods then most recently ended shall exceed 9.10%;

                  (ii) the  average of the  Charged-Off  Trigger  Ratios for the
         three Measurement  Periods then most recently ended shall exceed 0.90%,
         or

                  (iii) the average of the Dilution Trigger Ratios for the three
         Measurement Periods then most recently ended shall exceed 2.40%.

(g) A Change of Control shall occur.

(h) One or more  final  judgments  for the  payment  of money  shall be  entered
against  Seller on claims not covered by insurance or as to which the  insurance
carrier  has  denied  its  responsibility,  and  such  judgment  shall  continue
unsatisfied  and in effect for fifteen (15)  consecutive  days without a stay of
execution.

(i) The occurrence of any Termination Event or the Termination Date under and as
defined  in the  Receivables  Interest  Sale  Agreement  shall  occur  under the
Receivables Interest Sale Agreement.

(j) This  Agreement  shall  terminate in whole or in part (except in  accordance
with its terms),  or shall  cease to be  effective  or to be the legally  valid,
binding and enforceable  obligation of Seller,  or any Obligor shall directly or
indirectly contest in any manner such effectiveness, validity, binding nature or
enforceability,  or the Agent for the benefit of the  Purchasers  shall cease to
have a valid  and  perfected  first  priority  security  interest  in the  Asset
Interest.

Section 9.2 Remedies.  Upon the  occurrence  and during the  continuation  of an
Amortization  Event,  the  Agent  may,  or upon the  direction  of the  Required
Financial Institutions shall, take any of the following actions: (i) replace the
Person then acting as Servicer (if not  previously  replaced),  (ii) declare the
Amortization  Date to have  occurred,  whereupon  the  Amortization  Date  shall
forthwith occur,  without demand,  protest or further notice of any kind, all of
which are hereby expressly waived by each Seller Party; provided,  however, that
upon the occurrence of an Amortization  Event described in Section 9.1(d), or of
an actual or deemed  entry of an order for  relief  with  respect  to any Seller
Party  under  the  Federal   Bankruptcy  Code,  the   Amortization   Date  shall
automatically occur,  without demand,  protest or any notice of any kind, all of
which are hereby  expressly  waived by each Seller  Party,  (iii) to the fullest
extent  permitted by applicable  law,  declare that the Default Fee shall accrue
with respect to any of the Aggregate Unpaids  outstanding at such time, and (iv)
notify  Obligors  of the  Purchasers'  interest  in the  Pool  Receivables.  The
aforementioned rights and remedies shall be without limitation,  and shall be in
addition  to all other  rights  and  remedies  of the  Agent and the  Purchasers
otherwise available under any other provision of this Agreement, by operation of
law,  at  equity or  otherwise,  all of which are  hereby  expressly  preserved,
including,  without limitation,  all rights and remedies provided under the UCC,
all of which rights shall be cumulative.


ARTICLE X.
                                 INDEMNIFICATION

Section  10.1  Indemnities  by the Seller  Parties.  Without  limiting any other
rights that the Agent or any  Purchaser may have  hereunder or under  applicable
law, (A) Seller  hereby  agrees to indemnify  (and pay upon demand to) the Agent
and each Purchaser and their respective assigns, officers, directors, agents and
employees  (each an  "Indemnified  Party") from and against any and all damages,
losses,  claims, taxes,  liabilities,  costs, expenses and for all other amounts
payable,  including reasonable attorneys' fees (which attorneys may be employees
of the Agent or such  Purchaser) and  disbursements  (all of the foregoing being
collectively  referred to as "Indemnified  Amounts") awarded against or incurred
by  any  of  them  arising  out  of or as a  result  of  this  Agreement  or the
acquisition, either directly or indirectly, by a Purchaser of an interest in the
Pool Receivables,  and (B) the Servicer hereby agrees to indemnify (and pay upon
demand to) each  Indemnified  Party for  Indemnified  Amounts awarded against or
incurred by any of them  arising out of the  Servicer's  activities  as Servicer
hereunder  excluding,  however,  in all of the  foregoing  instances  under  the
preceding clauses (A) and (B):

                  (a)  Indemnified  Amounts to the extent a final  judgment of a
         court of competent  jurisdiction  holds that such  Indemnified  Amounts
         resulted from gross negligence or willful misconduct on the part of the
         Indemnified Party seeking indemnification;

                  (b) Indemnified Amounts to the extent the same includes losses
         in  respect of  Receivables  that are  uncollectible  on account of the
         insolvency,  bankruptcy  or lack  of  creditworthiness  of the  related
         Obligor; or

                  (c)  taxes   imposed  by  the   jurisdiction   in  which  such
         Indemnified  Party's  principal  executive  office  is  located,  on or
         measured  by the overall  net income of such  Indemnified  Party to the
         extent  that  the  computation  of such  taxes is  consistent  with the
         characterization  for income tax  purposes  of the  acquisition  by the
         Purchasers of Purchaser  Interests as a loan or loans by the Purchasers
         to Seller secured by the Asset Interest;
provided,  however,  that  nothing  contained in this  sentence  shall limit the
liability  of any Seller Party or limit the  recourse of the  Purchasers  to any
Seller  Party for  amounts  otherwise  specifically  provided to be paid by such
Seller Party under the terms of this Agreement.  Without limiting the generality
of the  foregoing  indemnification,  Seller  shall  indemnify  the Agent and the
Purchasers for Indemnified  Amounts (including,  without  limitation,  losses in
respect  of  uncollectible  receivables,  regardless  of  whether  reimbursement
therefor  would  constitute  recourse to Seller or the Servicer)  relating to or
resulting from:

(i)      any  representation  or warranty made by any Seller Party or Originator
         (or any officers of any such Person) under or in  connection  with this
         Agreement,  any other Transaction  Document or any other information or
         report  delivered by any such Person pursuant hereto or thereto,  which
         shall have been false or incorrect when made or deemed made;

(ii)     the failure by Seller,  the Servicer or  Originator  to comply with any
         applicable  law, rule or regulation  with respect to any  Receivable or
         Contract  related  thereto,  or the  nonconformity of any Receivable or
         Contract  included  therein  with  any  such  applicable  law,  rule or
         regulation  or any failure of  Originator to keep or perform any of its
         obligations, express or implied, with respect to any Contract;

(iii)    any  failure of Seller,  the  Servicer  or  Originator  to perform  its
         duties,   covenants  or  other   obligations  in  accordance  with  the
         provisions of this Agreement or any other Transaction Document;

(iv)     any  products  liability,  personal  injury  or damage  suit,  or other
         similar  claim  arising  out  of or  in  connection  with  merchandise,
         insurance  or  services  that are the  subject of any  Contract  or any
         Receivable;

(v)      any  dispute,  claim,  offset  or  defense  (other  than  discharge  in
         bankruptcy  of the  Obligor)  of the  Obligor  to  the  payment  of any
         Receivable  (including,  without  limitation,  a defense  based on such
         Receivable or the related Contract not being a legal, valid and binding
         obligation of such Obligor  enforceable  against it in accordance  with
         its  terms),  or  any  other  claim  resulting  from  the  sale  of the
         merchandise or service  related to such Receivable or the furnishing or
         failure to furnish such merchandise or services;

(vi) the commingling of Asset Interest Collections at any time with other funds;

(vii)    any investigation,  litigation or proceeding related to or arising from
         this  Agreement or any other  Transaction  Document,  the  transactions
         contemplated hereby, the use of the proceeds of an Incremental Purchase
         or a  Reinvestment,  the  ownership of the  Purchaser  Interests or any
         other  investigation,  litigation or proceeding relating to Seller, the
         Servicer or Originator in which any Indemnified  Party becomes involved
         as a result of any of the transactions contemplated hereby;

(viii)   any  inability to litigate any claim  against any Obligor in respect of
         any  Receivable as a result of such Obligor being immune from civil and
         commercial law and suit on the grounds of sovereignty or otherwise from
         any legal action, suit or proceeding;

(ix)     any Amortization Event described in Section 9.1(d);

(x)      any failure of Seller to acquire and maintain legal and equitable title
         to, and  ownership  of all or any  portion of the Asset  Interest  from
         Originator,  free and clear of any Adverse Claim (other than as created
         hereunder);  or any  failure  of Seller to give  reasonably  equivalent
         value to Originator  under the  Receivables  Interest Sale Agreement in
         consideration of the transfer by Originator of any portion of the Asset
         Interest,  or any  attempt  by any Person to void such  transfer  under
         statutory provisions or common law or equitable action;

(xi)     any failure to vest and maintain vested in the Agent for the benefit of
         the  Purchasers,  or to  transfer  to the Agent for the  benefit of the
         Purchasers,  legal and  equitable  title to, and  ownership of, a first
         priority  perfected  undivided  percentage  ownership  interest (to the
         extent of the Purchaser Interests  contemplated  hereunder) or security
         interest in the Asset  Interest,  free and clear of any  Adverse  Claim
         (except as created by the Transaction Documents);

(xii)    the failure to have filed, or any delay in filing, financing statements
         or  other  similar  instruments  or  documents  under  the  UCC  of any
         applicable  jurisdiction  or other  applicable laws with respect to the
         Asset Interest, and the proceeds of any thereof, whether at the time of
         any Incremental Purchase or Reinvestment or at any subsequent time;

(xiii)   any action or omission by any Seller Party which reduces or impairs the
         rights of the Agent or the Purchasers with respect to any Receivable or
         the value of any such Receivable;

(xiv)    any  attempt  by  any  Person  to  void  any  Incremental  Purchase  or
         Reinvestment  hereunder  under  statutory  provisions  or common law or
         equitable action; and

(xv)     the failure of any Pool  Receivable  included in the calculation of the
         Net Asset Interest Balance to be an Eligible  Receivable at the time so
         included.

Section 10.2 Increased Cost and Reduced  Return.  If after the date hereof,  any
Funding Source shall be charged any fee, expense or increased cost on account of
the adoption of any applicable law, rule or regulation (including any applicable
law, rule or regulation  regarding capital  adequacy) or any change therein,  or
any change in the  interpretation or administration  thereof by any governmental
authority,  central bank or comparable agency charged with the interpretation or
administration  thereof, or compliance with any request or directive (whether or
not having the force of law) of any such  authority,  central bank or comparable
agency (a  "Regulatory  Change"):  (i) that  subjects any Funding  Source to any
charge or withholding  on or with respect to any Funding  Agreement or a Funding
Source's  obligations  under a Funding  Agreement,  or on or with respect to the
Pool  Receivables,  or changes  the basis of taxation of payments to any Funding
Source of any amounts payable under any Funding Agreement (except for changes in
the rate of tax on the overall net income of a Funding  Source or taxes excluded
by Section 10.1) or (ii) that imposes, modifies or deems applicable any reserve,
assessment,  insurance charge,  special deposit or similar  requirement  against
assets  of,  deposits  with or for the  account of a Funding  Source,  or credit
extended  by a Funding  Source  pursuant  to a Funding  Agreement  or (iii) that
imposes any other  condition  the result of which is to  increase  the cost to a
Funding Source of performing its obligations  under a Funding  Agreement,  or to
reduce the rate of return on a Funding  Source's capital as a consequence of its
obligations  under a  Funding  Agreement,  or to  reduce  the  amount of any sum
received or  receivable  by a Funding  Source  under a Funding  Agreement  or to
require any payment  calculated by reference to the amount of interests or loans
held or interest  received by it, then,  upon demand by the Agent,  Seller shall
pay to the Agent, for the benefit of the relevant  Funding Source,  such amounts
charged to such  Funding  Source or such amounts to  otherwise  compensate  such
Funding Source for such increased cost or such reduction.

Section 10.3 Other Costs and Expenses. Seller shall pay to the Agent and Conduit
on  demand  all  costs  and  out-of-pocket   expenses  in  connection  with  the
preparation,  execution,  delivery and  administration  of this  Agreement,  the
transactions  contemplated  hereby  and  the  other  documents  to be  delivered
hereunder, including without limitation, the cost of Conduit's auditors auditing
the books,  records and procedures of Seller,  reasonable fees and out-of-pocket
expenses of legal  counsel for Conduit and the Agent  (which such counsel may be
employees  of Conduit or the Agent) with  respect  thereto  and with  respect to
advising Conduit and the Agent as to their respective  rights and remedies under
this  Agreement.  Seller  shall pay to the Agent on demand any and all costs and
expenses of the Agent and the Purchasers,  if any, including  reasonable counsel
fees and expenses in connection  with the  enforcement of this Agreement and the
other documents  delivered hereunder and in connection with any restructuring or
workout of this  Agreement  or such  documents,  or the  administration  of this
Agreement  following an Amortization  Event.  Seller shall reimburse  Conduit on
demand for all other costs and  expenses  incurred by Conduit  ("Other  Costs"),
including, without limitation, the cost of auditing Conduit's books by certified
public  accountants,  the cost of rating  the  Commercial  Paper by  independent
financial rating agencies, and the reasonable fees and out-of-pocket expenses of
counsel for Conduit or any counsel for any  shareholder  of Conduit with respect
to advising  Conduit or such  shareholder  as to matters  relating to  Conduit's
operations.

Section 10.4  Allocations.  Conduit shall allocate the liability for Other Costs
among Seller and other Persons with whom Conduit has entered into  agreements to
purchase  interests in  receivables  ("Other  Sellers").  If any Other Costs are
attributable to Seller and not attributable to any Other Seller, Seller shall be
solely liable for such Other Costs.  However, if Other Costs are attributable to
Other Sellers and not attributable to Seller, such Other Sellers shall be solely
liable  for  such  Other  Costs.  All  allocations  to be made  pursuant  to the
foregoing  provisions  of this  Article X shall be made by  Conduit  in its sole
discretion and shall be binding on Seller and the Servicer.

ARTICLE XI.
                                    THE AGENT

Section 11.1  Authorization  and Action.  Each Purchaser  hereby  designates and
appoints Bank One to act as its agent hereunder and under each other Transaction
Document,  and  authorizes the Agent to take such actions as agent on its behalf
and to exercise  such powers as are  delegated to the Agent by the terms of this
Agreement and the other Transaction  Documents  together with such powers as are
reasonably   incidental  thereto.  The  Agent  shall  not  have  any  duties  or
responsibilities,  except  those  expressly  set  forth  herein  or in any other
Transaction Document, or any fiduciary  relationship with any Purchaser,  and no
implied  covenants,   functions,   responsibilities,   duties,   obligations  or
liabilities  on the part of the Agent shall be read into this  Agreement  or any
other  Transaction  Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other  Transaction  Documents,  the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent  shall  not be  required  to take any  action  that  exposes  the Agent to
personal liability or that is contrary to this Agreement,  any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible  payment in full of all Aggregate Unpaids.
Each Purchaser hereby  authorizes the Agent to execute each of the UCC financing
statements  and the Blocked  Account  Agreement on behalf of such Purchaser (the
terms of which shall be binding on such Purchaser).

Section 11.2 Delegation of Duties. The Agent may execute any of its duties under
this  Agreement  and each other  Transaction  Document  by or through  agents or
attorneys-in-fact  and shall be  entitled  to advice of counsel  concerning  all
matters  pertaining to such duties.  The Agent shall not be responsible  for the
negligence or misconduct of any agents or attorneys-in-fact  selected by it with
reasonable care.

Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its directors,
officers,  agents or employees shall be (i) liable for any action lawfully taken
or omitted to be taken by it or them under or in connection  with this Agreement
or any other  Transaction  Document  (except for its, their or such Person's own
gross  negligence or willful  misconduct),  or (ii) responsible in any manner to
any  of  the  Purchasers  for  any  recitals,  statements,   representations  or
warranties  made by any Seller  Party  contained  in this  Agreement,  any other
Transaction  Document or any  certificate,  report,  statement or other document
referred to or provided for in, or received  under or in connection  with,  this
Agreement,  or any  other  Transaction  Document  or for  the  value,  validity,
effectiveness,  genuineness, enforceability or sufficiency of this Agreement, or
any other  Transaction  Document or any other  document  furnished in connection
herewith or  therewith,  or for any  failure of any Seller  Party to perform its
obligations  hereunder or thereunder,  or for the  satisfaction of any condition
specified in Article VI, or for the perfection,  priority,  condition,  value or
sufficiency of any collateral  pledged in connection  herewith.  The Agent shall
not be under any  obligation  to any  Purchaser to ascertain or to inquire as to
the observance or  performance  of any of the agreements or covenants  contained
in, or conditions of, this Agreement or any other  Transaction  Document,  or to
inspect the properties,  books or records of the Seller Parties. The Agent shall
not  be  deemed  to  have  knowledge  of any  Amortization  Event  or  Potential
Amortization  Event  unless  the  Agent has  received  notice  from  Seller or a
Purchaser.

Section  11.4  Reliance  by Agent.  The Agent  shall in all cases be entitled to
rely, and shall be fully protected in relying, upon any document or conversation
believed by it to be genuine and correct and to have been  signed,  sent or made
by the proper Person or Persons and upon advice and  statements of legal counsel
(including,  without limitation, counsel to Seller), independent accountants and
other  experts  selected  by the  Agent.  The Agent  shall in all cases be fully
justified in failing or refusing to take any action under this  Agreement or any
other  Transaction  Document  unless  it shall  first  receive  such  advice  or
concurrence  of Conduit or the  Required  Financial  Institutions  or all of the
Purchasers,  as  applicable,  as it  deems  appropriate  and it  shall  first be
indemnified  to its  satisfaction  by the  Purchasers,  provided that unless and
until the Agent shall have received  such advice,  the Agent may take or refrain
from  taking  any  action,  as the Agent  shall deem  advisable  and in the best
interests of the Purchasers.  The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Conduit or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act  pursuant  thereto  shall be
binding upon all the Purchasers.

Section  11.5  Non-Reliance  on  Agent  and  Other  Purchasers.  Each  Purchaser
expressly  acknowledges  that  neither  the  Agent,  nor  any of  its  officers,
directors,  employees,  agents,  attorneys-in-fact  or  affiliates  has made any
representations  or  warranties  to it and  that no act by the  Agent  hereafter
taken,  including,  without limitation,  any review of the affairs of any Seller
Party,  shall be deemed to  constitute  any  representation  or  warranty by the
Agent. Each Purchaser represents and warrants to the Agent that it has and will,
independently  and without  reliance  upon the Agent or any other  Purchaser and
based on such documents and information as it has deemed  appropriate,  made its
own  appraisal of and  investigation  into the business,  operations,  property,
prospects,  financial and other  conditions and  creditworthiness  of Seller and
made its own  decision  to enter  into this  Agreement,  the  other  Transaction
Documents and all other documents related hereto or thereto.

Section 11.6 Reimbursement and Indemnification. The Financial Institutions agree
to reimburse and indemnify  the Agent and its  officers,  directors,  employees,
representatives  and agents ratably  according to their Pro Rata Shares,  to the
extent not paid or  reimbursed  by the Seller  Parties  (i) for any  amounts for
which the Agent,  acting in its capacity as Agent, is entitled to  reimbursement
by the Seller Parties  hereunder and (ii) for any other expenses incurred by the
Agent,  in its  capacity  as Agent and  acting on behalf of the  Purchasers,  in
connection  with the  administration  and  enforcement of this Agreement and the
other Transaction Documents.

Section 11.7 Agent in its Individual Capacity.  The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with  Seller or any  Affiliate  of Seller as though the Agent were not the Agent
hereunder.  With respect to the acquisition of Purchaser  Interests  pursuant to
this  Agreement,  the Agent  shall have the same  rights  and powers  under this
Agreement in its individual  capacity as any Purchaser and may exercise the same
as  though  it  were  not the  Agent,  and the  terms  "Financial  Institution,"
"Purchaser,"  "Financial  Institutions" and "Purchasers" shall include the Agent
in its individual capacity.

Section 11.8  Successor  Agent.  The Agent may, upon five days' notice to Seller
and the  Purchasers,  and the  Agent  will,  upon  the  direction  of all of the
Purchasers  (other than the Agent, in its individual  capacity) resign as Agent.
If the Agent shall resign, then the Required Financial  Institutions during such
five-day  period shall appoint from among the Purchasers a successor  agent.  If
for any  reason  no  successor  Agent is  appointed  by the  Required  Financial
Institutions during such five-day period, then effective upon the termination of
such five day  period,  the  Purchasers  shall  perform all of the duties of the
Agent  hereunder  and under the other  Transaction  Documents and Seller and the
Servicer (as  applicable)  shall make all  payments in respect of the  Aggregate
Unpaids  directly to the  applicable  Purchasers and for all purposes shall deal
directly with the Purchasers.  After the  effectiveness  of any retiring Agent's
resignation  hereunder as Agent, the retiring Agent shall be discharged from its
duties and obligations  hereunder and under the other Transaction  Documents and
the provisions of this Article XI and Article X shall continue in effect for its
benefit with respect to any actions  taken or omitted to be taken by it while it
was Agent under this Agreement and under the other Transaction Documents.


ARTICLE XII.
                           ASSIGNMENTS; PARTICIPATIONS

Section 12.1      Assignments.

(a)  Seller  and each  Financial  Institution  hereby  agree and  consent to the
complete  or partial  assignment  by Conduit of all or any portion of its rights
under,  interest  in,  title to and  obligations  under  this  Agreement  to the
Financial Institutions pursuant to Section 13.1 or to any other commercial paper
conduit administered by Bank One that issues commercial paper which is rated A-1
or  better by  Standard  & Poor's  Ratings  Group  and P-1 by  Moody's  Investor
Service,  Inc.,  and upon such  assignment,  Conduit  shall be released from its
obligations so assigned.  Further,  Seller and each Financial Institution hereby
agree  that any  assignee  of  Conduit  of this  Agreement  or all or any of the
Purchaser  Interests of Conduit shall have all of the rights and benefits  under
this Agreement as if the term "Conduit"  explicitly  referred to such party, and
no such  assignment  shall in any way impair the rights and  benefits of Conduit
hereunder.  Neither  Seller nor the Servicer  shall have the right to assign its
rights or obligations under this Agreement.

(b) Any  Financial  Institution  may at any time and from time to time assign to
one or more Persons ("Purchasing Financial Institutions") all or any part of its
rights and obligations under this Agreement pursuant to an assignment agreement,
substantially  in the  form set  forth in  Exhibit  V  hereto  (the  "Assignment
Agreement") executed by such Purchasing  Financial  Institution and such selling
Financial Institution;  provided,  however, that the consent of Conduit shall be
required prior to the  effectiveness  of any such  assignment  and,  unless such
assignment  is required  under Section  12.1(c),  the consent of Seller shall be
required prior to the  effectiveness of any such assignment.  Each assignee of a
Financial Institution must (i) have a short-term debt rating of A-1 or better by
Standard & Poor's Ratings Group and P-1 by Moody's  Investor  Service,  Inc. and
(ii) agree to deliver to the Agent,  promptly  following any request therefor by
the  Agent  or  Conduit,  an  enforceability   opinion  in  form  and  substance
satisfactory to the Agent and Conduit.  Upon delivery of the executed Assignment
Agreement to the Agent,  such selling  Financial  Institution  shall be released
from its obligations hereunder to the extent of such assignment.  Thereafter the
Purchasing  Financial   Institution  shall  for  all  purposes  be  a  Financial
Institution  party  to  this  Agreement  and  shall  have  all  the  rights  and
obligations of a Financial  Institution  under this Agreement to the same extent
as if it were an  original  party  hereto  and no  further  consent or action by
Seller, the Purchasers or the Agent shall be required.

(c) Each of the  Financial  Institutions  agrees that in the event that it shall
cease to have a  short-term  debt  rating of A-1 or better by  Standard & Poor's
Ratings Group and P-1 by Moody's Investor Service,  Inc. (an "Affected Financial
Institution"),  such Affected  Financial  Institution  shall be obliged,  at the
request of Conduit  or the  Agent,  to assign all of its rights and  obligations
hereunder to (x) another  Financial  Institution  or (y) another  funding entity
nominated by the Agent and acceptable to Conduit,  and willing to participate in
this  Agreement  through  the  Liquidity  Termination  Date in the place of such
Affected Financial Institution; provided that the Affected Financial Institution
receives  payment in full,  pursuant to an  Assignment  Agreement,  of an amount
equal to such Financial  Institution's  Pro Rata Share of the Aggregate  Capital
and Yield owing to the  Financial  Institutions  and all accrued but unpaid fees
and other  costs and  expenses  payable  in respect of its Pro Rata Share of the
Purchaser Interests of the Financial Institutions.

Section 12.2  Participations.  Any  Financial  Institution  may, in the ordinary
course  of its  business  at any  time  sell to one or  more  Persons  (each,  a
"Participant")  participating  interests in its Pro Rata Share of the  Purchaser
Interests  of the  Financial  Institutions,  its  obligation  to pay Conduit its
Acquisition  Amounts  or  any  other  interest  of  such  Financial  Institution
hereunder.  Notwithstanding  any  such  sale  by a  Financial  Institution  of a
participating interest to a Participant, such Financial Institution's rights and
obligations  under  this  Agreement  shall  remain  unchanged,   such  Financial
Institution  shall  remain  solely   responsible  for  the  performance  of  its
obligations hereunder,  and Seller, Conduit and the Agent shall continue to deal
solely and directly with such  Financial  Institution  in  connection  with such
Financial  Institution's  rights  and  obligations  under this  Agreement.  Each
Financial   Institution   agrees  that  any  agreement  between  such  Financial
Institution and any such Participant in respect of such  participating  interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement,  waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 14.1(b)(i).


ARTICLE XIII.
                               LIQUIDITY FACILITY

Section 13.1  Transfer to Financial  Institutions.  Each  Financial  Institution
hereby agrees,  subject to Section 13.4,  that  immediately  upon written notice
from Conduit  delivered on or prior to the Liquidity  Termination Date, it shall
acquire by assignment from Conduit,  without recourse or warranty,  its Pro Rata
Share of one or more of the  Purchaser  Interests  of  Conduit as  specified  by
Conduit. Each such assignment by Conduit shall be made pro rata among all of the
Financial  Institutions,  except  for  pro  rata  assignments  to  one  or  more
Terminating Financial Institutions pursuant to Section 13.6. Each such Financial
Institution  shall,  no later than 1:00 p.m.  (Chicago time) on the date of such
assignment,  pay in immediately  available funds (unless another form of payment
is otherwise agreed between Conduit and any Financial  Institution) to the Agent
at an  account  designated  by the  Agent,  for  the  benefit  of  Conduit,  its
Acquisition Amount.  Unless a Financial  Institution has notified the Agent that
it does not intend to pay its Acquisition Amount, the Agent may assume that such
payment has been made and may, but shall not be obligated to, make the amount of
such payment  available  to Conduit in reliance  upon such  assumption.  Conduit
hereby sells and assigns to the Agent for the ratable  benefit of the  Financial
Institutions, and the Agent hereby purchases and assumes from Conduit, effective
upon the  receipt  by Conduit  of the  Conduit  Transfer  Price,  the  Purchaser
Interests  of Conduit  which are the  subject of any  transfer  pursuant to this
Article XIII.

Section 13.2 Transfer Price Reduction Yield. If the Adjusted  Liquidity Price is
included in the  calculation  of the Conduit  Transfer  Price for any  Purchaser
Interest,  each Financial Institution agrees that the Agent shall pay to Conduit
the Reduction Percentage of any Yield received by the Agent with respect to such
Purchaser Interest.

Section 13.3  Payments to Conduit.  In  consideration  for the  reduction of the
Conduit Transfer Prices by the Conduit Transfer Price Reductions, effective only
at such time as the aggregate  amount of the Capital of the Purchaser  Interests
of the  Financial  Institutions  equals the  Conduit  Residual,  each  Financial
Institution  hereby agrees that the Agent shall not  distribute to the Financial
Institutions and shall  immediately  remit to Conduit any Yield,  Asset Interest
Collections or other payments received by it to be applied pursuant to the terms
hereof or  otherwise  to reduce the Capital of the  Purchaser  Interests  of the
Financial Institutions.

Section 13.4 Limitation on Commitment to Purchase from Conduit.  Notwithstanding
anything to the contrary in this Agreement,  no Financial Institution shall have
any  obligation  to purchase any Purchaser  Interest  from Conduit,  pursuant to
Section 13.1 or otherwise, if:

(i)      Conduit shall have  voluntarily  commenced any  proceeding or filed any
         petition  under any  bankruptcy,  insolvency or similar law seeking the
         dissolution,  liquidation  or  reorganization  of  Conduit or taken any
         action for the purpose of effectuating any of the foregoing; or

(ii)     involuntary  proceedings  or an  involuntary  petition  shall have been
         commenced or filed against  Conduit by any Person under any bankruptcy,
         insolvency  or similar  law  seeking the  dissolution,  liquidation  or
         reorganization  of Conduit and such  proceeding or petition  shall have
         not been dismissed.

Section  13.5  Defaulting  Financial  Institutions.  If  one or  more  Financial
Institutions  defaults in its obligation to pay its Acquisition  Amount pursuant
to Section 13.1 (each such Financial  Institution  shall be called a "Defaulting
Financial  Institution" and the aggregate  amount of such defaulted  obligations
being herein called the "Conduit Transfer Price Deficit"), then upon notice from
the  Agent,  each  Financial  Institution  other than the  Defaulting  Financial
Institutions (a "Non-Defaulting  Financial  Institution")  shall promptly pay to
the Agent, in immediately  available funds, an amount equal to the lesser of (x)
such Non-Defaulting Financial Institution's  proportionate share (based upon the
relative  Commitments  of  the  Non-Defaulting  Financial  Institutions)  of the
Conduit Transfer Price Deficit and (y) the unused portion of such Non-Defaulting
Financial  Institution's  Commitment.  A Defaulting Financial  Institution shall
forthwith  upon  demand pay to the Agent for the  account of the  Non-Defaulting
Financial  Institutions  all  amounts  paid  by  each  Non-Defaulting  Financial
Institution on behalf of such Defaulting  Financial  Institution,  together with
interest  thereon,  for  each  day  from  the  date  a  payment  was  made  by a
Non-Defaulting   Financial   Institution  until  the  date  such  Non-Defaulting
Financial  Institution  has been paid such amounts in full,  at a rate per annum
equal to the Federal  Funds  Effective  Rate plus two percent (2%). In addition,
without  prejudice to any other  rights that  Conduit may have under  applicable
law, each Defaulting  Financial  Institution shall pay to Conduit forthwith upon
demand, the difference between such Defaulting  Financial  Institution's  unpaid
Acquisition   Amount  and  the  amount   paid  with   respect   thereto  by  the
Non-Defaulting Financial Institutions,  together with interest thereon, for each
day  from  the  date  of the  Agent's  request  for  such  Defaulting  Financial
Institution's  Acquisition  Amount  pursuant to Section  13.1 until the date the
requisite  amount is paid to Conduit in full,  at a rate per annum  equal to the
Federal Funds Effective Rate plus two percent (2%).

Section 13.6      Terminating Financial Institutions.

(a) Each Financial  Institution  hereby agrees to deliver  written notice to the
Agent not more than 30 Business  Days and not less than 5 Business Days prior to
the Liquidity  Termination  Date indicating  whether such Financial  Institution
intends to renew its Commitment hereunder. If any Financial Institution fails to
deliver such notice on or prior to the date that is 5 Business Days prior to the
Liquidity  Termination  Date, such Financial  Institution will be deemed to have
declined to renew its Commitment (each Financial  Institution which has declined
or has been  deemed  to have  declined  to renew  its  Commitment  hereunder,  a
"Non-Renewing Financial  Institution").  The Agent shall promptly notify Conduit
of each Non-Renewing  Financial Institution and Conduit, in its sole discretion,
may (A) to the extent of Commitment Availability, declare that such Non-Renewing
Financial  Institution's   Commitment  shall,  to  such  extent,   automatically
terminate on a date specified by Conduit on or before the Liquidity  Termination
Date or (B) upon one (1) Business  Days' notice to such  Non-Renewing  Financial
Institution  assign  to  such  Non-Renewing  Financial  Institution  on  a  date
specified  by Conduit its Pro Rata Share of the  aggregate  Purchaser  Interests
then held by Conduit,  subject to, and in  accordance  with,  Section  13.1.  In
addition,  Conduit may, in its sole discretion, at any time (x) to the extent of
Commitment  Availability,  declare  that any  Affected  Financial  Institution's
Commitment shall  automatically  terminate on a date specified by Conduit or (y)
assign to any Affected Financial  Institution on a date specified by Conduit its
Pro Rata  Share of the  aggregate  Purchaser  Interests  then  held by  Conduit,
subject  to, and in  accordance  with,  Section  13.1 (each  Affected  Financial
Institution or each Non-Renewing  Financial  Institution is hereinafter referred
to as a  "Terminating  Financial  Institution").  The parties  hereto  expressly
acknowledge  that any  declaration  of the  termination of any  Commitment,  any
assignment  pursuant to this  Section 13.6 and the order of priority of any such
termination or assignment among Terminating Financial Institutions shall be made
by Conduit in its sole and absolute discretion.

(b) Upon any  assignment to a Terminating  Financial  Institution as provided in
this Section  13.6,  any  remaining  Commitment  of such  Terminating  Financial
Institution shall automatically terminate. Upon reduction to zero of the Capital
of all of the Purchaser Interests of a Terminating  Financial Institution (after
application of Asset Interest  Collections  thereto pursuant to Sections 2.2 and
2.3) all  rights  and  obligations  of such  Terminating  Financial  Institution
hereunder shall be terminated and such Terminating  Financial  Institution shall
no longer be a "Financial  Institution" hereunder;  provided,  however, that the
provisions of Article X shall continue in effect for its benefit with respect to
Purchaser Interests held by such Terminating  Financial Institution prior to its
termination as a Financial Institution.


ARTICLE XIV.
                                  MISCELLANEOUS

Section 14.1      Waivers and Amendments.

(a) No failure or delay on the part of the Agent or any  Purchaser in exercising
any  power,  right or remedy  under  this  Agreement  shall  operate as a waiver
thereof,  nor shall any single or partial  exercise of any such power,  right or
remedy preclude any other further  exercise thereof or the exercise of any other
power,  right or remedy.  The  rights  and  remedies  herein  provided  shall be
cumulative  and  nonexclusive  of any rights or remedies  provided  by law.  Any
waiver of this Agreement  shall be effective  only in the specific  instance and
for the specific purpose for which given.

(b) No provision of this  Agreement  may be amended,  supplemented,  modified or
waived  except in writing in  accordance  with the  provisions  of this  Section
14.1(b).  Conduit,  Seller  and the  Agent,  at the  direction  of the  Required
Financial  Institutions,  may enter into written modifications or waivers of any
provisions of this Agreement,  provided,  however,  that no such modification or
waiver shall:

(i) without the consent of each  affected  Purchaser,  (A) extend the  Liquidity
Termination  Date or the  date of any  payment  or  deposit  of  Asset  Interest
Collections by Seller or the Servicer, (B) reduce the rate or extend the time of
payment of Yield or any CP Costs (or any  component  of Yield or CP Costs),  (C)
reduce any fee  payable  to the Agent for the  benefit  of the  Purchasers,  (D)
except  pursuant to Article XII hereof,  change the amount of the Capital of any
Purchaser,  any  Financial  Institution's  Pro Rata Share  (except  pursuant  to
Sections 13.1 or 13.5) or any  Financial  Institution's  Commitment,  (E) amend,
modify  or  waive  any  provision  of  the  definition  of  Required   Financial
Institutions or this Section 14.1(b), (F) consent to or permit the assignment or
transfer by Seller of any of its rights and  obligations  under this  Agreement,
(G)  change  the  definition  of  "Eligible  Receivable,"  "Purchase  Price," or
"Adjusted  Liquidity  Price,"  or (H) amend or modify any  defined  term (or any
defined term used  directly or  indirectly in such defined term) used in clauses
(A) through (G) above in a manner that would  circumvent  the  intention  of the
restrictions set forth in such clauses; or

(ii)     without the written consent of the then Agent,  amend,  modify or waive
         any provision of this  Agreement if the effect thereof is to affect the
         rights or duties of such Agent.

Notwithstanding  the  foregoing,  (i)  without  the  consent  of  the  Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional  Persons as Financial  Institutions  hereunder and (ii)
the Agent,  the  Required  Financial  Institutions  and  Conduit  may enter into
amendments to modify any of the terms or provisions of Article XI,  Article XII,
Section 14.13 or any other  provision of this  Agreement  without the consent of
Seller,  provided that such  amendment has no negative  impact upon Seller.  Any
modification  or waiver made in accordance with this Section 14.1 shall apply to
each of the Purchasers  equally and shall be binding upon Seller, the Purchasers
and the Agent.

Section  14.2   Notices.   Except  as  provided  in  this  Section   14.2,   all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other  parties  hereto at their  respective  addresses  or
telecopy  numbers  set forth on the  signature  pages  hereof  or at such  other
address or telecopy number as such Person may hereafter  specify for the purpose
of  notice  to each of the  other  parties  hereto.  Each  such  notice or other
communication  shall be  effective  (i) if given by  telecopy,  upon the receipt
thereof,  (ii) if given by mail,  three (3)  Business  Days  after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other  means,  when  received at the address  specified  in this
Section 14.2. Seller hereby authorizes the Agent to effect purchases and Tranche
Period and Discount  Rate  selections  based on  telephonic  notices made by any
Person  whom the Agent in good faith  believes to be acting on behalf of Seller.
Seller agrees to deliver  promptly to the Agent a written  confirmation  of each
telephonic notice signed by an authorized officer of Seller; provided,  however,
the absence of such  confirmation  shall not affect the validity of such notice.
If the written  confirmation  differs  from the action  taken by the Agent,  the
records of the Agent shall govern absent manifest error.

Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or otherwise,
has  payment  made to it with  respect to any portion of the  Aggregate  Unpaids
owing to such Purchaser (other than payments  received  pursuant to Section 10.2
or 10.3) in a greater  proportion  than  that  received  by any other  Purchaser
entitled to receive a ratable share of such  Aggregate  Unpaids,  such Purchaser
agrees,  promptly upon demand, to purchase for cash without recourse or warranty
a portion of such Aggregate  Unpaids held by the other  Purchasers so that after
such purchase each Purchaser will hold its ratable  proportion of such Aggregate
Unpaids; provided that if all or any portion of such excess amount is thereafter
recovered from such Purchaser, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.

Section 14.4      Protection of Ownership Interests of the Purchasers.

(a) Seller  agrees  that from time to time,  at its  expense,  it will  promptly
execute and deliver all  instruments and documents,  and take all actions,  that
may be  necessary  or  desirable,  or that the Agent may  request,  to  perfect,
protect or more fully evidence the Purchaser  Interests,  or to enable the Agent
or the  Purchasers to exercise and enforce their rights and remedies  hereunder.
At any time after the occurrence of an Amortization Event, the Agent may, or the
Agent  may  direct  Seller or the  Servicer  to,  notify  the  Obligors  of Pool
Receivables,  at Seller's expense, of the ownership or security interests of the
Purchasers under this Agreement and may also direct that payments of all amounts
due or that  become due under any or all  Receivables  be made  directly  to the
Agent or its  designee.  Seller or the Servicer (as  applicable)  shall,  at any
Purchaser's  request,  withhold  the  identity  of such  Purchaser  in any  such
notification.

(b) If any Seller Party fails to perform any of its obligations  hereunder:  (i)
the Agent or any Purchaser may (but shall not be required to) perform,  or cause
performance of, such obligations,  and the Agent's or such Purchaser's costs and
expenses incurred in connection therewith shall be payable by Seller as provided
in Section 10.3,  (ii)each Seller Party irrevocably  authorizes the Agent at any
time and from time to time in the sole discretion of the Agent, and appoints the
Agent as its  attorney-in-fact,  to act on  behalf of such  Seller  Party (A) to
execute on behalf of Seller as debtor and to file financing statements necessary
or  desirable  in the Agent's  sole  discretion  to perfect and to maintain  the
perfection  and  priority  of  the  interest  of  the  Purchasers  in  the  Pool
Receivables and (B) to file a carbon, photographic or other reproduction of this
Agreement or any  financing  statement  with respect to the Asset  Interest as a
financing  statement in such offices as the Agent in its sole  discretion  deems
necessary or desirable to perfect and to maintain the perfection and priority of
the interests of the Purchasers in the Asset  Interest.  The  appointment in the
preceding clause (ii) is coupled with an interest and is irrevocable.

Section 14.5      Confidentiality.

(a) Each Seller Party and each Purchaser  shall maintain and shall cause each of
its employees and officers to maintain the confidentiality of the Fee Letter and
the other confidential or proprietary  information with respect to the Agent and
Conduit and their  respective  businesses  obtained by it or them in  connection
with the structuring, negotiating and execution of the transactions contemplated
herein,  except that such Seller Party and such  Purchaser  and its officers and
employees  may  disclose  such  information  to such  Seller  Party's  and  such
Purchaser's external accountants and attorneys and as required by any applicable
law or order of any judicial or administrative proceeding.

(b) Anything  herein to the contrary  notwithstanding,  each Seller Party hereby
consents to the disclosure of any nonpublic  information  with respect to it (i)
to the Agent, the Financial  Institutions or Conduit by each other,  (ii) by the
Agent or the Purchasers to any  prospective or actual assignee or participant of
any of them and (iii) by the Agent to any rating agency, Commercial Paper dealer
or provider of a surety,  guaranty or credit or liquidity enhancement to Conduit
or any entity  organized for the purpose of purchasing,  or making loans secured
by, financial assets for which Bank One acts as the administrative  agent and to
any officers, directors,  employees, outside accountants and attorneys of any of
the foregoing,  provided each such Person is informed of the confidential nature
of such information.  In addition, the Purchasers and the Agent may disclose any
such nonpublic  information  pursuant to any law, rule,  regulation,  direction,
request or order of any  judicial,  administrative  or  regulatory  authority or
proceedings (whether or not having the force or effect of law).

Section 14.6  Bankruptcy  Petition.  Seller,  the  Servicer,  the Agent and each
Financial  Institution  hereby covenants and agrees that, prior to the date that
is one year and one day  after the  payment  in full of all  outstanding  senior
indebtedness of Conduit, it will not institute against, or join any other Person
in instituting  against,  Conduit any bankruptcy,  reorganization,  arrangement,
insolvency or liquidation proceedings or other similar proceeding under the laws
of the United States or any state of the United States.

Section 14.7  Limitation of Liability.  Except with respect to any claim arising
out of the willful  misconduct or gross negligence of Conduit,  the Agent or any
Financial  Institution,  no claim may be made by any  Seller  Party or any other
Person  against  Conduit,  the  Agent  or any  Financial  Institution  or  their
respective Affiliates,  directors,  officers, employees, attorneys or agents for
any special, indirect, consequential or punitive damages in respect of any claim
for  breach of  contract  or any other  theory of  liability  arising  out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each Seller Party hereby waives,
releases, and agrees not to sue upon any claim for any such damages,  whether or
not accrued and whether or not known or suspected to exist in its favor.

Section 14.8 CHOICE OF LAW.  THIS  AGREEMENT  SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
NEW YORK.

Section 14.9  CONSENT TO  JURISDICTION.  EACH SELLER  PARTY  HEREBY  IRREVOCABLY
SUBMITS TO THE  NON-EXCLUSIVE  JURISDICTION  OF ANY UNITED STATES FEDERAL OR NEW
YORK  STATE  COURT  SITTING IN NEW YORK,  NEW YORK IN ANY  ACTION OR  PROCEEDING
ARISING OUT OF OR RELATING TO THIS  AGREEMENT OR ANY  DOCUMENT  EXECUTED BY SUCH
PERSON  PURSUANT TO THIS  AGREEMENT  AND EACH SELLER  PARTY  HEREBY  IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING  MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY  WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT  FORUM.  NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING  PROCEEDINGS  AGAINST ANY
SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
ANY SELLER  PARTY  AGAINST THE AGENT OR ANY  PURCHASER  OR ANY  AFFILIATE OF THE
AGENT OR ANY PURCHASER INVOLVING,  DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF,  RELATED TO, OR  CONNECTED  WITH THIS  AGREEMENT OR ANY DOCUMENT
EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS  AGREEMENT  SHALL BE BROUGHT ONLY
IN A COURT IN NEW YORK, NEW YORK.

Section  14.10 WAIVER OF JURY TRIAL.  EACH PARTY HERETO  HEREBY  WAIVES TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING  INVOLVING,  DIRECTLY OR INDIRECTLY,  ANY MATTER
(WHETHER  SOUNDING IN TORT,  CONTRACT OR  OTHERWISE)  IN ANY WAY ARISING OUT OF,
RELATED TO, OR  CONNECTED  WITH THIS  AGREEMENT,  ANY  DOCUMENT  EXECUTED BY ANY
SELLER  PARTY  PURSUANT  TO  THIS  AGREEMENT  OR  THE  RELATIONSHIP  ESTABLISHED
HEREUNDER OR THEREUNDER.

Section 14.11     Integration; Binding Effect; Survival of Terms.

(a) This  Agreement and each other  Transaction  Document  contain the final and
complete integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof  superseding  all prior
oral or written understandings.

(b) This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their  respective  successors  and permitted  assigns  (including any
trustee  in  bankruptcy).   This  Agreement  shall  create  and  constitute  the
continuing  obligations of the parties  hereto in accordance  with its terms and
shall remain in full force and effect until  terminated in  accordance  with its
terms;  provided,  however, that the rights and remedies with respect to (i) any
breach of any  representation  and warranty made by any Seller Party pursuant to
Article V, (ii) the  indemnification  and payment  provisions  of Article X, and
Sections 14.5 and 14.6 shall be continuing and shall survive any  termination of
this Agreement.

Section 14.12 Counterparts; Severability; Section References. This Agreement may
be executed in any number of  counterparts  and by different  parties  hereto in
separate  counterparts,  each of which when so executed shall be deemed to be an
original and all of which when taken together shall  constitute one and the same
Agreement.   Any   provisions  of  this   Agreement   which  are  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.  Unless otherwise expressly indicated, all references herein
to  "Article,"  "Section,"  "Schedule"  or  "Exhibit"  shall mean  articles  and
sections of, and schedules and exhibits to, this Agreement.

Section 14.13 Bank One Roles.  Each of the Financial  Institutions  acknowledges
that Bank One acts,  or may in the future act, (i) as  administrative  agent for
Conduit or any Financial  Institution,  (ii) as issuing and paying agent for the
Commercial  Paper,  (iii) to provide  credit or  liquidity  enhancement  for the
timely payment for the Commercial  Paper and (iv) to provide other services from
time to time for Conduit or any Financial Institution  (collectively,  the "Bank
One  Roles").  Without  limiting the  generality  of this  Section  14.13,  each
Financial  Institution hereby  acknowledges and consents to any and all Bank One
Roles and agrees that in connection  with any Bank One Role,  Bank One may take,
or  refrain  from  taking,  any  action  that  it,  in  its  discretion,   deems
appropriate,  including, without limitation, in its role as administrative agent
for  Conduit,  and the  giving of notice  to the Agent of a  mandatory  purchase
pursuant to Section 13.1.

Section 14.14     Characterization.

(a) It is the intention of the parties hereto that each purchase hereunder shall
constitute and be treated as an absolute and  irrevocable  sale,  which purchase
shall provide the  applicable  Purchaser  with the full benefits of ownership of
the  applicable  Purchaser  Interest.  Except as  specifically  provided in this
Agreement,  each sale of a Purchaser Interest hereunder is made without recourse
to Seller; provided,  however, that (i) Seller shall be liable to each Purchaser
and the Agent for all  representations,  warranties,  covenants and  indemnities
made by Seller pursuant to the terms of this Agreement,  and (ii) such sale does
not  constitute  and is not intended to result in an assumption by any Purchaser
or the Agent or any assignee  thereof of any  obligation of Seller or Originator
or any other person  arising in connection  with the Asset Interest or any other
obligations of Seller or Originator.

(b) In addition to any ownership  interest which the Agent may from time to time
acquire  pursuant  hereto,  to secure  the prompt  and  complete  payment of the
Aggregate Unpaids,  Seller hereby grants to the Agent for the ratable benefit of
the Purchasers a valid and perfected security interest in all of Seller's right,
title  and  interest,  now  existing  or  hereafter  arising,  in (i) the  Asset
Interest,  (ii) the Facility  Account,  (iii) Seller's rights and remedies under
the  Receivables  Interest  Purchase  Agreement,  and (iv) all  proceeds  of any
thereof prior to all other liens on and security  interests  therein.  The Agent
and the Purchasers  shall have, in addition to the rights and remedies that they
may have under this  Agreement,  all other  rights and  remedies  provided  to a
secured  creditor  under the UCC and other  applicable  law,  which  rights  and
remedies shall be cumulative.



                            Signature pages follow
(a)

<PAGE>


     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.

FERRELLGAS RECEIVABLES, LLC


By:
Name:             Kevin T. Kelly
Title:            Chief Financial Officer
Address:          One Allen Center
                  500 Dallas Street, Suite 2700
                  Houston, TX  77002

                  Attention:  John Briscoe
                  Phone:   (713) 844-6309
                  Fax:     (713) 844-6527


FERRELLGAS, L.P.

BY:  FERRELLGAS, INC., ITS GENERAL PARTNER


By:
Name:             Kevin T. Kelly
Title:            Chief Financial Officer
Address:          One Liberty Plaza
                  Liberty, MO  64068

                  Attention:  Ken Heinz
                  Phone:   (816) 792-6907
                  Fax:     (816) 792-6979





<PAGE>


JUPITER SECURITIZATION CORPORATION


By:
         Leo V. Loughead
         Authorized Signatory

Address: c/o Bank One, NA (Main Office Chicago), as Agent
                  Asset Backed Finance
                  Suite IL1-0079, 1-19
                  1 Bank One Plaza
                  Chicago, Illinois  60670-0079
                  Attention:  Asset Backed Finance
                  Fax:  (312) 732-1844



BANK ONE, NA (MAIN OFFICE CHICAGO),
 as a Financial Institution and as Agent


By:
Name:             Leo V. Loughead
Title:            Vice President

Address: Bank One, NA (Main Office Chicago)
                  Asset Backed Finance
                  Suite IL1-0596, 1-21
                  1 Bank One Plaza
                  Chicago, Illinois  60670-0596
                  Attention:  Asset Backed Finance
                  Fax:  (312) 732-4487
(a)

<PAGE>


                                    EXHIBIT I

                                   DEFINITIONS


                  As used in this Agreement:

                  (a)  Capitalized  terms used and not otherwise  defined herein
shall have the meanings  attributed  thereto in the  Receivables  Interest  Sale
Agreement (hereinafter defined); and

                  (b) The  following  terms  shall have the  following  meanings
(such meanings to be equally applicable to both the singular and plural forms of
the terms defined):

                  "Accrual Period" means each calendar month,  provided that the
initial Accrual Period  hereunder means the period from (and including) the date
of the  initial  purchase  hereunder  to (and  including)  the  last  day of the
calendar month thereafter.

                  "Acquisition  Amount" means,  on the date of any purchase from
Conduit  of one or more  Purchaser  Interests  pursuant  to Section  13.1,  with
respect  to  each  Financial  Institution,  the  lesser  of (i)  such  Financial
Institution's  Pro Rata Share of the sum of (A) the  lesser of (1) the  Adjusted
Liquidity Price of each such Purchaser Interest and (2) the Capital of each such
Purchaser  Interest  and (B) all  accrued  and  unpaid  CP Costs  for each  such
Purchaser Interest and (ii) such Financial Institution's unused Commitment.

                  "Adjusted   Liquidity  Price"  means,   with  respect  to  any
Purchaser  Interest  transferred  from  Conduit  to the  Financial  Institutions
pursuant to Article XIII hereof, an amount equal to:


         ---                       --                    --    --

P x          (i) DC +       (ii)             NDR
                                      ------------------
                                            1.10

         ---                       --                    --    --

                  where:

                  P = the percentage of the Asset  Interest  represented by such
Purchaser Interest.

                  DC       = the Deemed Collections.

                  NDR      = the Outstanding Balance of all Receivables included
                           in the  Purchaser  Interests  (regardless  of whether
                           they  are  Eligible   Receivables   on  the  date  of
                           determination)  as to  which  any  payment,  or  part
                           thereof,  has not remained unpaid for 91 days or more
                           from the original due date for such payment.

Each of the foregoing  shall be determined  from the most recent  Monthly Report
received from the Servicer.

                  "Adverse  Claim" means a lien,  security  interest,  charge or
encumbrance,  or other  right or  claim  in,  of or on any  Person's  assets  or
properties in favor of any other Person.

     "Affected  Financial  Institution"  has the  meaning  specified  in Section
12.1(c).

                  "Affiliate"  means,  with  respect  to any  Person,  any other
Person  directly or indirectly  controlling,  controlled  by, or under direct or
indirect  common control with,  such Person or any Subsidiary of such Person.  A
Person shall be deemed to control another Person if the controlling  Person owns
10% or more of any  class of  voting  securities  of the  controlled  Person  or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled  Person,  whether through ownership
of stock, by contract or otherwise.

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

                  "Aggregate  Capital" means, on any date of determination,  the
aggregate amount of Capital of all Purchaser Interests outstanding on such date.

                 "Aggregate Reduction" has the meaning specified in Section 1.3.

                  "Aggregate Unpaids" means, at any time, an amount equal to the
sum of all  accrued  and unpaid  fees  under the Fee  Letter,  CP Costs,  Yield,
Aggregate  Capital and all other  unpaid  Recourse  Obligations  (whether due or
accrued) at such time.

                  "Agreement" means this Receivables  Purchase Agreement,  as it
may be amended or modified and in effect from time to time.

                  "Amortization Date" means the earliest to occur of (i) the day
on which  any of the  conditions  precedent  set  forth in  Section  6.2 are not
satisfied,  (ii) the  Business Day  immediately  prior to the  occurrence  of an
Amortization  Event set forth in  Section  9.1(d)(ii),  (iii) the  Business  Day
specified in a written  notice from the Agent  following  the  occurrence of any
other  Amortization  Event, and (iv) the date which is 5 Business Days after the
Agent's  receipt of written  notice from Seller that it wishes to terminate  the
facility evidenced by this Agreement.

                  "Amortization Event" has the meaning specified in Article IX.

                  "Applicable Margin" means the Applicable Margin (as defined in
the  Credit  Agreement)  for  Eurodollar  Rate  Loans (as  defined in the Credit
Agreement).

                  "Asset Interest" means, on any date of determination,  the sum
of the Receivables  Interest and the  Contributed  Interest (each, as defined in
the Receivables Interest Sale Agreement).

     "Asset  Interest  Collections"  means,  on any date of  determination,  the
Buyer's Percentage of all Collections.

     "Assignment Agreement" has the meaning set forth in Section 12.1(b).

                  "Authorized  Officer" means,  with respect to any Person,  its
president, controller, treasurer or chief financial officer.

                  "Bank One" means Bank One,  NA (Main  Office  Chicago)  in its
individual capacity and its successors.

                  "Blocked Account  Agreement" means an agreement among Servicer
or Seller,  as applicable,  the Agent and Wells Fargo Bank, N.A. with respect to
the  Servicer's  Concentration  Account  or the  Facility  Account  in form  and
substance reasonably satisfactory to the parties thereto.

                  "Broken Funding Costs" means for any Purchaser Interest which:
(i) has its  Capital  reduced  without  compliance  by  Seller  with the  notice
requirements hereunder or (ii) does not become subject to an Aggregate Reduction
following  the  delivery  of any  Reduction  Notice or (iii) is  assigned  under
Article  XIII or  terminated  prior  to the  date  on  which  it was  originally
scheduled to end; an amount equal to the excess,  if any, of (A) the CP Costs or
Yield (as  applicable)  that would have  accrued  during  the  remainder  of the
Tranche  Periods or the tranche periods for Commercial  Paper  determined by the
Agent to relate to such  Purchaser  Interest (as  applicable)  subsequent to the
date of such reduction,  assignment or termination (or in respect of clause (ii)
above, the date such Aggregate Reduction was designated to occur pursuant to the
Reduction  Notice) of the Capital of such Purchaser  Interest if such reduction,
assignment or termination had not occurred or such Reduction Notice had not been
delivered,  over  (B)  the sum of (x) to the  extent  all or a  portion  of such
Capital is allocated to another  Purchaser  Interest,  the amount of CP Costs or
Yield  actually  accrued during the remainder of such period on such Capital for
the new Purchaser Interest,  and (y) to the extent such Capital is not allocated
to another Purchaser Interest,  the income, if any, actually received during the
remainder of such period by the holder of such Purchaser Interest from investing
the  portion  of such  Capital  not so  allocated.  In the event that the amount
referred  to in clause (B) exceeds  the amount  referred  to in clause (A),  the
relevant  Purchaser  or  Purchasers  agree to pay to Seller  the  amount of such
excess. All Broken Funding Costs shall be due and payable hereunder upon demand.

                  "Business Day" means any day on which banks are not authorized
or  required  to  close  in New  York,  New York or  Chicago,  Illinois  and The
Depository  Trust  Company  of New  York  is  open  for  business,  and,  if the
applicable  Business Day relates to any  computation  or payment to be made with
respect to the LIBO  Rate,  any day on which  dealings  in dollar  deposits  are
carried on in the London interbank market.

                  "Capital" of any Purchaser  Interest  means,  at any time, (A)
the  Purchase  Price  of  such  Purchaser  Interest,  minus  (B)  the sum of the
aggregate  amount of Asset Interest  Collections and other payments  received by
the Agent which in each case are applied to reduce  such  Capital in  accordance
with the terms and  conditions  of this  Agreement;  provided  that such Capital
shall be restored  (in  accordance  with Section 2.5) in the amount of any Asset
Interest  Collections  or other  payments so received and applied if at any time
the  distribution of such Asset Interest  Collections or payments are rescinded,
returned or refunded for any reason.

                  "Change of Control" means (a) a Change of Control under and as
defined in the Receivables Interest Sale Agreement,  or (b) Ferrellgas ceases to
own 100% of the outstanding Equity Interests of Seller.

                  "Charged-Off  Receivable" means a Receivable:  (i) as to which
the Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 9.1(d) (as if references to Seller Party therein refer
to such Obligor);  (ii) as to which the Obligor thereof, if a natural person, is
deceased,  (iii) which,  consistent with the Credit and Collection Policy, would
be written off Seller's books as  uncollectible,  (iv) which has been identified
by Seller as  uncollectible  or (v) as to which any  payment,  or part  thereof,
remains  unpaid for more than 180 days from the  original  invoice date for such
payment.

                  "Charged-Off Trigger Ratio" means, as of any Cut-Off Date, the
ratio  (expressed as a percentage)  computed by dividing (x) the total amount of
Receivables that became  Charged-Off  Receivables  during the Measurement Period
ending on such Cut-Off Date, by (y) the aggregate monthly sales for the 6 months
ending on such Cut-Off Date.

                  "Collection   Account"  means  each   concentration   account,
depositary  account,  lock-box  account  or  similar  account in which any Asset
Interest Collections are collected or deposited.

                  "Collection Notice" means a notice in the form attached to the
Blocked Account Agreements from the Agent to Wells Fargo Bank, N.A.  terminating
the Servicer's  authority to make withdrawals from the Servicer's  Concentration
Account or Seller's authority to make withdrawals from the Facility Account.

     "Commercial  Paper" means  promissory notes of Conduit issued by Conduit in
the commercial paper market.

                  "Commitment"  means,  for  each  Financial  Institution,   the
commitment of such Financial  Institution to purchase  Purchaser  Interests from
(i) Seller and (ii)  Conduit,  in an amount not to exceed (i) in the  aggregate,
the amount set forth opposite such Financial Institution's name on Schedule A to
this  Agreement,  as such amount may be modified  in  accordance  with the terms
hereof (including,  without limitation,  any termination of Commitments pursuant
to  Section  13.6  hereof)  and (ii) with  respect  to any  individual  purchase
hereunder, its Pro Rata Share of the Purchase Price therefor.

                  "Commitment  Availability"  means  at any  time  the  positive
difference  (if any) between (a) an amount equal to the aggregate  amount of the
Commitments at such time minus (b) the Aggregate Capital at such time.

     "Conduit" has the meaning set forth in the preamble to this Agreement.

     "Conduit Residual" means the sum of the Conduit Transfer Price Reductions.

                  "Conduit Transfer Price" means, with respect to the assignment
by Conduit of one or more  Purchaser  Interests  to the Agent for the benefit of
one or more of the Financial  Institutions  pursuant to Section 13.1, the sum of
(i) the lesser of (a) the Capital of each such  Purchaser  Interest  and (b) the
Adjusted  Liquidity  Price of each such Purchaser  Interest and (ii) all accrued
and unpaid CP Costs for each such Purchaser Interest.

     "Conduit Transfer Price Deficit" has the meaning set forth in Section 13.5.

                  "Conduit  Transfer Price  Reduction"  means in connection with
the  assignment of a Purchaser  Interest by Conduit to the Agent for the benefit
of the Financial Institutions,  the positive difference (if any) between (i) the
Capital of such  Purchaser  Interest and (ii) the Adjusted  Liquidity  Price for
such Purchaser Interest.

                  "Contingent  Obligation"  of a  Person  means  any  agreement,
undertaking or arrangement by which such Person assumes,  guarantees,  endorses,
contingently  agrees  to  purchase  or  provide  funds  for the  payment  of, or
otherwise becomes or is contingently liable upon, the obligation or liability of
any other  Person,  or agrees to  maintain  the net worth or working  capital or
other financial condition of any other Person, or otherwise assures any creditor
of such other Person against loss,  including,  without limitation,  any comfort
letter, operating agreement, take-or-pay contract or application for a letter of
credit.

                  "CP Costs"  means,  for each day,  the sum of (i)  discount or
yield  accrued  on Pooled  Commercial  Paper on such day,  plus (ii) any and all
accrued commissions in respect of placement agents and Commercial Paper dealers,
and issuing and paying agent fees incurred, in respect of such Pooled Commercial
Paper for such day,  plus (iii) other costs  associated  with  funding  small or
odd-lot  amounts with respect to all receivable  purchase  facilities  which are
funded by Pooled Commercial Paper for such day, minus (iv) any accrual of income
net of expenses  received on such day from  investment of  collections  received
under all  receivable  purchase  facilities  funded  substantially  with  Pooled
Commercial Paper,  minus (v) any payment received on such day net of expenses in
respect of Broken  Funding  Costs  related to the  prepayment  of any  Purchaser
Interest of Conduit pursuant to the terms of any receivable  purchase facilities
funded  substantially with Pooled Commercial Paper. In addition to the foregoing
costs,  if Seller shall request any  Incremental  Purchase  during any period of
time determined by the Agent in its sole  discretion to result in  incrementally
higher CP Costs applicable to such Incremental Purchase,  the Capital associated
with any such Incremental  Purchase shall,  during such period,  be deemed to be
funded by Conduit in a special pool (which may include  capital  associated with
other  receivable   purchase   facilities)  for  purposes  of  determining  such
additional  CP Costs  applicable  only to such special pool and charged each day
during such period against such Capital.

                  "Credit and Collection Policy" means  Originator's  credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in Exhibit IV to the Receivables Interest Sale
Agreement, as modified from time to time in accordance with this Agreement.

                  "Cut-Off  Date" means August 31, 2000 and the last day of each
calendar month thereafter.

                  "Deemed Collections" means the aggregate of all amounts Seller
shall have been deemed to have  received as an Asset  Interest  Collection  of a
Receivable. Seller shall be deemed to have received an Asset Interest Collection
in full of a Receivable if at any time (i) the  Outstanding  Balance of any such
Receivable is either (x) reduced as a result of any defective or rejected  goods
or services,  any discount or any  adjustment or otherwise by Seller (other than
cash Asset Interest Collections on account of the Receivables) or (y) reduced or
canceled as a result of a setoff in respect of any claim by any Person  (whether
such  claim  arises  out of the same or a related  transaction  or an  unrelated
transaction) or (ii) any of the  representations  or warranties in Article V are
no longer true with respect to any Receivable.

                  "Default Fee" means with respect to any amount due and payable
by Seller in respect of any Aggregate Unpaids, an amount equal to the greater of
(i) $1000 and (ii) interest on any such unpaid  Aggregate  Unpaids at a rate per
annum equal to 2% above the Prime Rate.

     "Defaulting  Financial  Institution"  has the  meaning set forth in Section
13.5.

                  "Delinquency Trigger Ratio" means, as of any Cut-Off Date, the
ratio  (expressed  as a  percentage)  computed  by  dividing  (i) the  aggregate
Outstanding  Balance of all  Receivables  that are Delinquent  Receivables as of
such Cut-Off Date, by (ii) the aggregate  Outstanding Balance of all Receivables
as of such Cut-Off Date.
                  "Delinquent  Receivable"  means a  Receivable  as to which any
payment, or part thereof, remains unpaid for more than 60 days from the original
invoice date but not more than 90 days from the  original  invoice date for such
payment.

                  "Dilution  Trigger  Ratio"  means  a  percentage  equal  to  a
fraction, the numerator of which is the total amount of decreases in Outstanding
Balances of the Receivables due to Dilutions during the most recent  Measurement
Period,  and the  denominator  of which is the amount of sales  generated by the
Originators  during the  Measurement  Period one month  prior to the most recent
Measurement Period.

                  "Dilutions"  means,  at any  time,  the  aggregate  amount  of
reductions or cancellations described in clause (i) of the definition of "Deemed
Collections".

                  "Discount  Rate"  means,  the LIBO Rate or the Prime Rate,  as
applicable,   with  respect  to  each   Purchaser   Interest  of  the  Financial
Institutions.

                  "ERISA" means the Employee  Retirement  Income Security Act of
1974, as amended from time to time.

     "Facility  Account"  means Seller's  account no.  4496823691 at Wells Fargo
Bank, N.A.

                  "Facility  Termination  Date"  means  the  earlier  of (i) the
Liquidity Termination Date and (ii) the Amortization Date.

                  "Federal  Bankruptcy Code" means Title 11 of the United States
Code entitled "Bankruptcy," as amended and any successor statute thereto.

                  "Federal  Funds  Effective  Rate"  means,  for any  period,  a
fluctuating interest rate per annum for each day during such period equal to (a)
the weighted average of the rates on overnight  federal funds  transactions with
members of the Federal  Reserve  System  arranged by federal funds  brokers,  as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal  Reserve Bank of New York in the Composite  Closing
Quotations  for  U.S.  Government  Securities;  or (b) if  such  rate  is not so
published for any day which is a Business Day, the average of the  quotations at
approximately  10:30  a.m.  (Chicago  time)  for such  day on such  transactions
received by the Agent from three federal  funds  brokers of recognized  standing
selected by it.

                  "Fee Letter" means that certain letter  agreement  dated as of
the date hereof between  Seller and the Agent,  as it may be amended or modified
and in effect from time to time.

     "Ferrellgas" has the meaning set forth in the preamble in this Agreement.

     "Financial  Institutions" has the meaning set forth in the preamble in this
Agreement.

                  "Funding  Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Conduit.

                  "Funding  Source" means (i) any Financial  Institution or (ii)
any insurance company, bank or other funding entity providing liquidity,  credit
enhancement or back-up purchase support or facilities to Conduit.

                  "GAAP"  means  generally  accepted  accounting  principles  in
effect in the United States of America as of the date of this Agreement.

                  "Incremental  Purchase"  means  a  purchase  of  one  or  more
Purchaser  Interests which  increases the total  outstanding  Aggregate  Capital
hereunder.

                  "Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such  Person's  business  payable on terms  customary  in the  trade),  (iii)
obligations,  whether or not  assumed,  secured  by liens or payable  out of the
proceeds or production  from property now or hereafter owned or acquired by such
Person,  (iv) obligations  which are evidenced by notes,  acceptances,  or other
instruments,  (v) capitalized  lease  obligations,  (vi) net  liabilities  under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.

                  "Independent  Director"  shall  mean a member  of the Board of
Directors of Seller who is not at such time, and has not been at any time during
the preceding five (5) years, (A) a director,  officer, employee or affiliate of
Seller,  Originator,  or any of their respective Subsidiaries or Affiliates,  or
(B) the  beneficial  owner (at the time of such  individual's  appointment as an
Independent  Director or at any time thereafter  while serving as an Independent
Director) of any of the outstanding common shares of Seller,  Originator, or any
of their respective Subsidiaries or Affiliates, having general voting rights;

                  "LIBO  Rate"  means the rate per annum equal to the sum of (i)
(a) the applicable  British Bankers'  Association  Interest  Settlement Rate for
deposits  in U.S.  dollars  appearing  on Reuters  Screen  FRBD as of 12:00 noon
(London time) two Business  Days prior to the first day of the relevant  Tranche
Period,  and having a maturity equal to such Tranche Period,  provided that, (i)
if  Reuters  Screen  FRBD is not  available  to the  Agent for any  reason,  the
applicable  LIBO Rate for the  relevant  Tranche  Period  shall  instead  be the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars as reported by any other generally recognized financial information
service as of 12:00 noon (London  time) two Business Days prior to the first day
of such Tranche Period,  and having a maturity equal to such Tranche Period, and
(ii)  if no  such  British  Bankers'  Association  Interest  Settlement  Rate is
available to the Agent, the applicable LIBO Rate for the relevant Tranche Period
shall  instead be the rate  determined by the Agent to be the rate at which Bank
One offers to place  deposits  in U.S.  dollars  with  first-class  banks in the
London interbank  market at approximately  12:00 noon (London time) two Business
Days prior to the first day of such Tranche Period, in the approximate amount to
be funded at the LIBO Rate and having a maturity  equal to such Tranche  Period,
divided by (b) one minus the maximum  aggregate reserve  requirement  (including
all basic,  supplemental,  marginal or other  reserves) which is imposed against
the Agent in respect of Eurocurrency liabilities,  as defined in Regulation D of
the Board of Governors of the Federal  Reserve  System as in effect from time to
time  (expressed as a decimal),  applicable to such Tranche Period plus (ii) the
Applicable  Margin.  The LIBO Rate shall be rounded,  if necessary,  to the next
higher 1/16 of 1%.

                  "Liquidity Termination Date" means September 25, 2001.

                  "Lock-Box"  means each locked postal box with respect to which
a bank has been  granted  exclusive  access for the  purpose of  retrieving  and
processing payments made on the Pool Receivables.

                  "Material  Adverse Effect" means a material  adverse effect on
(i)  the  financial  condition  or  operations  of  any  Seller  Party  and  its
Subsidiaries,  (ii) the ability of any Seller  Party to perform its  obligations
under this Agreement,  (iii) the legality,  validity or  enforceability  of this
Agreement or any other Transaction  Document,  (iv) any Purchaser's  interest in
the  Pool  Receivables  generally  or in any  significant  portion  of the  Pool
Receivables, the Related Security or the Asset Interest Collections with respect
thereto,  or (v) the collectibility of the Pool Receivables  generally or of any
material portion of the Pool Receivables.

                  "Measurement Period" means a calendar month.

                  "Monthly Report" means a report,  in substantially the form of
Exhibit VI hereto  (appropriately  completed),  furnished by the Servicer to the
Agent pursuant to Section 8.5.

              "Monthly Reporting Date" has the meaning set forth in Section 8.5.

                  "Net Asset Interest  Balance"  means, at any time, the Buyer's
Percentage of the aggregate Outstanding Balance of all Pool Receivables that are
Eligible Receivables at such time.

     "Non-Defaulting Financial Institution" has the meaning set forth in Section
13.5.

     "Non-Renewing  Financial  Institution" has the meaning set forth in Section
13.6(a).

                  "Originator" means Ferrellgas, in its capacity as seller under
the Receivables Interest Sale Agreement.

                  "Participant" has the meaning set forth in Section 12.2.

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

                  "Pooled  Commercial  Paper"  means  Commercial  Paper notes of
Conduit subject to any particular pooling arrangement by Conduit,  but excluding
Commercial  Paper  issued by Conduit  for a tenor and in an amount  specifically
requested by any Person in connection with any agreement effected by Conduit.

                  "Potential  Amortization Event" means an event which, with the
passage  of  time  or the  giving  of  notice,  or  both,  would  constitute  an
Amortization Event.

                  "Prime Rate" means a rate per annum equal to the prime rate of
interest  announced  from time to time by Bank One or its  parent  (which is not
necessarily the lowest rate charged to any customer),  changing when and as said
prime rate changes.

                  "Pro Rata Share"  means,  for each  Financial  Institution,  a
percentage equal to (i) the Commitment of such Financial Institution, divided by
(ii) the  aggregate  amount of all  Commitments  of all  Financial  Institutions
hereunder,  adjusted as necessary to give effect to the application of the terms
of Sections 13.5 or 13.6.

     "Proposed Reduction Date" has the meaning set forth in Section 1.3.

                  "Purchase Limit" means $60,000,000.

                  "Purchase Notice" has the meaning set forth in Section 1.2.

                  "Purchase  Price"  means,  with  respect  to  any  Incremental
Purchase of a Purchaser  Interest,  the amount paid to Seller for such Purchaser
Interest which shall not exceed the least of (i) the amount  requested by Seller
in the applicable Purchase Notice, (ii) the unused portion of the Purchase Limit
on the applicable  purchase date and (iii) the excess, if any, of 80% of the Net
Asset  Interest  Balance  on the  applicable  purchase  date over the  aggregate
outstanding  amount of Aggregate  Capital  determined as of the date of the most
recent Monthly Report, taking into account such proposed Incremental Purchase.

                  "Purchasers" means Conduit and the Financial Institutions.

                  "Purchaser  Interest"  means,  at any time,  a  portion  of an
aggregate  undivided  100% ownership  interest in the Asset Interest  associated
with a  designated  amount  of  Capital,  selected  pursuant  to the  terms  and
conditions hereof.

     "Purchasing  Financial  Institution"  has the  meaning set forth in Section
12.1(b).

                  "Receivables  Interest  Sale  Agreement"  means  that  certain
Receivables  Interest Sale  Agreement,  dated as of September 26, 2000,  between
Originator  and  Seller,  as the  same may be  amended,  restated  or  otherwise
modified from time to time.

     "Recourse Obligations" shall have the meaning set forth in Section 2.1.

                  "Reduction Notice" has the meaning set forth in Section 1.3.

                  "Reduction  Percentage"  means,  for  any  Purchaser  Interest
acquired by the Financial Institutions from Conduit for less than the Capital of
such Purchaser Interest, a percentage equal to a fraction the numerator of which
is the Conduit  Transfer  Price  Reduction for such  Purchaser  Interest and the
denominator of which is the Capital of such Purchaser Interest.

     "Regulatory Change" has the meaning set forth in Section 10.2(a).

                  "Reinvestment" has the meaning set forth in Section 2.2.

                  "Required   Financial   Institutions"   means,  at  any  time,
Financial  Institutions  with  Commitments  in excess of 66-2/3% of the Purchase
Limit.

                  "Required Notice Period" means two (2) Business Days.

                  "Restricted  Junior  Payment"  means (i) any dividend or other
distribution,  direct or  indirect,  on  account  of any  shares of any class of
capital stock of Seller now or hereafter outstanding,  except a dividend payable
solely  in  shares  of that  class of stock or in any  junior  class of stock of
Seller,  (ii) any  redemption,  retirement,  sinking  fund or  similar  payment,
purchase or other  acquisition for value,  direct or indirect,  of any shares of
any class of capital  stock of Seller now or  hereafter  outstanding,  (iii) any
payment or  prepayment of principal of,  premium,  if any, or interest,  fees or
other charges on or with respect to, and any redemption,  purchase,  retirement,
defeasance,  sinking fund or similar  payment and any claim for rescission  with
respect to the Subordinated  Loans (as defined in the Receivables  Interest Sale
Agreement), (iv) any payment made to redeem, purchase,  repurchase or retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire  shares  of any  class of  capital  stock  of  Seller  now or  hereafter
outstanding,  and (v) any  payment  of  management  fees by Seller  (except  for
reasonable  management fees to the Originator or its Affiliates in reimbursement
of actual management services performed).

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

     "Seller  Parties"  has  the  meaning  set  forth  in the  preamble  to this
Agreement.

                  "Servicer"  means  at any time the  Person  (which  may be the
Agent) then  authorized  pursuant to Article  VIII to  service,  administer  and
collect Receivables.

                  "Settlement Date" means (A) the second Business Day after each
Monthly  Reporting Date, and (B) the last day of the relevant  Tranche Period in
respect of each Purchaser Interest of the Financial Institutions.

                  "Settlement  Period"  means (A) in respect  of each  Purchaser
Interest  of Conduit,  the  immediately  preceding  Accrual  Period,  and (B) in
respect of each  Purchaser  Interest of the Financial  Institutions,  the entire
Tranche Period of such Purchaser Interest.

                  "Subsidiary" of a Person means (i) any  corporation  more than
50% of the outstanding securities having ordinary voting power of which shall at
the time be owned or controlled,  directly or  indirectly,  by such Person or by
one or  more  of its  Subsidiaries  or by  such  Person  and  one or more of its
Subsidiaries, or (ii) any partnership,  association,  limited liability company,
joint venture or similar  business  organization  more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled.  Unless otherwise  expressly  provided,  all references  herein to a
"Subsidiary" shall mean a Subsidiary of Seller.

                  "Termination Date" has the meaning set forth in Section 2.2.

     "Termination Percentage" has the meaning set forth in Section 2.2.

     "Terminating  Financial  Institution"  has the meaning set forth in Section
13.6(a).

     "Terminating Tranche" has the meaning set forth in Section 4.3(b).

                  "Tranche Period" means, with respect to any Purchaser Interest
held by a Financial Institution:

                  (a) if Yield for such Purchaser  Interest is calculated on the
         basis of the LIBO Rate, a period of one, two,  three or six months,  or
         such other period as may be mutually agreeable to the Agent and Seller,
         commencing  on a Business Day selected by Seller or the Agent  pursuant
         to this  Agreement.  Such  Tranche  Period  shall end on the day in the
         applicable  succeeding calendar month which corresponds  numerically to
         the beginning day of such Tranche Period,  provided,  however,  that if
         there  is no such  numerically  corresponding  day in  such  succeeding
         month,  such Tranche  Period shall end on the last Business Day of such
         succeeding month; or

                  (b) if Yield for such Purchaser  Interest is calculated on the
         basis of the Prime Rate, a period commencing on a Business Day selected
         by Seller, provided no such period shall exceed one month.

If any  Tranche  Period  would end on a day which is not a  Business  Day,  such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding  Business Day falls in a new month,  such Tranche Period shall end on
the  immediately  preceding  Business Day. In the case of any Tranche Period for
any Purchaser  Interest which commences before the  Amortization  Date and would
otherwise end on a date  occurring  after the  Amortization  Date,  such Tranche
Period shall end on the  Amortization  Date. The duration of each Tranche Period
which  commences  after  the  Amortization  Date  shall be of such  duration  as
selected by the Agent.

                  "Transaction Documents" means,  collectively,  this Agreement,
each Purchase Notice, the Receivables  Interest Sale Agreement,  the Fee Letter,
the  Subordinated  Note (as defined in the Receivables  Interest Sale Agreement)
and all other  instruments,  documents and agreements  executed and delivered in
connection herewith.

                  "UCC" means the Uniform  Commercial  Code as from time to time
in effect in the specified jurisdiction.

                  "Yield" means for each  respective  Tranche Period relating to
Purchaser  Interests  of the  Financial  Institutions,  an  amount  equal to the
product of the applicable  Discount Rate for each Purchaser Interest  multiplied
by the  Capital of such  Purchaser  Interest  for each day  elapsed  during such
Tranche Period, annualized on a 360 day basis in the case of Yield computed at a
LIBO  Rate and on a 365 (or,  when  appropriate,  366) day  basis in the case of
Yield computed at the Prime Rate.

                  (c) All accounting terms not specifically defined herein shall
be construed in accordance with GAAP.

                  (d) All terms used in Article 9 of the UCC in the State of New
York, and not  specifically  defined herein,  are used herein as defined in such
Article 9.



<PAGE>


                                   EXHIBIT II

                             FORM OF PURCHASE NOTICE

                                     [DATE]


Bank One, NA (Main Office Chicago), as Agent
1 Bank One Plaza, 21st Floor
Asset-Backed Finance
Chicago, Illinois 60670-0596
Attention:  Conduit Administrator, Jupiter Securitization Corporation

                  Re:   PURCHASE NOTICE

Ladies and Gentlemen:

                  Reference   is  hereby  made  to  the   Receivables   Purchase
Agreement,  dated as of September 26, 2000, by and among Ferrellgas Receivables,
LLC, a Delaware limited liability company ("Seller"),  between Ferrellgas, L.P.,
a Delaware limited partnership, as Servicer, the Financial Institutions, Jupiter
Securitization Corporation ("Conduit"),  and Bank One, NA (Main Office Chicago),
as Agent (the "Receivables Purchase  Agreement").  Capitalized terms used herein
shall  have the  meanings  assigned  to such terms in the  Receivables  Purchase
Agreement.

                  The  Agent is hereby  notified  of the  following  Incremental
Purchase:

Purchase Price:          $
Date of Purchase:
Requested Discount Rate: [LIBO Rate] [Prime Rate] [Pooled Commercial Paper rate]

                  Please  credit the  Purchase  Price in  immediately  available
funds to our Facility  Account  [and then  wire-transfer  the Purchase  Price in
immediately available funds on the above-specified date of purchase to:

                  [Account Name]
                  [Account No.]
                  [Bank Name & Address]
                  [ABA #]
                  Reference:
                  Telephone advice to: [Name] @ tel. No. ( )

                  Please advise [Name] at telephone no ( ) _________________
if Conduit will not be making this purchase.

                  In connection with the Incremental  Purchase to be made on the
above  listed  "Date of  Purchase"  (the  "Purchase  Date"),  the Seller  hereby
certifies that the following statements are true on the date hereof, and will be
true on the  Purchase  Date  (before  and after  giving  effect to the  proposed
Incremental Purchase):

                  (i) the representations and warranties of the Seller set forth
in Section 5.1 of the Receivables Purchase Agreement are true and correct on and
as of the Purchase Date as though made on and as of such date;

                  (ii) no event has occurred and is continuing,  or would result
from the proposed  Incremental  Purchase,  that will  constitute an Amortization
Event or a Potential Amortization Event;

                  (iii) the  Facility  Termination  Date has not  occurred,  the
Aggregate Capital does not exceed the Purchase Limit and the aggregate Purchaser
Interests do not exceed 100%; and

                  (iv) the  amount of  Aggregate  Capital  is  $_________  after
giving effect to the Incremental Purchase to be made on the Purchase Date.

                                Very truly yours,

                                                     FERRELLGAS RECEIVABLES, LLC



                                                     By:
                                                     Name:
                                                     Title:



<PAGE>


                                   EXHIBIT III

     PRINCIPAL  PLACES OF  BUSINESS  AND CHIEF  EXECUTIVE  OFFICES OF THE SELLER
PARTIES; LOCATIONS OF RECORDS; FEDERAL EMPLOYER IDENTIFICATION NUMBER(S)



Places of Business:

         Seller:          Principal Place of Business and Chief Executive Office
                           One Allen Center
                           500 Dallas Street, Suite 2700
                           Houston, TX  77002

         Servicer:        Principal Place of Business and Chief Executive Office
                           One Liberty Plaza
                           Liberty, Missouri 64068

Locations of Records:

         Seller:           Seller's and Servicer's addresses above

         Servicer:         Seller's and Servicer's addresses above

Federal Employer Identification Numbers:

         Seller:           43-1698481

         Servicer:         43-1698481



<PAGE>


                                   EXHIBIT IV

                         FORM OF COMPLIANCE CERTIFICATE


To:  Bank One, NA (Main Office Chicago), as Agent

                  This  Compliance  Certificate  is  furnished  pursuant to that
certain  Receivables  Purchase  Agreement dated as of September 26, 2000,  among
Ferrellgas Receivables,  LLC (the "Seller"),  Ferrellgas, L.P. (the "Servicer"),
the Purchasers  party thereto and Bank One, NA (Main Office  Chicago),  as agent
for such Purchasers (the "Agreement").

                  THE UNDERSIGNED HEREBY CERTIFIES THAT:

                  1.       I am the duly elected ________________ of Seller.

                  2. I have reviewed the terms of the Agreement and I have made,
or have  caused  to be made  under my  supervision,  a  detailed  review  of the
transactions and conditions of Seller and its Subsidiaries during the accounting
period covered by the attached financial statements.

                  3. The examinations described in paragraph 2 did not disclose,
and I have no  knowledge  of, the  existence  of any  condition  or event  which
constitutes an Amortization Event or Potential  Amortization Event, as each such
term is  defined  under the  Agreement,  during or at the end of the  accounting
period  covered by the attached  financial  statements or as of the date of this
Certificate, except as set forth in paragraph 5 below.

                  4. Schedule I attached  hereto sets forth  financial  data and
computations  evidencing the compliance with certain covenants of the Agreement,
all of which data and computations are true, complete and correct.

                  5. Described below are the exceptions,  if any, to paragraph 3
by listing,  in detail,  the nature of the condition or event, the period during
which it has  existed  and the action  which  Seller has  taken,  is taking,  or
proposes to take with respect to each such condition or event:



<PAGE>


THE  FOREGOING  CERTIFICATIONS,  TOGETHER  WITH THE  COMPUTATIONS  SET  FORTH IN
SCHEDULE I HERETO AND THE FINANCIAL  STATEMENTS  DELIVERED WITH THIS CERTIFICATE
IN SUPPORT HEREOF, ARE MADE AND DELIVERED THIS ____ DAY OF _________, __ .

BY:____________________________________
NAME:
TITLE:



<PAGE>


                      SCHEDULE I TO COMPLIANCE CERTIFICATE

                  A. Schedule of Compliance as of [Date] with Section  9.1(f) of
the  Agreement.  Unless  otherwise  defined  herein,  the  terms  used  in  this
Compliance Certificate have the meanings ascribed thereto in the Agreement.

                  This schedule relates to the month ended: _______________



<PAGE>


                                    EXHIBIT V

                          FORM OF ASSIGNMENT AGREEMENT

                  THIS  ASSIGNMENT  AGREEMENT (this  "Assignment  Agreement") is
entered  into  as  of  the  ___  day  of  ____________,  ____,  by  and  between
_____________________ ("Assignor") and __________________ ("Assignee").

                             PRELIMINARY STATEMENTS

                  A. This  Assignment  Agreement is being executed and delivered
in  accordance  with  Section  12.1(b)  of  that  certain  Receivables  Purchase
Agreement  dated as of September 26, 2000 by and among  Ferrellgas  Receivables,
LLC, Ferrellgas,  L.P., as Servicer,  Jupiter Securitization  Corporation,  Bank
One, NA (Main Office Chicago),  as Agent, and the Financial  Institutions  party
thereto  (as  amended,  modified or restated  from time to time,  the  "Purchase
Agreement").  Capitalized  terms used and not otherwise  defined herein are used
with the  meanings  set  forth or  incorporated  by  reference  in the  Purchase
Agreement.

     B. Assignor is a Financial Institution party to the Purchase Agreement, and
Assignee
wishes to become a Financial Institution thereunder; and

                  C.  Assignor is selling and assigning to Assignee an undivided
____________%  (the  "Transferred  Percentage")  interest  in all of  Assignor's
rights  and  obligations  under  the  Purchase  Agreement  and  the  Transaction
Documents,   including,  without  limitation,   Assignor's  Commitment  and  (if
applicable) the Capital of Assignor's Purchaser Interests as set forth herein.

                                    AGREEMENT

                  The parties hereto hereby agree as follows:

1. The sale, transfer and assignment effected by this Assignment Agreement shall
become  effective  (the  "Effective  Date") two (2) Business Days (or such other
date selected by the Agent in its sole discretion) following the date on which a
notice  substantially  in the form of Schedule II to this  Assignment  Agreement
("Effective  Notice")  is  delivered  by the  Agent  to  Conduit,  Assignor  and
Assignee.  From and after the  Effective  Date,  Assignee  shall be a  Financial
Institution  party to the  Purchase  Agreement  for all  purposes  thereof as if
Assignee were an original  party thereto and Assignee  agrees to be bound by all
of the terms and provisions contained therein.

2. If Assignor has no outstanding Capital under the Purchase  Agreement,  on the
Effective Date, Assignor shall be deemed to have hereby transferred and assigned
to Assignee, without recourse, representation or warranty (except as provided in
paragraph 6 below),  and the Assignee shall be deemed to have hereby irrevocably
taken,  received  and assumed  from  Assignor,  the  Transferred  Percentage  of
Assignor's Commitment and all rights and obligations  associated therewith under
the  terms  of  the  Purchase  Agreement,  including,  without  limitation,  the
Transferred  Percentage of Assignor's  future funding  obligations under Section
4.1 of the Purchase Agreement.

3. If Assignor has any outstanding Capital under the Purchase  Agreement,  at or
before 12:00 noon, local time of Assignor,  on the Effective Date Assignee shall
pay to Assignor,  in immediately  available funds, an amount equal to the sum of
(i)  the  Transferred  Percentage  of  the  outstanding  Capital  of  Assignor's
Purchaser  Interests  (such  amount,   being  hereinafter  referred  to  as  the
"Assignee's  Capital");  (ii) all accrued  but unpaid  (whether or not then due)
Yield attributable to Assignee's Capital; and (iii) accruing but unpaid fees and
other costs and expenses payable in respect of Assignee's Capital for the period
commencing  upon  each  date  such  unpaid  amounts  commence  accruing,  to and
including the Effective Date (the  "Assignee's  Acquisition  Cost");  whereupon,
Assignor  shall be deemed to have sold,  transferred  and  assigned to Assignee,
without recourse,  representation or warranty (except as provided in paragraph 6
below), and Assignee shall be deemed to have hereby irrevocably taken,  received
and assumed from Assignor,  the Transferred  Percentage of Assignor's Commitment
and the  Capital of  Assignor's  Purchaser  Interests  (if  applicable)  and all
related rights and obligations under the Purchase  Agreement and the Transaction
Documents,   including,   without  limitation,  the  Transferred  Percentage  of
Assignor's  future  funding  obligations  under  Section  4.1  of  the  Purchase
Agreement.

4. Concurrently with the execution and delivery hereof, Assignor will provide to
Assignee  copies of all documents  requested by Assignee which were delivered to
Assignor pursuant to the Purchase Agreement.

5. Each of the parties to this Assignment  Agreement agrees that at any time and
from time to time upon the written  request of any other party,  it will execute
and deliver such further  documents  and do such further acts and things as such
other  party may  reasonably  request  in order to effect the  purposes  of this
Assignment Agreement.

6. By executing and delivering this Assignment Agreement,  Assignor and Assignee
confirm to and agree with each other,  the Agent and the Financial  Institutions
as  follows:  (a) other than the  representation  and  warranty  that it has not
created  any  Adverse  Claim  upon any  interest  being  transferred  hereunder,
Assignor makes no representation or warranty and assumes no responsibility  with
respect  to any  statements,  warranties  or  representations  made by any other
Person  in or in  connection  with the  Purchase  Agreement  or the  Transaction
Documents or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency or value of Assignee, the Purchase Agreement or any other instrument
or document furnished pursuant thereto or the perfection,  priority,  condition,
value or sufficiency of any collateral;  (b) Assignor makes no representation or
warranty and assumes no responsibility  with respect to the financial  condition
of the Seller,  any Obligor,  any Affiliate of the Seller or the  performance or
observance  by the Seller,  any Obligor,  any  Affiliate of the Seller of any of
their  respective  obligations  under  the  Transaction  Documents  or any other
instrument or document  furnished  pursuant thereto or in connection  therewith;
(c) Assignee confirms that it has received a copy of the Purchase  Agreement and
copies of such other Transaction Documents,  and other documents and information
as it has requested and deemed  appropriate to make its own credit  analysis and
decision  to  enter  into  this   Assignment   Agreement;   (d)  Assignee  will,
independently  and without reliance upon the Agent,  Conduit,  the Seller or any
other  Financial  Institution  or  Purchaser  and  based on such  documents  and
information as it shall deem  appropriate at the time,  continue to make its own
credit decisions in taking or not taking action under the Purchase Agreement and
the  Transaction  Documents;  (e) Assignee  appoints and authorizes the Agent to
take such  action as agent on its behalf and to exercise  such powers  under the
Transaction  Documents  as are  delegated  to the  Agent by the  terms  thereof,
together with such powers as are reasonably incidental thereto; and (f) Assignee
agrees  that  it  will  perform  in  accordance  with  their  terms  all  of the
obligations  which,  by the  terms  of the  Purchase  Agreement  and  the  other
Transaction  Documents,  are  required  to be  performed  by  it as a  Financial
Institution or, when applicable, as a Purchaser.

7. Each party hereto  represents  and warrants to and agrees with the Agent that
it is aware of and will comply with the  provisions  of the Purchase  Agreement,
including, without limitation, Sections 4.1, 13.1 and 14.6 thereof.

8.  Schedule I hereto sets forth the  revised  Commitment  of  Assignor  and the
Commitment of Assignee,  as well as  administrative  information with respect to
Assignee.

9. THIS  ASSIGNMENT  AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

10.  Assignee hereby  covenants and agrees that,  prior to the date which is one
year and one day  after  the  payment  in full of all  senior  indebtedness  for
borrowed  money of Conduit,  it will not  institute  against,  or join any other
Person  in  instituting   against,   Conduit  any  bankruptcy,   reorganization,
arrangement,  insolvency or liquidation  proceedings or other similar proceeding
under the laws of the United States or any state of the United States.

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Assignment Agreement to be executed by their respective duly authorized officers
of the date hereof.

                                            [ASSIGNOR]


                          By: _________________________
                                     Title:


                                            [ASSIGNEE]


                         By: __________________________
                                     Title:



<PAGE>


                       SCHEDULE I TO ASSIGNMENT AGREEMENT

                       LIST OF LENDING OFFICES, ADDRESSES
                       FOR NOTICES AND COMMITMENT AMOUNTS

Date:  _____________, ______

Transferred Percentage:    ____________%

<TABLE>
<CAPTION>

                                   A-1                    A-2                     B-1                    B-2

<S>                        <C>                       <C>                   <C>                    <C>
Assignor                  Commitment (prior to     Commitment (after      Outstanding Capital     Ratable Share of
                          giving effect to the    giving effect to the         (if any)          Outstanding Capital
                          Assignment Agreement)  Assignment Agreement)

                                                          A-2                     B-1                    B-2


Assignee                                           Commitment (after      Outstanding Capital     Ratable Share of
                                                  giving effect to the         (if any)          Outstanding Capital
                                                  Assignment Agreement)

Address for Notices


Attention:
Phone:
Fax:
</TABLE>





<PAGE>


                       SCHEDULE II TO ASSIGNMENT AGREEMENT

                                EFFECTIVE NOTICE

TO:      ________________________, Assignor
         ------------------------

TO:      ________________________, Assignee
         ------------------------

                  The  undersigned,  as Agent  under  the  Receivables  Purchase
Agreement  dated as of September 26, 2000 by and among  Ferrellgas  Receivables,
LLC, a Delaware limited liability company ("Seller"),  between Ferrellgas, L.P.,
a Delaware limited partnership, as Servicer, Jupiter Securitization Corporation,
Bank One, NA (Main Office  Chicago),  as Agent,  and the Financial  Institutions
party  thereto,  hereby  acknowledges  receipt  of  executed  counterparts  of a
completed   Assignment   Agreement  dated  as  of  ____________,   ____  between
__________________,  as Assignor,  and  __________________,  as Assignee.  Terms
defined in such Assignment Agreement are used herein as therein defined.

     1.  Pursuant  to such  Assignment  Agreement,  you  are  advised  that  the
Effective Date will be
--------------, ----.

                  2. By its  signature  below,  [each of] Conduit  [and  Seller]
hereby  consents to the Assignment  Agreement as required by Section  12.1(b) of
the Receivables Purchase Agreement.

     [3. Pursuant to such Assignment Agreement,  the Assignee is required to pay
$____________  to Assignor at or before  12:00 noon (local time of  Assignor) on
the Effective Date in immediately available funds.]

                                            Very truly yours,

                       BANK ONE, NA (MAIN OFFICE CHICAGO),
                            individually and as Agent


                         By: __________________________
                          Title:_______________________


                       JUPITER SECURITIZATION CORPORATION


                        By: ____________________________
                                            Authorized Signatory



[The foregoing is hereby consented to:

FERRELLGAS RECEIVABLES, LLC


By:
Name:
Title:]

<PAGE>


                                   EXHIBIT VI

                             FORM OF MONTHLY REPORT



Monthly Report as of x/xx/xx
For Month Day, Year


Originator-specific data:

I.    Receivables Rollforward
<TABLE>
<CAPTION>

                                                                                Ferrellgas, L.P.
                                                                              --------------------
<S>                                                                                             <C>
      Beginning Receivables                                                                     0
                                                                              --------------------
                                                                              --------------------
      Add:    Invoices                                                                          0
                                                                              --------------------
                                                                              --------------------
              Finance Charges                                                                   0
                                                                              --------------------
                                                                              --------------------
              Debit Memos                                                                       0
                                                                              --------------------
                                                                              --------------------
      Less:   Cash Collections                                                                  0
                                                                              --------------------
                                                                              --------------------
              Credit Memos (Note 1)                                                             0
                                                                              --------------------
                                                                              --------------------
              Charge-offs                                                                       0
                                                                              --------------------
      --------------------------------------------------------------------------------------------
      Total Receivables                                                                         0
      --------------------------------------------------------------------------------------------


II.   Summary Aging Schedule

      --------------------------------------------------------------------------------------------
                                                                               Ferrellgas, L.P.
      --------------------------------------------------------------------------------------------
      --------                                                                --------------------
      Current                                                                                   0
                                                                              --------------------
                                                                              --------------------
      30-60 days from invoice                                                                   0
                                                                              --------------------
                                                                              --------------------
      61-90 days from invoice                                                                   0
                                                                              --------------------
      > 91 days from invoice                                                                    0
                                                                              --------------------
      --------------------------------------------------------------------------------------------
      Total Receivables                                                                         0
      --------------------------------------------------------------------------------------------

                                                                              --------------------
III.  Ending G/L Balance                                                                        0
                                                                              --------------------

IV.   Eligible Receivables

      --------------------------------------------------------------------------------------------
                                                                               Ferrellgas, L.P.
      --------------------------------------------------------------------------------------------
      Total Receivables (Note 2)                                                                0
                                                "Eligible Receivable" definition (Note 3):
                                                                              --------------------
      Less:   Non - U.S. Receivables             (i)                                            0
                                                                              --------------------
                                                                              --------------------
              Receivables of Affiliates          (i)                                            0
                                                                              --------------------
                                                                              --------------------
              Government Receivables >           (i)                                            0
              2% of Outstanding Balance
                                                                              --------------------
                                                                              --------------------
              Obligors of Defaulted             (ii)                                            0
              Receivables (10%) (Note 4)
                                                                              --------------------
                                                                              --------------------
              Defaulted Receivables > 60        (iii)                                           0
              days from invoice
                                                                              --------------------
                                                                              --------------------
              Rec.w/ terms > 30                 (iv)                                            0
                                                                              --------------------
                                                                              --------------------
              Originator Obligations not        (xvi)                                           0
              fully performed
                                                                              --------------------
                                                                              --------------------
              Other Ineligible              (v-xv & xvii)                                       0
                                                                              --------------------
              Excess Concentrations            (xviii)                                          0
              (from Section VII below)
      --------------------------------------------------------------------------------------------
      Pool Receivables Balance                                                                  0
      --------------------------------------------------------------------------------------------


V.    Capital Availability

      Pool Receivables                                                                         $0
      Less:   Reserve Percentage x Pool                                20.00%                  $0
                                                                                               --
              Receivables
      Available for Funding                                                                    $0

      Capital Outstanding (cannot exceed                                                       $0
      $60 million)

      Asset Interest (sum of the Receivables Interest and the Contributed         $             -
      Interest)


      Purchaser Interest (cannot exceed                                                   100.00%
      100%)


VI.   Receivable Interest Sale Agreement
      Calculations
                                                                 % Value            $ Value
      Adjusted Pool Amount (Capital /                                             $             -
      0.80)
      Minimum Receivables Percentage
      Variable Purchased Percentage                                               $             - Receivable
                                                                                                  Interest
      Variable Contributed Percentage                                             $             - Contributed
                                                                                                  Interest
                                                            ======================================
      Buyer's Percentage (equal to Net Asset Interest                             $             -
      Balance)

      Originator's Percentage (100% minus the Buyer's                             $             -
      Percentage)


</TABLE>




<PAGE>




                                   SCHEDULE A

                      COMMITMENTS OF FINANCIAL INSTITUTIONS
<TABLE>
<CAPTION>

                     FINANCIAL INSTITUTION                                       COMMITMENT


<S>                                                                              <C>
               Bank One, NA (Main Office Chicago)                                $61,200,000

</TABLE>


<PAGE>


                                   SCHEDULE B

                    DOCUMENTS  TO BE  DELIVERED  TO THE AGENT ON OR PRIOR TO THE
INITIAL  PURCHASE 1. The  Receivables  Interest  Sale  Agreement and each of the
documents listed on Schedule A thereto.

2. Executed copies of this Agreement, duly executed by the parties thereto.

3.   Copy of the  Resolutions  of the Board of Directors of Seller  certified by
     its Secretary  authorizing Seller's execution,  delivery and performance of
     this Agreement and the other documents to be delivered by it hereunder.

4.   Copy of the  Resolutions  of the Board of Directors of the General  Partner
     and the Servicer  certified by its  Secretary  authorizing  the  Servicer's
     execution,  delivery  and  performance  of this  Agreement  and  the  other
     documents to be delivered by it hereunder.

5.   Organization Documents of Seller and certified by the Secretary of State of
     Delaware on or within  thirty  (30) days prior to the  initial  Incremental
     Purchase.

     6. Good Standing  Certificate for Seller issued by the Secretaries of State
of:

                  a.       Delaware
                  b.       Texas

7.   A  certificate  of  the  Secretary  of  Seller  certifying  the  names  and
     signatures  of the  officers  authorized  on its  behalf  to  execute  this
     Agreement and any other documents to be delivered by it hereunder.

8.   A  certificate  of the  Secretary  of  Servicer  and  the  General  Partner
     certifying  the names and  signatures  of the  officers  authorized  on its
     behalf to execute this Agreement and any other documents to be delivered by
     it hereunder.

9.   UCC financing statements,  in form suitable for filing under the UCC in all
     jurisdictions  as  may  be  necessary  or,  in the  opinion  of the  Agent,
     desirable, under the UCC of all appropriate jurisdictions or any comparable
     law in  order to  perfect  the  ownership  interests  contemplated  by this
     Agreement.

10.  Time stamped receipt copies of proper UCC termination  statements,  if any,
     necessary to release all security  interests and other rights of any Person
     in the Asset Interest previously granted by Seller.

11.  A  favorable  opinion of legal  counsel for the Seller  Parties  reasonably
     acceptable  to the Agent which  addresses  the  following  matters and such
     other matters as the Agent may reasonably request:

                  --Each Seller Party is duly organized,  validly existing,  and
in good standing under the laws of its state of organization.

                  --Each Seller Party has all requisite authority to conduct its
business in each  jurisdiction  where  failure to be so  qualified  would have a
material adverse effect on such Person's business.

                  --The  execution  and  delivery by each  Seller  Party of this
Agreement  and each other  Transaction  Document  to which it is a party and its
performance  of its  obligations  thereunder  have been duly  authorized  by all
necessary action and proceedings on the part of such Person and will not:

                  (a) require  any action by or in respect  of, or filing  with,
any  governmental  body,  agency  or  official  (other  than the  filing  of UCC
financing statements);

                  (b) contravene,  or constitute a default under,  any provision
of  applicable  law or  regulation  or of its  Organization  Documents or of any
agreement,  judgment, injunction, order, decree or other instrument binding upon
such Person; or

                  (c) result in the creation or  imposition of any Adverse Claim
on assets of such Person or any of its  Subsidiaries  (except as contemplated by
this Agreement).

                  --This Agreement and each other Transaction  Document to which
such Person is a party has been duly  executed and  delivered by such Person and
constitutes the legal, valid, and binding obligation of such Person, enforceable
in accordance with its terms,  except to the extent the enforcement  thereof may
be limited by bankruptcy,  insolvency or similar laws affecting the  enforcement
of creditors' rights generally and subject also to the availability of equitable
remedies if equitable remedies are sought.

                  --The  provisions  of the  Agreement are effective to create a
valid security  interest in favor of the Agent for the benefit of the Purchasers
in all Receivables,  and upon the filing of financing statements,  the Agent for
the benefit of the Purchasers shall acquire a first priority, perfected security
interest in such Receivables.

                  --To the best of the opinion  giver's  knowledge,  there is no
action,  suit or  other  proceeding  against  any  Seller  Party or any of their
respective  Affiliates,  which would materially adversely affect the business or
financial  condition of such Person and its Affiliates taken as a whole or which
would  materially  adversely  affect the  ability of such  Person to perform its
obligations under any Transaction Document to which it is a party.

12.      A Compliance Certificate.

13.      The Fee Letter.

14.      A Monthly Report as at August 31, 2000.

15.  On or before October 26, 2000, a Blocked Account Agreement by and among the
     Servicer,  Wells Fargo Bank,  and the Agent with respect to the  Servicer's
     Concentration Account, in form and substance satisfactory to the Agent.

16.  On or before  October 26,  2000, a Blocked  Account  Agreement by and among
     Seller,  Wells  Fargo  Bank,  and the Agent with  respect  to the  Facility
     Account, in form and substance satisfactory to the Agent.





<PAGE>





                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                               PAGE



<S>                                                                                                              <C>
ARTICLE I.PURCHASE ARRANGEMENTS...................................................................................1

                                                                                             <C>
   SECTION 1.1    PURCHASE FACILITY...............................................................................1
   SECTION 1.2    INCREASES.......................................................................................2
   SECTION 1.3    DECREASES.......................................................................................2
   SECTION 1.4    PAYMENT REQUIREMENTS............................................................................2

ARTICLE II.PAYMENTS AND ASSET INTEREST COLLECTIONS................................................................3

   SECTION 2.1    PAYMENTS........................................................................................3
   SECTION 2.2    ASSET INTEREST COLLECTIONS PRIOR TO AMORTIZATION................................................3
   SECTION 2.3    ASSET INTEREST COLLECTIONS FOLLOWING AMORTIZATION...............................................4
   SECTION 2.3    APPLICATION OF ASSET INTEREST COLLECTIONS.......................................................4
   SECTION 2.4    PAYMENT RECISSION...............................................................................5
   SECTION 2.5    MAXIMUM PURCHASER INTERESTS.....................................................................5
   SECTION 2.6    CLEAN UP CALL...................................................................................5

ARTICLE III.CONDUIT FUNDING.......................................................................................5

   SECTION 3.1    CP COSTS........................................................................................5
   SECTION 3.2    CP COSTS PAYMENTS...............................................................................6
   SECTION 3.3    CALCULATION OF CP COSTS.........................................................................6

ARTICLE IV.FINANCIAL INSTITUTION FUNDING..........................................................................6

   SECTION 4.1    FINANCIAL INSTITUTION FUNDING...................................................................6
   SECTION 4.2    YIELD PAYMENTS..................................................................................6
   SECTION 4.3    SELECTION AND CONTINUATION OF TRANCHE PERIODS...................................................6
   SECTION 4.4    FINANCIAL INSTITUTION DISCOUNT RATES............................................................7
   SECTION 4.5    SUSPENSION OF THE LIBO RATE.....................................................................7

ARTICLE V.REPRESENTATIONS AND WARRANTIES..........................................................................7

   SECTION 5.1    REPRESENTATIONS AND WARRANTIES OF THE SELLER....................................................7
   SECTION 5.2    FINANCIAL INSTITUTION REPRESENTATIONS AND WARRANTIES...........................................11

ARTICLE VI.CONDITIONS OF PURCHASES...............................................................................12

   SECTION 6.1    CONDITIONS PRECEDENT TO INITIAL INCREMENTAL PURCHASE...........................................12
   SECTION 6.2    CONDITIONS PRECEDENT TO ALL PURCHASES AND REINVESTMENTS........................................12

ARTICLE VII.COVENANTS............................................................................................13

   SECTION 7.1    FINANCIAL REPORTING............................................................................13
   SECTION 7.2    CERTIFICATES; OTHER INFORMATION................................................................13
   SECTION 7.3    NOTICES........................................................................................13
   SECTION 7.4    COMPLIANCE WITH LAWS...........................................................................14
   SECTION 7.5    PRESERVATION OF EXISTENCE, ETC.................................................................14
   SECTION 7.6    PAYMENT OF OBLIGATIONS.........................................................................15
   SECTION 7.7    AUDITS.........................................................................................15
   SECTION 7.8    KEEPING OF RECORDS AND BOOKS. .................................................................15
   SECTION 7.9    COMPLIANCE WITH CONTRACTS AND CREDIT AND COLLECTION POLICY.  ..................................16
   SECTION 7.10   PURCHASERS'RELIANCE............................................................................16
   SECTION 7.11   PERFORMANCE AND ENFORCEMENT OF RECEIVABLES INTEREST SALE AGREEMENT.............................18
   SECTION 7.12   COLLECTIONS....................................................................................18
   SECTION 7.13   OWNERSHIP......................................................................................18
   SECTION 7.14   TAXES.  .......................................................................................19
   SECTION 7.15   NEGATIVE COVENANTS OF THE SELLER PARTIES.......................................................19

ARTICLE VIII.ADMINISTRATION AND COLLECTION.......................................................................20

   SECTION 8.1    DESIGNATION OF SERVICER........................................................................20
   SECTION 8.2    CERTAIN DUTIES OF SERVICER.....................................................................20
   SECTION 8.3    COLLECTION NOTICES.............................................................................21
   SECTION 8.4    RESPONSIBILITIES OF SELLER.....................................................................22
   SECTION 8.5    REPORTS........................................................................................22

ARTICLE IX.AMORTIZATION EVENTS...................................................................................22

   SECTION 9.1    AMORTIZATION EVENTS............................................................................22
   SECTION 9.2    REMEDIES.......................................................................................23

ARTICLE X.INDEMNIFICATION........................................................................................24

   SECTION 10.1   INDEMNITIES BY THE SELLER PARTIES..............................................................24
   SECTION 10.2   INCREASED COST AND REDUCED RETURN..............................................................26
   SECTION 10.3   OTHER COSTS AND EXPENSES.......................................................................27
   SECTION 10.4   ALLOCATIONS....................................................................................27

ARTICLE XI.THE AGENT.............................................................................................28

   SECTION 11.1   AUTHORIZATION AND ACTION.......................................................................28
   SECTION 11.2   DELEGATION OF DUTIES...........................................................................28
   SECTION 11.3   EXCULPATORY PROVISIONS.........................................................................28
   SECTION 11.4   RELIANCE BY AGENT..............................................................................29
   SECTION 11.5   NON-RELIANCE ON AGENT AND OTHER PURCHASERS.....................................................29
   SECTION 11.6   REIMBURSEMENT AND INDEMNIFICATION..............................................................29
   SECTION 11.7   AGENT IN ITS INDIVIDUAL CAPACITY...............................................................29
   SECTION 11.8   SUCCESSOR AGENT................................................................................30

ARTICLE XII.ASSIGNMENTS; PARTICIPATIONS..........................................................................30

   SECTION 12.1   ASSIGNMENTS....................................................................................30
   SECTION 12.2   PARTICIPATIONS.................................................................................31

ARTICLE XIII.LIQUIDITY FACILITY..................................................................................31

   SECTION 13.1   TRANSFER TO FINANCIAL INSTITUTIONS.............................................................31
   SECTION 13.2   TRANSFER PRICE REDUCTION YIELD.................................................................32
   SECTION 13.3   PAYMENTS TO CONDUIT............................................................................32
   SECTION 13.4   LIMITATION ON COMMITMENT TO PURCHASE FROM CONDUIT..............................................32
   SECTION 13.5   DEFAULTING FINANCIAL INSTITUTIONS..............................................................32
   SECTION 13.6   TERMINATING FINANCIAL INSTITUTIONS.............................................................33

ARTICLE XIV.MISCELLANEOUS........................................................................................34

   SECTION 14.1   WAIVERS AND AMENDMENTS.........................................................................34
   SECTION 14.2   NOTICES........................................................................................35
   SECTION 14.3   RATABLE PAYMENTS...............................................................................35
   SECTION 14.4   PROTECTION OF OWNERSHIP INTERESTS OF THE PURCHASERS............................................35
   SECTION 14.5   CONFIDENTIALITY................................................................................36
   SECTION 14.6   BANKRUPTCY PETITION............................................................................36
   SECTION 14.7   LIMITATION OF LIABILITY........................................................................36
   SECTION 14.8   CHOICE OF LAW..................................................................................37
   SECTION 14.9   CONSENT TO JURISDICTION........................................................................37
   SECTION 14.10     WAIVER OF JURY TRIAL........................................................................37
   SECTION 14.11     INTEGRATION; BINDING EFFECT; SURVIVAL OF TERMS..............................................37
   SECTION 14.12     COUNTERPARTS; SEVERABILITY; SECTION REFERENCES..............................................38
   SECTION 14.13     BANK ONE ROLES..............................................................................38
   SECTION 14.14     CHARACTERIZATION............................................................................38



                             EXHIBITS AND SCHEDULES

Exhibit I         Definitions

Exhibit II        Form of Purchase Notice

Exhibit III       Principal Places of Business and Chief Executive Offices of the Seller Parties; Locations of
                  Records; Federal Employer Identification Number(s)

Exhibit IV        Form of Compliance Certificate

Exhibit V         Form of Assignment Agreement

Exhibit VI        Form of Monthly Report




Schedule A        Commitments

Schedule B        Closing Documents

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