<PAGE>
Exhibit 10.1(b)
FORM OF INDENTURE SUPPLEMENT
SERIES 200_-___ SUPPLEMENT
Dated as of ________ __, 200_
to
MASTER INDENTURE
Dated as of July 14, 2000
Series 200_-___ Asset Backed Notes
$__________________ Class A Variable Funding Floating Rate Notes
Class B Variable Funding Floating Rate Notes
--------------------------------------------------------------------------------
COMPUCREDIT CREDIT CARD MASTER NOTE BUSINESS TRUST
SERIES 200_-___
--------------------------------------------------------------------------------
among
COMPUCREDIT CREDIT CARD MASTER NOTE BUSINESS TRUST
Issuer
COMPUCREDIT CORPORATION
Servicer
and
THE BANK OF NEW YORK
Indenture Trustee
on behalf of the Series 200_-___ Noteholders
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
Creation of the Series 200_-___ Notes
Section 1.01. Designation................................................ 1
ARTICLE II
Definitions
Section 2.01. Definitions................................................ 2
ARTICLE III
Servicing Fee and Interchange
Section 3.01. Servicing Compensation; Interchange........................ 13
ARTICLE IV
Rights of Series 200_-___ Noteholders
and Allocation and Application of Collections
Section 4.01. Collections and Allocations................................ 13
Section 4.02. Determination of Monthly Interest.......................... 17
Section 4.03. Suspension of the Revolving Period; Limited Redemption
Period and Optional Redemption............................. 18
Section 4.04. Class A Required Amount.................................... 19
Section 4.05. Application of Available Funds and Available Principal
Collections................................................ 19
Section 4.06. Defaulted Amounts; Reduction Amounts....................... 21
Section 4.07. Reallocated Principal Collections.......................... 21
Section 4.08. Excess Finance Charge Collections.......................... 22
Section 4.09. Reallocated Series Finance Charge Collections.............. 22
Section 4.10. Shared Principal Collections............................... 23
Section 4.11. Spread Account............................................. 24
Section 4.12. Principal Amount Increases................................. 25
ARTICLE V
Distributions and Reports to Series 200_-___ Noteholders
Section 5.01. Distributions.............................................. 26
Section 5.02. Reports and Statements to Series 200_-___ Noteholders...... 27
</TABLE>
i
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE VI
Early Redemption Events
Section 6.01. Early Redemption Events.................................... 28
ARTICLE VII
Optional Redemption; Series Termination
Section 7.01. Optional Redemption........................................ 30
Section 7.02. Stated Maturity Date....................................... 31
ARTICLE VIII
Redemption of Series 200_-___ Notes; Final Distributions
Section 8.01. Sale of Receivables or Redemption of the Notes pursuant to
Section 2.06 or 8.01 of the Transfer and Servicing
Agreement and Sections 5.05 and 5.17 of the Indenture and
Section 7.01 of this Supplement............................ 31
ARTICLE IX
Miscellaneous Provisions
Section 9.01. Ratification of Agreement.................................. 32
Section 9.02. Counterparts............................................... 32
Section 9.03. Governing Law.............................................. 32
Section 9.04. Tax Matters................................................ 32
Section 9.05. Additional Provisions Regarding Agreement.................. 35
Section 9.06. Additional Provisions Regarding the Servicer............... 35
Section 9.07. Notices.................................................... 36
Section 9.08. Transfer of Class B Notes.................................. 36
Section 9.09. Certain Matters Relating to the Initial Distribution Date.. 36
Section 9.10. Limitation of Liability.................................... 37
</TABLE>
ii
<PAGE>
EXHIBITS
Exhibit A Form of Class A Note
Exhibit B Form of Class B Note
Exhibit C Form of Monthly Servicer's Statement
Exhibit D Form of Class B Increase Notice
Exhibit E Form of Investment Letter
<PAGE>
SERIES 200_-___ INDENTURE SUPPLEMENT, dated as of ________ __, 200_ (this
"SUPPLEMENT"), between COMPUCREDIT CREDIT CARD MASTER NOTE BUSINESS TRUST, a
business trust organized and existing under the laws of the State of Nevada (the
"ISSUER"), COMPUCREDIT CORPORATION, a Georgia corporation, as Servicer, and THE
BANK OF NEW YORK, a banking corporation organized and existing under the laws of
the State of New York, not in its individual capacity, but solely as Indenture
Trustee (together with its successors in the trusts thereunder as provided in
the Indenture, the "INDENTURE TRUSTEE") under the Master Indenture dated as of
July 14, 2000 (the "INDENTURE") between the Issuer, the Servicer and the
Indenture Trustee.
Section 2.11 of the Indenture provides that the Issuer may, from time to
time, pursuant to one or more Indenture Supplements direct the Indenture
Trustee, on behalf of the Issuer, to issue one or more new Series of Notes and
to set forth the Principal Terms of such Series.
Pursuant to this Supplement, the Issuer and the Indenture Trustee shall
create a new Series of Notes and specify the Principal Terms thereof.
ARTICLE I
CREATION OF THE SERIES 200_-___ NOTES
Section 1.01. DESIGNATION.
(a) There is hereby created and designated a Series of Notes to be
issued pursuant to the Indenture and this Supplement to be known as "CompuCredit
Credit Card Master Note Business Trust, Series 200_-___ Notes" or the "Series
200_-___ Notes." The Series 200_-___ Notes shall be issued in two Classes, the
first of which shall be known as the "Class A Series 200_-___ Floating Rate
Variable Funding Notes" and the second of which shall be known as the "Class B
Series 200_-___ Floating Rate Variable Funding Notes." The Series 200_-___ Notes
shall be due and payable on the Stated Maturity Date.
(b) Series 200_-___ shall be included in Group __ and shall be a
Principal Sharing Series. Series 200_-___ shall be an Excess Allocation Series.
Series 200_-___ shall not be subordinated to any other Series. Notwithstanding
any provision in the Indenture or in this Supplement to the contrary, the first
Distribution Date with respect to Series 200_-___ shall be _______ __, 200_.
(c) In the event that any term or provision contained herein shall
conflict with or be inconsistent with any term or provision contained in the
Indenture, the terms and provisions of this Supplement shall be controlling.
<PAGE>
ARTICLE II
DEFINITIONS
Section 2.01. DEFINITIONS.
(a) All capitalized terms not otherwise defined herein are defined in
the Indenture, the Transfer and Servicing Agreement or the Trust Agreement
(including by way of reference to other documents). Each capitalized term
defined herein shall relate only to the Series 200_-___ Notes and no other
Series of Notes issued by the Issuer. Whenever used in this Supplement, the
following words and phrases shall have the following meanings, and the
definitions of such terms are applicable to the singular as well as the plural
forms of such terms and the masculine as well as the feminine and neuter genders
of such terms.
"ADMINISTRATIVE AGENT" shall mean ____________________, or any successor
designated as the Agent in the Note Purchase Agreement.
"ALLOCATION AMOUNT" shall mean, as of any date of determination, an
amount equal to (a) the Initial Note Principal Balance, PLUS (b) the total
amount of Class A Note Principal Balance Increases and Class B Note Principal
Balance Increases on or prior to such date, MINUS (c) the total amount of
principal payments made on the Series 200_-___ Notes prior to such date, MINUS
(d) the excess, if any, of the total amount of Reduction Amounts for all prior
Distribution Dates and Reallocated Principal Collections that under Section 4.07
were used to fund the Class A Required Amount on all prior Distribution Dates
OVER such Reduction Amounts and Reallocated Principal Collections reimbursed
pursuant to subsection 4.05(a)(vi) prior to such date.
"AVAILABLE FUNDS" shall mean, for any Distribution Date, an amount equal
to the sum of (a) the Reallocated Series Finance Charge Collections, (b) the
Excess Finance Charge Collections and (c) the amount of funds, if any, to be
withdrawn from the Spread Account which, pursuant to subsection 4.11(c), are
required to be included in Available Funds with respect to such Distribution
Date.
"AVAILABLE PRINCIPAL COLLECTIONS" shall mean, with respect to any Monthly
Period, an amount equal to the sum of (a) (i) an amount equal to the
Fixed/Floating Allocation Percentage of Series 200_-___ Allocable Principal
Collections received during the related Monthly Period MINUS (ii) the amount of
Reallocated Principal Collections with respect to such Monthly Period which
pursuant to Section 4.07 are required to fund the Class A Required Amount for
the related Distribution Date, (b) any Shared Principal Collections with respect
to other Series that are allocated to Series 200_-___ in accordance with Section
4.02 of the Transfer and Servicing Agreement and Section 4.10 hereof and (c) any
other amounts which pursuant to Section 4.05 hereof are to be treated as
Available Principal Collections with respect to such Distribution Date.
"AVAILABLE SPREAD ACCOUNT AMOUNT" shall mean, with respect to any
Distribution Date, the lesser of (a) the principal amount on deposit in the
Spread Account on such date (before
2
<PAGE>
giving effect to any deposit to be made to the Spread Account on such date) and
(b) the Required Spread Account Amount.
"AVERAGE ALLOCATION AMOUNT" shall mean, for any period, the sum of the
Allocation Amounts for each day in such period divided by the number of days in
such period.
"AVERAGE NOTE PRINCIPAL BALANCE" shall mean, for any period, the sum of
the Note Principal Balances for each day in such period divided by the number of
days in such period.
"AVERAGE PRINCIPAL RECEIVABLES" shall mean, for any period, the sum of
the Principal Receivables for each day in such period divided by the number of
days in such period.
"BASE RATE" shall mean, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is equal
to the sum of the Monthly Interest and the Monthly Servicing Fee, if any, with
respect to the related Distribution Date and the denominator of which is the
Average Note Principal Balance as of the last day of the preceding Monthly
Period.
"CLASS A INITIAL NOTE PRINCIPAL BALANCE" shall mean $________.
"CLASS A MONTHLY INTEREST" shall have the meaning specified in subsection
4.02(a).
"CLASS A NOTE PRINCIPAL BALANCE" shall mean, on any date, (a) the Class A
Initial Note Principal Balance, PLUS (b) the total amount of Class A Note
Principal Balance Increases made on or prior to such date, MINUS (c) the total
amount of principal payments made on the Class A Notes on or prior to such date.
"CLASS A NOTE PRINCIPAL BALANCE INCREASE" shall have the meaning
specified in subsection 4.12(a).
"CLASS A NOTEHOLDER" shall mean the Person in whose name a Class A Note
is registered in the Note Register.
"CLASS A NOTES" shall mean any one of the Notes executed by the Issuer
and authenticated by or on behalf of the Indenture Trustee, substantially in the
form of Exhibit A.
"CLASS A REQUIRED AMOUNT" shall have the meaning specified in Section
4.04.
"CLASS B INITIAL NOTE PRINCIPAL BALANCE" shall mean $________.
"CLASS B MONTHLY INTEREST" shall have the meaning specified in subsection
4.02(b).
"CLASS B NOTE PRINCIPAL BALANCE" shall mean, on any date, (a) the Class B
Initial Note Principal Balance, PLUS (b) the total amount of Class B Note
Principal Balance Increases
3
<PAGE>
made on or prior to such date, MINUS (c) the total amount of principal payments
made on the Class B Notes on or prior to such date.
"CLASS B NOTE PRINCIPAL BALANCE INCREASE" shall have the meaning
specified in subsection 4.12(b).
"CLASS B NOTE RATE" shall mean, for any Interest Period with respect to
the Class B Notes, a per annum rate of 0%, PROVIDED, HOWEVER, that upon notice
to the Indenture Trustee and the Servicer, the Class B Note Rate shall equal
such other rate as shall be agreed upon by the Issuer and the Class B
Noteholder, from time to time.
"CLASS B NOTEHOLDER" shall mean the Person in whose name a Class B Note
is registered in the Note Register.
"CLASS B NOTES" shall mean any one of the Notes executed by the Issuer
and authenticated by or on behalf of the Indenture Trustee, substantially in the
form of Exhibit B.
"CLOSING DATE" shall mean ________ __, 200_.
"COLUMBUS BANK" shall mean Columbus Bank and Trust Company, a state bank
chartered under the laws of the State of Georgia, and its successors and
permitted assigns under the Affinity Card Agreement.
"COMMITMENT TERMINATION DATE" shall have the meaning provided in the Note
Purchase Agreement.
"CONTROLLED REDEMPTION PERIOD" shall mean, unless an Early Redemption
Event with respect to Series 200_-___ shall have occurred prior thereto, the
period commencing on the Termination Date (as defined in the Note Purchase
Agreement, excluding clause (v) thereof) and ending upon the first to occur of
(x) the commencement of the Early Redemption Period, (y) the payment in full to
Class A Noteholders and the Class B Noteholders of the Class A Note Principal
Balance and the Class B Note Principal Balance, respectively, and (z) the Stated
Maturity Date.
"DELINQUENCY RATIO" shall mean, for any Monthly Period, the ratio
(expressed as a percentage) of (i) the balance of all Receivables as to which,
as of the last day of such Monthly Period, any payment remains unpaid for more
than 30 days from the due date with respect thereto, but excludes Ineligible
Receivables, to (ii) the balance of all Receivables (excluding Ineligible
Receivables) as of the last day of such Monthly Period.
"DISTRIBUTION DATE" shall mean the fifteenth day of each calendar month,
or if such fifteenth day is not a Business Day, the next succeeding Business Day
commencing with ________ __, 200_.
"EARLY REDEMPTION EVENT" shall mean any Early Redemption Event specified
in Section 5.01 of the Indenture and any Early Redemption Event specified in
Section 6.01 hereof.
4
<PAGE>
"EARLY REDEMPTION PERIOD" shall mean the period commencing at the close
of business on the Business Day immediately preceding the day on which an Early
Redemption Event with respect to Series 200_-___ is deemed to have occurred, and
ending on the first to occur of (i) the payment in full of the Note Principal
Balance or (ii) the Stated Maturity Date.
"EXCESS FINANCE CHARGE COLLECTIONS" shall have the meaning specified in
Section 4.05 of the Transfer and Servicing Agreement, as further described in
Section 4.08 hereof.
"EXPECTED PRINCIPAL PAYMENT DATE" shall mean the twelfth Distribution
Date occurring in the Controlled Redemption Period.
"FACILITY LIMIT" shall have the meaning specified in the Note Purchase
Agreement.
"FINANCE CHARGE SHORTFALL" shall have the meaning specified in Section
4.08.
"FIXED/FLOATING ALLOCATION PERCENTAGE" shall mean, with respect to any
day during a Monthly Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is (a) during the
Revolving Period, the Series Adjusted Allocation Amount for Series 200_-___ as
of the last day of the immediately preceding Monthly Period (or, in the case of
the first Monthly Period, the Initial Note Principal Balance) and (b) during the
Redemption Period or any Limited Redemption Period, the Series Adjusted
Allocation Amount for Series 200_-___ as of the close of business on the date on
which the Revolving Period shall have terminated or been suspended, as the case
may be, and the denominator of which is the product of (x) the greater of (A)
the sum of (i) the total amount of Principal Receivables as of the last day of
the immediately preceding Monthly Period (or with respect to the first Monthly
Period, the total amount of Principal Receivables as of the Closing Date), (ii)
the Special Funding Amount as of such last day (or with respect to the first
Monthly Period, the Closing Date) and (iii) the amount of Collections of
Principal Receivables on deposit in the Collection Account as of such last day
(or with respect to the first Monthly Period, as of the Closing Date) and (B)
the sum of the numerators used to determine the series allocation percentages
with respect to Collections of Principal Receivables for all Series of Notes
Outstanding, and (y) the Series 200_-___ Allocation Percentage as of the last
day of the immediately preceding Monthly Period; PROVIDED, HOWEVER, that with
respect to any Monthly Period in which one or more Reset Dates occurs, the
Fixed/Floating Allocation Percentage shall be recalculated as provided above but
as of such Reset Date for the period from and including such Reset Date to but
excluding the next such Reset Date, if any, or if no other Reset Date occurs
during such Monthly Period, to and including the last day of such Monthly
Period, as applicable; PROVIDED FURTHER, that the numerator in clause (b) above
shall continue to be the Series Adjusted Allocation Amount for Series 200_-___
as of the close of business on the date on which the Revolving Period shall have
been terminated or suspended unless the Series 200_-___ Notes are paid in full
on such date.
"FLOATING ALLOCATION PERCENTAGE" shall mean, with respect to any day
during a Monthly Period, the percentage equivalent (which percentage shall never
exceed 100%) of a fraction, the numerator of which is the Allocation Amount as
of the last day of the preceding
5
<PAGE>
Monthly Period (or in the case of the first Monthly Period, the Initial Note
Principal Balance) and the denominator of which is the product of (x) the Series
200_-___ Allocation Percentage with respect to such Monthly Period and (y) the
greater of (A) the sum of (i) the total amount of Principal Receivables as of
such day (or with respect to the first Monthly Period, the total amount of
Principal Receivables on the Closing Date), (ii) the Special Funding Amount as
of such last day (or with respect to the first Monthly Period, the Closing Date)
and (iii) the amount of Collections of Principal Receivables on deposit in the
Collection Account as of such last day (or with respect to the first Monthly
Period, as of the Closing Date) and (B) the sum of the numerators used to
determine the series allocation percentages with respect to Collections of
Finance Charge Receivables for all Series of Notes Outstanding; PROVIDED,
HOWEVER, that with respect to any Monthly Period in which one or more Reset
Dates occurs, the Floating Allocation Percentage shall be recalculated as
provided above but as of such Reset Date, for the period from and after the date
on which any such Reset Date occurs to but excluding the date, if any, that
another such Reset Date occurs or, if no other Reset Date occurs during such
Monthly Period, to and including the last day of such Monthly Period.
"GROUP __" shall mean Series 200_-___ and each other Series specified in
the related Supplement to be included in Group __.
"GROUP __ SERIES ADDITIONAL AMOUNTS" shall mean, with respect to any
Monthly Period, the sum of (a) Series 200_-___ Additional Amounts for such
Distribution Date and (b) for all other Series included in Group __, the sum of
(i) the aggregate net amount by which the allocation amounts of such Series have
been reduced as a result of Reduction Amounts, subordination of principal
collections and, if applicable, funding the series default amounts in respect of
any Class of Notes or Series Enhancement of such Series as of such Distribution
Date and (ii) if the applicable Supplements so provide, the aggregate unpaid
amount of interest at the applicable note interest rates that has accrued on the
amounts described in the preceding clause (i) for such Distribution Date.
"GROUP __ SERIES DEFAULT AMOUNT" shall mean, with respect to any
Distribution Date, the sum of (a) the Series Default Amount for such
Distribution Date and (b) the aggregate amount of the series default amounts for
all other Series included in Group __ for such Distribution Date.
"GROUP __ SERIES FINANCE CHARGE COLLECTIONS" shall mean, with respect to
any Distribution Date, the sum of (a) Series Finance Charge Collections for such
Distribution Date and (b) the aggregate amount of the series finance charge
collections for all other Series included in Group __ for such Distribution
Date.
"GROUP __ SERIES MONTHLY FEES" shall mean with respect to any
Distribution Date, the sum of (a) Series 200_-___ Monthly Fees for such
Distribution Date and (b) the aggregate amount of the servicing fees, series
fees, fees payable to any Series Enhancer and any other similar fees, which are
payable out of reallocated series finance charge collections pursuant to the
related Supplements, for all other Series included in Group __ for such
Distribution Date.
6
<PAGE>
"GROUP __ SERIES MONTHLY INTEREST" shall mean, with respect to any
Distribution Date, the sum of (a) Series 200_-___ Monthly Interest for such
Distribution Date and (b) the aggregate amount of monthly interest, including
overdue monthly interest and interest on such overdue monthly interest, if such
amounts are payable out of reallocated series finance charge collections
pursuant to the related Supplements, for all other Series included in Group __
for such Distribution Date.
"GROUP __ SERIES SERVICER ADVANCES" shall mean, with respect to any
Distribution Date, the sum of (a) amounts owed to the Servicer in respect of
Servicer Advances pursuant to Section 4.05(a)(i) hereof for such Distribution
Date and (b) the aggregate amount of servicer advances, including unreimbursed
servicer advances from prior Interest Periods, for all other Series included in
Group __ for such Distribution Date.
"INITIAL NOTE PRINCIPAL BALANCE" shall mean the sum of the Class A
Initial Note Principal Balance and the Class B Initial Note Principal Balance.
"INTEREST DISTRIBUTION DATE" shall have the meaning assigned to such term
in Section 4.02(c).
"INTEREST PERIOD" shall mean, with respect to any Distribution Date, the
period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"INVESTMENT LETTER" shall have the meaning specified in Section 9.04(c).
"LIMITED REDEMPTION AMOUNT" shall mean for any Distribution Date relating
to a Limited Redemption Period, the excess, if any, of (i) the amount specified
in the notice delivered by the Issuer in accordance with Section 4.03(a) over
(ii) the aggregate amount of principal paid on the Class A Notes on all prior
Distribution Dates, if any, in such Limited Redemption Period.
"LIMITED REDEMPTION PERIOD" shall mean, unless the Controlled Redemption
Period or the Early Redemption Period shall have commenced prior thereto, a
period beginning on the first day of the Monthly Period specified in the notice
delivered by the Issuer in accordance with Section 4.03(a), and ending upon the
first to occur of (i) the commencement of the Controlled Redemption Period or
the Early Redemption Period and (ii) the last day of the Monthly Period related
to the Distribution Date on which the aggregate amount distributed pursuant to
Section 4.05(c)(ii) equals the Limited Redemption Amount for such Distribution
Date.
"MONTHLY INTEREST" shall mean, with respect to any Distribution Date, the
Class A Monthly Interest and the Class B Monthly Interest for such Distribution
Date.
"MONTHLY SERVICING FEE" shall have the meaning specified in Section
3.01(a).
"NET PORTFOLIO YIELD" shall mean, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, (A) the numerator of which is
equal to (a) Series
7
<PAGE>
Finance Charge Collections with respect to such Monthly Period, PLUS (b) without
duplication of amounts referred to in clause (a) above, the amount of
Interchange to be included as Series 200_-___ Allocable Finance Charge
Collections for such Monthly Period pursuant to subsection 3.01(b), MINUS (c)
the Series Default Amount for the Distribution Date with respect to such Monthly
Period, and (B) the denominator of which is the Average Note Principal Balance
with respect to such Monthly Period.
"NET YIELD" shall mean, with respect to any Monthly Period, (a) the Net
Portfolio Yield with respect to such Monthly Period MINUS (b) the Base Rate with
respect to such Monthly Period.
"NOTE ASSIGNMENT" shall have the meaning specified in Section 9.04(e).
"NOTE PRINCIPAL BALANCE" shall mean, for any date of determination, the
sum of the Class A Note Principal Balance and the Class B Note Principal
Balance.
"NOTE PRINCIPAL BALANCE INCREASE" shall mean a Class A Note Principal
Balance Increase or a Class B Note Principal Balance Increase.
"NOTE PURCHASE AGREEMENT" shall mean the Note Purchase Agreement dated as
of ________ __, 200_ by and among CFC, CompuCredit, the Issuer, the
Administrative Agent and ______________________________, and all amendments
thereto.
"OPTIONAL REDEMPTION AMOUNT" shall have the meaning specified in
subsection 4.03(b).
"OPTIONAL REDEMPTION DATE" shall have the meaning specified in subsection
4.03(b).
"OPTIONAL REDEMPTION NOTICE" shall have the meaning specified in
subsection 4.03(b).
"PARTICIPANT" shall have the meaning specified in Section 9.04(f).
"PRIVATE HOLDER" shall mean each holder of a right to receive interest or
principal in respect of any direct or indirect interest in the Issuer, including
any financial instrument or contract the value of which is determined in whole
or in part by reference to the Issuer (including the assets of the Issuer,
income of the Issuer or distributions made by the Issuer), but excluding any
interest in the Issuer represented by any Series or Class of Notes or any other
interest as to which the Transferor has provided to the Indenture Trustee an
Opinion of Counsel to the effect that such Series, Class or other interest will
be treated as debt or otherwise not as an equity interest in either the Issuer
or the Receivables for federal income tax purposes, in each case, PROVIDED such
interest is not convertible or exchangeable into an interest in the Issuer or
the Issuer's income or equivalent value. Notwithstanding the immediately
preceding sentence, (i) "Private Holder" shall also include any other Person
that the Transferor determines is, may be or may become a "partner" within the
meaning of Section 1.7704-1(h)(1)(ii) (including by reason of Section
1.7704-1(h)(3)) of the United States Treasury Regulations. "Private Holders"
shall
8
<PAGE>
include the Holders of the Trust Certificate, the Transferor Certificates or any
interest in either, the Servicer and the Series 200_-___ Noteholders. Any Person
holding more than one interest in the Issuer each of which separately would
cause such Person to be a Private Holder shall be treated as a single Private
Holder. Each holder of an interest in a Private Holder which is a partnership, S
corporation or a grantor trust under the Code shall be treated as a Private
Holder unless excepted with the consent of the Transferor (which consent shall
be based on an Opinion of Counsel generally to the effect that the action taken
pursuant to the consent will not cause the Issuer to become a publicly traded
partnership treated as a corporation).
"RATING AGENCY CONDITION" shall mean, if no Series or Class of Notes has
been rated, the consent of the Administrative Agent.
"REALLOCATED SERIES FINANCE CHARGE COLLECTIONS" shall mean that portion
of Group __ Series Finance Charge Collections allocated to Series 200_-___
pursuant to Section 4.09.
"REALLOCATED PRINCIPAL COLLECTIONS" shall mean, with respect to any
Distribution Date, an amount equal to the lesser of (I) the product of (a) the
Series 200_-___ Allocable Principal Collections deposited in the Collection
Account for the related Monthly Period and, (b) the Fixed/Floating Allocation
Percentage for the related Monthly Period, and (II) the greater of (x) the Class
B Note Principal Balance minus the excess, if any, of the total amount of
Reduction Amounts for all prior Distribution Dates and Reallocated Principal
Collections that under Section 4.07 were used to fund the Class A Required
Amount on all prior Distribution Dates OVER such Reduction Amounts and
Reallocated Principal Collections reimbursed pursuant to Section 4.05(a)(vi)
prior to such date and (y) 0.
"RECORDS" shall mean all Credit Card Agreements and other documents,
books, records and other information (including, without limitation, computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) maintained with respect to Receivables and the related
Obligors.
"REDEMPTION AMOUNT" shall mean, with respect to any Distribution Date,
after giving effect to any deposits and distributions otherwise to be made on
such Distribution Date, the sum of (i) the Note Principal Balance on such
Distribution Date PLUS (ii) Monthly Interest for such Distribution Date and any
Monthly Interest previously due but not distributed to the Series 200_-___
Noteholders on a prior Distribution Date.
"REDEMPTION PERIOD" shall mean, with respect to Series 200_-___, the
Controlled Redemption Period or the Early Redemption Period (or both), as the
context requires and, for purposes of Shared Principal Collections, the Limited
Redemption Period and an Optional Redemption Date, if so designated by the
Issuer.
"REDUCTION AMOUNTS" shall have the meaning specified in Section 4.06.
"REQUIRED SPREAD ACCOUNT AMOUNT" shall mean, on any date of
determination, the product of (i) the Class A Note Principal Balance as of such
date of determination and (ii) the Spread Account Cap Percentage as of such date
of determination.
9
<PAGE>
"REQUIRED SUBORDINATE AMOUNT" shall mean, on any date of determination,
the Class A Note Principal Balance as of the end of the day immediately
preceding such determination date, multiplied by the Required Subordination
Percentage.
"REQUIRED SUBORDINATION PERCENTAGE" shall mean, for any date of
determination, ____%.
"RESET DATE" shall mean each of (a) an Addition Date, (b) a date on which
a Note Principal Balance Increase occurs, (c) an Optional Redemption Date, (d)
the date of any increase or decrease (other than regularly scheduled redemptions
or early redemptions but including any optional redemption in the principal
balance of the Notes of any Series) in the note principal balance or allocation
amount for another variable funding series, and (e) any date on which a new
Series is issued.
"REVOLVING PERIOD" shall mean the period beginning at the close of
business on the Closing Date and ending on the earlier of (a) the close of
business on the day immediately preceding the day the Controlled Redemption
Period commences and (b) the close of business on the day immediately preceding
the day the Early Redemption Period commences; PROVIDED, HOWEVER, that the
Revolving Period shall be temporarily suspended for the duration of any Limited
Redemption Period.
"SERIES 200_-___" shall mean the Series of Notes the terms of which are
specified in this Supplement.
"SERIES 200_-___ ADDITIONAL AMOUNTS" shall mean, with respect to any
Distribution Date, the sum of the amounts determined pursuant to subsection
4.05(a)(vi) for such Distribution Date.
"SERIES 200_-___ ALLOCABLE DEFAULTED AMOUNT" shall mean the Series
Allocable Defaulted Amount with respect to Series 200_-___.
"SERIES 200_-___ ALLOCABLE FINANCE CHARGE COLLECTIONS" shall mean the
Series Allocable Finance Charge Collections with respect to Series 200_-___.
"SERIES 200_-___ ALLOCABLE PRINCIPAL COLLECTIONS" shall mean the Series
Allocable Principal Collections with respect to Series 200_-___.
"SERIES 200_-___ ALLOCATION PERCENTAGE" shall mean the Series Allocation
Percentage with respect to Series 200_-___ which shall be an amount equal to,
with respect to any Monthly Period, the percentage equivalent of a fraction, the
numerator of which is the Series Adjusted Allocation Amount for Series 200_-___
as of the last day of the immediately preceding Monthly Period PLUS the Series
Required Transferor Amount as of such last day and the denominator of which is
the Trust Adjusted Allocation Amount PLUS the Required Transferor Amount as of
such last day; PROVIDED, HOWEVER, that with respect to any Monthly Period in
which one or more Reset Dates occurs, the Series 200_-___ Allocation Percentage
shall be recalculated as provided above but as of such Reset Date for the period
from and after the date on which any such Reset Date occurs to but excluding the
date, if any, that another such Reset Date occurs or,
10
<PAGE>
if no other Reset Date occurs during such Monthly Period, to and including the
last day of such Monthly Period.
"SERIES 200_-___ MONTHLY FEES" shall mean, with respect to any
Distribution Date, the amount determined pursuant to subsection 4.05(a)(iv).
"SERIES 200_-___ MONTHLY INTEREST" shall mean the amounts determined
pursuant to subsections 4.02(a) and (b).
"SERIES 200_-___ NOTE" shall mean a Class A Note or a Class B Note.
"SERIES 200_-___ NOTEHOLDER" shall mean a Class A Noteholder or a Class B
Noteholder.
"SERIES 200_-___ PRINCIPAL SHORTFALL" shall have the meaning specified in
Section 4.10.
"SERIES ALLOCATION AMOUNT" shall mean, for Series 200_-___ and with
respect to any date of determination, the Initial Note Principal Balance plus
the aggregate principal amount of Note Principal Balance Increases and MINUS any
payments of principal to the Series 200_-___ Noteholders during the Limited
Redemption Period or on an Optional Redemption Date.
"SERIES DEFAULT AMOUNT" shall mean, with respect to any Monthly Period,
an amount equal to the product of (a) the Series 200_-___ Allocable Defaulted
Amount for the related Monthly Period and (b) the Floating Allocation Percentage
for such Monthly Period.
"SERIES FINANCE CHARGE COLLECTIONS" shall mean with respect to any
Distribution Date, an amount equal to the product of (a) (i) during the
Revolving Period, the Controlled Redemption Period or the Limited Redemption
Period, the Floating Allocation Percentage for the related Monthly Period and
(ii) during the Early Redemption Period, the Fixed/Floating Allocation
Percentage for the related Monthly Period and (b) the Series 200_-___ Allocable
Finance Charge Collections deposited in the Collection Account for the related
Monthly Period.
"SERIES REQUIRED TRANSFEROR AMOUNT" shall mean an amount equal to 0% of
the Allocation Amount.
"SERVICER ADVANCE" shall have the meaning specified in Section 4.02(c).
"SERVICING BASE AMOUNT" shall have the meaning specified in Section
3.01(a).
"SERVICING FEE RATE" shall mean the greater of (a) 2.0% per annum and (b)
the percentage cost per annum of servicing the Accounts or Receivables pursuant
to the applicable fee schedule governing the then-effective servicing or
sub-servicing arrangement as estimated by independent public accountants on
behalf of the Indenture Trustee, the Class A Noteholders and the Noteholders of
each other Series of Notes then outstanding; PROVIDED, HOWEVER, that during the
period that Columbus Bank owns the Accounts pursuant to the Affinity Card
Agreement, the Servicing Fee Rate shall be 0.10% per annum.
11
<PAGE>
"SPECIAL PAYMENT DATE" shall mean each Distribution Date with respect to
the Early Redemption Period.
"SPREAD ACCOUNT" shall have the meaning specified in subsection 4.11(a).
"SPREAD ACCOUNT CAP PERCENTAGE" shall mean, as of any date of
determination, if the most recent two-month average (calculated as of the
Determination Date immediately preceding such date) of the Net Yield for such
date is greater than or equal to the percentage set forth in the left-hand
column of the table below, and less than the percentage set forth in the middle
column of the table below, an amount equal to the percentage set forth next to
such percentages in the right-hand column of the table below:
<TABLE>
<CAPTION>
AVERAGE NET YIELD
Spread
Greater Than Less Account
or Equal to Than Cap %
----------- ---- -----
<S> <C> <C>
</TABLE>
"SPREAD ACCOUNT DRAW AMOUNT" shall have the meaning specified in
subsection 4.11(c).
"SPREAD ACCOUNT SURPLUS" shall mean, as of any date of determination, the
amount, if any, by which the amount on deposit in the Spread Account exceeds the
Required Spread Account Amount.
"STATED MATURITY DATE" shall mean the August, 2008 Distribution Date.
"TERMINATION DATE" shall mean the earliest to occur of (a) the
commencement of the Early Redemption Period, (b) the second Business Day prior
to the Commitment Termination Date and (c) the date of termination as specified
in the Note Purchase Agreement.
"TRANSFEROR PERCENTAGE" shall mean 100% MINUS (a) the Floating Allocation
Percentage, when used at any time with respect to Defaulted Receivables, (b) the
Floating Allocation Percentage, when used during the Revolving Period, the
Controlled Redemption Period or the Limited Redemption Period with respect to
Collections of Finance Charge Receivables, (c) the Fixed/Floating Allocation
Percentage, when used during the Early Redemption Period with respect to
Collections of Finance Charge Receivables or (d) the Fixed/Floating Allocation
Percentage, when used at any time with respect to Collections of Principal
Receivables.
12
<PAGE>
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Supplement shall refer to this Supplement as a whole
and not to any particular provision of this Supplement; references to any
Article, subsection, Section or Exhibit are references to Articles, subsections,
Sections and Exhibits in or to this Supplement unless otherwise specified; and
the term "including" means "including without limitation."
ARTICLE III
SERVICING FEE AND INTERCHANGE
Section 3.01. SERVICING COMPENSATION; INTERCHANGE.
(a) SERVICING FEE. The share of the Servicing Fee allocable to the
Series 200_-___ Noteholders with respect to any Distribution Date (the "MONTHLY
SERVICING FEE") shall be equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) (i) the Average Allocation Amount for the Monthly
Period preceding such Distribution Date, MINUS (ii) the product of the amount,
if any, on deposit in the Special Funding Account as of the last day of the
Monthly Period preceding such Distribution Date and the Series 200_-___
Allocation Percentage with respect to such Monthly Period (the amount calculated
pursuant to this clause (b) is referred to as the "SERVICING BASE AMOUNT"). The
remainder of the Servicing Fee shall be paid by the Issuer and the Noteholders
of other Series (as provided in the Transfer and Servicing Agreement and the
related Supplements) and in no event shall the Indenture Trustee or the Series
200_-___ Noteholders be liable for the share of the Servicing Fee to be paid by
the Issuer or the Noteholders of any other Series.
(b) INTERCHANGE. On or before each Determination Date, the Servicer
shall notify the Indenture Trustee and the Transferor of the amount of
Interchange to be included as Series 200_-___ Allocable Finance Charge
Collections with respect to the preceding Monthly Period as determined pursuant
to this subsection 3.01(b). Such amount of Interchange shall be equal to the
product of (i) the amount of Interchange attributable to the Accounts, as
reasonably estimated by the Servicer and (ii) the Series 200_-___ Allocation
Percentage. On each Transfer Date, pursuant to the Transfer and Servicing
Agreement, the Transferor shall pay to the Servicer, and the Servicer shall
deposit into the Collection Account, in same day funds, the amount of
Interchange to be so included as Series 200_-___ Allocable Finance Charge
Collections with respect to the preceding Monthly Period and such Interchange
shall be treated as a portion of Series 200_-___ Allocable Finance Charge
Collections for all purposes of this Supplement and the Indenture.
ARTICLE IV
Rights of Series 200_-___ Noteholders and
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01. COLLECTIONS AND ALLOCATIONS.
13
<PAGE>
(a) ALLOCATIONS. Collections of Finance Charge Receivables and
Principal Receivables and Defaulted Receivables allocated to Series 200_-___
pursuant to Section 4.01 of the Transfer and Servicing Agreement (and, as
described herein, Collections of Finance Charge Receivables reallocated from
other Series in Group __) shall be allocated and distributed or reallocated as
set forth in this Article.
(b) PAYMENTS TO THE ISSUER. The Servicer shall, on any Business Day
requested by the Issuer, withdraw from the Collection Account and pay to the
Issuer for application as provided in the Trust Agreement the following amounts:
(i) an amount equal to the Transferor Percentage for the related
Monthly Period of Series 200_-___ Allocable Finance Charge Collections deposited
in the Collection Account; PROVIDED, HOWEVER, that if on such date the Available
Spread Account Amount is less than the Required Spread Account Amount (after
giving effect to any deposits into the Spread Account on such date pursuant to
subsection 4.05(a)(viii)), then such amount shall be deposited on such date into
the Spread Account to the extent of such deficiency; and
(ii) an amount equal to the Transferor Percentage for the related
Monthly Period of Series 200_-___ Allocable Principal Collections deposited in
the Collection Account, if the Transferor Amount (determined after giving effect
to any Principal Receivables transferred to the Issuer on such date) exceeds
zero; PROVIDED, HOWEVER, that if on such date the Available Spread Account
Amount is less than the Required Spread Account Amount (after giving effect to
any deposits into the Spread Account on such date pursuant to subsections
4.01(b)(i), 4.01(c)(ii)(w) or (x) and 4.05(a)(viii)), then such amount shall be
deposited on such date into the Spread Account to the extent of such deficiency.
The withdrawals to be made from the Collection Account pursuant to this
subsection 4.01(b) do not apply to deposits into the Collection Account that do
not represent Collections, including payment for the reassignment of the
Receivables and Participation Interests pursuant to Section 2.06 of the Transfer
and Servicing Agreement, payment of the purchase price for the Series 200_-___
Notes pursuant to Section 8.01 of the Transfer and Servicing Agreement, payment
of the redemption price for the Series 200_-___ Notes pursuant to Section 7.01
of this Supplement and proceeds from the sale, disposition or liquidation of
Receivables pursuant to Section 5.05 of the Indenture.
(c) ALLOCATIONS TO THE SERIES 200_-___ NOTEHOLDERS. The Servicer
shall, prior to the close of business on any Deposit Date, allocate to the
Series 200_-___ Noteholders the following amounts as set forth below:
(i) ALLOCATIONS OF FINANCE CHARGE COLLECTIONS. The Servicer shall
allocate to the Series 200_-___ Noteholders the following amounts as set forth
below:
(x) ALLOCATIONS DURING THE REVOLVING PERIOD, THE CONTROLLED REDEMPTION
PERIOD AND THE LIMITED REDEMPTION PERIOD. During the Revolving Period, the
Controlled Redemption Period and the Limited Redemption Period, the Servicer
shall allocate to the Series 200_-___ Noteholders and retain in the Collection
Account for application as provided herein an amount
14
<PAGE>
equal to the product of (A) the Floating Allocation Percentage and (B) the
Series 200_-___ Allocation Percentage and (C) the aggregate amount of
Collections of Finance Charge Receivables deposited in the Collection Account on
such Deposit Date; PROVIDED, HOWEVER, that after the date on which an amount of
such Collections of Finance Charge Receivables equal to the amount specified in
subsection 4.05(a)(i) has been deposited into the Collection Account and
allocated to the Series 200_-___ Noteholders, such amount specified in
subsection 4.05(a)(i) shall be paid to the Servicer; PROVIDED FURTHER, HOWEVER,
that after the date on which an amount of such Collections of Finance Charge
Receivables equal to the sum of the amounts specified in subsections 4.05(a)(i)
through (viii) have been deposited into the Collection Account (or paid to the
Servicer pursuant to the immediately preceding proviso) and allocated to the
Series 200_-___ Noteholders (and, with respect to the amount specified in
subsection 4.05(a)(viii), deposited into the Spread Account), such amount shall
be paid to the Issuer for application pursuant to the Trust Agreement.
(y) ALLOCATIONS DURING THE EARLY REDEMPTION PERIOD. During the Early
Redemption Period, the Servicer shall allocate to the Series 200_-___
Noteholders and retain in the Collection Account for application as provided
herein an amount equal to the product of (A) the Fixed/Floating Allocation
Percentage and (B) the Series 200_-___ Allocation Percentage and (C) the
aggregate amount of Collections of Finance Charge Receivables deposited in the
Collection Account on such Deposit Date; PROVIDED, HOWEVER, that after the date
on which an amount of such Collections of Finance Charge Receivables equal to
the amount specified in subsection 4.05(a)(i) has been deposited into the
Collection Account and allocated to the Series 200_-___ Noteholders, such amount
specified in subsection 4.05(a)(i) shall be paid to the Servicer; PROVIDED
FURTHER, HOWEVER, that after the date on which an amount of such Collections of
Finance Charge Receivables equal to the sum of the amounts specified in
subsections 4.05(a)(i) through (viii) have been deposited into the Collection
Account (or paid to the Servicer pursuant to the immediately preceding proviso)
and allocated to the Series 200_-___ Noteholders (and, with respect to the
amount specified in subsection 4.05(a)(viii), deposited into the Spread
Account), such amount shall be paid to the Issuer for application pursuant to
the Trust Agreement.
(ii) ALLOCATIONS OF PRINCIPAL COLLECTIONS. The Servicer shall allocate
to the Series 200_-___ Noteholders the following amounts as set forth below:
(w) ALLOCATIONS DURING THE REVOLVING PERIOD. During the Revolving
Period (A) an amount equal to the product of (I) the Required Subordination
Percentage and (II) the Fixed/Floating Allocation Percentage and (III) the
Series 200_-___ Allocation Percentage and (IV) the aggregate amount of
Collections of Principal Receivables deposited in the Collection Account on such
Deposit Date, shall be allocated to the Series 200_-___ Noteholders and retained
in the Collection Account until applied as provided herein; PROVIDED, HOWEVER,
that any such amount may be paid to the Issuer for application pursuant to the
Trust Agreement on any Business Day requested by the Issuer, but only if (i) the
Transferor Amount on such date is greater than the Required Transferor Amount
(after giving effect to all Principal Receivables transferred to the Issuer on
such day) and (ii) the Available Spread Account Amount is equal to or greater
than the Required Spread Account Amount (after giving effect to any deposits
into the Spread Account on such Deposit Date pursuant to subsection
4.05(a)(viii)) and (B) an amount
15
<PAGE>
equal to the product of (I) 1 MINUS the Required Subordination Percentage and
(II) the Fixed/Floating Allocation Percentage and (III) the Series 200_-___
Allocation Percentage and (IV) the aggregate amount of Collections of Principal
Receivables deposited in the Collection Account on such Deposit Date shall, if
such Deposit Date is after an Optional Redemption Notice has been given but
prior to the related Optional Redemption Date, be allocated to the Series
200_-___ Noteholders and retained in the Collection Account until applied as
provided herein; PROVIDED, HOWEVER, that, with respect to clause (B) above, if
the sum of such amount and all such preceding amounts since the date the
Optional Redemption Notice was given exceeds the Optional Redemption Amount
(less (x) any amounts which the Servicer has notified the Indenture Trustee will
be available to pay the Optional Redemption Amount from the proceeds of the
issuance of one or more new Series of Notes and (y) any amounts available in the
Special Funding Account to pay such Optional Redemption Amount), or if no
Optional Redemption Notice has been given or the needed amount has been
allocated, then such excess shall be first, if on such Deposit Date the
Available Spread Account Amount is less than the Required Spread Account Amount
(after giving effect to any deposits into the Spread Account on such Deposit
Date pursuant to subsection 4.05(a)(viii)), deposited into the Spread Account,
second, if any other Principal Sharing Series is outstanding and in its
redemption period or accumulation period, retained in the Collection Account for
application, to the extent necessary, as Shared Principal Collections on the
related Distribution Date, and third, paid to the Issuer for application
pursuant to the Trust Agreement on each Distribution Date; PROVIDED, HOWEVER,
that any such amount to be paid to the Issuer shall be paid to the Issuer only
if the Transferor Amount on such date is greater than the Required Transferor
Amount (after giving effect to all Principal Receivables transferred to the
Issuer on such day) and otherwise shall be deposited in the Special Funding
Account.
(x) ALLOCATIONS DURING THE LIMITED REDEMPTION PERIOD. During the
Limited Redemption Period, (A) an amount equal to the product of (I) the
Required Subordination Percentage and (II) the Fixed/Floating Allocation
Percentage and (III) the Series 200_-___ Allocation Percentage and (IV) the
aggregate amount of Collections of Principal Receivables deposited in the
Collection Account on such Deposit Date, shall be allocated to the Series
200_-___ Noteholders and retained in the Collection Account until applied as
provided herein; PROVIDED, HOWEVER, that any such amount may be paid to the
Issuer for application pursuant to the Trust Agreement on any Business Day
requested by the Issuer, but only if (i) the Transferor Amount on such date is
greater than the Required Transferor Amount (after giving effect to all
Principal Receivables transferred to the Issuer on such day) and (ii) the
Available Spread Account Amount is equal to or greater than the Required Spread
Account Amount (after giving effect to any deposits into the Spread Account on
such Deposit Date pursuant to subsection 4.05(a)(viii)) and (B) an amount equal
to the product of (I) 1 MINUS the Required Subordination Percentage and (II) the
Fixed/Floating Allocation Percentage and (III) the Series 200_-___ Allocation
Percentage and (IV) the aggregate amount of Collections of Principal Receivables
deposited in the Collection Account on such Deposit Date, shall be allocated to
the Series 200_-___ Noteholders and retained in the Collection Account until
applied as provided herein; PROVIDED, HOWEVER, that, with respect to clause (B)
above, after the date on which an amount of such Collections equal to the
Limited Redemption Amount has been deposited into the Collection Account and
allocated to the Series 200_-___ Noteholders, such amount shall be first,
16
<PAGE>
if on such Deposit Date the Available Spread Account Amount is less than the
Required Spread Account Amount (after giving effect to any deposits into the
Spread Account on such Deposit Date pursuant to subsection 4.05(a)(viii)),
deposited into the Spread Account, second, if any other Principal Sharing Series
is outstanding and in its redemption period or accumulation period, retained in
the Collection Account for application, to the extent necessary, as Shared
Principal Collections on the related Distribution Date, and third paid to the
Issuer for application pursuant to the Trust Agreement only if the Transferor
Amount on such Deposit Date is greater than the Required Transferor Amount
(after giving effect to all Principal Receivables transferred to the Issuer on
such day) and otherwise shall be deposited in the Special Funding Account.
(y) ALLOCATIONS DURING THE CONTROLLED REDEMPTION PERIOD. During the
Controlled Redemption Period, an amount equal to the product of (I) the
Fixed/Floating Allocation Percentage and (II) the Series 200_-___ Allocation
Percentage and (III) the aggregate amount of Collections of Principal
Receivables deposited in the Collection Account on such Deposit Date, shall be
allocated to the Series 200_-___ Noteholders and retained in the Collection
Account until applied as provided herein; PROVIDED, HOWEVER, that after the date
on which an amount of such Collections equal to the Note Principal Balance has
been deposited into the Collection Account and allocated to the Series 200_-___
Noteholders, such amount shall be first, if any other Principal Sharing Series
is outstanding and in its redemption period or accumulation period, retained in
the Collection Account for application, to the extent necessary, as Shared
Principal Collections on the related Distribution Date, and second paid to the
Issuer for application pursuant to the Trust Agreement only if the Transferor
Amount on such Deposit Date is greater than the Required Transferor Amount
(after giving effect to all Principal Receivables transferred to the Issuer on
such day) and otherwise shall be deposited in the Special Funding Account.
(z) ALLOCATIONS DURING THE EARLY REDEMPTION PERIOD. During the Early
Redemption Period, an amount equal to the product of (I) the Fixed/Floating
Allocation Percentage and (II) the Series 200_-___ Allocation Percentage and
(III) the aggregate amount of Collections of Principal Receivables deposited in
the Collection Account on such Deposit Date, shall be allocated to the Series
200_-___ Noteholders and retained in the Collection Account until applied as
provided herein; PROVIDED, HOWEVER, that after the date on which an amount of
such Collections equal to the Note Principal Balance has been deposited into the
Collection Account and allocated to the Series 200_-___ Noteholders, such amount
shall be first, if any other Principal Sharing Series is outstanding and in its
redemption period or accumulation period, retained in the Collection Account for
application, to the extent necessary, as Shared Principal Collections on the
related Distribution Date, and second paid to the Issuer for application
pursuant to the Trust Agreement only if the Transferor Amount on such date is
greater than the Required Transferor Amount (after giving effect to all
Principal Receivables transferred to the Issuer on such day) and otherwise shall
be deposited in the Special Funding Account.
17
<PAGE>
Section 4.02. DETERMINATION OF MONTHLY INTEREST.
(a) The amount of monthly interest ("CLASS A MONTHLY INTEREST")
distributable from the Collection Account with respect to the Class A Notes on
any Distribution Date shall be an amount determined as provided in the Note
Purchase Agreement.
(b) The amount of monthly interest ("CLASS B MONTHLY INTEREST")
distributable from the Collection Account with respect to the Class B Notes on
any Distribution Date shall be an amount equal to the product of (i) (A) a
fraction, the numerator of which is the actual number of days in the applicable
Interest Period and the denominator of which is 360, times (B) the Class B Note
Rate and (ii) the Class B Note Principal Balance with respect to the related
Interest Period.
(c) Interest accrued on each Tranche shall be payable on the day on
which such Tranche matures (each such day, an "INTEREST DISTRIBUTION DATE"). The
Servicer, for so long as CompuCredit is the Servicer, shall make an advance on
each Interest Distribution Date in an amount equal to the interest due and
payable with respect to each Tranche maturing on such Interest Distribution Date
(each such advance, a "SERVICER ADVANCE"). Such Servicer Advance shall be paid
to the Administrative Agent, for the benefit of the Class A Noteholders, on each
such Interest Distribution Date. The Servicer shall not be required to make a
Servicer Advance to the extent that the Servicer, in its sole discretion,
determines that such Servicer Advance is unlikely to be recovered from amounts
retained in the Collection Account pursuant to Section 4.01(c)(i) and subsequent
applications of Available Funds pursuant to Section 4.05(a)(i). On each
Distribution Date, the Servicer shall be entitled to reimbursement, without
interest, for any Servicer Advances not previously reimbursed in accordance with
Section 4.05(a)(i).
Section 4.03. SUSPENSION OF THE REVOLVING PERIOD; LIMITED REDEMPTION
PERIOD AND OPTIONAL REDEMPTION.
(a) The Issuer may from time to time at its sole discretion, unless an
Early Redemption Event shall have occurred prior thereto, suspend the Revolving
Period and cause a Limited Redemption Period to commence for one or more Monthly
Periods by delivering to the Servicer, the Indenture Trustee and the
Administrative Agent written notice at least two Business Days prior to the
first day of the Monthly Period in which such Limited Redemption Period is
scheduled to commence, which notice shall specify the Limited Redemption Amount
for such Limited Redemption Period; PROVIDED, HOWEVER, that any Limited
Redemption Amount shall be in an amount of $1,000,000 or any higher multiple of
$100,000; PROVIDED FURTHER that the Issuer may not cause a Limited Redemption
Period to commence unless, in the reasonable belief of the Issuer, such Limited
Redemption Period would not result in the occurrence of an Early Redemption
Event.
(b) On any Business Day during the Revolving Period, the Issuer may
cause the Servicer to provide written notice to the Indenture Trustee, the
Administrative Agent and the Series 200_-___ Noteholders (an "OPTIONAL
REDEMPTION NOTICE") at least two Business Days prior to any Business Day that is
the last day of a funding period (as determined pursuant to section 2.5 of the
Note Purchase Agreement) (the "OPTIONAL REDEMPTION DATE") stating its
18
<PAGE>
intention to cause a full redemption of the Series 200_-___ Notes on the
Optional Redemption Date in an amount (the "OPTIONAL REDEMPTION AMOUNT") of (x)
with respect to the Class A Notes, an amount equal to the Class A Note Principal
Balance (plus accrued interest, if any) on such Optional Redemption Date and (y)
with respect to the Class B Notes, an amount equal to the Class B Note Principal
Balance on such Optional Redemption Date. The Optional Redemption Notice shall
state the Optional Redemption Date and the Optional Redemption Amount. The
Optional Redemption Amount shall be paid from any Available Principal
Collections on deposit in the Collection Account, from funds on deposit in the
Special Funding Account (but only to the extent withdrawals from the Special
Funding Account will not cause the Transferor Amount to be less than the
Required Transferor Amount after giving effect to such withdrawal) or from the
proceeds of the issuance of one or more new Series of Notes issued substantially
contemporaneously with such full redemption (or any combination of the above).
The accrued interest, if any, on the Class B Notes being paid on such date shall
be payable on the first Distribution Date on or after the related Optional
Redemption Date. On the Optional Redemption Date the Servicer shall pay (x) the
Optional Redemption Amount with respect to the Class A Notes to the
Administrative Agent for the benefit of the Class A Noteholders and (y) the
Optional Redemption Amount with respect to the Class B Notes to the Class B
Noteholders.
Section 4.04. CLASS A REQUIRED AMOUNT. With respect to each Distribution
Date, on the related Determination Date, the Servicer shall determine the amount
(the "CLASS A REQUIRED AMOUNT"), if any, by which (x) the amount required
pursuant to subsections 4.05(a)(ii) and 4.05(a)(iv) for such Distribution Date
exceeds (y) the Available Funds for such Distribution Date available to fund
each such amount. In the event that the Class A Required Amount for such
Distribution Date is greater than zero, the Servicer shall give written notice
to the Indenture Trustee of such Class A Required Amount on the date of
computation.
Section 4.05. APPLICATION OF AVAILABLE FUNDS AND AVAILABLE PRINCIPAL
COLLECTIONS. The Servicer shall apply, or shall cause the Indenture Trustee to
apply by written instruction to the Indenture Trustee, on each Distribution
Date, Available Funds and Available Principal Collections on deposit in the
Collection Account with respect to such Distribution Date to make the following
distributions:
(a) On each Distribution Date, an amount equal to the Available Funds
with respect to such Distribution Date will be distributed in the following
priority:
(i) an amount equal to the Servicer Advances made with respect to the
preceding Monthly Period which have not been reimbursed pursuant to Section
4.01(c)(i) and any unreimbursed Servicer Advances from prior Interest Periods
shall be distributed to the Servicer, to the extent not distributed pursuant to
Section 4.01(c)(i);
(ii) an amount equal to Class A Monthly Interest for such Distribution
Date, PLUS the amount of any Class A Monthly Interest previously due but not
distributed to Class A Noteholders on a prior Distribution Date shall be
distributed to the Class A Noteholders on the applicable Distribution Date;
19
<PAGE>
(iii) an amount equal to the Series Default Amount for such Distribution
Date shall be treated as a portion of Available Principal Collections for such
Distribution Date;
(iv) an amount equal to the Monthly Servicing Fee for such Distribution
Date, PLUS the amount of any Monthly Servicing Fee previously due but not
distributed to the Servicer on a prior Distribution Date, shall be distributed
to the Servicer (unless such amount has been netted against deposits to the
Collection Account in accordance with Section 4.01 of the Transfer and Servicing
Agreement);
(v) if the Transferor fails to deposit the amount the Transferor is
required to deposit on such Distribution Date into the Special Funding Account
pursuant to Section 3.08 of the Transfer and Servicing Agreement, an amount
equal to the product of (a) the Series 200_-___ Allocation Percentage, (b) the
Floating Allocation Percentage, and (c) the amount the Transferor should have
deposited into the Special Funding Account on such Distribution Date shall be
treated as a portion of Available Principal Collections for such Distribution
Date;
(vi) an amount equal to the aggregate amount of Reduction Amounts and
Reallocated Principal Collections that under Section 4.07 were used to fund the
Class A Required Amount which have not been previously reimbursed shall be
treated as a portion of Available Principal Collections for such Distribution
Date;
(vii) if an Early Redemption Event has occurred on or prior to such
Distribution Date, an amount up to the Class A Note Principal Balance on such
Distribution Date shall be treated as a portion of Available Principal
Collections for such Distribution Date and distributed to the Class A
Noteholders;
(viii) on each Distribution Date prior to the date on which the Spread
Account terminates pursuant to subsection 4.11(e), an amount up to the excess,
if any, of the Required Spread Account Amount for such Distribution Date over
the Available Spread Account Amount for such Distribution Date shall be
deposited into the Spread Account;
(ix) an amount equal to Class B Monthly Interest for such Distribution
Date, PLUS the amount of any Class B Monthly Interest previously due but not
distributed to Class B Noteholders on a prior Distribution Date shall be
distributed to the Class B Noteholders; and
(x) the balance, if any, will constitute a portion of Excess Finance
Charge Collections for such Distribution Date and will be available for
allocation to other Series or to the Issuer as described in Section 4.05 of the
Transfer and Servicing Agreement.
(b) On each Distribution Date with respect to the Revolving Period, an
amount equal to the Available Principal Collections deposited in the Collection
Account for the related Monthly Period shall be distributed in the following
order of priority:
(i) an amount equal to the excess, if any, of (1) the Class B Note
Principal Balance less the amount of unreimbursed Reduction Amounts and
Reallocated Principal Collections that under Section 4.07 were used to fund the
Class A Required Amount over (2) the Required Subordinate Amount shall be
distributed to the Class B Noteholders; and
20
<PAGE>
(ii) the balance of such Available Principal Collections shall be
treated as Shared Principal Collections and applied in accordance with Section
4.02 of the Transfer and Servicing Agreement.
(c) On each Distribution Date with respect to the Limited Redemption
Period, an amount equal to the Available Principal Collections deposited in the
Collection Account for the related Monthly Period shall be distributed in the
following order of priority:
(i) an amount equal to the excess, if any, of (1) the Class B Note
Principal Balance less the amount of the unreimbursed Reduction Amounts and
Reallocated Principal Collections over (2) the Required Subordinate Amount shall
be distributed to the Class B Noteholders;
(ii) an amount equal to the Limited Redemption Amount shall be
distributed to the Class A Noteholders; and
(iii) the balance of such Available Principal Collections shall be
treated as Shared Principal Collections and applied in accordance with Section
4.02 of the Transfer and Servicing Agreement.
(d) On each Distribution Date with respect to the Controlled
Redemption Period or the Early Redemption Period, an amount equal to the
Available Principal Collections deposited in the Collection Account for the
related Monthly Period shall be distributed in the following order of priority:
(i) an amount, to the extent available, equal to the Class A Note
Principal Balance shall be distributed to the Class A Noteholders;
(ii) for each Distribution Date beginning on the Distribution Date on
which the Class A Note Principal Balance shall have been paid in full, an
amount, to the extent available, equal to the Class B Note Principal Balance
shall be paid to the Class B Noteholders; and
(iii) for each Distribution Date beginning on the Distribution Date on
which the Class B Notes are paid in full, an amount equal to the balance, if
any, of such Available Principal Collections shall be treated as Shared
Principal Collections and applied in accordance with Section 4.02 of the
Transfer and Servicing Agreement.
Section 4.06. DEFAULTED AMOUNTS; REDUCTION AMOUNTS.
On each Determination Date, the Servicer shall calculate the Series
Default Amount for the related Distribution Date. If, on any Distribution Date,
the Series Default Amount for the related Monthly Period exceeds the Available
Funds allocated and available for that purpose pursuant to subsection
4.05(a)(iii) for such Distribution Date, the Allocation Amount (after giving
effect to any reductions for Reallocated Principal Collections that under
Section 4.07 were used to fund the Class A Required Amount on such Distribution
Date), will be reduced, subject to the succeeding sentence, by the amount of
such excess, but not by more than
21
<PAGE>
the Series Default Amount for such Distribution Date (a "REDUCTION AMOUNT"). In
the event that such reduction would cause the Allocation Amount to be a negative
number, the Allocation Amount shall be reduced to zero. Reduction Amounts shall
thereafter be reimbursed and the Allocation Amount increased (but not by an
amount in excess of the aggregate unreimbursed Reduction Amounts) on any
Distribution Date by the amount of Available Funds allocated and available for
that purpose pursuant to subsection 4.05(a)(vi).
Section 4.07. REALLOCATED PRINCIPAL COLLECTIONS. On each Distribution
Date, the Servicer shall apply, or shall cause the Indenture Trustee to apply,
by written instruction to the Indenture Trustee, Reallocated Principal
Collections with respect to such Distribution Date, to fund any deficiency
pursuant to subsections 4.05(a)(ii) and 4.05(a)(iv).
On each Distribution Date, the Allocation Amount shall be reduced by the
amount of Reallocated Principal Collections, used to fund the Class A Required
Amount, for such Distribution Date, but in any event the Allocation Amount shall
not be reduced by operation of this Section 4.07 to an amount less than the
Class A Note Principal Balance. Reallocated Principal Collections, used to fund
the Class A Required Amount, shall thereafter be reimbursed, and the Allocation
Amount increased (but not by an amount in excess of the aggregate unreimbursed
Reallocated Principal Collections used to fund the Class A Required Amount) on
any Distribution Date by the amount of Available Funds allocated and available
for that purpose pursuant to subsection 4.05(a)(vi).
Section 4.08. EXCESS FINANCE CHARGE COLLECTIONS. Series 200_-___ shall
be an Excess Allocation Series. Subject to Section 4.05 of the Transfer and
Servicing Agreement, Excess Finance Charge Collections with respect to all
the Excess Allocation Series for any Distribution Date will be allocated to
Series 200_-___ in an amount equal to the product of (x) the aggregate amount
of Excess Finance Charge Collections with respect to all the Excess
Allocation Series for such Distribution Date and (y) a fraction, the
numerator of which is the Finance Charge Shortfall for Series 200_-___ for
such Distribution Date and the denominator of which is the aggregate amount
of Finance Charge Shortfalls for all the Excess Allocation Series for such
Distribution Date. The "Finance Charge Shortfall" for Series 200_-___ for any
Distribution Date will be equal to the excess, if any, of (a) the full amount
required to be paid, without duplication, pursuant to subsections 4.05(a) (i)
through (ix) on such Distribution Date over (b) the Reallocated Series
Finance Charge Collections for such Distribution Date.
Section 4.09. REALLOCATED SERIES FINANCE CHARGE COLLECTIONS.
(a) That portion of Group __ Series Finance Charge Collections for any
Distribution Date equal to the amount of Reallocated Series Finance Charge
Collections for such Distribution Date will be allocated to Series 200_-___ and
will be distributed as set forth in this Supplement.
(b) Reallocated Series Finance Charge Collections with respect to any
Distribution Date shall equal the sum of (i) any amounts payable to the Servicer
pursuant to Section 4.05(a)(i), the aggregate amount of Series 200_-___ Monthly
Interest, Series Default Amount, Series 200_-___ Monthly Fees and Series
200_-___ Additional Amounts for such
22
<PAGE>
Distribution Date and (ii) that portion of excess Group __ Series Finance Charge
Collections to be included in Reallocated Series Finance Charge Collections
pursuant to subsection (c) hereof; PROVIDED, HOWEVER, that if the amount of
Group __ Series Finance Charge Collections for such Distribution Date is less
than the sum of (v) any amounts payable to the Servicer in reimbursement of
servicer advances for Group __ Series, (w) Group __ Series Monthly Interest, (x)
Group __ Series Default Amount, (y) Group __ Series Monthly Fees and (z) Group
__ Series Additional Amounts, then Reallocated Series Finance Charge Collections
shall equal the sum of the following amounts for such Distribution Date:
(A) the product of (I) Group __ Series Finance Charge Collections (up to
the amount of Group __ Series Servicer Advances) and (II) a fraction, the
numerator of which is the amounts owed to the Servicer in respect of Servicer
Advances pursuant to Section 4.05(a)(i) hereof and the denominator of which is
the Group __ Series Servicer Advances;
(B) the product of (I) Group __ Series Finance Charge Collections less
the amount of Group __ Series Servicer Advances (up to the amount of Group __
Series Monthly Interest) and (II) a fraction, the numerator of which is Series
200_-___ Monthly Interest and the denominator of which is Group __ Series
Monthly Interest;
(C) the product of (I) Group __ Series Finance Charge Collections less
the amount of Group __ Series Servicer Advances and Group __ Series Monthly
Interest (such amount not less than zero) (up to the Group __ Series Default
Amount) and (II) a fraction, the numerator of which is the Series Default Amount
and the denominator of which is the Group __ Series Default Amount;
(D) the product of (I) Group __ Series Finance Charge Collections less
the sum of (i) Group __ Series Servicer Advances, (ii) Group __ Series Monthly
Interest and (iii) the Group __ Series Default Amount (such amount not less than
zero) (up to Group __ Series Monthly Fees) and (II) a fraction, the numerator of
which is Series 200_-___ Monthly Fees and the denominator of which is Group __
Series Monthly Fees; and
(E) the product of (I) Group __ Series Finance Charge Collections less
the sum of (i) Group __ Series Servicer Advances, (ii) Group __ Series Monthly
Interest, (iii) the Group __ Series Default Amount and (iv) Group __ Series
Monthly Fees (such amount not less than zero) and (II) a fraction, the numerator
of which is Series 200_-___ Additional Amounts and the denominator of which is
Group __ Series Additional Amounts.
(c) If the amount of Group __ Series Finance Charge Collections for such
Distribution Date exceeds the sum of (i) Group __ Series Servicer Advances, (ii)
Group __ Series Monthly Interest, (iii) Group __ Series Default Amount, (iv)
Group __ Series Monthly Fees and (v) Group __ Series Additional Amounts, then
Reallocated Series Finance Charge Collections for such Distribution Date shall
include an amount equal to the product of (x) the amount of such excess and (y)
a fraction, the numerator of which is the Allocation Amount as of the last day
of the second preceding Monthly Period and the denominator of which is the sum
of such Allocation Amount and the aggregate allocation amounts for all other
Series included in Group __ as of such last day.
23
<PAGE>
Section 4.10. SHARED PRINCIPAL COLLECTIONS. Subject to Section 4.02 of
the Transfer and Servicing Agreement, Shared Principal Collections for any
Distribution Date will be allocated to Series 200_-___ in an amount equal to the
product of (x) the aggregate amount of Shared Principal Collections with respect
to all Principal Sharing Series for such Distribution Date and (y) a fraction,
the numerator of which is the Series 200_-___ Principal Shortfall for such
Distribution Date and the denominator of which is the aggregate amount of
Principal Shortfalls for all the Series which are Principal Sharing Series for
such Distribution Date. The "Series 200_-___ Principal Shortfall" will be equal
to (a) for any Distribution Date with respect to the Revolving Period, zero;
PROVIDED, that if such Distribution Date is an Optional Redemption Date, the
Series 200_-___ Shortfall shall be an amount determined by the Issuer not to
exceed the related Optional Redemption Amount, (b) for any Distribution Date
with respect to the Limited Redemption Period, the excess, if any, of the
Limited Redemption Amount over the amount of Available Principal Collections for
such Distribution Date (excluding any portion thereof attributable to Shared
Principal Collections) and (c) for any Distribution Date with respect to the
Controlled Redemption Period or the Early Redemption Period, the excess, if any,
of the Allocation Amount over the amount of Available Principal Collections for
such Distribution Date (excluding any portion thereof attributable to Shared
Principal Collections).
Section 4.11. SPREAD ACCOUNT.
(a) The Servicer shall establish and maintain, in the name of the
Indenture Trustee, for the benefit of the Class A Noteholders, an Eligible
Deposit Account (the "SPREAD ACCOUNT") bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Class A
Noteholders. The Spread Account shall initially be established with the
Indenture Trustee. The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Spread Account and in
all proceeds thereof. The Spread Account shall be under the sole dominion and
control of the Indenture Trustee for the benefit of the Class A Noteholders. If
at any time the Spread Account ceases to be an Eligible Deposit Account, the
Indenture Trustee (or the Servicer on its behalf) shall within 10 Business Days
(or such longer period, not to exceed 30 calendar days, as to which the
Administrative Agent shall consent) establish a new Spread Account meeting the
conditions specified above as an Eligible Deposit Account, and shall transfer
any cash or any investments to such new Spread Account. The Indenture Trustee,
at the written direction of the Servicer, shall (i) make withdrawals from the
Spread Account from time to time in an amount up to the Available Spread Account
Amount at such time, for the purposes set forth in this Supplement, and (ii) on
each Distribution Date prior to the termination of the Spread Account make a
deposit into the Spread Account in the amount specified in, and otherwise in
accordance with, subsection 4.05(a)(viii).
(b) Funds on deposit in the Spread Account shall be invested at the
written direction of the Servicer by the Indenture Trustee in Eligible
Investments. In no event shall the Indenture Trustee be liable for the selection
of Eligible Investments or for investment losses incurred thereon, except with
respect to investments on which the institution acting as the Indenture Trustee
is an obligor. The Indenture Trustee shall have no liability in respect of
losses incurred as a result of the liquidation of any Eligible Investment prior
to its stated maturity or the failure of the Servicer to provide timely written
investment direction. The Indenture Trustee shall have no obligation to invest
or reinvest any amounts held hereunder in the absence of
24
<PAGE>
written investment direction. Funds on deposit in the Spread Account on any
Transfer Date, after giving effect to any withdrawals from the Spread Account on
such Transfer Date, shall be invested in such investments that will mature so
that such funds will be available for withdrawal on or prior to the following
Transfer Date. The Indenture Trustee shall hold such Eligible Investments as
provided in Section 6.15 of the Indenture. No such Eligible Investment shall be
disposed of prior to its maturity; PROVIDED, HOWEVER, that the Indenture Trustee
may sell, liquidate or dispose of any such Eligible Investment before its
maturity, at the written direction of the Servicer, if such sale, liquidation or
disposal would not result in a loss of all or part of the principal portion of
such Eligible Investment or if, prior to the maturity of such Eligible
Investment, a default occurs in the payment of principal, interest or any other
amount with respect to such Eligible Investment. On each Distribution Date, all
interest and earnings (net of losses and investment expenses) accrued since the
preceding Distribution Date on funds on deposit in the Spread Account shall be
retained in the Spread Account (to the extent that the Available Spread Account
Amount is less than the Required Spread Account Amount) and the balance, if any,
shall be deposited in the Collection Account and treated as Collections of
Finance Charge Receivables allocable to Series 200_-___. For purposes of
determining the availability of funds or the balance in the Spread Account for
any reason under this Supplement, except as otherwise provided in the preceding
sentence, investment earnings on such funds shall be deemed not to be available
or on deposit.
(c) In the event that for any Distribution Date (x) the sum of the
amounts required pursuant to subsections 4.05(a)(i) through (vii) exceeds (y)
the amount of Reallocated Series Finance Charge Collections and Excess Finance
Charge Collections allocated to Series 200_-___ (any such excess, the "SPREAD
ACCOUNT DRAW AMOUNT"), the Spread Account Draw Amount, up to the Available
Spread Account Amount, shall be withdrawn from the Spread Account on the related
Transfer Date by the Indenture Trustee (acting in accordance with the written
instructions of the Servicer), deposited into the Collection Account and
included in Available Funds for such Distribution Date. Notwithstanding anything
else to the contrary in this SECTION 4.11, if an Event of Default shall have
occurred with respect to Series 200_-___ and the maturity of the Series 200_-___
Notes shall have been accelerated under Section 5.03 of the Indenture, any
amounts remaining on deposit in the Spread Account shall be applied to pay
interest and principal on the Class A Notes as provided in Section 5.03 of the
Indenture.
(d) In the event that the Spread Account Surplus on any Distribution
Date, after giving effect to all deposits to and withdrawals from the Spread
Account with respect to such Distribution Date, is greater than zero, the
Indenture Trustee, acting in accordance with the written instructions of the
Servicer, shall withdraw from the Spread Account, and pay to the Issuer for
distribution pursuant to the Trust Agreement, an amount equal to such Spread
Account Surplus.
(e) Upon the earlier to occur of (i) the day on which the outstanding
principal balance of the Class A Notes and all other accrued and unpaid amounts
owing to the Class A Noteholders pursuant to the Note Purchase Agreement are
paid in full to the Class A Noteholders and (ii) the termination of the Issuer
pursuant to the Trust Agreement, the Indenture Trustee, acting in accordance
with the instructions of the Servicer, after the prior payment of all amounts
owing to the Class A Noteholders which are payable from the Spread Account as
provided herein, shall withdraw from the Spread Account and pay to the Issuer
(or, if the Issuer has been terminated, the Transferor) for application pursuant
to the Trust Agreement all amounts, if any, on deposit in the Spread Account and
the Spread Account shall be deemed to have terminated for purposes of this
Supplement.
25
<PAGE>
Section 4.12. PRINCIPAL AMOUNT INCREASES.
(a) The Class A Noteholders agree, by acceptance of the Class A Notes,
that the Issuer may from time to time, prior to the commencement of the
Controlled Redemption Period or the Early Redemption Period, request upon one
Business Day prior irrevocable written notice to each of the Indenture Trustee,
the Servicer and the Class A Noteholders substantially in the form of EXHIBIT A
to the Note Purchase Agreement that the Class A Noteholders fund increases in
the outstanding principal balance of the Class A Notes in the specified amounts
(each such amount, a "CLASS A NOTE PRINCIPAL BALANCE INCREASE"); PROVIDED,
HOWEVER, that any applicable conditions set forth in Section 2.2 of the Note
Purchase Agreement shall have been satisfied or waived as provided therein. The
Class A Noteholders shall fund such increase, upon payment, in same day funds,
to the Issuer of the amount of such Class A Note Principal Balance Increase, in
accordance with the payment instructions specified in the notice delivered with
respect to such Class A Note Principal Balance Increase.
(b) The Class B Noteholders agree, by acceptance of the Class B Notes,
that the Issuer may from time to time, prior to the commencement of the
Controlled Redemption Period or the Early Redemption Period, request upon one
Business Day prior written notice to each of the Indenture Trustee, the Servicer
and the Class B Noteholders substantially in the form of EXHIBIT D that the
Class B Noteholders fund increases in the outstanding principal balance of the
Class B Notes (each such amount, a "CLASS B NOTE PRINCIPAL BALANCE INCREASE");
PROVIDED, HOWEVER, that (i) after giving effect to such Class B Note Principal
Balance Increase, the Transferor Amount shall not be less than the Required
Transferor Amount and (ii) after giving effect to such Class B Note Principal
Balance Increase, (a) the product of the Transferor Amount and the Series
200_-___ Allocation Percentage shall not be less than (b) the Series Required
Transferor Amount. The Class B Noteholders shall fund such increase through a
reduction of the Transferor Amount by the amount of such Class B Note Principal
Balance Increase.
(c) The Issuer may on any Business Day permanently reduce the Facility
Limit if the following conditions are met: (i) after giving effect to such
reduction, the Facility Limit would be not less than the Class A Note Principal
Balance on the date of such reduction (after giving effect to any increase
pursuant to subsection 4.12(a) on or prior to the date of such reduction of the
Facility Limit) and (ii) the aggregate Commitments (as defined in the Note
Purchase Agreement) is reduced by the same amount on such date. In order to
effect the reduction of the Facility Limit pursuant to this subsection 4.12(c),
the Issuer shall deliver to the Servicer, the Indenture Trustee and the
Administrative Agent at least five Business Days prior to such reduction a
written notice executed by an Authorized Officer of the Issuer specifying the
decrease in the Facility Limit, the date on which such decrease is to become
effective and the Class A Note Principal Balance on such date. The
Administrative Agent shall, subject to the provisions of the Note Purchase
Agreement, take all actions necessary to reduce the Commitments to an amount
that will permit the specified reduction of the Facility Limit. Upon
26
<PAGE>
the date specified in such notice, if the conditions set forth in this
subsection 4.12(c) have been met, the Facility Limit shall be reduced by the
amount specified in such notice.
(d) No decrease in the outstanding principal balance of the Class A
Notes pursuant to Section 4.03 shall limit the ability of the Issuer to increase
the outstanding principal balance of the Class A Notes pursuant to subsection
4.12(a).
ARTICLE V
Distributions and Reports to
SERIES 200_-___ NOTEHOLDERS
Section 5.01. DISTRIBUTIONS.
(a) On each Distribution Date, the Paying Agent, in accordance with
the statement delivered pursuant to Section 5.02(a)(i), shall distribute to each
Class A Noteholder (other than as provided in Section 10.02 of the Indenture)
such amounts held by the Paying Agent that are allocated and available on such
Distribution Date to pay the Class A Monthly Interest, any principal payable to
and other amounts due to the Class A Notes pursuant to this Supplement.
(b) On each Special Payment Date, the Paying Agent, in accordance with
the statement delivered pursuant to Section 5.02(a)(i), shall distribute to each
Class A Noteholder of record on the related Record Date (other than as provided
in Section 10.02 of the Indenture) such amounts held by the Paying Agent that
are allocated and available on such date to pay principal of the Class A Notes
pursuant to this Supplement up to a maximum amount on any such date equal to the
Class A Note Principal Balance on such date.
(c) On each Distribution Date, the Paying Agent, in accordance with
the statement delivered pursuant to Section 5.02(a)(i), shall distribute to each
Class B Noteholder of record on the related Record Date (other than as provided
in Section 10.02 of the Indenture) such amounts held by the Paying Agent that
are allocated and available on such Distribution Date to pay interest on the
Class B Notes pursuant to this Supplement.
(d) On each Special Payment Date, the Paying Agent, in accordance with
the statement delivered pursuant to Section 5.02(a)(i), shall distribute to each
Class B Noteholder of record on the related Record Date (other than as provided
in Section 10.02 of the Indenture) such amounts held by the Paying Agent that
are allocated and available on such date to pay principal of the Class B Notes
pursuant to this Supplement up to a maximum amount on any such date equal to the
Class B Note Principal Balance on such date.
(e) The distributions to be made pursuant to this Section 5.01 are
subject to the provisions of Sections 2.06 and 8.01 of the Transfer and
Servicing Agreement and Section 5.05 of the Indenture and Section 8.01 of this
Supplement.
(f) Except as provided in Section 10.02 of the Indenture with respect
to a final distribution, distributions to Series 200_-___ Noteholders hereunder
shall be made by wire
27
<PAGE>
transfer of same day funds to the account that has been designated by the
applicable Noteholders not less than ten Business Days prior to such
Distribution Date.
Section 5.02. REPORTS AND STATEMENTS TO SERIES 200_-___ NOTEHOLDERS.
(a) Not later than each Determination Date, the Servicer shall deliver
to the Indenture Trustee, the Paying Agent and the Administrative Agent (i) a
statement substantially in the form of Exhibit C prepared by the Servicer and
(ii) a certificate of a Servicing Officer substantially in the form attached
thereto.
(b) A copy of each statement or certificate provided pursuant to
paragraph (a) may be obtained by any Series 200_-___ Noteholder or any
beneficial owner thereof by a request in writing to the Servicer.
(c) On or before January 31 of each calendar year, beginning with
calendar year 2001, the Paying Agent, on behalf of the Indenture Trustee, shall
furnish or cause to be furnished to each Person who at any time during the
preceding calendar year was a Series 200_-___ Noteholder, a statement prepared
by the Servicer containing the information which is required to be contained in
the statement to Series 200_-___ Noteholders, as set forth in paragraph (a)
above aggregated for such calendar year or the applicable portion thereof during
which such Person was a Series 200_-___ Noteholder, together with other
information as is required to be provided by an issuer of indebtedness under the
Code. Such obligation of the Servicer shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by the
Paying Agent pursuant to any requirements of the Code as from time to time in
effect.
ARTICLE VI
EARLY REDEMPTION EVENTS
Section 6.01. EARLY REDEMPTION EVENTS. If any one of the following events
shall occur with respect to the Series 200_-___ Notes:
(a) (i) failure on the part of the Transferor or the Issuer to make
any payment or deposit required by the terms of the Transfer and Servicing
Agreement, the Indenture or this Supplement on or before the date occurring five
Business Days after the date such payment or deposit is required to be made
therein or herein or (ii) failure on the part of the Transferor duly to observe
or perform any other covenants or agreements of the Transferor set forth in the
Transfer and Servicing Agreement or the CFC Receivables Purchase Agreement, or
failure on the part of the Issuer duly to observe or perform any other covenants
of the Issuer set forth in the Indenture or this Supplement, which failure has a
material adverse effect on the Series 200_-___ Noteholders and which continues
unremedied for a period of 10 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Transferor and the Issuer by the Indenture Trustee, or to the Transferor, the
Issuer and the Indenture Trustee by the Administrative Agent or any Holder of a
Class A Note;
28
<PAGE>
(b) any representation or warranty made by (i) the Transferor in the
Transfer and Servicing Agreement or (ii) the Issuer in the Indenture, or this
Supplement shall prove to have been incorrect when made or when delivered, which
continues to be incorrect for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Transferor and the Issuer by the Indenture Trustee, or to the
Transferor, the Issuer and the Indenture Trustee by any Holder of the Series
200_-___ Notes, and as a result of which the interests of the Series 200_-___
Noteholders are materially and adversely affected for such period; PROVIDED,
HOWEVER, that an Early Redemption Event pursuant to this subsection 6.01(b)
shall not be deemed to have occurred hereunder if the Transferor has accepted
reassignment of the related Receivable, or all of such Receivables, if
applicable, during such period in accordance with the provisions of the Transfer
and Servicing Agreement;
(c) any Servicer Default shall occur as a result of which the
interests of the Series 200_-___ Noteholders are materially and adversely
affected (provided that a Servicer Default under subsection 8.01(d) of the
Transfer and Servicing Agreement is hereby deemed to materially and adversely
affect the Series 200_-___ Noteholders, and, notwithstanding subsection 8.01(d)
of the Transfer and Servicing Agreement, shall not be subject to any grace
period);
(d) on any date of determination, (i) the Class B Note Principal
Balance MINUS the excess, if any, of the total amount of Reduction Amounts for
all prior Distribution Dates and Reallocated Principal Collections that under
Section 4.07 were used to fund the Class A Required Amount on all prior
Distribution Dates OVER such Reduction Amounts and Reallocated Principal
Collections reimbursed pursuant to Section 4.05(a)(vi) prior to such date is
less than (ii) the Required Subordinate Amount and such deficiency continues for
a period of two Business Days after such date of determination;
(e) on any date of determination, the Transferor Amount is less than
the Required Transferor Amount (after giving effect to all Principal Receivables
transferred to the Issuer on such date of determination) and which shortfall
continues unremedied for a period of five days after the date of such
determination;
(f) the average Net Yield for any two consecutive Monthly Periods is
reduced to a rate which is less than ___%;
(g) the average Delinquency Ratio for any two consecutive Monthly
Periods exceeds ___%;
(h) the date on which a Program Support Provider (as defined in the
Note Purchase Agreement) shall have given notice that an event of default has
occurred and is continuing under their respective agreements with the Purchaser
(as defined in the Note Purchase Agreement);
(i) for so long as the Affinity Card Agreement is in effect, the
Letter of Credit (as such term is defined in the Affinity Card Agreement)
maintained by CompuCredit in favor of Columbus Bank pursuant to Section 3.3 of
the Affinity Card Agreement shall be terminated, revoked, reduced or drawn on
(unless such termination, revocation, reduction or drawing is with
29
<PAGE>
the consent of Columbus Bank) and such termination, revocation or reduction has
not been remedied within five days and, in the case of a drawing, such drawing
is not reimbursed within five days;
(j) default in the payment at stated maturity of any indebtedness of
CompuCredit or any direct affiliate thereof having an outstanding principal
amount greater than $_____________ and such default remains unremedied for a
period of 30 days beyond any applicable grace period;
(k) the change in control of CompuCredit or the Transferor subject to
Sections 5.02 and 6.02 of the Transfer and Servicing Agreement;
(l) the Indenture Trustee shall, for any reason, fail to have a valid
and perfected first priority security interest in such of the Receivables as
shall constitute part of the Trust Estate;
(m) any material adverse change in the operations of the Issuer, the
Transferor, the Servicer or Columbus Bank, or any other event, which materially
affects the Issuer's, the Transferor's, the Servicer's, Columbus Bank's ability
to either collect upon the Receivables or the Issuer's, the Transferor's, the
Servicer's or Columbus Bank's ability to perform thereunder, which has a
material adverse effect on the Class A Noteholders;
(n) if, on any date, the product of (i) the Floating Allocation
Percentage (determined, for this purpose only, by using a numerator equal to the
Class A Note Principal Balance, or Class A Initial Note Principal Balance, as
applicable, in lieu of the Allocation Amount or Initial Note Principal Balance,
as applicable), (ii) the Series 200_-___ Allocation Percentage and (iii) the sum
of the Special Funding Amount, the amount on deposit in the Collection Account
in respect of Collections of Principal Receivables and the total amount of
Principal Receivables on such date, is less than the Class A Note Principal
Balance on such date; and
(o) without limiting any of the foregoing, the occurrence of an Event
of Default with respect to Series 200_-___ and acceleration of the maturity of
the Series 200_-___ Notes in accordance with Section 5.03 of the Indenture;
then, in the case of any event described in subparagraph (b) or (c), after the
applicable grace period, if any, set forth in such subparagraphs, either the
Indenture Trustee or the Holders of Class A Notes evidencing more than 50% of
the Class A Note Principal Balance, by notice then given in writing to the
Issuer, the Servicer and the Indenture Trustee may declare that an Early
Redemption Event has occurred with respect to Series 200_-___ as of the date of
such notice, and, in the case of any event described in subparagraph (a), (d),
(e), (f), (g), (h), (i), (j), (k), (l), (m), (n) or (o), an Early Redemption
Event shall occur with respect to Series 200_-___ without any notice or other
action on the part of the Indenture Trustee or the Series 200_-___ Noteholders
immediately upon the occurrence of such event, unless such Early Redemption
Event is waived by the Holders of Class A Notes evidencing more than 50% of the
Class A Note Principal Balance, by notice given in writing to the Indenture
Trustee, the Issuer and the Servicer.
30
<PAGE>
ARTICLE VII
OPTIONAL REDEMPTION; SERIES TERMINATION
Section 7.01. OPTIONAL REDEMPTION.
(a) On any day occurring on or after the date on which the Note
Principal Balance is reduced to 10% or less of the highest Note Principal
Balance at any time on or after the Closing Date, the Issuer shall have the
option to redeem the Series 200_-___ Notes, at a redemption price equal to (i)
if such day is a Distribution Date, the Redemption Amount for such Distribution
Date or (ii) if such day is not a Distribution Date, the Redemption Amount for
the Distribution Date first following such day.
(b) The Issuer shall give the Servicer and the Indenture Trustee at
least 30 days prior written notice of the date on which the Issuer intends to
exercise such redemption option. The Issuer shall deposit the Redemption Amount
into the Collection Account in same day funds and the Issuer shall initiate such
deposit prior to 10:00 a.m. New York City time on such day. Such redemption
option is subject to payment in full of the Redemption Amount. Following the
deposit of the Redemption Amount into the Collection Amount in accordance with
the foregoing, the Allocation Amount for Series 200_-___ shall be reduced to
zero and the Series 200_-___ Noteholders shall have no further interest in the
Trust Estate. The Redemption Amount shall be distributed as set forth in
subsection 8.01(b).
Section 7.02. STATED MATURITY DATE.
On the Stated Maturity Date, the right of the Series 200_-___ Noteholders
to receive payments from the Issuer will be limited solely to the right to
receive payments pursuant to Section 5.05 of the Indenture and Section 8.01 of
this Supplement.
ARTICLE VIII
REDEMPTION OF SERIES 200_-___ NOTES; FINAL DISTRIBUTIONS
Section 8.01. SALE OF RECEIVABLES OR REDEMPTION OF THE NOTES PURSUANT TO
SECTION 2.06 OR 8.01 OF THE TRANSFER AND SERVICING AGREEMENT AND SECTIONS 5.05
AND 5.17 OF THE INDENTURE AND SECTION 7.01 OF THIS SUPPLEMENT.
(a) (1) The amount to be paid by the Transferor with respect to
Series 200_-___ in connection with a reassignment of Receivables to the
Transferor pursuant to Section 2.06 of the Transfer and Servicing Agreement
shall equal the Redemption Amount for the first Distribution Date following the
Monthly Period in which the reassignment obligation arises under the Transfer
and Servicing Agreement.
(i) The amount to be paid by the Transferor with respect to Series
200_-___ in connection with any purchase of Notes, pursuant to the exercise of a
right of first refusal contained in Section 8.01(d) of the Transfer and
Servicing Agreement shall be an amount equal to the Redemption Amount for the
Distribution Date of any such purchase.
31
<PAGE>
(b) With respect to the Redemption Amount deposited into the
Collection Account pursuant to Section 7.01 or any amounts allocable to the
Series 200_-___ Notes deposited into the Collection Account pursuant to Sections
5.05 and 5.17 of the Indenture, the Indenture Trustee shall, in accordance with
the written direction of the Servicer, not later than 2:30 p.m., New York City
time, on the related Distribution Date, make deposits or distributions of the
following amounts (in the priority set forth below and, in each case after
giving effect to any deposits and distributions otherwise to be made on such
date) in same day funds: (i) (x) the Class A Note Principal Balance on such
Distribution Date will be distributed to the Paying Agent for payment to the
Class A Noteholders and (y) an amount equal to the sum of (A) Class A Monthly
Interest for such Distribution Date and (B) any Class A Monthly Interest
previously due but not distributed to the Class A Noteholders on a prior
Distribution Date will be distributed to the Paying Agent for payment to the
Class A Noteholders and (ii) (x) the Class B Note Principal Balance on such
Distribution Date will be distributed to the Paying Agent for payment to the
Class B Noteholders and (y) an amount equal to the sum of (A) Class B Monthly
Interest for such Distribution Date and (B) any Class B Monthly Interest
previously due but not distributed to the Class B Noteholders on a prior
Distribution Date will be distributed to the Paying Agent for payment to the
Class B Noteholders.
(c) Notwithstanding anything to the contrary in this Supplement or the
Indenture, all amounts distributed to the Paying Agent pursuant to subsection
8.01(b) for payment to the Series 200_-___ Noteholders shall be deemed
distributed in full to the Series 200_-___ Noteholders on the date on which such
funds are distributed to the Paying Agent pursuant to this Section and the
Series 200_-___ Notes shall be deemed to be no longer Outstanding as such term
is defined in Section 1.01 of the Indenture.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. RATIFICATION OF AGREEMENT. As supplemented by this
Supplement, the Indenture is in all respects ratified and confirmed and the
Indenture as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.
Section 9.02. COUNTERPARTS. This Supplement may be executed in two or
more counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the same
instrument.
Section 9.03. GOVERNING LAW. THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED THEREIN.
Section 9.04. TAX MATTERS.
(a) Notwithstanding anything to the contrary herein, each of the
Paying Agent, Servicer or Indenture Trustee shall be entitled to withhold any
amount that it determines in its
32
<PAGE>
sole discretion is required to be withheld pursuant to Section 1446 of the Code
and such amount shall be deemed to have been paid for all purposes of the
Indenture.
(b) Each of the Series 200_-___ Noteholders agrees that prior to the
date on which the first interest payment hereunder is due thereto, it will
provide to the Servicer and the Indenture Trustee (i) if such Series 200_-___
Noteholder is incorporated or organized under the laws of a jurisdiction outside
the United States, two duly completed copies of the United States Internal
Revenue Service Form W-8ECI or, if the Transferor in its sole discretion
consents, Form W-8BEN claiming treaty benefits, or in either case successor
applicable or required forms, (ii) if required by the Transferor, a duly
completed copy of United States Internal Revenue Service Form W-9 or successor
applicable or required forms, and (iii) such other forms and information as may
be required to confirm the availability of any applicable exemption from United
States federal, state or local withholding taxes. Each Series 200_-___
Noteholder agrees to provide to the Servicer and Indenture Trustee, like
additional subsequent duly completed forms (subject to like consent)
satisfactory to the Servicer and Indenture Trustee on or before the date that
any such form expires or becomes obsolete, or upon the occurrence of any event
requiring an amendment, resubmission or change in the most recent form
previously delivered by it, and to provide such extensions or renewals as may be
reasonably requested by the Servicer or Indenture Trustee. Each Series 200_-___
Noteholder certifies, represents and warrants that as of the date of this
Agreement, or in the case of a Series 200_-___ Noteholder which is an assignee
as of the date of such Note Assignment, that it is entitled (x) to receive
payments under this Supplement without deduction or withholding (other than
pursuant to Section 1446 of the Code, if applicable) of any United States
federal income taxes and (y) to an exemption from United States backup
withholding tax. Each Series 200_-___ Noteholder represents and warrants that it
shall pay any taxes imposed on such Series 200_-___ Noteholder attributable to
its interest in the Series 200_-___ Notes.
(c) Each Series 200_-___ Noteholder agrees with the Transferor that:
(a) such Series 200_-___ Noteholder will deliver to the Transferor on or before
the Closing Date or the effective date of any participation or Note Assignment a
letter in the form annexed hereto as Exhibit E (an "INVESTMENT LETTER"),
executed by such assignee Series 200_-___ Noteholder, in the case of a Note
Assignment, or by the Participant, in the case of a participation, with respect
to the purchase by such Series 200_-___ Noteholder or Participant of a portion
of an interest relating to the Series 200_-___ Note and (b) all of the
statements made by such Series 200_-___ Noteholder in its Investment Letter
shall be true and correct as of the date made.
(d) Each Series 200_-___ Noteholder, by its holding of an interest in
the Series 200_-___ Notes, hereby severally represents, warrants and covenants,
and each Series 200_-___ Noteholder that acquires an interest in the Series
200_-___ Notes by Note Assignment shall be deemed to have severally represented,
warranted and covenanted upon such Note Assignment that: (i) such Series
200_-___ Noteholder has not acquired and shall not sell, trade or transfer any
interest in the Series 200_-___ Notes, nor cause any interest in the Series
200_-___ Notes to be marketed, on or through either (A) an "established
securities market (or the substantial equivalent thereof)" within the meaning of
Section 7704(b)(1) of the Code (including an interdealer quotation system that
regularly disseminates firm buy or sell quotations by identified brokers or
dealers by electronic means or otherwise) or (B) a "secondary market (or the
33
<PAGE>
substantial equivalent thereof)" within the meaning of Section 7704(b)(2) of the
Code (including a market wherein interests in the Series 200_-___ Notes are
regularly quoted by any person making a market in such interests and a market
wherein any person regularly makes available bid or offer quotes with respect to
interests in the Series 200_-___ Notes and stands ready to effect buy or sell
transactions at the quoted prices for itself or on behalf of others), and (ii)
unless the Transferor consents otherwise, such Series 200_-___ Noteholder (A) is
properly classified as, and shall remain classified as, a "corporation" as
described in Section 7701(a)(3) of the Code and (B) is not, and shall not
become, an "S corporation" as described in Section 1361 of the Code. Each Series
200_-___ Noteholder represents, warrants and covenants that it shall (A) cause
each of its Participants otherwise permitted hereunder to make representations,
warranties and covenants similar to the foregoing for the benefit of the
Transferor and the Issuer at the time such Participant becomes a Participant and
(B) forward a copy of such representations, warranties and covenants to the
Indenture Trustee. In the event of any breach of the representation, warranty
and covenant of a Series 200_-___ Noteholder or its Participant that such Series
200_-___ Noteholder or participant shall remain classified as a corporation
other than an S corporation, such Series 200_-___ Noteholder shall notify the
Transferor promptly upon such Series 200_-___ Noteholder's becoming aware of
such breach, and thereupon the Series 200_-___ Noteholder hereby agrees to use
reasonable efforts to procure a replacement investor which is acceptable to the
Transferor not so affected to replace such affected Series 200_-___ Noteholder.
In any such event, the Transferor shall also have the right to procure a
replacement investor. Each affected Series 200_-___ Noteholder hereby agrees to
take all actions necessary to permit a replacement investor to succeed to its
rights and obligations hereunder. Each Series 200_-___ Noteholder which has a
Participant which has breached its representation, warranty and covenant that it
shall remain classified as a corporation other than an S corporation hereby
agrees (without limiting the right of the Transferor to procure a replacement
investor for such Series 200_-___ Noteholder as provided above in this
paragraph) to notify the Transferor of such breach promptly upon such Series
200_-___ Noteholder's becoming aware thereof and to use reasonable efforts to
procure a replacement Participant, as applicable, not so affected which is
acceptable to the Transferor to replace any such Participant.
(e) Subject to the provisions of subsection (g), each Series 200_-___
Noteholder may at any time sell, assign or otherwise transfer, to the extent of
such Series 200_-___ Noteholder's interest in the Series 200_-___ Notes (each, a
"NOTE ASSIGNMENT"), to any Person to which the Transferor may consent, which
consent shall not be unreasonably withheld (it being understood that such
consent shall be considered to be withheld reasonably on the basis that
following such proposed Note Assignment the number of Private Holders would
exceed 80 or the Issuer would otherwise be in jeopardy of being treated as
taxable as a publicly traded partnership pursuant to Section 7704 of the Code),
all or part of its interest in the Series 200_-___ Notes; PROVIDED, HOWEVER,
that any Note Assignment shall be void unless (i) the minimum amount of such
Note Assignment shall be $5,000,000, (ii) such assignee Series 200_-___
Noteholder shall comply with this Section 9.04 and shall have delivered to the
Indenture Trustee, prior to the effectiveness of such Note Assignment, a copy of
an agreement under which such assignee Series 200_-___ Noteholder has made the
representations, warranties and covenants required to be made pursuant to this
Section 9.04, (iii) following the Note Assignment there would be no more than
four Series 200_-___ Noteholders and Participants, and (iv) such
34
<PAGE>
proposed assignee shall provide the forms described in clauses (i), (ii) and
(iii) of subsection 9.04(b) (subject to the Transferor's consent, as applicable
and as set forth therein) in the manner described therein. In connection with
any Note Assignment, the assignor Series 200_-___ Noteholder shall request in
writing to the Indenture Trustee (who shall promptly deliver it to the
Transferor) for the consent of the Transferor (the Transferor shall respond to
any such request within ten Business Days after its receipt and the Transferor
will not unreasonably withhold such consent) it being understood that the
obtaining of such consent is a condition to the effectiveness of the Note
Assignment. Each assignee Series 200_-___ Noteholder is subject to the terms and
conditions of subsection 9.04(b) on an ongoing basis and hereby makes the
certifications, representations and warranties contained therein.
(f) Subject to the provisions of subsection (g), any Series 200_-___
Noteholder may at any time grant a participation in all or part (but not less
than $5,000,000) of its interest in Series 200_-___ Notes to any Person to which
the Transferor may consent, which consent shall not be unreasonably withheld (it
being understood that such consent shall be considered to be withheld reasonably
on the basis that following such proposed participation the number of Private
Holders would exceed 80 or the Issuer would otherwise be in jeopardy of being
treated as taxable as a publicly traded partnership pursuant to Section 7704 of
the Code) (each such Person, a "PARTICIPANT"); PROVIDED, HOWEVER, that such
participation shall be void, unless (i) such Participant complies with the
applicable provisions of this Section 9.04, (ii) following the participation
there would be no more than four Series 200_-___ Noteholders and Participants
and (iii) such Series 200_-___ Noteholder delivers to the Indenture Trustee,
prior to the effectiveness of its participation, a copy of an agreement under
which such Participant has made the representations, warranties and covenants
required to be made pursuant to this Section. In connection with the granting of
any such participation to any Person, the granting Series 200_-___ Noteholder
shall provide a written request to the Indenture Trustee (who shall promptly
deliver it to the Transferor) for the consent of the Transferor to the granting
of the specified interest to any identified prospective Participant. The
Transferor shall respond to any such request within ten Business Days after its
receipt, it being understood that the obtaining of such consent is a condition
to the effectiveness of a participation. Each Series 200_-___ Noteholder hereby
acknowledges and agrees that any such participation will not alter or affect in
any way whatsoever such Series 200_-___ Noteholder's direct obligations
hereunder and that the Transferor shall have no obligation to have any
communication or relationship whatsoever with any Participant of such Series
200_-___ Noteholder in order to enforce the obligations of such Series 200_-___
Noteholder hereunder. Each Series 200_-___ Noteholder shall promptly notify the
Indenture Trustee (which shall promptly notify the Transferor) in writing of the
identity and interest of each Participant upon any such disposition. As a
condition of granting any participation, the Series 200_-___ Noteholder hereby
agrees to deliver to the Transferor a certification of the proposed Participant
pursuant to which the Participant certifies, represents and warrants that (i)
such Participant is entitled to (x) receive payments with respect to its
participation without deduction or withholding of any United States federal
income taxes and (y) an exemption from United States backup withholding tax,
(ii) prior to the date on which the first interest payment is due to the
Participant, such Series 200_-___ Noteholder will provide to the Servicer and
Indenture Trustee, the forms described in clauses (i), (ii) and (iii) of
subsection 9.04(b) (subject to the Transferor's consent, as applicable and as
set forth therein) as though the
35
<PAGE>
Participant were a Series 200_-___ Noteholder, (iii) such Series 200_-___
Noteholder similarly will provide subsequent forms as described in subsection
9.04(b) with respect to such Participant as though it were a Series 200_-___
Noteholder, and (iv) such Participant will pay any taxes imposed on its
participation interest in the Series 200_-___ Notes.
(g) Except (i) as provided in subsections (e) and (f) above and (ii)
in connection with any pledge to any Federal Reserve Bank to secure any
obligation of a Series 200_-___ Noteholder, no Series 200_-___ Noteholder may
transfer, assign, exchange or otherwise convey or pledge, hypothecate, or
otherwise grant a security interest in a Series 200_-___ Note and any such
attempted transfer, assignment, exchange, conveyance, pledge, hypothecation or
grant shall be void.
Section 9.05. ADDITIONAL PROVISIONS REGARDING AGREEMENT. Promptly after
the execution of any supplemental indenture or consent pursuant to Section 9.01
of the Indenture (other than an amendment pursuant to subsection 9.01(a)), the
Indenture Trustee shall furnish notification of the form of such amendment to
the Administrative Agent and the consent of the Administrative Agent shall be
necessary to approve the particular form of any proposed amendment.
Section 9.06. ADDITIONAL PROVISIONS REGARDING THE SERVICER.
(a) NO EXTENSION OR AMENDMENT OF RECEIVABLES. Except as otherwise
expressly permitted by the Transfer and Servicing Agreement, the Indenture and
the Credit Card Guidelines, the Servicer will not extend, amend or otherwise
modify the terms of any Receivable, or amend, modify or waive any term or
condition of any Account related thereto. The Servicer further covenants that,
except as otherwise required by any Requirement of Law, it shall not reduce the
periodic finance charges assessed on any Receivable or other fees on any Account
if, as a result of such reduction, the reasonable expectation of the Net Yield
as of such date would be less than 2.00% or has a material adverse effect on the
Series 200_-___ Noteholders and unless (a) such reduction is made applicable to
the comparable segment of the consumer revolving credit accounts owned or
serviced by the Servicer that have characteristics the same as, or substantially
similar to, the Accounts that are the subject of such change or (b) if it does
not own such a comparable segment, it will not make any such change with the
intent to materially benefit the Transferor or itself over the Series 200_-___
Noteholders.
(b) Furnishing of Information and Inspection of Records. (2) The
Servicer will furnish to the Transferor and the Issuer from time to time such
information with respect to the Receivables as the Transferor and the Issuer may
reasonably request, including, without limitation, listings identifying the
Obligor and the outstanding Principal Balance for each Receivable.
(i) The Servicer will at any time and from time to time during regular
business hours permit the Transferor, the Issuer or either of their agents,
designees, or representatives, (a) to examine and make copies of and take
abstracts from all Records and (b) to visit the offices and properties of the
Servicer for the purpose of examining such Records, and to discuss matters
relating to Receivables or the Servicer's performance under the Indenture with
36
<PAGE>
any of the officers, directors, employees or independent public accountants of
the Servicer having knowledge of such matters.
(c) Keeping of Records and Books of Account. 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 daily identification of each new Receivable and
all Collections of and adjustments to each existing Receivable). The Servicer
will give the Transferor and the Issuer notice of any material change in the
administrative and operating procedures of the Servicer referred to in the
previous sentence.
Section 9.07. NOTICES. The Indenture Trustee shall give notice to the
Administrative Agent of any proposed change or amendment to either the Affinity
Card Agreement or the Facilities Management Services Agreement with respect to
which the Indenture Trustee's consent is sought pursuant to the Indenture.
Section 9.08. TRANSFER OF CLASS B NOTES. Any transfer of the Class B
Notes shall be subject to delivery to the Indenture Trustee of a Tax Opinion
with respect to such transfer.
Section 9.09. LIMITATION OF LIABILITY. It is expressly understood and
agreed by the parties hereto that (a) this Supplement is executed and delivered
by Wilmington Trust, FSB, not individually or personally but solely as trustee
of the Issuer, in the exercise of the powers and authority conferred and vested
in it under the Trust Agreement, (b) each of the representations, undertakings
and agreements herein made on the part of the Issuer is made and intended not as
personal representations, undertakings and agreements by Wilmington Trust, FSB
but is made and intended for the purpose of binding only the Issuer and (c)
under no circumstances shall Wilmington Trust, FSB be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer under this Supplement or the other Transaction
Documents (as defined in the Note Purchase Agreement) to which the Issuer is a
party.
37
<PAGE>
IN WITNESS WHEREOF, the Issuer, the Servicer and the Indenture Trustee
have caused this Indenture Supplement to be duly executed by their respective
officers thereunto duly authorized, all as of the day and year first above
written.
COMPUCREDIT CREDIT CARD MASTER NOTE
BUSINESS TRUST,
Issuer
By: ______________________________
not in its individual capacity, but
solely as Owner Trustee
By: ______________________________
Name:
Title:
THE BANK OF NEW YORK
Indenture Trustee
By: _____________________________
Name:
Title:
COMPUCREDIT CORPORATION,
Servicer
By: _____________________________
Name: Ashley L. Johnson
Title: Treasurer
s
