EXECUTION COPY
Exhibit 10.4.1
COMPUCREDIT FUNDING CORP.,
Transferor,
COMPUCREDIT CORPORATION,
Servicer,
and
BANKERS TRUST COMPANY,
Trustee
COMPUCREDIT CREDIT CARD MASTER TRUST
POOLING AND SERVICING AGREEMENT
Dated as of August 29, 1997
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions.................................................. 1
Section 1.02. Other Definitional Provisions................................ 24
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables.................................... 26
Section 2.02. Acceptance by Trustee........................................ 28
Section 2.03. Representations and Warranties of Each
Transferor Relating to Such Transferor...................... 29
Section 2.04. Representations and Warranties of each
Transferor Relating to the Agreement and
Any Supplement and the Receivables.......................... 31
Section 2.05. Treatment of Ineligible Receivables.......................... 33
Section 2.06. Reassignment of Certificateholders'
Interest in Trust Portfolio................................. 34
Section 2.07. Covenants of Each Transferor................................. 35
Section 2.08. Covenants of Each Transferor with Respect
to Receivables Purchase Agreement........................... 39
Section 2.09. Addition of Accounts......................................... 40
Section 2.10. Defaulted Receivables........................................ 42
Section 2.11. Account Allocations.......................................... 42
Section 2.12. Discount Option.............................................. 43
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01. Acceptance of Appointment and Other
Matters Relating to the Servicer............................ 44
Section 3.02. Servicing Compensation....................................... 45
Section 3.03. Representations, Warranties and Covenants
of the Servicer............................................. 46
Section 3.04. Reports and Records for the Trustee.......................... 49
Section 3.05. Annual Certificate of Servicer............................... 49
Section 3.06. Annual Servicing Report of Independent
Public Accountants; Copies of Reports
Available................................................... 49
Section 3.07. Tax Treatment................................................ 50
Section 3.08. Notices to CompuCredit....................................... 51
Section 3.09. Adjustments.................................................. 51
Section 3.10. Reports to the Commission.................................... 52
ARTICLE IV
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RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01. Rights of Certificateholders................................. 53
Section 4.02. Establishment of Collection Account and
Special Funding Account..................................... 53
Section 4.03. Collections and Allocations.................................. 56
Section 4.04. Shared Principal Collections................................. 57
Section 4.05. Additional Withdrawals from the Collection
Account..................................................... 57
Section 4.06. Allocation of Trust Assets to Series or
Groups....................................................... 58
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
ARTICLE VI
THE CERTIFICATES
Section 6.01. The Certificates............................................. 60
Section 6.02. Authentication of Certificates............................... 60
Section 6.03. New Issuances................................................ 61
Section 6.04. Registration of Transfer and Exchange of
Certificates................................................ 62
Section 6.05. Mutilated, Destroyed, Lost or Stolen
Certificates................................................ 66
Section 6.06. Persons Deemed Owners........................................ 66
Section 6.07. Appointment of Paying Agent.................................. 67
Section 6.08. Access to List of Registered
Certificateholders' Names and Addresses..................... 68
Section 6.09. Authenticating Agent......................................... 68
Section 6.10. Book-Entry Certificates...................................... 69
Section 6.11. Notices to Clearing Agency................................... 70
Section 6.12. Definitive Certificates...................................... 70
Section 6.13. Global Certificate; Exchange Date............................ 71
Section 6.14. Meetings of Certificateholders............................... 73
Section 6.15. Uncertificated Classes....................................... 75
ARTICLE VII
OTHER MATTERS RELATING TO EACH TRANSFEROR
Page
Section 7.01. Liability of each Transferor................................. 76
Section 7.02. Merger or Consolidation of, or Assumption
of the Obligations of, a Transferor......................... 76
Section 7.03. Limitations on Liability of Each
Transferor.................................................. 77
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.01. Liability of the Servicer.................................... 78
Section 8.02. Merger or Consolidation of, or Assumption of the
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Obligations of, the Servicer.......................... 78
Section 8.03. Limitation on Liability of the Servicer
and Others.................................................. 79
Section 8.04. Servicer Indemnification of the Trust and
the Trustee................................................. 79
Section 8.05. Resignation of the Servicer.................................. 79
Section 8.06. Access to Certain Documentation and
Information Regarding the Receivables....................... 80
Section 8.07. Delegation of Duties......................................... 80
Section 8.08. Examination of Records....................................... 81
ARTICLE IX
INSOLVENCY EVENTS
Section 9.01. Rights upon the Occurrence of an
Insolvency Event............................................ 82
ARTICLE X
SERVICER DEFAULTS
Section 10.01. Servicer Defaults............................................ 83
Section 10.02. Trustee To Act; Appointment of Successor..................... 86
Section 10.03. Notification to Certificateholders........................... 87
ARTICLE XI
THE TRUSTEE
Section 11.01. Duties of Trustee............................................ 88
Section 11.02. Certain Matters Affecting the Trustee........................ 90
Section 11.03. Trustee Not Liable for Recitals in
Certificates................................................ 91
Section 11.04. Trustee May Own Certificates................................. 92
Section 11.05. The Servicer To Pay Trustee's Fees and
Expenses.................................................... 92
Section 11.06. Eligibility Requirements for Trustee......................... 92
Section 11.07. Resignation or Removal of Trustee............................ 93
Section 11.08. Successor Trustee............................................ 94
Section 11.09. Merger or Consolidation of Trustee........................... 94
Section 11.10. Appointment of Co-Trustee or Separate
Trustee..................................................... 94
Section 11.11. Tax Returns.................................................. 96
Section 11.12. Trustee May Enforce Claims Without
Possession of Certificates.................................. 96
Section 11.13. Suits for Enforcement........................................ 96
Section 11.14. Rights of Certificateholders To Direct
Trustee..................................................... 97
Section 11.15. Representations and Warranties of Trustee.................... 97
Section 11.16. Maintenance of Office or Agency.............................. 98
ARTICLE XII
TERMINATION
Section 12.01. Termination of Trust......................................... 99
Section 12.02. Final Distribution........................................... 99
Section 12.03. Transferor's Termination Rights..............................100
Section 12.04 Defeasance...................................................101
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ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01. Amendment; Waiver of Past Defaults...........................103
Section 13.02. Protection of Right, Title and Interest to
Trust.......................................................105
Section 13.03. Limitation on Rights of Certificateholders...................106
Section 13.04. Governing Law................................................107
Section 13.05. Notices; Payments............................................107
Section 13.06. Severability of Provisions...................................109
Section 13.07. Certificates Nonassessable and Fully Paid....................109
Section 13.08. Further Assurances...........................................109
Section 13.09. Nonpetition Covenant.........................................109
Section 13.10. No Waiver; Cumulative Remedies...............................110
Section 13.11. Counterparts.................................................110
Section 13.12. Third-Party Beneficiaries....................................110
Section 13.13. Actions by Certificateholders................................110
Section 13.14. Rule 144A Information........................................110
Section 13.15. Merger and Integration.......................................111
Section 13.16. Headings.....................................................111
EXHIBITS
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Exhibit A Form of Transferor Certificate
Exhibit B Form of Annual Servicer's Certificate
Exhibit C-1 Form of Opinion of Counsel with respect to
Amendments
Exhibit C-2 Form of Opinion of Counsel with respect to
Accounts
Exhibit C-3 Provisions to be Included in Annual Opinion of
Counsel
Exhibit D-1 Form of Clearance System Certificate to be
delivered to the Trustee by Euroclear or Cedel
Exhibit D-2 Form of Certificate to be delivered to Euroclear or
Cedel with respect to Registered Certificates sold
to Qualified Institutional Buyers ("QIBs")
Exhibit D-3 Form of Certificate to be delivered to Euroclear
or Cedel by a beneficial owner other than a QIB
Exhibit E-1 Private Placement Legend
Exhibit E-2 Form of Representation Letter
Exhibit E-3 ERISA Legend
SCHEDULES
Schedule 1 List of Accounts [Deemed Incorporated]
POOLING AND SERVICING AGREEMENT dated as of August 29, 1997, among
COMPUCREDIT FUNDING CORP., a Georgia corporation as Transferor; COMPUCREDIT
CORPORATION, a Georgia corporation, as Servicer; and Bankers Trust Company a
New York banking corporation, as Trustee.
In consideration of the mutual agreements herein contained, each party
agrees as follows for the benefit of the other parties, the Certificateholders
and any Series Enhancer (as defined below) to the extent provided herein and in
any Supplement:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement, 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 to the masculine as well as to the feminine and neuter
genders of such terms.
"Account" shall mean (a) each Initial Account, (b) each Automatic
Additional Account (but only from and after the Addition Date with respect
thereto), (c) each Related Account, and (d) each Transferred Account.
"Account Schedule" means a computer file or microfiche list containing
a true and complete list of Accounts, identified by account number and setting
forth the aggregate amount outstanding in such Account and the aggregate amount
of Principal Receivables outstanding in such account as of (a) the Initial
Cut-Off Date (for the Account Schedule delivered on the first Closing Date) or
(b) the end of the related Monthly Period (for any Account Schedule relating to
Automatic Additional Accounts).
"Account Owner" shall mean Columbus Bank, or any other entity which is
the issuer of the credit card relating to an Account pursuant to a Credit Card
Agreement.
"Accumulation Period" shall mean, with respect to any Series, or any
Class within a Series, a period following the Revolving Period, which shall be
the controlled accumulation period, the principal accumulation period, the rapid
accumulation period, the optional accumulation period, the limited accumulation
period or other accumulation period, in each case as defined with respect to
such Series in the related Supplement.
"Act" shall mean the Securities Act of 1933, as amended.
"Addition Date" means (a) as to Automatic Additional Accounts, the date
on which such accounts are created or otherwise become Automatic Additional
Accounts pursuant to Section 2.09(a) and (b) as to Participation Interests, the
date from and after which such Participation Interests are to be included as
Trust Assets pursuant to Section 2.09(b).
"Additional Transferor" shall have the meaning specified in subsection
2.09(d).
"Adverse Effect" shall mean, with respect to any action, that such
action will (a) result in the occurrence of a Pay Out Event or a Reinvestment
Event or (b) materially adversely affect the amount or timing of distributions
to be made to the Investor Certificateholders of any Series or Class pursuant to
this Agreement and the related Supplement.
"Affiliate" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" shall mean the power to
direct the management and policies of a Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Affinity Card Agreement" shall mean the Affinity Card Agreement dated
as of January 6, 1997, between Columbus Bank and CompuCredit, and all
amendments, modifications and supplements thereto and restatements thereof.
"Aggregate Invested Amount" shall mean, as of any date of
determination, the aggregate Invested Amounts of all Series of Certificates
issued and outstanding on such date of determination.
"Agreement" shall mean this Pooling and Servicing Agreement and all
amendments hereof and supplements hereto, including, with respect to any Series
or Class, the related Supplement.
"Amortization Period" shall mean, with respect to any Series, or any
Class within a Series, a period following the Revolving Period, which shall be
the controlled amortization period, the principal amortization period, the rapid
amortization period, the optional amortization period, the limited amortization
period or other amortization period, in each case as defined with respect to
such Series in the related Supplement.
"Applicants" shall have the meaning specified in Section 6.08.
"Appointment Date" shall have the meaning specified in subsection
9.01(a).
"Authorized Newspaper" shall mean any newspaper or newspapers of
general circulation in the Borough of Manhattan, The City of New York, printed
in the English language (and, with respect to any Series or Class, if and so
long as the Investor Certificates of such Series are listed on the Luxembourg
Stock Exchange and such Exchange shall so require, in Luxembourg, printed in any
language satisfying the requirements of such exchange) and customarily published
on each business day at such place, whether or not published on Saturdays,
Sundays or holidays.
"Automatic Additional Account" means each Visa(R) consumer revolving
credit card account established pursuant to a Credit Card Agreement between an
Account Owner and any Person with respect to which one or more credit cards are
issued to a cardholder bearing the name or logo "Aspire" which account comes
into existence after the Initial Cut-Off Date.
"Automatic Addition Suspension Date" is defined in Section 2.09(a).
"Automatic Addition Termination Date" is defined in Section 2.09(a).
"Average Rate" shall mean, as of any date of determination and with
respect to any Group, the percentage equivalent of a decimal equal to the sum of
the amounts for each outstanding Series (or each Class within any Series
consisting of more than one Class) within such Group obtained by multiplying (a)
the Certificate Rate (reduced to take into account the payments received
pursuant to any interest rate agreements net of any amounts payable under such
agreements, or, if such agreements result in a net amount payable, increased by
such net amount payable) for such Series or Class, by (b) a fraction, the
numerator of which is the aggregate unpaid principal amount of the Investor
Certificates of such Series or Class and the denominator of which is the
aggregate unpaid principal amount of all Investor Certificates within such
Group.
"Bearer Certificates" shall have the meaning specified in Section 6.01.
"Benefit Plan" shall have the meaning specified in subsection 6.04(c).
"Book-Entry Certificates" shall mean beneficial interests in the
Investor Certificates, ownership and transfers of which shall be made through
book entries by a Clearing Agency as described in Section 6.10.
"Business Day" shall mean any day other than (a) a Saturday or Sunday
or (b) any other day on which national banking associations or state banking
institutions in ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ or any other State in
which the principal executive offices of CompuCredit, the Trustee, Columbus Bank
or other Account Owner, as the case may be, are located, are authorized or
obligated by law, executive order or governmental decree to be closed or (c) for
purposes of any particular Series, any other day specified in the applicable
Series Supplement.
"Cash Advance Fees" shall mean cash advance transaction fees, if any,
as specified in the Credit Card Agreement applicable to each Account.
"Cedel" shall mean Cedel Bank, societe anonyme, a professional
depository incorporated under the laws of Luxembourg, and its successors.
"Certificate" shall mean any one of the Investor Certificates or the
Transferor Certificates.
"Certificateholder" or "Holder" shall mean an Investor
Certificateholder or a Person in whose name any one of the Transferor
Certificates is registered.
"Certificateholders' Interest" shall have the meaning specified in
Section 4.01. For purposes of determining whether Holders of Investor
Certificates evidencing a specified percentage of the Certificateholders'
Interest have approved, consented or otherwise agreed to any action hereunder,
such determination shall be made based on the percentage of the Invested Amount
represented by such Investor Certificates.
"Certificate Owner" shall mean, with respect to a Book- Entry
Certificate, the Person who is the owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in accordance with the rules of such
Clearing Agency).
"Certificate Rate" shall mean, as of any particular date of
determination and with respect to any Series or Class, the certificate rate as
of such date specified therefor in the related Supplement.
"Certificate Register" shall mean the register maintained pursuant to
Section 6.04, providing for the registration of the Registered Certificates and
transfers and exchanges thereof.
"Class" shall mean, with respect to any Series, any one of the classes
of Investor Certificates of that Series.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended, and serving as clearing agency for a Series or Class of Book-Entry
Certificates.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" shall mean, with respect to any Series, the closing date
specified in the related Supplement.
"Code" shall mean the Internal Revenue Code of 1986.
"Collection Account" shall have the meaning specified in Section 4.02.
"Collections" shall mean all payments by or on behalf of Obligors
(including Insurance Proceeds) received in respect of the Receivables, in the
form of cash, checks, wire transfers, electronic transfers, ATM transfers or any
other form of payment in accordance with a Credit Card Agreement in effect from
time to time and all other amounts specified by this Agreement or any Supplement
as constituting Collections; provided, however, that during the period Columbus
Bank owns the Accounts pursuant to the Affinity Card Agreement, Collections
shall mean the sum of (i) Net Excess Amount payable by Columbus Bank to
CompuCredit, as defined in the Affinity Card Agreement and (ii) all amounts paid
by Columbus Bank to CompuCredit pursuant to Section 8.1(e)(iii) of the Affinity
Card Agreement. As specified in any Participation Interest Supplement or Series
Supplement, Collections shall include amounts received with respect to
Participation Interests. All Recoveries with respect
to Receivables previously charged-off as uncollectible will be treated as
Collections of Finance Charge Receivables. Collections with respect to any
Monthly Period shall include a portion, calculated pursuant to subsection
2.07(h), of Interchange paid to the Trust with respect to such Monthly Period,
to be applied as if such amount were Collections of Finance Charge Receivables
for all purposes.
"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 Agreement.
"Commission" shall mean the Securities and Exchange Commission and its
successors in interest.
"Companion Series" shall mean (i) each Series which has been paired
with another Series (which Series may be prefunded or partially prefunded), such
that the reduction of the Invested Amount of such Series results in the increase
of the Invested Amount of such other Series, as described in the related
Supplements, and (ii) such other Series.
"CompuCredit" shall mean CompuCredit Corporation, a Georgia
corporation, and its successors and permitted assigns hereunder.
"CompuCredit Funding" shall mean CompuCredit Funding Corp., a Georgia
corporation, and its successors and permitted assigns hereunder.
"Corporate Trust Office" shall mean the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered which office at the date of the execution of the Agreement located
at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust and
Agency Group - Structured Finance Group - 10th Floor, or at any other time at
such other address as the Trustee may designate from time to time by notice to
the Certificateholder, the Transferor and the Servicer.
"Coupon" shall have the meaning specified in Section 6.01.
"Credit Card Agreement" shall mean, with respect to a revolving credit
card account, the agreements (including any applicable truth in lending
disclosure statements) between an Account Owner and the Obligor governing the
terms and conditions of such account, as such agreements or statements may be
amended, modified or otherwise changed from time to time and as distributed
(including any amendments and revisions thereto) to holders of such account.
"Credit Card Guidelines" shall mean the respective policies and
procedures of the Servicer, Columbus Bank or any other Account Owner, as the
case may be, as such policies and procedures relate to the Accounts and as such
may be amended from time to time, (a) relating to the operation of its credit
card business, which generally are applicable to its portfolio of revolving
credit card accounts or, in the case of an Account Owner that has only a portion
of its portfolio subject to a Receivables Purchase Agreement, applicable to such
portion of its portfolio, and in each case which are consistent with prudent
practice, including the policies and procedures for determining the
creditworthiness of credit card customers and the extension of credit to credit
card customers, and (b) relating to the maintenance of credit
card accounts and collection of credit card receivables.
"Date of Processing" shall mean, with respect to any transaction or
receipt of Collections, the date on which such transaction is first recorded on
the Servicer's computer file of revolving credit card accounts (without regard
to the effective date of such recordation).
"Defaulted Amount" shall mean, with respect to any Monthly Period, an
amount (which shall not be less than zero) equal to (a) the amount of Principal
Receivables which became Defaulted Receivables in such Monthly Period, minus (b)
the amount of any Defaulted Receivables of which the Transferor or the Servicer
became obligated to accept reassignment or assignment in accordance with the
terms of this Agreement during such Monthly Period (including, without
duplication, Ineligible Receivables pursuant to Section 2.05); provided,
however, that, if an Insolvency Event occurs with respect to the Transferor, the
amount of such Defaulted Receivables which are subject to reassignment to the
Transferor in accordance with the terms of this Agreement shall not be added to
the sum so subtracted and, if any of the events described in subsection 10.01(d)
occur with respect to the Servicer, the amount of such Defaulted Receivables
which are subject to reassignment or assignment to the Servicer in accordance
with the terms of this Agreement shall not be added to the sum so subtracted.
"Defaulted Receivables" shall mean, with respect to any Monthly Period,
all Principal Receivables (i) which are charged off as uncollectible in such
Monthly Period in accordance with the Credit Card Guidelines or the Servicer's
customary and usual servicing procedures for servicing revolving credit card
accounts; (ii) as to which any payment or part thereof remains unpaid for 180
days or more from the original due date for such Receivables; (iii) as to which
the Obligor thereof has been adjudicated a bankrupt; or (iv) as to which the
Obligor is deceased. A Principal Receivable shall become a Defaulted Receivable
no later than on the day on which such Principal Receivable is recorded as
charged-off on the Servicer's computer file of revolving credit card accounts.
"Definitive Certificates" shall have the meaning specified in Section
6.10.
"Definitive Euro-Certificates" shall have the meaning specified in
subsection 6.13(a).
"Deposit Date" shall mean each day on which the Servicer deposits
Collections in the Collection Account.
"Depositaries" shall mean the Person specified in the applicable
Supplement, in its capacity as depositary for the respective accounts of any
Clearing Agency or any Foreign Clearing Agencies.
"Depository Agreement" shall mean, with respect to any Series or Class
of Book-Entry Certificates, the agreement among the Transferor, the Trustee and
the Clearing Agency.
"Determination Date" shall mean, unless otherwise specified in the
Supplement for a particular Series, either (i) the twelfth calendar day of
each calendar month (or if the twelfth calendar day is not a Business Day, then
the next Business Day) or (ii) such earlier date chosen by the Servicer.
"Discount Option Date" shall mean each date on which a Discount
Percentage designated by the Transferor pursuant to Section 2.12 takes effect.
"Discount Option Receivables" shall have the meaning specified in
subsection 2.12(a). The aggregate amount of Discount Option Receivables
outstanding on any Date of Processing occurring on or after the Discount Option
Date shall equal the sum of (a) the aggregate Discount Option Receivables at the
end of the prior Date of Processing (which amount, prior to the Discount Option
Date, shall be zero) plus (b) any new Discount Option Receivables created on
such Date of Processing minus (c) any Discount Option Receivables Collections
received on such Date of Processing. Discount Option Receivables created on any
Date of Processing shall mean the product of the amount of any Principal
Receivables created on such Date of Processing (without giving effect to the
proviso in the definition of Principal Receivables) and the Discount Percentage.
"Discount Option Receivable Collections" shall mean on any Date of
Processing occurring in any Monthly Period succeeding the Monthly Period in
which the Discount Option Date occurs, the product of (a) a fraction the
numerator of which is the Discount Option Receivables and the denominator of
which is the sum of the Principal Receivables and the Discount Option
Receivables in each case (for both the numerator and the denominator) at the end
of the preceding Monthly Period and (b) Collections of Principal Receivables on
such Date of Processing (without giving effect to the proviso in the definition
of Principal Receivables).
"Discount Percentage" shall mean the percentages, if any, designated by
the Transferor pursuant to subsection 2.12(a).
"Distribution Date" shall mean, with respect to any Series, the date
specified in the applicable Supplement.
"Dollars", "$" or "U.S. $" shall mean United States dollars.
"Eligible Account" shall mean a consumer revolving credit card account
owned by Columbus Bank, in the case of the Initial Accounts on the Initial
Cut-Off Date, or Columbus Bank or other Account Owner, in the case of Automatic
Additional Accounts which, as of the Initial Cut-Off Date with respect to an
Initial Account or as of the Addition Date with respect to an Automatic
Additional Account meets the following requirements:
(a) is a VISA(R) revolving credit card account in existence and
maintained by Columbus Bank or other Account Owner, as the case may be;
(b) is payable in Dollars;
(c) has an Obligor who has provided, as his most recent billing
address, an address located in the United States or its territories or
possessions or a military address;
(d) has not been identified as an account with respect to which
the
related card has been lost or stolen;
(e) has not been sold or pledged to any other party except for any
sale to another Account Owner that has either entered into a
Receivables Purchase Agreement or is an Additional Transferor;
(f) does not have receivables which have been sold or pledged by
Columbus Bank or any other Account Owner, as the case may be, to any
other party other than CompuCredit or any Transferor pursuant to a
Receivables Purchase Agreement;
(g) with respect to the Initial Accounts, is an account in
existence and maintained by Columbus Bank as of the Initial Cut-Off
Date;
(h) does not have any Receivables that are Defaulted Receivables;
(i) does not have any Receivables that have been identified by the
Servicer or the relevant Obligor as having been incurred as a result of
fraudulent use of any related credit card;
(j) which has a required monthly minimum payment of at least 3% of
the account balance;
(k) which has not been categorized as being one statement cycle or
more delinquent;
(l) which has an annual percentage rate of interest of not less
than 15%;
(m) the Obligor of which is not a corporation; and
(n) which had an original Fair, ▇▇▇▇▇▇ & Co. credit risk score, at
the time an account is established, of no less than 580.
"Eligible Deposit Account" shall mean either (a) a segregated account
with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States or any one of the states thereof, including the District of
Columbia (or any domestic branch of a foreign bank), and acting as a trustee for
funds deposited in such account, so long as any of the unsecured, unguaranteed
senior debt securities of such depository institution shall have a credit rating
from each Rating Agency in one of its generic credit rating categories that
signifies investment grade.
"Eligible Institution" shall mean any depository institution (which may
be the Trustee) organized under the laws of the United States or any one of the
states thereof, including the District of Columbia (or any domestic branch of a
foreign bank), which depository institution at all times (a) is a member of the
FDIC and (b) has (i) a long-term unsecured debt rating acceptable to the Rating
Agency or (ii) a certificate of deposit rating acceptable to the Rating Agency.
Notwithstanding the previous sentence any institution the appointment of which
satisfies the Rating Agency Condition shall be considered an Eligible
Institution. If so qualified, the Servicer may be considered an Eligible
Institution for the purposes of this definition.
"Eligible Investments" shall mean negotiable instruments or securities
represented by instruments in bearer or registered form, or, in the case of
deposits described below, deposit accounts held in the name of the Trustee in
trust for the benefit of the Certificateholders, other than securities issued by
or obligations of CompuCredit or any Affiliate thereof, subject to the exclusive
custody and control of the Trustee and for which the Trustee has sole signature
authority, which mature so that funds will be available no later than the close
of business on each Transfer Date following each Monthly Period and which
evidence:
(a) direct obligations of, or obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of
depository institutions or trust companies incorporated under the laws
of the United States of America or any state thereof, including the
District of Columbia (or domestic branches of foreign banks) and
subject to supervision and examination by federal or state banking or
depository institution authorities; provided that at the time of the
Trust's investment or contractual commitment to invest therein, the
short-term debt rating of such depository institution or trust company
shall be A-1 by Standard and Poor's and P-1 by Moody's;
(c) commercial paper having, at the time of the Trust's investment
or contractual commitment to invest therein, a rating of A-1 by
Standard & Poor's and P-1 by Moody's;
(d) demand deposits, time deposits and certificates of deposit
which are fully insured by the FDIC having, at the time of the Trust's
investment therein, a rating of A-1 by Standard & Poor's and P-1 by
Moody's;
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) time deposits other than as referred to in clause (d) above,
with a Person the commercial paper of which has a credit rating
satisfactory to the Rating Agency; or
(g) any other investment of a type or rating that satisfies the
Rating Agency Condition.
"Eligible Receivable" shall mean each Receivable, including the
underlying receivable:
(a) which has arisen in an Eligible Account;
(b) which was created in compliance in all material respects with
all Requirements of Law applicable to the institution which owned such
Receivable at the time of its creation and pursuant to a Credit Card
Agreement which complies in all material respects with all Requirements
of Law applicable to Columbus Bank or other Account Owner, as the case
may be;
(c) with respect to which all material consents, licenses,
approvals or authorizations of, or registrations or declarations with,
any Governmental Authority required to be obtained, effected or given
in connection with the creation of such Receivable or the execution,
delivery and performance by Columbus Bank or other Account Owner, as
the case may be, of the Credit Card Agreement pursuant to which such
Receivable was created, have been duly obtained, effected or given and
are in full force and effect;
(d) as to which at the time of the transfer of such Receivable to
the Trust, the Transferor or the Trust will have good and marketable
title thereto and which itself is, and the underlying receivables are,
free and clear of all Liens (other than any Lien for municipal or other
local taxes if such taxes are not then due and payable or if the
Transferor is then contesting the validity thereof in good faith by
appropriate proceedings and has set aside on its books adequate
reserves with respect thereto);
(e) which has been the subject of either a valid transfer and
assignment from the Transferor to the Trust of all the Transferor's
right, title and interest therein (including any proceeds thereof), or
the grant by the Transferor to the Trust of a valid first priority
perfected security interest therein (and in the proceeds thereof),
effective until the termination of the Trust;
(f) which, at all times will be the legal, valid and binding
payment obligation of the Obligor thereon enforceable against such
Obligor in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in effect, affecting
the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity);
(g) which, at the time of transfer to the Trust, has not been
waived or modified except as permitted in accordance with the Credit
Card Guidelines and which waiver or modification is reflected in the
Servicer's computer file of revolving credit card accounts;
(h) which, at the time of transfer to the Trust is not subject to
any right of rescission, setoff, counterclaim or any other defense
(including defenses arising out of violations of usury laws) of the
Obligor, other than defenses arising out of applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights in general;
(i) as to which, at the time of transfer to the Trust, Columbus
Bank or other Account Owner, as the case may be, have satisfied all
their obligations required to be satisfied by such time;
(j) as to which, at the time of transfer to the Trust, none of the
Transferor, CompuCredit, Columbus Bank or any other Account Owner, as
the case may be, has taken any action which would impair, or omitted to
take any action the omission of which would impair, the rights of the
Trust or the Certificateholders therein; and
(k) which constitutes either an "account", "chattel paper" or a
"general intangible" under and as defined in Article 9 of the UCC as
then in effect in the State of Georgia and any other state where the
filing of a financing statement is required to perfect the Trust's
interest in the Receivables and the proceeds thereof.
"Eligible Servicer" shall mean CompuCredit, the Trustee or, if neither
CompuCredit nor the Trustee is acting as Servicer, an entity which, at the time
of its appointment as Servicer, (a) is servicing a portfolio of revolving credit
card accounts, (b) is legally qualified and has the capacity to service the
Accounts, (c) has demonstrated the ability to service professionally and
competently a portfolio of similar accounts in accordance with high standards of
skill and care, (d) is qualified to use the software that is then being used to
service the Accounts or obtains the right to use or has its own software which
is adequate to perform its duties under this Agreement and (e) has a net worth
of at least $50,000,000 as of the end of its most recent fiscal quarter.
"Enhancement Agreement" shall mean any agreement, instrument or
document governing the terms of any Series Enhancement or pursuant to which any
Series Enhancement is issued or outstanding.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Euroclear Operator" shall mean ▇▇▇▇▇▇ Guaranty Trust Company of New
York, Brussels office, as operator of the Euroclear System.
"Excess Allocation Series" shall mean a Series that, pursuant to the
Supplement therefor, is entitled to receive certain excess Collections of
Finance Charge Receivables, as more specifically set forth in such Supplement.
"Exchange Date" shall mean, with respect to any Series, any date that
is after the related Closing Date, in the case of Definitive Euro-Certificates
in registered form, or upon presentation of certification of non-United States
beneficial ownership (as described in Section 6.13), in the case of Definitive
Euro-Certificates in bearer form.
"Facilities Management Agreement" shall mean the agreement attached as
Exhibit E to the Affinity Card Agreement and all amendments, modifications and
supplements thereto and restatements thereof.
"FDIC" shall mean the Federal Deposit Insurance Corporation or any
successor.
"Finance Charge Receivables" shall mean the sum of (A) all amounts
billed to the Obligors on any Account as determined based on either (a) the
actual amounts posted on the system servicing reports provided to the Servicer
by Total Systems Services, Inc. or other provider of such reports, if available
to the Servicer, or (b) if such actual amounts are not available to the
Servicer, the amount of Finance Charge Receivables for the prior Monthly
Period or other reasonable estimation method, in respect of (i) all Periodic
Rate Finance Charges, (ii) Cash Advance Fees, (iii) annual membership fees and
annual service charges, (iv) Late Fees, (v) Overlimit Fees, and (vi) any other
fees with respect to the Accounts designated by the Transferor at any time and
from time to time to be included as Finance Charge Receivables (but any such
amount estimated pursuant to this clause (b) shall be reduced by the amount of
all accrued Finance Charge Receivables on Defaulted Receivables for such Monthly
Period) and (B) Discount Option Receivables, if any, after the Discount Option
Date. Finance Charge Receivables shall also include (a) the interest portion of
Participation Interests as shall be determined pursuant to, and only if so
provided in, the applicable Participation Interest Supplement or Series
Supplement, (b) Interchange as calculated pursuant to the Supplement for any
Series, (c) all Recoveries with respect to Receivables previously charged off as
uncollectible, (d) all Collections in respect of Ineligible Receivables and (e)
all amounts paid by Columbus Bank to CompuCredit pursuant to Section 8.1(e)(iii)
of the Affinity Card Agreement. For the avoidance of doubt, for so long as
Columbus Bank owns the Accounts pursuant to the Affinity Card Agreement, Finance
Charge Receivables and Collections thereon shall not include amounts accrued and
due to Columbus Bank in accordance with Exhibit C of the Affinity Card
Agreement.
"FIRREA" shall mean the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended.
"Fitch" shall mean Fitch Investors Service, L.P. or its successors.
"Foreign Clearing Agency" shall mean Cedel and the Euroclear Operator.
"Global Certificate" shall have the meaning specified in subsection
6.13(a).
"Governmental Authority" shall mean the United States of America, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Group" shall mean, with respect to any Series, the group of Series, if
any, in which the related Supplement specifies such Series is to be included.
"Independent Director" shall have the meaning specified in subsection
2.07(g)(vii).
"Ineligible Receivable" shall have the meaning specified in subsection
2.05(a).
"Initial Account" shall mean each VISA(R) consumer revolving credit
card account established pursuant to a Credit Card Agreement between an Account
Owner and any Person with respect to which one or more credit cards are issued
to a cardholder bearing the name or logo "Aspire", which account is identified
in the computer file or microfiche list delivered to the Trustee by the
Transferor pursuant to Section 2.01 on the Initial Issuance Date.
"Initial Cut-Off Date" shall mean August 22, 1997.
"Initial Issuance Date" shall mean August 29, 1997, the date the
Transferor Certificate is issued by the Trust and delivered to the Transferor.
"Insolvency Event" shall have the meaning specified in subsection 9.01.
"Insurance Proceeds" shall mean any amounts received by the Servicer
pursuant to the payment of benefits under any credit life insurance policies,
credit disability or unemployment insurance policies covering any Obligor with
respect to Receivables under such Obligor's Account.
"Interchange" shall mean interchange fees payable to Columbus Bank or
any other Account Owner (net of any interchange fees paid by such Account
Owner), in its capacity as credit card issuer, through VISA in connection with
cardholder charges for goods or services with respect to the Accounts, as
calculated pursuant to the related Supplement for any Series. Any reference in
this Agreement or any Supplement to Interchange shall refer to only the
fractional undivided interest in the interchange fees that are transferred by
CompuCredit or an Account Owner to a Transferor pursuant to a Receivables
Purchase Agreement, which fractional undivided interest may be less than a 100%
interest therein.
"Invested Amount" shall mean, with respect to any Series and for any
date, an amount equal to the invested amount or adjusted invested amount, as
applicable, specified in the related Supplement.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended.
"Investor Certificateholder" shall mean the Person in whose name a
Registered Certificate is registered in the Certificate Register or the bearer
of any Bearer Certificate (or the Global Certificate, as the case may be) or
Coupon.
"Investor Certificates" shall mean any certificated or uncertificated
interest in the Trust designated as, or deemed to be, an "Investor Certificate"
in the related Supplement.
"Late Fees" shall have the meaning specified in the Credit Card
Agreement applicable to each Account for late fees or similar terms.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, equity interest, encumbrance, lien (statutory
or other), preference, participation interest, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including any conditional sale or other title retention agreement, any financing
lease having substantially the same economic effect as any of the foregoing and
the filing of any financing statement under the UCC or comparable law of any
jurisdiction to evidence any of the foregoing; provided, however, that any
assignment permitted by subsection 6.03(b) or Section 7.02 and the lien created
by this Agreement shall not be deemed to constitute a
Lien.
"Manager" shall mean the lead manager, manager or co-manager or Person
performing a similar function with respect to an offering of Definitive
Euro-Certificates.
"Monthly Period" shall mean, with respect to each Distribution Date,
unless otherwise provided in a Supplement, the period from and including the
first day of the preceding calendar month to and including the last day of such
calendar month; provided, however, that the initial Monthly Period with respect
to any Series will commence on the Closing Date with respect to such Series.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.02.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., or its successor.
"Notices" shall have the meaning specified in subsection 13.05(a).
"Obligor" shall mean, with respect to any Account, the Person or
Persons obligated to make payments with respect to such Account, including any
guarantor thereof, but excluding any merchant.
"Officer's Certificate" shall mean, unless otherwise specified in this
Agreement, a certificate delivered to the Trustee signed by the President, any
Vice President, the Treasurer, Chief Financial Officer, Controller or Member of
a Transferor or the Servicer, as the case may be, (or an officer holding an
office with equivalent or more senior responsibilities or, in the case of the
Servicer, a Servicing Officer, and, in the case of the Transferor, any executive
of the Transferor designated in writing by a Vice President or more senior
officer of the Transferor for this purpose) or by the President, any Vice
President, the Chief Financial Officer, Controller or Member of a Successor
Servicer.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be counsel for, or an employee of, the Person providing the opinion and who
shall be reasonably acceptable to the Trustee; provided, however, that any Tax
Opinion or other opinion relating to federal income tax matters shall be an
opinion of nationally recognized tax counsel.
"Overlimit Fees" shall have the meaning specified in the Credit Card
Agreement applicable to each Account for overlimit fees or similar terms if such
fees are provided for with respect to such Account.
"Participation Interest Supplement" shall mean a Supplement entered
into pursuant to subsection 2.09(b) in connection with the conveyance of
Participation Interests to the Trust.
"Participation Interests" shall have the meaning specified in
subsection 2.09(b).
"Paying Agent" shall mean any paying agent appointed pursuant to
Section 6.07 and shall initially be the Trustee; provided, that if the
Supplement for a Series so provides, a separate or additional Paying Agent may
be appointed with respect to such Series.
"Pay Out Event" shall mean, with respect to any Series, any Pay Out
Event specified in the related Supplement.
"Periodic Rate Finance Charges" shall have the meaning specified in the
Credit Card Agreement applicable to each Account for finance charges (due to
periodic rate) or any similar term.
"Person" shall mean any legal person, including any individual,
corporation, limited liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, governmental entity or
other entity of similar nature.
"Principal Receivables" shall mean all Receivables other than Finance
Charge Receivables or Defaulted Receivables. Principal Receivables shall also
include the principal portion of Participation Interests as shall be determined
pursuant to, and only if so provided in, the applicable Participation Interest
Supplement or Series Supplement. In calculating the aggregate amount of
Principal Receivables on any day, the amount of Principal Receivables shall be
reduced by the aggregate amount of credit balances in the Accounts on such day.
Any Principal Receivables which the Transferor is unable to transfer as provided
in Section 2.11 shall not be included in calculating the amount of Principal
Receivables.
"Principal Sharing Series" shall mean a Series that, pursuant to the
Supplement therefor, is entitled to receive Shared Principal Collections.
"Principal Shortfalls" shall have the meaning specified in Section
4.04.
"Principal Terms" shall mean, with respect to any Series, (i) the name
or designation; (ii) the initial principal amount (or method for calculating
such amount), the Invested Amount, the Series Invested Amount and the Required
Series Transferor Amount, (iii) the Certificate Rate (or method for the
determination thereof); (iv) the payment date or dates and the date or dates
from which interest shall accrue; (v) the method for allocating Collections to
Investor Certificateholders; (vi) the designation of any Series Accounts and the
terms governing the operation of any such Series Accounts; (vii) the Servicing
Fee; (viii) the issuer and terms of any form of Series Enhancements with respect
thereto; (ix) the terms on which the Investor Certificates of such Series may be
exchanged for Investor Certificates of another Series, repurchased by the
Transferor or remarketed to other investors; (x) the Series Termination Date;
(xi) the number of Classes of Investor Certificates of such Series and, if more
than one Class, the rights and priorities of each such Class; (xii) the extent
to which the Investor Certificates of such Series will be issuable in temporary
or permanent global form (and, in such case, the depositary for such global
certificate or certificates, the terms and conditions, if any, upon which such
global certificate may be exchanged, in whole or in part, for Definitive
Certificates, and the manner in which any interest payable on a temporary or
global certificate will be paid); (xiii) whether the Investor Certificates of
such Series may be issued in bearer form and any limitations imposed thereon;
(xiv) the priority of such Series with respect to any other Series; (xv) whether
such Series will be part of a Group; (xvi) whether such Series will be a
Principal Sharing Series, (xvii) whether such Series will be an Excess
Allocation Series, (xviii) the Distribution Date, and (xix) any other terms of
such Series.
"Rating Agency" shall mean, with respect to any outstanding Series or
Class of Investor Certificates which has been rated, each rating agency, as
specified in the applicable Supplement, selected by the Transferor to rate the
Investor Certificates of such Series or Class.
"Rating Agency Condition" shall mean, with respect to any action, that
each Rating Agency shall have notified the Transferor, the Servicer and the
Trustee in writing that such action will not result in a reduction or withdrawal
of the then existing rating of any outstanding Series or Class with respect to
which it is a Rating Agency; provided, however, that if no such series or class
of Investor Certificates has been rated, the Rating Agency Condition with
respect to any such action shall not apply.
"Reassignment" shall have the meaning specified in Section 2.10.
"Receivables" shall mean all amounts payable by Obligors on any Account
from time to time, including amounts payable for Principal Receivables and
Finance Charge Receivables. Receivables which become Defaulted Receivables will
cease to be included as Receivables as of the day on which they become Defaulted
Receivables. Unless the context otherwise requires (whether or not there is a
specific reference to the underlying receivable), any reference in this
Agreement or any Supplement to a Receivable (including any Principal Receivable,
Finance Charge Receivable or Defaulted Receivable) and any Collections thereon
or other amounts recoverable with respect thereto (including any Insurance
Proceeds or Recoveries with respect thereto) shall refer to only the fractional
undivided interest in the amounts paid or payable by Obligors on the Accounts
that are transferred by CompuCredit or an Account Owner to a Transferor pursuant
to a Receivables Purchase Agreement, which undivided interest may be less than a
100% undivided interest therein. Any reference in this Agreement or any
Supplement to the "underlying receivable" with respect to a Receivable shall
refer to the receivable in which such Receivable represents an undivided
interest.
"Receivables Purchase Agreement" shall mean, as applicable, (i) the
receivables purchase agreement between CompuCredit and Columbus Bank, dated as
of August 29, 1997 as amended from time to time in accordance with the terms
thereof, and including any receivables purchase agreement, substantially in the
form of such agreement dated as of August 29, 1997, entered into in the future
between CompuCredit or the Transferor and an Account Owner; provided, that (A)
the Rating Agency Condition is satisfied with respect to such receivables
purchase agreement and (B) CompuCredit or the Transferor, as applicable, shall
have delivered to the Trustee an Officer's Certificate to the effect that such
officer reasonably believes that the execution and delivery of such receivables
purchase agreement will not have an Adverse Effect, and (ii) the receivables
purchase agreement between CompuCredit and the Transferor, dated as of
August 29, 1997, as amended from time to time in accordance therewith.
"Record Date" shall mean, with respect to any Distribution Date, the
last day of the calendar month immediately preceding such Distribution Date
unless otherwise specified for a Series in the applicable Supplement.
"Recoveries" shall mean all amounts received by the Servicer (net of
out-of-pocket costs of collection) including Insurance Proceeds, with respect to
Defaulted Receivables, including the net proceeds of any sale of such Defaulted
Receivables by the Transferor.
"Registered Certificateholder" shall mean the Holder of a Registered
Certificate.
"Registered Certificates" shall have the meaning specified in Section
6.01.
"Reinvestment Event" shall mean, if applicable with respect to any
Series, any Reinvestment Event specified in the related Supplement.
"Related Account" shall mean an Account with respect to which a new
credit account number has been issued by the applicable Account Owner or
Servicer or the applicable Transferor under circumstances resulting from an
error or a lost or stolen credit card and not requiring standard application and
credit evaluation procedures under the Credit Card Guidelines.
"Required Minimum Principal Balance" shall mean, with respect to any
date (a) the sum of the numerators used to determine investor percentages with
respect to Principal Receivables for each Series outstanding on such date plus
the Required Transferor Amount on such date, minus (b) the Special Funding
Amount.
"Required Transferor Amount" shall mean, with respect to any date, the
sum of the Series Required Transferor Amounts for all Series outstanding on such
date.
"Requirements of Law" shall mean any law, treaty, rule or regulation,
or determination of an arbitrator or Governmental Authority, whether Federal,
state or local (including usury laws, the Federal Truth in Lending Act and
Regulation B and Regulation Z of the Board of Governors of the Federal Reserve
System), and, when used with respect to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person.
"Responsible Officer" shall mean any officer within the Corporate Trust
Office including any Vice President, Managing Director, Assistant Vice
President, Secretary, Assistant Secretary or Assistant Treasurer or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge and familiarity with the particular subject.
"Restart Date" is defined in Section 2.09(a).
"Revolving Period" shall mean, with respect to any Series, the
period specified in the related Supplement.
"Series" shall mean any series of Investor Certificates issued pursuant
to Section 6.03.
"Series Account" shall mean any deposit, trust, escrow or similar
account maintained for the benefit of the Investor Certificateholders of any
Series or Class, as specified in any Supplement.
"Series Adjusted Invested Amount" shall mean, with respect to any
Series and for any Monthly Period, the Series Invested Amount of such Series,
after subtracting therefrom the excess, if any, of the cumulative amount
(calculated in accordance with the terms of the related Supplement) of investor
charge-offs, subordination of principal collections and funding the investor
default amount for any other Class of Investor Certificates of such Series or
another Series allocable to the Invested Amount for such Series as of the last
day of the immediately preceding Monthly Period over the aggregate reimbursement
of such investor charge-offs, subordination of principal collections and funding
the investor default amount for any other Class of Investor Certificates of such
Series or another Series as of such last day, or such lesser amount as may be
provided in the Series Supplement for such Series.
"Series Allocable Defaulted Amount" shall mean, with respect to any
Series and for any Monthly Period, the product of the Series Allocation
Percentage and the Defaulted Amount with respect to such Monthly Period.
"Series Allocable Finance Charge Collections" shall mean, with respect
to any Series and for any Monthly Period, the product of the Series Allocation
Percentage and the amount of Collections of Finance Charge Receivables with
respect to such Monthly Period.
"Series Allocable Principal Collections" shall mean, with respect to
any Series and for any Monthly Period, the product of the Series Allocation
Percentage and the amount of Collections of Principal Receivables with respect
to such Monthly Period.
"Series Allocation Percentage" shall mean, with respect to any Series
and for any Monthly Period, the percentage equivalent of a fraction, the
numerator of which is the Series Adjusted Invested Amount plus the Series
Required Transferor Amount as of the last day of the immediately preceding
Monthly Period and the denominator of which is the Trust Adjusted Invested
Amount plus the sum of all Series Required Transferor Amounts as of such last
day.
"Series Enhancement" shall mean the rights and benefits provided to the
Trust or the Investor Certificateholders of any Series or Class pursuant to any
letter of credit, surety bond, cash collateral account, collateral invested
amount, spread account, guaranteed rate agreement, maturity liquidity facility,
tax protection agreement, interest rate swap agreement, interest rate cap
agreement or other similar arrangement. The subordination of any Series or Class
to another Series or Class shall be deemed to be a Series Enhancement.
"Series Enhancer" shall mean the Person or Persons providing any Series
Enhancement, other than (except to the extent otherwise provided with respect to
any Series in the Supplement for such Series) the Investor Certificateholders of
any Series or Class which is subordinated to another Series or Class.
"Series Invested Amount" shall have, with respect to any Series, the
meaning specified in the related Supplement.
"Series Issuance Date" shall mean, with respect to any Series, the date
on which the Investor Certificates of such Series are to be originally issued in
accordance with Section 6.03 and the related Supplement.
"Series Required Transferor Amount" shall have the meaning, with
respect to any Series, specified in the related Supplement.
"Series Termination Date" shall mean, with respect to any Series, the
termination date for such Series specified in the related Supplement.
"Service Transfer" shall have the meaning specified in Section 10.01.
"Servicer" shall mean CompuCredit, in its capacity as Servicer pursuant
to this Agreement, and, after any Service Transfer, the Successor Servicer.
"Servicer Default" shall have the meaning specified in Section 10.01.
"Servicing Fee" shall have the meaning specified in Section 3.02.
"Servicing Fee Rate" shall mean, with respect to any Series, the
servicing fee rate specified in the related Supplement.
"Servicing Officer" shall mean any officer of the Servicer or an
attorney-in-fact of the Servicer who in either case is involved in, or
responsible for, the administration and servicing of the Receivables and whose
name appears on a list of servicing officers furnished to the Trustee by the
Servicer, as such list may from time to time be amended.
"Shared Principal Collections" shall have the meaning specified in
Section 4.04.
"Special Funding Account" shall have the meaning set forth in Section
4.02.
"Special Funding Amount" shall mean the amount on deposit in the
Special Funding Account.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group or its
successor.
"Successor Servicer" shall have the meaning specified in subsection
10.02(a).
"Supplement" shall mean, with respect to any Series, a supplement to
this Agreement, executed and delivered in connection with the original issuance
of the Investor Certificates of such Series pursuant to Section 6.03, and, with
respect to any Participation Interest, an amendment to this Agreement executed
pursuant to Section 13.01, and, in either case, including all amendments thereof
and supplements thereto.
"Supplemental Certificate" shall have the meaning specified in
subsection 6.03(b).
"Tax Opinion" shall mean, with respect to any action, an Opinion of
Counsel to the effect that, for federal income tax purposes, (a) such action
will not adversely affect the tax characterization as debt of the Investor
Certificates of any outstanding Series or Class that was characterized as debt
at the time of its issuance, (b) such action will not cause the Trust to be
deemed to be an association (or publicly traded partnership) taxable as a
corporation, (c) such action will not cause or constitute an event in which gain
or loss would be recognized by any Investor Certificateholder and (d) except as
is otherwise provided in a Supplement, in the case of subsection 6.03(b)(vi),
the Investor Certificates of the Series established pursuant to such Supplement
will be properly characterized as debt.
"Termination Notice" shall have the meaning specified in subsection
10.01(d).
"Termination Proceeds" shall have the meaning specified in subsection
12.02(c).
"Transfer Agent and Registrar" shall have the meaning specified in
Section 6.04.
"Transfer Date" shall mean the Business Day immediately preceding each
Distribution Date.
"Transfer Restriction Event" shall have the meaning specified in
Section 2.11.
"Transferor" shall mean (a) CompuCredit Funding, a wholly owned special
purpose subsidiary of CompuCredit organized in the State of Georgia, or its
successor under this Agreement and (b) any Additional Transferor or Transferors.
References to "each Transferor" shall refer to each entity mentioned in the
preceding sentence and references to "the Transferor" shall refer to all of such
entities.
"Transferor Amount" shall mean on any date of determination an amount
equal to the difference between (I) the sum of (A) the aggregate balance of
Principal Receivables at the end of the day immediately prior to such date of
determination and (B) the Special Funding Amount at the end of the day
immediately prior to such date of determination minus (II) the Aggregate
Invested Amount at the end of such day.
"Transferor Certificate" shall mean the certificate executed by
CompuCredit Funding and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
"Transferor Certificate Supplement" shall have the meaning specified in
subsection 6.03(b).
"Transferor Certificates" shall mean, collectively, the Transferor
Certificate and any outstanding Supplemental Certificates.
"Transferor's Interest" shall have the meaning specified in Section
4.01.
"Transferred Account" shall mean each account into which an Account
shall be transferred provided that such transfer was made in accordance with the
Credit Card Guidelines.
"Trust" shall mean the CompuCredit Credit Card Master Trust created by
this Agreement.
"Trust Adjusted Invested Amount" shall mean, with respect to any
Monthly Period, the aggregate Series Adjusted Invested Amounts for all
outstanding Series for such Monthly Period.
"Trust Assets" shall have the meaning specified in Section 2.01.
"Trustee" shall mean Bankers Trust Company, a New York banking
corporation, in its capacity as trustee on behalf of the Trust, or its successor
in interest, or any successor trustee appointed as herein provided.
"UCC" shall mean the Uniform Commercial Code, as amended from time to
time, as in effect in any specified jurisdiction.
"VISA" shall mean VISA USA, Inc., and its successors in interest.
Section 1.02. Other Definitional Provisions.
(a) With respect to any Series, all terms used herein and not
otherwise defined herein shall have meanings ascribed to them in the
related Supplement.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Agreement or in any such certificate or other
document, and accounting terms partly defined in this Agreement or in
any such certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted
accounting principles or regulatory accounting principles, as
applicable and as in effect on the date of this Agreement. To the
extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles
or regulatory accounting principles in the United States, the
definitions contained in this Agreement or in any such certificate or
other document shall control.
(d) The agreements, representations and warranties of CompuCredit
Funding and CompuCredit in this Agreement in each of their respective
capacities as Transferor and Servicer shall be deemed to be the
agreements, representations and warranties of CompuCredit Funding and
CompuCredit solely in each such capacity for so long as CompuCredit
Funding and CompuCredit act in each such capacity under this Agreement.
(e) Any reference to each Rating Agency shall only apply to any
specific rating agency if such rating agency is then rating any
outstanding Series.
(f) Unless otherwise specified, references to any amount as on
deposit or outstanding on any particular date shall mean such amount at
the close of business on such day.
(g) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement; references to any subsection, Section, Schedule or Exhibit
are references to subsections, Sections, Schedules and Exhibits in or
to this Agreement unless otherwise specified; and the term "including"
means "including without limitation."
[END OF ARTICLE I]
ARTICLE II
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables. By execution of this
Agreement, the Transferor does hereby transfer, assign, set over and otherwise
convey to the Trustee, on behalf of the Trust, for the benefit of the
Certificateholders, without recourse except as provided herein, all its right,
title and interest in, to and under all accounts, money, chattel paper,
securities, instruments, documents, deposit accounts, certificates of deposit,
letters of credit, advices of credit, banker's acceptances, uncertificated
securities, general intangibles, contract rights, goods and other property
consisting of, arising from or relating to, (i) in the case of Receivables
arising in the Initial Accounts (including Transferred Accounts and Related
Accounts related to such Initial Accounts), the Receivables existing at the
close of business on the Initial Cut-Off Date, and thereafter created from time
to time in the Initial Accounts until the termination of the Trust and (ii) in
the case of Receivables arising in the Automatic Additional Accounts (including
Transferred Accounts and Related Accounts related to such Initial Accounts), the
Receivables created from time to time after the Initial Cut-Off Date until the
termination of the Trust, (iii) all Interchange allocable to the Trust as
provided herein and Recoveries, (iv) all rights to payment and amounts due or to
become due with respect to all of the foregoing, (v) the Collection Account, the
Series Accounts and the Special Funding Account and all amounts, investment
property, financial assets and property credited to each and/or all of such
accounts, (vi) any property conveyed to the Trustee on behalf of the Trust
pursuant to any Participation Interest Supplement, (vii) all Series
Enhancements, (viii) Recoveries attributable to cardholder charges for
merchandise and services in the Accounts, (ix) all rights, remedies, powers,
privileges and claims of the Transferor under or with respect to the Receivables
Purchase Agreement (whether arising pursuant to the terms of the Receivables
Purchase Agreement or otherwise available to the Transferor at law or in
equity), including, without limitation, the rights of the Transferor to enforce
the Receivables Purchase Agreement, and to give or withhold any and all
consents, requests, notices, directions, approvals, extensions or waivers under
or with respect to the Receivables Purchase Agreement to the same extent as the
Transferor could but for the assignment and security interest granted to the
Trustee for the benefit of the Certificateholders, (x) all rights, remedies,
powers, privileges and claims of the Transferor under or with respect to any
"Key Person" insurance policies relating to ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇▇▇▇ as to which the Transferor is a named insured, (xi) all amounts
received with respect to any of the foregoing and (xii) all proceeds (including
"proceeds" as defined in the UCC) thereof. Such property, together with all
monies and other property on deposit in the Collection Account,
the Series Accounts and the Special Funding Account, the rights of the Trustee
on behalf of the Trust under this Agreement and any Supplement, the property
conveyed to the Trustee on behalf of the Trust under any Participation Interest
Supplement, any Series Enhancement, the right to receive Recoveries attributed
to cardholder charges for merchandise and services in the Accounts and the
rights of the Transferor under the Receivables Purchase Agreement shall
constitute the assets of the Trust (the "Trust Assets"). The foregoing does not
constitute and is not intended to result in the creation or assumption by the
Trust, the Trustee, any Investor Certificateholder or any Series Enhancer of any
obligation of Columbus Bank or
other Account Owner or the Transferor, any Additional Transferor, the Servicer
or any other Person in connection with the Accounts or the Receivables or under
any agreement or instrument relating thereto, including any obligation to
Obligors, merchant banks, merchants clearance systems, VISA or insurers. The
Obligors shall not be notified in connection with the creation of the Trust of
the transfer, assignment, set-over and conveyance of the Receivables to the
Trust. The foregoing transfer, assignment, set-over and conveyance to the Trust
shall be made to the Trustee, on behalf of the Trust, and each reference in this
Agreement to such transfer, assignment, set-over and conveyance shall be
construed accordingly.
Each Transferor agrees to record and file, at its own expense,
financing statements (and continuation statements when applicable) with respect
to the Receivables and other Trust Assets conveyed by such Transferor now
existing and hereafter created meeting the requirements of applicable state law
in such manner and in such jurisdictions as are necessary to perfect, and
maintain the perfection of, the transfer and assignment of its interest in such
Receivables and other Trust Assets to the Trust, and to deliver a file stamped
copy of each such financing statement or other evidence of such filing (which
can include telephonic confirmation) to the Trustee on or prior to the Closing
Date and, in the case of continuation statements, as soon as practicable after
receipt thereof by the Transferor. The Trustee shall be under no obligation
whatsoever to file such financing or continuation statements or to make any
other filing under the UCC in connection with such transfer and assignment.
Each Transferor further agrees, at its own expense, (i) on or prior to
(A) the first Closing Date in the case of the Initial Accounts, (B) the
Automatic Addition Termination Date or any Automatic Addition Suspension Date,
or subsequent to a Restart Date, in the case of the Automatic Additional
Accounts to indicate in its books and records that Receivables created in
connection with the Accounts have been conveyed to the Trust pursuant to this
Agreement for the benefit of the Holders and (ii) on or prior to the date
referred to in clause (i)(B) to deliver to the Trustee an Account Schedule
(provided that such Account Schedule shall be provided in respect of Automatic
Additional Accounts on or prior to the Determination Date relating to the
Monthly Period during which their respective Addition Dates occur), specifying
for each such Account, as of the Automatic Addition Termination Date or
Automatic Addition Suspension Date, its account number, the aggregate amount
outstanding in such Account and the aggregate amount of Principal Receivables
outstanding in such Account. Each Account Schedule, as supplemented, from time
to time, shall be marked as Schedule 1 to this Agreement and is hereby
incorporated into and made a part of this Agreement. Once the books and records
referenced in clause (i) of this paragraph have been indicated with respect to
any Account, Transferor further agrees not to alter such indication during the
remaining term of this Agreement unless and until (x) a Restart Date has
occurred on which the Transferor starts including Automatic Additional Accounts
as Accounts or (y) the Transferors shall have delivered to the Trustee at least
30 days prior written notice of its intention to do so and has taken such action
as is necessary or advisable to cause the interest of the Trustee in the
Receivables and other Trust Assets to continue to be perfected with the priority
required by this Agreement, including the delivery to the Trustee of an Opinion
of Counsel to such effect.
It is the intention of the parties hereto that the arrangements with
respect to the Receivables shall constitute either a purchase and sale of such
Receivables or a loan. In the event that it is determined that the transactions
evidenced hereby constitute a loan and not a purchase and sale, it is the
intention of the parties hereto that this Agreement shall constitute a security
agreement under applicable law, and that each Transferor shall be deemed to have
granted to the Trust a first priority perfected security interest in all of such
Transferor's right, title and interest, whether now owned or hereafter acquired,
in, to and under the Receivables and the other Trust Assets conveyed by such
Transferor to secure its obligations hereunder.
Section 2.02. Acceptance by Trustee.
(a) The Trustee hereby acknowledges its acceptance on behalf of
the Trust of all right, title and interest to the property, now
existing and hereafter created, conveyed to the Trust pursuant to
Section 2.01 and declares that it shall maintain such right, title and
interest, upon the trust herein set forth, for the benefit of all
Certificateholders. The Trustee further acknowledges that, prior to or
simultaneously with the execution and delivery of this Agreement, the
Transferor delivered to the Trustee the computer file or microfiche
list relating to the Initial Accounts described in the penultimate
paragraph of Section 2.01. The Trustee shall maintain a copy of
Schedule 1, as delivered from time to time, at the Corporate Trust
Office.
(b) The Trustee hereby agrees not to disclose to any Person any of
the account numbers or other information contained in the computer
files or microfiche lists marked as Schedule 1 and delivered to the
Trustee, from time to time, except (i) to a Successor Servicer or as
required by a Requirement of Law applicable to the Trustee, (ii) in
connection with the performance of the Trustee's duties hereunder,
(iii) in enforcing the rights of Certificateholders or (iv) to bona
fide creditors or potential creditors of any Account Owner, CompuCredit
or any Transferor for the limited purpose of enabling any such creditor
to identify Receivables or Accounts subject to this Agreement or the
Receivables Purchase Agreements. The Trustee agrees to take such
measures as shall be reasonably requested by any Transferor to protect
and maintain the security and confidentiality of such information and,
in connection therewith, shall allow each Transferor or its duly
authorized representatives to inspect the Trustee's security and
confidentiality arrangements as they specifically relate to the
administration of the Trust from time to time during normal business
hours upon prior written notice. The Trustee shall provide the
applicable Transferor with notice five Business Days prior to
disclosure of any information of the type described in this subsection
2.02(b).
(c) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than
as contemplated in this Agreement.
Section 2.03. Representations and Warranties of Each Transferor
Relating to Such Transferor. Each Transferor hereby severally represents and
warrants to the Trust (and agrees that the Trustee may conclusively rely on each
such representation and warranty in accepting the Receivables in trust and in
authenticating the Certificates) as of the Initial Issuance Date and
each Closing Date (but only if, in either case, it was a Transferor on such
Date) that:
(a) Organization and Good Standing. Such Transferor is a
corporation or limited liability company validly existing under the
laws of the jurisdiction of its organization or incorporation and has,
in all material respects, full power and authority to own its
properties and conduct its business as presently owned or conducted,
and to execute, deliver and perform its obligations under this
Agreement, any Receivables Purchase Agreement to which it is a party
and each applicable Supplement and to execute and deliver to the
Trustee the Certificates.
(b) Due Qualification. Such Transferor is duly qualified to do
business and is in good standing as a foreign corporation or limited
liability company and has obtained all necessary licenses and
approvals, in each jurisdiction in which failure to so qualify or to
obtain such licenses and approvals would (i) render any Credit Card
Agreement relating to an Account specified in a Receivables Purchase
Agreement with such Transferor or any Receivable conveyed to the Trust
by such Transferor unenforceable by such Transferor or the Trust or
(ii) have a material adverse effect on the Investor Certificateholders.
(c) Due Authorization. The execution and delivery of this
Agreement, any Receivables Purchase Agreement to which it is a party
and each Supplement by such Transferor and the execution and delivery
to the Trustee of the Certificates and the consummation by such
Transferor of the transactions provided for in this Agreement, each
Receivables Purchase Agreement to which it is a party and each
Supplement have been duly authorized by such Transferor by all
necessary action on the part of such Transferor.
(d) No Conflict. The execution and delivery by such Transferor of
this Agreement, each Receivables Purchase Agreement to which it is a
party, each Supplement, and the Certificates, the performance of the
transactions contemplated by this Agreement, any Receivables Purchase
Agreement to which it is a party and each Supplement and the
fulfillment of the terms hereof and thereof applicable to such
Transferor, will not conflict with or violate any Requirements of Law
applicable to such Transferor or conflict with, result in any breach of
any of the terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, any indenture,
contract, agreement, mortgage, deed of trust or other instrument to
which such Transferor is a party or by which it or its properties are
bound.
(e) No Proceedings. There are no proceedings or investigations,
pending or, to the best knowledge of such Transferor, threatened
against such Transferor before any Governmental Authority (i) asserting
the invalidity of this Agreement, any Receivables Purchase Agreement to
which it is a party, any Supplement or the Certificates, (ii) seeking
to prevent the issuance of any of the Certificates or the consummation
of any of the transactions contemplated by this Agreement, any
Receivables Purchase Agreement to which it is a party, any Supplement
or the Certificates, (iii) seeking any determination or ruling that, in
the
reasonable judgment of such Transferor, would materially and adversely
affect the performance by such Transferor of its obligations under this
Agreement, any Receivables Purchase Agreement to which is it a party or
any Supplement, (iv) seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Agreement any Receivables Purchase Agreement to which it is a party,
any Supplement or the Certificates or (v) seeking to affect adversely
the income or franchise tax attributes of the Trust under the United
States Federal or any State income or franchise tax systems.
(f) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by such Transferor
in connection with the execution and delivery by such Transferor of
this Agreement, any Receivables Purchase Agreement to which it is a
party, each Supplement and the Certificates and the performance of the
transactions contemplated by this Agreement and each Supplement by such
Transferor have been duly obtained, effected or given and are in full
force and effect.
Section 2.04. Representations and Warranties of each Transferor
Relating to the Agreement and Any Supplement and the Receivables.
(a) Representations and Warranties. Each Transferor hereby
severally represents and warrants to the Trust and the Trustee as of
the Initial Issuance Date and each Closing Date (but only if, in either
case, it was a Transferor on such date) and, with respect to clauses
(vi) and (vii) below, on each Addition Date that:
(i) this Agreement, any Receivables Purchase Agreement to
which it is a party, each Supplement each constitutes a legal,
valid and binding obligation of such Transferor enforceable
against such Transferor in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally from time to time in effect
or general principles of equity;
(ii) as of the Initial Cut-Off Date the portion of Schedule 1
to this Agreement under such Transferor's name, as supplemented to
such date, is an accurate and complete listing in all material
respects of all the Accounts the Receivables in which were
transferred by such Transferor as of the Initial Cut-Off Date, and
the information contained therein with respect to the identity of
such Accounts and the Receivables existing thereunder is true and
correct in all material respects as of the Initial Cut-Off Date;
(iii) each Receivable conveyed to the Trust by such
Transferor has been conveyed to the Trust free and clear of any
Lien and each underlying receivable is free and clear of all
Liens;
(iv) all authorizations, consents, orders or approvals of or
registrations or declarations with any Governmental Authority
required to be obtained, effected or given by such Transferor in
connection with the conveyance by such Transferor of Receivables
to the Trust have been
duly obtained, effected or given and are in full force and effect;
(v) either this Agreement constitutes a valid sale, transfer
and assignment to the Trust of all right, title and interest of
such Transferor in the Receivables conveyed to the Trust by such
Transferor and the proceeds thereof and Recoveries and Interchange
identified as relating to the Receivables conveyed to the Trust by
such Transferor or, if this Agreement does not constitute a sale
of such property, it constitutes a grant of a first priority
perfected "security interest" (as defined in the UCC) in such
property to the Trust, which, in the case of existing Receivables
and the proceeds thereof and said Recoveries and Interchange, is
enforceable upon execution and delivery of this Agreement, and
which will be enforceable with respect to such Receivables
hereafter and thereafter created and the proceeds thereof upon
such creation. Upon the filing of the financing statements and, in
the case of Receivables hereafter created and the proceeds
thereof, upon the creation thereof, the Trust shall have a first
priority perfected security or ownership interest in such property
and proceeds;
(vi) on the Initial Cut-Off Date, with respect to each
Initial Account, and on each Addition Date with respect to each
Automatic Additional Account, each such Account is an Eligible
Account;
(vii) on the Initial Cut-Off Date, each Receivable then
existing and conveyed to the Trust by such Transferor is an
Eligible Receivable and on each Addition Date with respect to an
Automatic Additional Account, each Receivable contained in such
Automatic Additional Account and conveyed to the Trust by such
Transferor is an Eligible Receivable;
(viii) as of the date of the creation of any new Receivable
in an Account specified in a Receivables Purchase Agreement with
such Transferor, such Receivable is an Eligible Receivable; and
(ix) no selection procedures believed by such Transferor to
be materially adverse to the interests of the Investor
Certificateholders have been used in selecting such Accounts
specified in a Receivables Purchase Agreement with such
Transferor.
(b) Notice of Breach. The representations and warranties set forth
in Section 2.03, this Section 2.04 and subsection 2.09(f) shall survive
the transfers and assignments of the Receivables to the Trust and the
issuance of the Certificates. Upon discovery by any Transferor, the
Servicer or a Responsible Officer of the Trustee of a breach of any of
the representations and warranties set forth in Section 2.03, this
Section 2.04 or subsection 2.09(f), the party discovering such breach
shall give notice to the other parties and to each Series Enhancer
within three Business Days following such discovery, provided that the
failure to give notice within three Business Days does not preclude
subsequent notice.
Section 2.05. Treatment of Ineligible Receivables.
(a) Reassignment of Receivables. In the event (i) any
representation or warranty contained in subsection 2.04(a)(ii), (iv),
(vi), (vii), (viii) or (ix) is not true and correct in any material
respect as of the date specified
therein with respect to any Receivable or the related Account and such
breach results in such Receivable in the related Account becoming a
Defaulted Receivable or the Trust's rights in, to or under the
Receivable or its proceeds becoming impaired or the proceeds of such
Receivable not being available for any other reason to the Trust free
and clear of any Lien, unless cured within 60 days (or such longer
period, not in excess of 120 days, as may be agreed to by the Trustee
and the Servicer) after the earlier to occur of the discovery thereof
by the Transferor which conveyed such Receivables to the Trust or
receipt by such Transferor of written notice thereof given by the
Trustee or the Servicer, (ii) in the event that a Receivable is not an
Eligible Receivable because of the failure to satisfy the conditions
set forth in clause (d) or (e) of the definition of "Eligible
Receivable" or (iii) it is so provided in subsection 2.07(a) with
respect to any Receivables conveyed to the Trust by such Transferor,
then such Receivable shall be designated an "Ineligible Receivable" and
shall be assigned a principal balance of zero for the purpose of
determining the aggregate amount of Principal Receivables on any day;
provided that such Receivables pursuant to clause (i) will not be
deemed to be Ineligible Receivables but will be deemed Eligible
Receivables and such Principal Receivables shall be included in
determining the aggregate Principal Receivables in the Trust if, on any
day prior to the end of such 60-day or longer period, (x) either (A) in
the case of an event described in clause (i), the relevant
representation and warranty shall be true and correct in all material
respects as if made on such day or (B) in the case of an event
described in clauses (ii) and (iii), the circumstances causing such
Receivable to become an Ineligible Receivable shall no longer exist and
(y) Transferor shall have delivered an Officer's Certificate describing
the nature of such breach and the manner in which the relevant
representation and warranty became true and correct.
(b) Price of Reassignment. On and after the date of its
designation as an Ineligible Receivable, each Ineligible Receivable
shall not be included in determining the aggregate amount of Principal
Receivables used to calculate the Transferor Amount or the investor
allocation percentages applicable to any Series. If, immediately
following the exclusion of such Principal Receivables from the
calculation of the Transferor Amount, the Transferor Amount would be
Tless than the Required Transferor Amount, Transferor shall make a
deposit into the Special Funding Account in immediately available funds
prior to the fifth succeeding Business Day in an amount equal to the
amount by which the Transferor Amount would be less than the Required
Transferor Amount (up to the amount of such Principal Receivables). The
payment of such deposit amount in immediately available funds shall
otherwise be considered payment in full of all of the Ineligible
Receivables.
The obligation of Transferor to make the deposits, if any, required to
be made to the Special Funding Account as provided in this Section, shall
constitute the sole remedy respecting the event giving rise to such obligation
available to Holders (or the Trustee on behalf of the Holders) or any
enhancement provider pursuant to any Enhancement Agreement.
Section 2.06. Reassignment of Certificateholders' Interest in Trust
Portfolio. In the event any representation or warranty of a Transferor set forth
in subsection 2.03(a) or (c) or subsection 2.04(a)(i) or (v) is not true and
correct in any material respect and such breach has a material adverse effect on
the Certificateholders' Interest in Receivables conveyed to
the Trust by such Transferor or the availability of the proceeds thereof to the
Trust (which determination shall be made without regard to whether funds are
then available pursuant to any Series Enhancement), then either the Trustee or
the Holders of Investor Certificates evidencing not less than 50% of the
aggregate unpaid principal amount of all outstanding Investor Certificates, by
notice then given to such Transferor and the Servicer (and to the Trustee if
given by the Investor Certificateholders), may direct such Transferor to accept
a reassignment of the Certificateholders' Interest in the Receivables and any
Participation Interests conveyed to the Trust by such Transferor if such breach
and any material adverse effect caused by such breach is not cured within 60
days of such notice (or within such longer period, not in excess of 120 days, as
may be specified in such notice), and upon those conditions such Transferor
shall be obligated to accept such reassignment on the terms set forth below;
provided, however, that such Receivables and Participation Interests will not be
reassigned to such Transferor if, on any day prior to the end of such 60-day or
longer period (i) the relevant representation and warranty shall be true and
correct in all material respects as if made on such day and (ii) such Transferor
shall have delivered to the Trustee a certificate of an authorized officer
describing the nature of such breach and the manner in which the relevant
representation and warranty has become true and correct.
The applicable Transferor shall deposit in the Collection Account in
immediately available funds not later than 11:00 a.m., New York City time, on
the fifth Business Day after the day on which such reassignment obligation
arises, in payment for such reassignment, an amount equal to the sum of the
amounts specified therefor with respect to each outstanding Series in the
related Supplement. Notwithstanding anything to the contrary in this Agreement,
such amounts shall be distributed to the Investor Certificateholders on such
Distribution Date in accordance with the terms of each Supplement. If the
Trustee or the Investor Certificateholders give notice directing the applicable
Transferor to accept a reassignment of the Certificateholders' Interest in the
Receivables and Participation Interests as provided above, the obligation of
such Transferor to accept such reassignment pursuant to this Section and to make
the deposit required to be made to the Collection Account as provided in this
paragraph shall constitute the sole remedy respecting an event of the type
specified in the first sentence of this Section available to the
Certificateholders (or the Trustee on behalf of the Certificateholders) or any
Series Enhancer.
Section 2.07. Covenants of Each Transferor. Each Transferor hereby
covenants to the Trustee on behalf of the Trust, for the benefit of the
Certificateholders, until the termination of the Trust that:
(a) Receivables Not To Be Evidenced by Promissory Notes. Except in
connection with its enforcement or collection of an Account, such
Transferor will take no action to cause any Receivable conveyed by it
to the Trust to be evidenced by any instrument (as defined in the UCC)
and if any such Receivable (or any underlying receivable) is so
evidenced as a result of any action of the Transferor it shall be
deemed to be an Ineligible Receivable in accordance with Section
2.05(a) and shall be treated in accordance with Section 2.05(b).
(b) Security Interests. Except for the conveyances hereunder, such
Transferor will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on,
any Receivable (or any underlying receivable) or Participation Interest
conveyed by it to the Trust, whether now existing or hereafter created,
or any interest therein, and such Transferor shall defend the right,
title and interest of the Trust in, to and under the Receivables and
any Participation Interest, whether now existing or hereafter created,
against all claims of third parties claiming through or under such
Transferor.
(c) Transferor's Interest. Except for the conveyances hereunder,
and except in connection with any transaction permitted by Section 7.02
and as provided in subsection 2.09(d) and Section 6.03, such Transferor
agrees not to transfer, sell, assign, exchange or otherwise convey or
pledge, hypothecate or otherwise grant a security interest in the
Transferor's Interest represented by the Transferor Certificate or any
Supplemental Certificate and any such attempted transfer, assignment,
exchange, conveyance, pledge, hypothecation, grant or sale shall be
void.
(d) Delivery of Collections or Recoveries. In the event that such
Transferor receives Collections or Recoveries, such Transferor agrees
to pay to the Servicer all such Collections and Recoveries as soon as
practicable after receipt thereof but in no event later than two
Business Days after receipt.
(e) Notice of Liens. Such Transferor shall notify the Trustee
and each Series Enhancer in writing promptly after becoming aware of
any Lien on any Receivable (or on the underlying receivable) or
Participation Interest conveyed by it to the Trust other than the
conveyances hereunder and under the Receivables Purchase Agreements.
(f) Amendment of the Certificate of Incorporation. Such Transferor
will not amend in any material respect its Certificate of
Incorporation, certificate of formation or other organization documents
without providing the Rating Agency with notice no later than the fifth
Business Day prior to such amendment (unless the right to such notice
is waived by the Rating Agency) and satisfying the Rating Agency
Condition.
(g) Separate Corporate Existence. Such Transferor shall:
(i) Maintain in full effect its existence, rights and
franchises as a limited liability company or corporation under the
laws of the state of its organization or incorporation and will
obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary
to protect the validity and enforceability of this Agreement and
any Receivables Purchase Agreement to which it is a party and each
other instrument or agreement necessary or appropriate to proper
administration hereof and permit and effectuate the transactions
contemplated hereby.
(ii) Maintain its own deposit account or accounts, separate
from those of any Affiliate of such Transferor, with commercial
banking
institutions. The funds of such Transferor will not be
diverted to any other Person or for other than the corporate use
of such Transferor, and, except as may be expressly permitted by
this Agreement or any Receivables Purchase Agreement to which it
is a party, the funds of such Transferor shall not be commingled
with those of any Affiliate of such Transferor.
(iii) Ensure that, to the extent that it shares the same
officers or other employees as any of its partners, members,
managers, stockholders or Affiliates, the salaries of and the
expenses related to providing benefits to such officers and other
employees shall be fairly allocated among such entities, and each
such entity shall bear its fair share of the salary and benefit
costs associated with all such common officers and employees.
(iv) Ensure that, to the extent that it jointly contracts
with any of its partners, members, managers, stockholders or
Affiliates to do business with vendors or service providers or to
share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, and each such entity shall
bear its fair share of such costs. To the extent that such
Transferor contracts or does business with vendors or service
providers where the goods and services provided are partially for
the benefit of any other Person, the costs incurred in so doing
shall be fairly allocated to or among such entities for whose
benefit the goods and services are provided, and each such entity
shall bear its fair share of such costs. All material transactions
between such Transferor and any of its partners, members,
managers, stockholders or Affiliates shall be only on an
arm's-length basis and shall receive the approval of such
Transferor's Board of Directors, partners, members, managers or
other governing body including at least one Independent Director
(defined below).
(v) Maintain a principal executive and administrative office
through which its business is conducted and a telephone number
separate from those of its members or stockholders and Affiliates.
To the extent that such Transferor and any of its members or
stockholders or Affiliates have offices in contiguous space, there
shall be fair and appropriate allocation of overhead costs among
them, and each such entity shall bear its fair share of such
expenses.
(vi) Conduct its affairs strictly in accordance with its
Certificate of Incorporation or other certificate of formation, as
the case may be, and observe all necessary, appropriate and
customary corporate formalities (or such formalities appropriate
to the entity), including, but not limited to, holding all regular
and special stockholders' and directors', or partners', members'
or managers', as the case may be, meetings appropriate to
authorize all entity action, keeping separate and accurate minutes
of such meetings, passing all resolutions or consents necessary to
authorize actions taken or to be taken, and maintaining accurate
and separate books, records and accounts, including, but not
limited to, payroll and intercompany transaction accounts. Regular
stockholders' or other owners' and directors', partners', members'
or managers', as the case may be, meetings shall be held at least
annually.
(vii) Ensure that its Board of Directors shall at all times
include at least one Independent Director (for purposes hereof,
"Independent Director" shall mean any member of the Board of
Directors, or partner, member or manager, as the case may be, of
such Transferor that is not and has not at any time been (x) a
director, partner, member, manager, officer, agent, employee or
shareholder of any Affiliate of such Transferor or (y) a member of
the immediate family of any of the foregoing).
(viii) Ensure that decisions with respect to its business and
daily operations shall be independently made by such Transferor
(although the officer making any particular decision may also be
an officer, partner, member, manager or director of an Affiliate
of such Transferor) and shall not be dictated by an Affiliate of
such Transferor.
(ix) Act solely in its own corporate or entity name and
through its own authorized officers, members, managers and agents,
and no Affiliate of such Transferor shall be appointed to act as
agent of such Transferor, except as expressly contemplated by this
Agreement or any Receivables Purchase Agreement to which it is a
party. The Transferor shall at all times use its own stationery.
(x) Ensure that no Affiliate of such Transferor shall advance
funds to such Transferor, and no Affiliate of such Transferor will
otherwise guaranty debts of, such Transferor; provided, however,
that an Affiliate of such Transferor may provide funds to such
Transferor in connection with the capitalization of such
Transferor, including capital necessary to assure that such
Transferor has "substantial assets" as described in Treasury
Regulation Section 301.7701- 2(d)(2).
(xi) Other than organizational expenses and as expressly
provided herein, pay all expenses, indebtedness and other
obligations incurred by it.
(xii) Not enter into any guaranty, or otherwise become
liable, with respect to any obligation of any Affiliate of such
Transferor other than with respect to Section 7.04, nor shall
Transferor make any loans to any Person.
(xiii) Ensure that any financial reports required of such
Transferor shall comply with generally accepted accounting
principles and shall be issued separately from, but may be
consolidated with, any reports prepared for any of its Affiliates,
provided that any such consolidated reports shall indicate that
the assets of the Transferor are not available to the creditors of
any Affiliate of the Transferor.
(xiv) Ensure that at all times it is adequately capitalized
to engage in the transactions contemplated in its Certificate of
Incorporation or other organization documents.
(h) Interchange. With respect to any Distribution Date, on or
prior to the immediately preceding Determination Date, the Servicer
shall notify the Transferor of the amount of Interchange required to be
included as Collections of Finance Charge Receivables with respect to
such Monthly Period, which amount for any Series shall be specified in
the related Supplement. Not later than 11:00 a.m., New York City time,
on the related Transfer Date, the Transferor shall remit to the
Servicer for deposit into the Collection Account, in immediately
available funds, the amount of Interchange to be so included as
Collections of Finance Charge Receivables with respect to such Monthly
Period.
Section 2.08. Covenants of Each Transferor with Respect to Receivables
Purchase Agreement. Each Transferor, in its capacity as purchaser of Receivables
from CompuCredit pursuant to a Receivables Purchase Agreement, hereby covenants
that such Transferor will at all times enforce the covenants and agreements of
CompuCredit in such Receivables Purchase Agreement, including covenants to the
effect that CompuCredit will enforce covenants, including covenants to the
effect set forth below, against an Account Owner under the Receivables Purchase
Agreement that CompuCredit has with such Account Owner:
(a) Credit Card Agreements and Guidelines. Each of the Transferor
and the Servicer shall comply and perform, their respective obligations
under the applicable Credit Card Agreements relating to the Accounts
and the Credit Card Guidelines except insofar as any failure so to
comply or perform would not materially and adversely affect the rights
of the Trust or the Investor Certificateholders hereunder (without
regard to the amount of any Series Enhancement) or under the
Certificates. Subject to compliance with all Requirements of Law, the
failure to comply with which would have a material adverse effect on
the Investor Certificateholders (without regard to the amount of any
Series Enhancement), the Transferor or the Servicer may change the
terms and provisions of the Agreements or the Credit Card Guidelines in
any respect as follows: (i) if the Transferor owns a comparable segment
of accounts, then such change shall be made applicable to such
comparable segment of the accounts owned and serviced by the Transferor
that have characteristics the same as, or substantially similar to, the
Accounts that are the subject of such change, (ii) if the Transferor
does not own such a comparable segment, then neither the Servicer nor
the Transferor will not make or cause to be made any such change with
the intent to materially benefit the Transferor over the Investor
Certificateholders and (iii) such change will not adversely and
materially affect the rights of the Trust or the Investor
Certificateholders.
(b) Delivery of Collections. In the event that a Transferor
receives Collections, such Transferor agrees to pay to the Servicer all
payments received by the Transferor with respect to Collections on the
Receivables promptly after receipt thereof by the Transferor, but in no
event later than two (2) Business Days after the receipt by the
Transferor thereof.
Each Transferor further covenants that it will not enter into any
amendments to a Receivables Purchase Agreement or enter into a new Receivables
Purchase Agreement unless the Rating Agency Condition has been satisfied.
Section 2.09. Addition of Accounts.
(a) Automatic Additional Accounts. Subject to any limitations
specified in any Supplement (which Supplement shall be subject to the
terms of Section 13.01 to the extent it amends any of the terms of this
Agreement), Automatic Additional Accounts shall be included as Accounts
from and after the date upon which they are created, and all
Receivables in Automatic Additional Accounts, whether such Receivables
are then existing or thereafter created, shall be transferred
automatically to the Trust upon their creation. For all purposes of
this Agreement, all receivables relating to Automatic Additional
Accounts shall be treated as Receivables upon their creation and shall
be subject to the eligibility criteria specified in the definitions of
"Eligible Receivable" and "Eligible Account." The Transferor may elect
at any time to terminate the inclusion in Accounts of new accounts
which would otherwise be Automatic Additional Accounts as of any
Business Day (the "Automatic Addition Termination Date"), or suspend
any such inclusion as of any Business Day (an "Automatic Addition
Suspension Date") until a date (the "Restart Date") to be notified in
writing by Transferor to Trustee by delivering to Trustee, Servicer and
each Rating Agency written notice of such election at least 10 days
prior to such Automatic Addition Termination Date, Automatic Addition
Suspension Date or Restart Date, as the case may be. Promptly after
each of an Automatic Addition Termination Date, an Automatic Addition
Suspension Date and a Restart Date, Transferor and Trustee agree to
execute, and Transferor agrees to record and file at its own expense,
an amendment to the financing statements referred to in Section 2.1 to
specify the accounts then subject to this Agreement (which
specification may incorporate a list of accounts by reference) and,
except in connection with any such filing made after a Restart Date, to
release any security in any accounts created after the Automatic
Addition Termination Date or Automatic Addition Suspension Date.
(b) Optional Participation Interests. In lieu of, or in addition
to, the Automatic Additional Accounts referred to in clause (a) above,
the Transferor may (but shall not be required), subject to paragraph
(c) below, convey to the Trust participations (including 100%
participations) representing undivided interests in a pool of assets
primarily consisting of revolving credit card receivables, consumer
loan receivables (secured and unsecured), charge card receivables, and
any interests in any of the foregoing, including securities
representing or backed by such receivables, and other self-liquidating
financial assets including any "Eligible Assets" as such term is
defined in Rule 3a-7 under the Investment Company Act (or any successor
to such Rule) and collections, together with all earnings, revenue,
dividends, distributions, income, issues and profits thereon
("Participation Interests"). Receivables shall not be treated as a
Participation Interest for purposes of this Agreement. The addition of
Participation Interests in the Trust pursuant to this paragraph (b)
shall be effected by a Participation Interest Supplement, dated the
applicable Addition Date and entered into pursuant to Section 13.01(a).
(c) Representations and Warranties. Each Transferor conveying
Automatic Additional Accounts or Participation Interests hereby
represents and warrants to the Trust and the Trustee as of the related
Addition Date that:
(i) as of each Addition Date, no Insolvency Event with
respect to Columbus Bank or other Account Owner, as applicable,
CompuCredit or the Transferor shall have occurred nor shall the
transfer to the Trust of the Receivables arising in the Automatic
Additional Accounts or of the Participation Interests have been
made in contemplation of the occurrence thereof; and
(ii) the addition to the Trust of the Receivables arising in
the Automatic Additional Accounts or of the Participation
Interests will not result in an Adverse Effect.
(d) Additional Transferors. The Transferor may designate
Affiliates of the Transferor to be included as Transferors ("Additional
Transferors") under this Agreement in an amendment hereto pursuant to
subsection 13.01(a) and, in connection with such designation, the
Transferor shall surrender the Transferor Certificate to the Trustee in
exchange for a newly issued Transferor Certificate modified to reflect
such Additional Transferor's interest in the Transferor's Interest;
provided, however, that, if the provisions of Section 6.03(b) are not
otherwise applicable, prior to any such designation and exchange the
conditions set forth in clauses (iv) and (vi) of subsection 6.03(b)
shall have been satisfied with respect thereto (as applied with respect
to an issuance of a new Series or of a Supplemental Certificate).
Section 2.10. Defaulted Receivables. On the date when any Receivable in
an Account becomes a Defaulted Receivable, the Trust shall automatically and
without further action or consideration be deemed to transfer, set over and
otherwise convey to the Transferor with respect to such Account, without
recourse, representation or warranty, all right, title and interest of the Trust
in and to the Defaulted Receivables in such Account, all monies due or to become
due with respect thereto, all proceeds thereof and any Insurance Proceeds
relating thereto; provided, that Recoveries of such Account shall remain
property of the Trust and be applied as provided herein.
Section 2.11. Account Allocations. In the event that any Transferor is
unable for any reason to transfer Receivables to the Trust in accordance with
the provisions of this Agreement, including by reason of the application of the
provisions of Section 9.01 or any order of any Governmental Authority (a
"Transfer Restriction Event"), then, in any such event, (a) such Transferor and
the Servicer agree (except as prohibited by any such order) to allocate and pay
to the Trust, after the date of such inability, all Collections, including
Collections of Receivables transferred to the Trust prior to the occurrence of
such event, and all amounts which would have constituted Collections but for
such Transferor's inability to transfer Receivables (up to an aggregate amount
equal to the amount of Receivables transferred to the Trust by such Transferor
in the Trust on such date), (b) such Transferor and the Servicer agree that such
amounts will be applied as Collections in accordance with Article IV and the
terms of each Supplement and (c) for so long as the allocation and application
of all Collections and all amounts that would have constituted Collections are
made in accordance with clauses (a) and (b) above, Principal Receivables and all
amounts which would have constituted Principal Receivables but for such
Transferor's inability to
transfer Receivables to the Trust which are written off as uncollectible in
accordance with this Agreement shall continue to be allocated in accordance with
Article IV and the terms of each Supplement. For the purpose of the immediately
preceding sentence, such Transferor and the Servicer shall treat the first
received Collections with respect to the Accounts as allocable to the Trust
until the Trust shall have been allocated and paid Collections in an amount
equal to the aggregate amount of Principal Receivables in the Trust as of the
date of the occurrence of such event. If such Transferor and the Servicer are
unable pursuant to any Requirements of Law to allocate Collections as described
above, such Transferor and the Servicer agree that, after the occurrence of such
event, payments on each Account with respect to the principal balance of such
Account shall be allocated first to the oldest principal balance of such Account
and shall have such payments applied as Collections in accordance with Article
IV and the terms of each Supplement. The parties hereto agree that Finance
Charge Receivables, whenever created, accrued in respect of Principal
Receivables which have been conveyed to the Trust shall continue to be a part of
the Trust notwithstanding any cessation of the transfer of additional Principal
Receivables to the Trust and Collections with respect thereto shall continue to
be allocated and paid in accordance with Article IV and the terms of each
Supplement.
Section 2.12. Discount Option.
(a) The Transferor shall have the option to designate at any time
and from time to time a percentage or percentages, which may be a fixed
percentage or a variable percentage based on a formula (the "Discount
Percentage"), of all or any specified portion of Principal Receivables
created after the Discount Option Date to be treated as Finance Charge
Receivables ("Discount Option Receivables"). The Transferor shall also
have the option of reducing or withdrawing the Discount Percentage, at
any time and from time to time, on and after such Discount Option Date.
The Transferor shall provide to the Servicer, the Trustee and any
Rating Agency 30 days' prior written notice of the Discount Option
Date, and such designation shall become effective on the Discount
Option Date (i) unless such designation in the reasonable belief of the
Transferor would cause a Pay Out Event or Reinvestment Event with
respect to any Series to occur, or an event which, with notice or lapse
of time or both, would constitute a Pay Out Event or Reinvestment Event
with respect to any Series and (ii) only if the Rating Agency Condition
shall have been satisfied with respect to such designation.
(b) After the Discount Option Date, Discount Option Receivable
Collections shall be treated as Collections of Finance Charge
Receivables.
[END OF ARTICLE II]
ARTICLE III
ADMINISTRATION AND SERVICING
OF RECEIVABLES
Section 3.01. Acceptance of Appointment and Other Matters Relating to
the Servicer.
(a) CompuCredit agrees to act as the Servicer under this Agreement
and the Certificateholders by their acceptance of Certificates consent
to CompuCredit acting as Servicer.
(b) As agent for each Transferor and the Trust, the Servicer shall
service and administer the Receivables (including the underlying
receivables) and any Participation Interests, shall collect and deposit
into the Collection Account payments due under the Receivables
(including the underlying receivables) and any Participation Interests
and shall charge-off as uncollectible Receivables, all in accordance
with its customary and usual servicing procedures for servicing credit
card receivables comparable to the Receivables and in accordance with
the Credit Card Guidelines. As agent for each Transferor and the Trust,
the Servicer shall have full power and authority, acting alone or
through any party properly designated by it hereunder, to do any and
all things in connection with such servicing and administration which
it may deem necessary or desirable; provided, however, that subject to
the rights of the Trustee and the Certificateholders hereunder,
CompuCredit Funding shall have the absolute right to direct the
Servicer with respect to any power conferred on the Servicer hereunder.
Without limiting the generality of the foregoing and subject to Section
10.01, the Servicer or its designee is hereby authorized and empowered,
unless such power is revoked by the Trustee on account of the
occurrence of a Servicer Default pursuant to Section 10.01, (i) to
instruct the Trustee to make withdrawals and payments from the
Collection Account, the Special Funding Account and any Series Account,
as set forth in this Agreement or any Supplement, (ii) to take any
action required or permitted under any Series Enhancement, as set forth
in this Agreement or any Supplement, (iii) to execute and deliver, on
behalf of the Trust for the benefit of the Certificateholders, any and
all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with
respect to the Receivables and, after the delinquency of any Receivable
and to the extent permitted under and in compliance with applicable
Requirements of Law, to commence collection proceedings with respect to
such Receivables and (iv) to make any filings, reports, notices,
applications and registrations with, and to seek any consents or
authorizations from, the Commission and any state securities authority
on behalf of the Trust as may be necessary or advisable to comply with
any Federal or state securities or reporting requirements or other laws
or regulations. The Trustee shall furnish the Servicer with any
documents necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder.
(c) The Servicer shall not, and no Successor Servicer shall, be
obligated to use separate servicing procedures, offices, employees or
accounts for servicing the Receivables from the procedures, offices,
employees and accounts used by the Servicer or such Successor Servicer,
as the case may be, in connection with servicing other credit card
receivables.
(d) The Servicer shall comply with and perform its servicing
obligations with respect to the Accounts and Receivables in accordance
with the Credit Card Agreements relating to the Accounts and the Credit
Card Guidelines and all applicable rules and regulations of VISA,
except insofar as any failure to so comply or perform would not
materially and adversely affect the Trust or the Investor
Certificateholders.
(e) The Servicer shall pay out of its own funds, without
reimbursement (except as provided in Section 3.02), all expenses
incurred in connection with the Trust and the servicing activities
hereunder including expenses related to enforcement of the Receivables,
fees and disbursements of the Trustee (including the reasonable fees
and expenses of its outside counsel) and independent accountants and
all other fees and expenses, including the costs of filing UCC
continuation statements, the costs and expenses relating to obtaining
and maintaining the listing of any Investor Certificates on any stock
exchange and any stamp, documentary, excise, property (whether on real,
personal or intangible property) or any similar tax levied on the Trust
or the Trust's assets that are not expressly stated in this Agreement
to be payable by the Trust or the Transferor (other than federal,
state, local and foreign income and franchise taxes, if any, or any
interest or penalties with respect thereto, assessed on the Trust).
Section 3.02. Servicing Compensation. As full compensation for its
servicing activities hereunder and as reimbursement for any expense incurred by
it in connection therewith, the Servicer shall be entitled to receive a
servicing fee (the "Servicing Fee") with respect to each Monthly Period, payable
monthly on the related Distribution Date, in an amount equal to one-twelfth of
the product of (a) the weighted average of the Servicing Fee Rates with respect
to each outstanding Series (based upon the Servicing Fee Rate for each Series
and the Invested Amount (or such other amount as specified in the related
Supplement) of such Series, in each case as of the last day of the prior Monthly
Period) and (b) the amount of Principal Receivables on the last day of the prior
Monthly Period. The share of the Servicing Fee allocable to the
Certificateholders' Interest of a particular Series with respect to any Monthly
Period (the "Monthly Servicing Fee") of a particular Series with respect to any
Monthly Period will each be determined in accordance with the relevant
Supplement. The portion of the Servicing Fee with respect to any Monthly Period
not so allocated to the Certificateholders' Interest of any particular Series
shall be paid by the Holders of the Transferor Certificates on the related
Distribution Date and in no event shall the Trust, the Trustee, the Investor
Certificateholders of any Series or any Series Enhancer be liable for the share
of the Servicing Fee with respect to any Monthly Period to be paid by the
Holders of the Transferor Certificates.
Section 3.03. Representations, Warranties and Covenants of the
Servicer. CompuCredit, as initial Servicer, hereby makes, and any Successor
Servicer by its appointment hereunder shall make, with respect to itself, on
each Closing Date (and on the date of any such appointment), the following
representations, warranties and covenants on which the Trustee shall be deemed
to have relied in accepting the Receivables in trust and in authenticating the
Certificates:
(a) Organization and Good Standing. The Servicer is a limited
partnership or a corporation or other legal entity validly existing
under the applicable law of the jurisdiction of its organization or
incorporation and has, in all material respects, full power and
authority to own its properties and conduct its credit card servicing
business as presently owned or conducted, and to execute, deliver and
perform its obligations under this Agreement and each Supplement.
(b) Due Qualification. The Servicer is duly qualified to do
business and is in good standing as a foreign limited partnership or
corporation or other foreign entity (or is exempt from such
requirements) and has obtained all necessary licenses and approvals in
each jurisdiction in which the servicing of the Receivables (including
the underlying receivables) and any Participation Interests as required
by this Agreement requires such qualification except where the failure
to so qualify or obtain licenses or approvals would not have a material
adverse effect on its ability to perform its obligations as Servicer
under this Agreement.
(c) Due Authorization. The execution, delivery, and performance of
this Agreement and each Supplement, and the other agreements and
instruments executed or to be executed by the Servicer as contemplated
hereby, have been duly authorized by the Servicer by all necessary
action on the part of the Servicer.
(d) Binding Obligation. This Agreement and each Supplement
constitutes a legal, valid and binding obligation of the Servicer,
enforceable in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally
from time to time in effect or by general principles of equity.
(e) No Conflict. The execution and delivery of this Agreement and
each Supplement by the Servicer, and the performance of the
transactions contemplated by this Agreement and each Supplement and the
fulfillment of the terms hereof and thereof applicable to the Servicer,
will not conflict with, violate or result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, any indenture, contract, agreement,
mortgage, deed of trust or other instrument to which the Servicer is a
party or by which it or its properties are bound.
(f) No Violation. The execution and delivery of this Agreement and
each Supplement by the Servicer, the performance of the transactions
contemplated by this Agreement and each Supplement and the fulfillment
of the terms hereof and thereof applicable to the Servicer will not
conflict with or violate any Requirements of Law applicable to the
Servicer.
(g) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Servicer, threatened against
the Servicer before any Governmental Authority seeking to prevent the
consummation of any of the transactions contemplated by this Agreement
or any Supplement or seeking any determination or ruling that, in the
reasonable judgment of the Servicer, would materially and adversely
affect the performance by the Servicer of its obligations under this
Agreement or any Supplement.
(h) Compliance with Requirements of Law. The Servicer shall duly
satisfy all obligations on its part to be fulfilled under or in
connection with each Receivable (and the underlying receivable) and the
related Account, if any, will maintain in effect all qualifications
required under Requirements of Law in order to service properly each
Receivable and the related Account, if any, and will comply in all
material respects with all other Requirements of Law in connection with
servicing each Receivable and the related Account the failure to comply
with which would have an Adverse Effect.
(i) No Rescission or Cancellation. The Servicer shall not permit
any rescission or cancellation of any Receivable (or the underlying
receivable) except in accordance with the Credit Card Guidelines or as
ordered by a court of competent jurisdiction or other Governmental
Authority.
(j) Protection of Certificateholders' Rights. The Servicer shall
take no action which, nor omit to take any action the omission of
which, would impair the rights of Certificateholders in any Receivable
(or the underlying receivable) or the related Account, if any, nor
shall it reschedule, revise or defer payments due on any Receivable
except in accordance with the Credit Card Guidelines.
(k) Receivables Not To Be Evidenced by Promissory Notes. Except in
connection with its enforcement or collection of an Account, the
Servicer will take no action to cause any Receivable to be evidenced by
any instrument (as defined in the UCC) and if any Receivable is so
evidenced it shall be reassigned or assigned to the Servicer as
provided in this Section.
(l) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the Servicer in
connection with the execution and delivery of this Agreement and each
Supplement by the Servicer and the performance of the transactions
contemplated by this Agreement and each Supplement by the Servicer,
have been duly obtained, effected or given and are in full force and
effect.
In the event (x) any of the representations, warranties or covenants of
the Servicer contained in subsection 3.03 (h), (i) or (j) with respect to any
Receivable or the related Account is breached, and such breach has a material
adverse effect on the Certificateholders' Interest in such Receivable (which
determination shall be made without regard to whether funds are then available
to any Investor Certificateholders pursuant to any Series Enhancement) and is
not cured within 60 days (or such longer period, not in excess of 120 days, as
may be agreed to by the Trustee and the Transferor) of the earlier to occur of
the discovery of such event by the Servicer, or receipt by the Servicer of
notice of such event given by the Trustee or the Transferor, or (y) as provided
in subsection 3.03(k) with respect to any Receivable, all Receivables in the
Account or Accounts to which such event relates shall be assigned and
transferred to the Servicer on the terms and conditions set forth below.
The Servicer shall effect such assignment by making a deposit into the
Collection Account in immediately available funds not later than seven days
after such assignment obligation arises in an amount equal to the amount of such
Receivables.
Upon each such reassignment or assignment to the Servicer, the Trustee,
on behalf of the Trust, shall automatically and without further action be deemed
to sell, transfer, assign, set over and otherwise convey to the Servicer,
without recourse, representation or warranty, all right, title and interest of
the Trust in and to such Receivables, all monies due or to become due and all
amounts received with respect thereto and all proceeds thereof. The Trustee
shall execute such documents and instruments of transfer or assignment and take
such other actions as shall be reasonably requested by the Servicer to effect
the conveyance of any such Receivables pursuant to this Section but only upon
receipt of an Officer's Certificate of the Servicer that states that all
conditions set forth in this section have been satisfied. The obligation of the
Servicer to accept reassignment or assignment of such Receivables, and to make
the deposits, if any, required to be made to the Collection Account as provided
in the preceding paragraph, shall constitute the sole remedy respecting the
event giving rise to such obligation available to Certificateholders (or the
Trustee on behalf of Certificateholders) or any Series Enhancer, except as
provided in Section 8.04.
Section 3.04. Reports and Records for the Trustee.
(a) Daily Records. On each Business Day, the Servicer shall make
or cause to be made available at the office of the Servicer for
inspection by the Trustee upon request a record setting forth (i) the
Collections in respect of Principal Receivables and in respect of
Finance Charge Receivables processed by the Servicer on the second
preceding Business Day in respect of each Account and (ii) the amount
of Receivables as of the close of business on the second preceding
Business Day in each Account. The Servicer shall, at all times,
maintain its computer files with respect to the Accounts in such a
manner so that the Accounts may be specifically identified and shall
make available to the Trustee at the office of the Servicer on any
Business Day any computer programs necessary to make such
identification. The Trustee shall enter into such reasonable
confidentiality agreements as the Servicer shall deem necessary to
protect its interests and as are reasonably acceptable in form and
substance to the Trustee.
(b) Monthly Servicer's Certificate. Not later than the second
Business Day preceding each Distribution Date, the Servicer shall, with
respect to each outstanding Series, deliver to the Trustee and each
Rating Agency a certificate of a Servicing Officer in substantially the
form set forth in the related Supplement.
Section 3.05. Annual Certificate of Servicer. The Servicer shall
deliver to the Trustee and the Rating Agency on or before March 31 of each
calendar year, beginning with March 31, 1998, an Officer's Certificate
substantially in the form of Exhibit B.
Section 3.06. Annual Servicing Report of Independent Public
Accountants; Copies of Reports Available.
(a) On or before April 15 of each calendar year, beginning with
April 15, 1998, the Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other
services to the Servicer or the Transferor) to furnish a report
(addressed to the Trustee) to the Trustee, the
Servicer and each Rating Agency to the effect that they have applied
certain procedures that accountants are reasonably able to review and
perform under such accounting firm's policies and are agreed upon with
the Servicer and examined certain documents and records relating to the
servicing of Accounts under this Agreement and each Supplement and
that, on the basis of such agreed-upon procedures, nothing has come to
the attention of such accountants that caused them to believe that the
servicing (including the allocation of Collections) has not been
conducted in compliance with the terms and conditions as set forth in
Article III and Article IV and Section 8.08 of this Agreement and the
applicable provisions of each Supplement, except for such exceptions as
they believe to be immaterial and such other exceptions as shall be set
forth in such statement. Such report shall set forth the agreed-upon
procedures performed. In the event such firm requires the Trustee to
agree to the procedures performed by such firm, the Servicer shall
direct the Trustee in writing to so agree; it being understood and
agreed that the Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Servicer, and the Trustee
makes no independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.
(b) On or before April 15 of each calendar year, beginning with
April 15, 1998, the Servicer shall cause a firm of nationally
recognized independent public accountants (who may also render other
services to the Servicer or Transferor) to furnish a report to the
Trustee, the Servicer and each Rating Agency to the effect that they
have applied certain procedures that accountants are reasonably able to
review and perform under such accounting firm's policies and are agreed
upon with the Servicer to compare the mathematical calculations of
certain amounts set forth in the Servicer's certificates delivered
pursuant to subsection 3.04(b) during the period covered by such report
with the Servicer's and Columbus Bank's computer reports that were the
source of such amounts and that on the basis of such agreed-upon
procedures and comparison, such accountants are of the opinion that
such amounts are in agreement, except for such exceptions as they
believe to be immaterial and such other exceptions as shall be set
forth in such statement. Such report shall set forth the agreed-upon
procedures performed.
(c) A copy of each certificate and report provided pursuant to
subsection 3.04(b), or Section 3.05 or 3.06 may be obtained by any
Investor Certificateholder or Certificate Owner by a request in writing
to the Trustee addressed to the Corporate Trust Office.
Section 3.07. Tax Treatment. Unless otherwise specified in a Supplement
with respect to a particular Series, the Transferor has entered into this
Agreement, and the Certificates will be issued, with the intention that, for
federal, state and local income and franchise tax purposes, (i) the Investor
Certificates of each Series which are characterized as indebtedness at the time
of their issuance will qualify as indebtedness secured by the Receivables and
(ii) the Trust shall not be treated as an association or publicly traded
partnership taxable as a corporation. The Transferor, by entering into this
Agreement, and each Certificateholder, by the acceptance of any such Certificate
(and each Certificate Owner, by its acceptance of an interest in the applicable
Certificate), agree to treat such Investor Certificates for federal, state and
local income and franchise tax purposes as indebtedness of the Transferor. Each
Holder of such Investor Certificate
agrees that it will cause any Certificate Owner acquiring an interest in a
Certificate through it to comply with this Agreement as to treatment as
indebtedness under applicable tax law, as described in this Section 3.07.
Subject to Section 11.11 or unless the Transferor shall determine that the
filing of returns is appropriate, the Trustee shall treat the Trust as a
security device only and shall not file tax returns or obtain an employer
identification number on behalf of the Trust and none of the parties hereto
shall make the election provided for in Treasury Regulation section
301.7701-3(c). The provisions of this Agreement shall be construed in
furtherance of the foregoing intended tax treatment.
Section 3.08. Notices to CompuCredit. In the event that CompuCredit is
no longer acting as Servicer, any Successor Servicer shall deliver or make
available to CompuCredit each certificate and report required to be provided
thereafter pursuant to subsection 3.04(b) and Sections 3.05 and 3.06.
Section 3.09. Adjustments.
(a) If the Servicer adjusts downward the amount of any Receivable
because of a rebate, refund, unauthorized charge or billing error to a
cardholder, because such Receivable was created in respect of
merchandise which was refused or returned by a cardholder, or if the
Servicer otherwise adjusts downward the amount of any Receivable
without receiving Collections therefor or charging off such amount as
uncollectible, then, in any such case, the amount of Principal
Receivables used to calculate the Transferor Amount, the Transferor's
Interest, and (unless otherwise specified) any other amount required
herein or in any Supplement to be calculated by reference to the amount
of Principal Receivables, will be reduced by the amount of the
adjustment. Similarly, the amount of Principal Receivables used to
calculate the Transferor Amount and (unless otherwise specified) any
other amount required herein or in any Supplement to be calculated by
reference to the amount of Principal Receivables will be reduced by the
principal amount of any Receivable which was discovered as having been
created through a fraudulent or counterfeit charge or with respect to
which the covenant contained in subsection 2.07(b) was breached. Any
adjustment required pursuant to either of the two preceding sentences
shall be made on or prior to the end of the Monthly Period in which
such adjustment obligation arises. In the event that, following the
exclusion of such Principal Receivables from the calculation of the
Transferor Amount, the Transferor Amount would be less than the
Required Transferor Amount, not later than seven days after such
adjustment, the Transferor shall make a deposit into the Special
Funding Account in immediately available funds in an amount equal to
the amount by which the Transferor Amount would be less than the
Required Transferor Amount, due to adjustments with respect to
Receivables conveyed by such Transferor (up to the amount of such
Principal Receivables).
(b) If (i) the Servicer makes a deposit into the Collection
Account in respect of a Collection of a Receivable and such Collection
was received by the Servicer in the form of a check which is not
honored for any reason or (ii) the Servicer makes a mistake with
respect to the amount of any Collection and deposits an amount that is
less than or more than the actual amount of such Collection, the
Servicer shall appropriately adjust the amount subsequently deposited
into the Collection Account to reflect such dishonored
check or mistake. Any Receivable in respect of which a dishonored check
is received shall be deemed not to have been paid. Notwithstanding the
first two sentences of this paragraph, adjustments made pursuant to
this Section shall not require any change in any report previously
delivered pursuant to subsection 3.04(a).
Section 3.10. Reports to the Commission. The Servicer shall, on behalf
of the Trust, cause to be filed with the Commission any periodic reports
required to be filed under the provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder.
The Transferor shall, at the expense of the Servicer, cooperate in any
reasonable request of the Servicer in connection with such filings.
[END OF ARTICLE III]
ARTICLE IV
RIGHTS OF CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01. Rights of Certificateholders. The Investor Certificates
shall represent fractional undivided interests in the Trust, which, with respect
to each Series, shall consist of the right to receive, to the extent necessary
to make the required payments with respect to the Investor Certificates of such
Series at the times and in the amounts specified in the related Supplement, the
portion of Collections allocable to Investor Certificateholders of such Series
pursuant to this Agreement and such Supplement, funds on deposit in the
Collection Account and the Special Funding Account allocable to
Certificateholders of such Series pursuant to this Agreement and such
Supplement, funds on deposit in any related Series Account and funds available
pursuant to any related Series Enhancement (collectively, with respect to all
Series, the "Certificateholders' Interest"), it being understood that, except as
specifically set forth in the Supplement with respect thereto, the Investor
Certificates of any Series or Class shall not represent any interest in any
Series Account or Series Enhancement for the benefit of any other Series or
Class. The Transferor Certificates shall represent the ownership interest in the
remainder of the Trust Assets not allocated pursuant to this Agreement or any
Supplement to the Certificateholders' Interest, including the right to receive
Collections with respect to the Receivables and other amounts at the times and
in the amounts specified in any Supplement to be paid to the Transferor on
behalf of all holders of the Transferor Certificates (the "Transferor's
Interest"); provided, however, that the Transferor Certificates shall not
represent any interest in the Collection Account, any Series Account or any
Series Enhancement, except as specifically provided in this Agreement or any
Supplement.
Section 4.02. Establishment of Collection Account and Special Funding
Account. The Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee, on behalf of the Trust, an
Eligible Deposit Account bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders (the
"Collection Account"). The Trustee shall possess all right, title and interest
in all monies, instruments, securities, documents, certificates of deposit and
other property on deposit from time to time in the Collection Account and in all
proceeds, earnings, income, revenue, dividends and distributions thereof for the
benefit of the Certificateholders.
The Collection Account shall be under the sole dominion and control of
the Trustee for the benefit of the Certificateholders. Except as expressly
provided in this Agreement, the Servicer agrees that it shall have no right of
setoff or banker's lien against, and no right to otherwise deduct from, any
funds held in the Collection Account for any amount owed to it by the Trustee,
the Trust, any Certificateholder or any Series Enhancer. If, at any time, the
Collection Account ceases to be an Eligible Deposit Account, the 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 each Rating Agency may consent)
establish a new Collection Account meeting the conditions specified above,
transfer any monies, documents, instruments, securities,
certificates of deposit and other property to such new Collection Account and
from the date such new Collection Account is established, it shall be the
"Collection Account." Pursuant to the authority granted to the Servicer in
subsection 3.01(b), the Servicer shall have the power, revocable by the Trustee,
to make withdrawals and payments from the Collection Account and to instruct the
Trustee to make withdrawals and payments from the Collection Account for the
purposes of carrying out the Servicer's or the Trustee's duties hereunder. The
Servicer shall reduce deposits into the Collection Account payable by the
Transferor on any Deposit Date to the extent the Transferor is entitled to
receive funds from the Collection Account on such Deposit Date, but only to the
extent such reduction would not reduce the Transferor Amount to an amount less
than the Required Transferor Amount.
Funds on deposit in the Collection Account (other than investment
earnings and amounts deposited pursuant to Sections 2.06, 9.01, 10.01 or 12.02)
shall at the written direction of the Servicer be invested by the Trustee in
Eligible Investments selected by the Servicer. All such Eligible Investments
shall be held by the Trustee for the benefit of the Certificateholders. The
Trustee shall maintain for the benefit of the Certificateholders possession of
the instruments, documents, certificates of deposit or securities, if any,
evidencing such Eligible Investments. Investments of funds representing
Collections collected during any Monthly Period shall be invested in Eligible
Investments that will mature so that such funds will be available no later than
the close of business on each Transfer Date following such Monthly Period in
amounts sufficient to the extent of such funds to make the required
distributions on the following Distribution Date. No such Eligible Investment
shall be disposed of prior to its maturity; provided, however, that the 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. Unless directed by the
Servicer, funds deposited in the Collection Account on a Transfer Date with
respect to the immediately succeeding Distribution Date are not required to be
invested overnight. On each Distribution Date, all interest and other investment
earnings (net of losses and investment expenses) on funds on deposit in the
Collection Account shall be paid to the Transferor, except as otherwise
specified in any Supplement. The Trustee shall bear no responsibility or
liability for any losses resulting from investment or reinvestment of any funds
in accordance with this Section 4.02 nor for the selection of Eligible
Investments in accordance with the provisions of this Agreement. In addition,
the Trustee shall have no liability in respect of the 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 Servicer, for the benefit of the Certificateholders, shall
establish and maintain in the name of the Trustee, on behalf of the Trust, an
Eligible Deposit Account bearing a designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders (the
"Special Funding Account"). The Trustee shall possess all right, title and
interest in all monies, instruments, securities, documents, certificates of
deposit and other property on deposit from time to time in the Special
Funding Account and in all proceeds, dividends distributions, earnings, income
and revenue thereof for the benefit of the Certificateholders. The Special
Funding Account shall be under the sole dominion and control of the Trustee for
the benefit of the Certificateholders. Except as expressly provided in this
Agreement, the Servicer agrees that it shall have no right of setoff or banker's
lien against, and no right to otherwise deduct from, any funds held in the
Special Funding Account for any amount owed to it by the Trustee, the Trust, any
Certificateholder or any Series Enhancer. If, at any time, the Special Funding
Account ceases to be an Eligible Deposit Account, the 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 each Rating Agency may consent) establish a
new Special Funding Account meeting the conditions specified above, transfer any
monies, documents, instruments, securities, certificates of deposit and other
property to such new Special Funding Account and from the date such new Special
Funding Account is established, it shall be the "Special Funding Account."
Funds on deposit in the Special Funding Account shall at the written
direction of the Servicer be invested by the Trustee in Eligible Investments
selected by the Servicer. All such Eligible Investments shall be held by the
Trustee for the benefit of the Certificateholders. The Trustee shall maintain
for the benefit of the Certificateholders possession of the instruments,
documents, certificates of deposit or securities, if any, evidencing such
Eligible Investments. Funds on deposit in the Special Funding Account on any
date will be invested in Eligible Investments that will mature so that such
funds will be available no later than the close of business on the Transfer Date
following such date. No such Eligible Investment shall be disposed of prior to
its maturity; provided, however, that the Trustee may sell, liquidate or dispose
of an 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. Unless directed by the Servicer, funds deposited in the Special
Funding Account on a Transfer Date with respect to the immediately succeeding
Distribution Date are not required to be invested overnight. On each
Distribution Date, all interest and other investment earnings (net of losses and
investment expenses) on funds on deposit in the Special Funding Account shall be
treated as Collections of Finance Charge Receivables with respect to the last
day of the related Monthly Period except as otherwise specified in the related
Supplement. On each Business Day on which funds are on deposit in the Special
Funding Account and on which no Series is in an Accumulation Period or
Amortization Period, the Servicer shall determine the amount (if any) by which
the Transferor Amount exceeds the Required Transferor Amount on such date and
shall instruct the Trustee in writing to withdraw any such excess from the
Special Funding Account and pay such amount to the Holders of the Transferor
Certificates; provided, however, that, if an Accumulation Period or Amortization
Period has commenced and is continuing with respect to one or more outstanding
Series, any funds on deposit in the Special Funding Account shall be treated as
Shared Principal Collections and shall be allocated and distributed in
accordance with Section 4.04 and the terms of each Supplement.
Section 4.03. Collections and Allocations.
(a) The Servicer will apply or will instruct the Trustee in
writing to apply all funds on deposit in the Collection Account as
described in this Article IV and in each Supplement. Except as
otherwise provided below, the Servicer shall deposit Collections into
the Collection Account as promptly as possible after the Date of
Processing of such Collections, but in no event later than the second
Business Day following the Date of Processing. Subject to the express
terms of any Supplement, but notwithstanding anything else in this
Agreement to the contrary, for so long as the following conditions are
satisfied: (i) CompuCredit remains the Servicer and maintains a
commercial paper rating of not less than A-1 by Standard & Poor's and
P-1 by Moody's, and (ii) no Pay Out Event or Reinvestment Event shall
have occurred, the Servicer need not make the daily deposits of
Collections into the Collection Account as provided in the preceding
sentence, but may make a single deposit in the Collection Account in
immediately available funds not later than 4:00 P.M., New York City
time, on the Transfer Date following the Monthly Period with respect to
which such deposit relates. Subject to the first proviso in Section
4.04 and the express terms of any Supplement, but notwithstanding
anything else in this Agreement to the contrary, with respect to any
Monthly Period, whether the Servicer is required to make deposits of
Collections pursuant to the first or the second preceding sentence, (i)
the Servicer will only be required to deposit Collections into the
Collection Account up to the aggregate amount of Collections required
to be deposited into any Series Account or, without duplication,
distributed on or prior to the related Distribution Date to Investor
Certificateholders or to any Series Enhancer pursuant to the terms of
any Supplement or Enhancement Agreement and (ii) if at any time prior
to such Distribution Date the amount of Collections deposited in the
Collection Account exceeds the amount required to be deposited pursuant
to clause (i) above, the Servicer will be permitted to withdraw the
excess from the Collection Account. Subject to the immediately
preceding sentence, the Servicer may retain its Servicing Fee with
respect to a Series and shall not be required to deposit it in the
Collection Account.
(b) Collections of Finance Charge Receivables, Principal
Receivables and Defaulted Receivables will be allocated to each Series
on the basis of the Series Allocable Finance Charge Collections of such
Series, Series Allocable Principal Collections of such Series and
Series Allocable Defaulted Amount of such Series and amounts so
allocated to any Series will not, except as specified in the related
Supplement, be available to the Investor Certificateholders of any
other Series. Allocations of the foregoing amounts between the
Certificateholders' Interest and the Transferor's Interest, among the
Series and among the Classes in any Series, shall be set forth in the
related Supplement or Supplements.
Section 4.04. Shared Principal Collections. On each Distribution Date,
(a) the Servicer shall allocate Shared Principal Collections (as described
below) to each Principal Sharing Series, pro rata, in proportion to the
Principal Shortfalls (as defined below), if any, with respect to each such
Series and (b) the Servicer shall withdraw from the Collection Account and pay
to the Holders of the Transferor Certificates an amount equal to the excess, if
any, of (x) the aggregate amount for all outstanding Series of Collections of
Principal Receivables which the related Supplements specify are to be treated as
"Shared Principal Collections" for such Distribution Date over (y) the aggregate
amount for all outstanding Series which the related Supplements
specify are "Principal Shortfalls" for such Series and for such Distribution
Date; provided, however, that if the Transferor Amount as of such Distribution
Date (determined after giving effect to the Principal Receivables or
Participation Interests transferred to the Trust on such date) is less than the
Required Transferor Amount, the Servicer will not distribute to the Holders of
the Transferor Certificates any such amounts that otherwise would be distributed
to the Holders of the Transferor Certificates, but shall deposit such funds in
the Special Funding Account. The Transferor may, at its option, instruct the
Trustee in writing to deposit Shared Principal Collections which are otherwise
payable to the Holders of the Transferor Certificates pursuant to the provisions
set forth above into the Special Funding Account.
Section 4.05. Additional Withdrawals from the Collection Account. On or
before the Determination Date with respect to any Monthly Period, the Servicer
shall determine the amounts payable to CompuCredit, Columbus Bank or any other
Account Owner with respect to such Monthly Period under the applicable
Receivables Purchase Agreement in respect of amounts on deposit in the
Collection Account that were not transferred to the Trust hereunder, and the
Servicer shall withdraw such amounts from the Collection Account and pay such
amount to CompuCredit for distribution to CompuCredit, Columbus Bank or any
other Account Owner, as applicable.
Section 4.06. Allocation of Trust Assets to Series or Groups. To the
extent so provided in the Supplement for any Series or in an amendment to this
Agreement executed pursuant to subsection 13.01(a), Receivables conveyed to the
Trust pursuant to Section 2.01 and Receivables or Participation Interests
conveyed to the Trust pursuant to Section 2.09 or any Participation Interest
Supplement, and all Collections received with respect thereto may be allocated
or applied in whole or in part to one or more Series or Groups as may be
provided in such Supplement or amendment, provided, however, that any such
allocation or application shall be effective only upon satisfaction of the
following conditions:
(i) on or before the fifth Business Day immediately preceding
such allocation, the Servicer shall have given the Trustee and
each Rating Agency written notice of such allocation;
(ii) the Rating Agency Condition shall have been satisfied
with respect to such allocation; and
(iii) the Servicer shall have delivered to the Trustee an
Officer's Certificate, dated the date of such allocation, to the
effect that the Servicer reasonably believes that such allocation
will not have an Adverse Effect.
Any such Supplement or amendment may provide that (i) such allocation
to one or more particular Series or Groups may terminate upon the occurrence of
certain events specified therein and (ii) that upon the occurrence of any such
event, such assets and any Collections with respect thereto, shall be
reallocated to other Series or Groups or to all Series, all as shall be provided
in such Supplement or amendment.
[END OF ARTICLE IV]
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS
Distributions shall be made to, and reports shall be provided to,
Certificateholders as set forth in the applicable Supplement. The identity of
the Certificateholders with respect to distributions and reports shall be
determined according to the immediately preceding Record Date.
[END OF ARTICLE V]
ARTICLE VI
THE CERTIFICATES
Section 6.01. The Certificates. The Investor Certificates of any Series
or Class shall be issued in fully registered form (including any uncertificated
Series or Class which is registered in the Certificate Register, the "Registered
Certificates") unless the applicable Supplement provides, in accordance with
then applicable laws, that such Certificates be issued in bearer form ("Bearer
Certificates") with attached interest coupons and a special coupon (collectively
the "Coupons"). Such Registered Certificates or Bearer Certificates, as the case
may be, shall be substantially in the form of the exhibits with respect thereto
attached to the applicable Supplement. The Transferor Certificate will be issued
in registered form, substantially in the form of Exhibit A, and shall upon
issue, be executed and delivered by the Transferor to the Trustee for
authentication and redelivery as provided in Section 6.02. If specified in any
Supplement, the Investor Certificates of any Series or Class shall be issued
upon initial issuance as one or more certificates evidencing the aggregate
original principal amount of such Series or Class as described in Section 6.10.
The Transferor Certificate shall be a single certificate and shall initially
represent the entire Transferor's Interest. Each Certificate shall be executed
by manual or facsimile signature on behalf of the Transferor by its President,
any Vice President or its Chief Financial Officer or by any attorney-in-fact
duly authorized to execute such Certificate on behalf of any such officer.
Certificates bearing the manual or facsimile signature of an individual who was,
at the time when such signature was affixed, authorized to sign on behalf of the
Transferor shall not be rendered invalid, notwithstanding that such individual
ceased to be so authorized prior to the authentication and delivery of such
Certificates or does not hold such office at the date of such Certificates. No
Certificates shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by or on
behalf of the Trustee by the manual signature of a duly authorized signatory,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder. Bearer Certificates shall be dated the Series Issuance Date. All
Registered Certificates and Transferor Certificates shall be dated the date of
their authentication.
Section 6.02. Authentication of Certificates. The Trustee shall, at the
written direction of the Transferor, authenticate and deliver the Investor
Certificates of each Series and Class that are issued upon original issuance to
or upon the order of the Transferor. The Trustee shall at the written direction
of the Transferor authenticate and deliver the Transferor Certificate to the
Transferor simultaneously with the execution of this Agreement. If specified in
the related Supplement for any Series or Class, the Trustee shall authenticate
and deliver outside the United States the Global Certificate that is issued upon
original issuance thereof.
Section 6.03. New Issuances.
(a) The Transferor may from time to time direct the Trustee, on
behalf of the Trust, to issue one or more new Series of Investor
Certificates. The Investor Certificates of all outstanding Series shall
be equally and ratably entitled as provided herein to the benefits of
this Agreement without preference, priority or distinction, all in
accordance with the terms and provisions of this Agreement and the
applicable Supplement except, with respect to any Series or Class, as
provided in the related Supplement.
(b) On or before the Series Issuance Date relating to any new
Series, the parties hereto will execute and deliver a Supplement which
will specify the Principal Terms of such new Series. The Trustee shall
execute the Supplement and the Transferor shall execute the Investor
Certificates of such Series and deliver such Investor Certificates to
the Trustee for authentication. In connection with the issuance of a
new Series of Investor Certificates or at any other time, a Transferor
may surrender its Transferor Certificate to the Trustee in exchange for
a newly issued Transferor Certificate and a second certificate (a
"Supplemental Certificate"), the terms of which shall be defined in a
supplement (a "Transferor Certificate Supplement") to this Agreement
(which Transferor Certificate Supplement shall be subject to Section
13.01 to the extent that it amends any of the terms of this Agreement)
to be delivered to or upon the order of the Transferor. The issuance of
any such Investor Certificates or Supplemental Certificate shall be
subject to satisfaction of the following conditions:
(i) on or before the fifth day immediately preceding the
Series Issuance Date or Transferor Certificate surrender and
exchange, as the case may be, such Transferor shall have given the
Trustee, the Servicer and each Rating Agency notice (unless such
notice requirement is otherwise waived) of such issuance and the
Series Issuance Date or such Transferor Certificate surrender and
exchange, as the case may be;
(ii) such Transferor shall have delivered to the Trustee the
related Supplement or Transferor Certificate Supplement, as
applicable, in form satisfactory to the Trustee, executed by each
party hereto (other than the Trustee and the Holder of the
Supplemental Certificate, if any);
(iii) such Transferor shall have delivered to the Trustee any
related Enhancement Agreement executed by each of the parties
thereto, other than the Trustee;
(iv) the Rating Agency Condition shall have been satisfied
with respect to such issuance or such Transferor Certificate
surrender and exchange, as the case may be;
(v) such issuance or surrender and exchange, as the case may
be, will not result in any Adverse Effect and the Transferor shall
have delivered to the Trustee an Officer's Certificate, dated the
Series Issuance Date or the date of such surrender and exchange,
as the case may be, to the effect that the Transferor reasonably
believes that such issuance or such surrender and exchange, as the
case may be, will not, based on the facts known to such officer at
the time of such certification, have an Adverse Effect;
(vi) the Transferor shall have delivered to the Trustee (with
a copy to each Rating Agency) a Tax Opinion, dated the Series
Issuance Date or
the date of such surrender and exchange, as the case may be, with
respect to such issuance or surrender and exchange, respectively;
and
(vii) the aggregate amount of Principal Receivables plus the
principal amount of any Participation Interest theretofore
conveyed to the Trust as of the Series Issuance Date or the date
of such surrender and exchange, as the case may be, shall be
greater than the Required Minimum Principal Balance as of the
Series Issuance Date or the date of such surrender and exchange,
as the case may be, and after giving effect to such issuance or
such surrender and exchange, respectively, and the Transferor
shall have delivered to the Trustee an Officer's Certificate to
such effect.
Any Supplemental Certificate held by any Person, and any Investor Certificate
held by the Transferor at any time after the date of its initial issuance, may
be transferred or exchanged only upon the delivery to the Trustee of a Tax
Opinion dated as of the date of such transfer or exchange, as the case may be,
with respect to such transfer or exchange.
Section 6.04. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at the Corporate Trust
Office a register (the "Certificate Register") in which, subject to
such reasonable regulations as it may prescribe, a transfer agent and
registrar (which may be the Trustee) (the "Transfer Agent and
Registrar") shall provide for the registration of the Registered
Certificates and of transfers and exchanges of the Registered
Certificates as herein provided. The Transfer Agent and Registrar shall
initially be the Trustee and any co-transfer agent and co-registrar
chosen by the Transferor and acceptable to the Trustee, including, if
and so long as any Series or Class is listed on the Luxembourg Stock
Exchange and such exchange shall so require, a co-transfer agent and
co-registrar in Luxembourg. Any reference in this Agreement to the
Transfer Agent and Registrar shall include any co-transfer agent and
registrar unless the context requires otherwise.
The Trustee may revoke such appointment and remove any Transfer Agent
and Registrar if the Trustee determines in its sole discretion that such
transfer Agent and Registrar failed to perform its obligations under this
Agreement in any material respect. Any Transfer Agent and Registrar shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' notice to the
Transferor, the Trustee and the Servicer; provided, however, that such
resignation shall not be effective and such Transfer Agent and Registrar shall
continue to perform its duties as Transfer Agent and Registrar until the Trustee
has appointed a successor Transfer Agent and Registrar reasonably acceptable to
the Transferor.
Subject to subsection (c) below, upon surrender for registration of
transfer or exchange of any Registered Certificate at any office or agency of
the Transfer Agent and Registrar maintained for such purpose, one or more new
Registered Certificates (of the same Series and Class) in authorized
denominations of like aggregate fractional undivided interests in the
Certificateholders' Interest shall be executed, authenticated and delivered, in
the name of the designated transferee or transferees.
At the option of a Registered Certificateholder, subject to subsection
(c) below, Registered Certificates (of the same Series and Class) may be
exchanged for other Registered Certificates of authorized denominations of like
aggregate fractional undivided interests in the Certificateholders' Interest,
upon surrender of the Registered Certificates to be exchanged at any such office
or agency; Registered Certificates, including Registered Certificates received
in exchange for Bearer Certificates, may not be exchanged for Bearer
Certificates. At the option of the Holder of a Bearer Certificate, subject to
applicable laws and regulations, Bearer Certificates may be exchanged for other
Bearer Certificates or Registered Certificates (of the same Series and Class) of
authorized denominations of like aggregate fractional undivided interests in the
Certificateholders' Interest, upon surrender of the Bearer Certificates to be
exchanged at an office or agency of the Transfer Agent and Registrar located
outside the United States. Each Bearer Certificate surrendered pursuant to this
Section shall have attached thereto all unmatured Coupons; provided that any
Bearer Certificate so surrendered after the close of business on the Record Date
preceding the relevant payment date or distribution date after the expected
final payment date need not have attached the Coupon relating to such payment
date or distribution date (in each case, as specified in the applicable
Supplement).
The preceding provisions of this Section notwithstanding, the Trustee
or the Transfer Agent and Registrar, as the case may be, shall not be required
to register the transfer of or exchange any Certificate for a period of 15 days
preceding the due date for any payment with respect to the Certificate.
Whenever any Investor Certificates are so surrendered for exchange, the
Transferor shall execute, the Trustee shall authenticate and the Transfer Agent
and Registrar shall deliver (in the case of Bearer Certificates, outside the
United States) the Investor Certificates which the Investor Certificateholder
making the exchange is entitled to receive. Every Investor Certificate presented
or surrendered for registration of transfer or exchange shall be accompanied by
a written instrument of transfer in a form satisfactory to the Trustee or the
Transfer Agent and Registrar duly executed by the Investor Certificateholder or
the attorney-in-fact thereof duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any such transfer or exchange.
All Investor Certificates (together with any Coupons) surrendered for
registration of transfer and exchange or for payment shall be canceled and
disposed of in a manner satisfactory to the Trustee. The Trustee shall cancel
and destroy any Global Certificate upon its exchange in full for Definitive
Euro-Certificates and shall deliver a certificate of destruction to the
Transferor. Such certificate shall also state that a certificate or certificates
of a Foreign Clearing Agency to the effect referred to in Section 6.13 was
received with respect to each portion of the Global Certificate exchanged for
Definitive Euro-Certificates.
The Transferor shall execute and deliver to the Trustee Bearer
Certificates and Registered Certificates in such amounts and at such times as
are necessary to enable the Trustee to fulfill its responsibilities under this
Agreement, each Supplement and the Certificates.
The interest of any Investor Certificateholder in any Receivable shall
not be transferable other than through the transfer of an Investor Certificate,
and except as provided in this Article VI, a Certificate shall not be
transferable or divisible.
(b) The Transfer Agent and Registrar will maintain at its expense
in the Borough of Manhattan, The City of New York, and, if and so long
as any Series or Class is listed on the Luxembourg Stock Exchange,
Luxembourg, an office or agency where Investor Certificates may be
surrendered for registration of transfer or exchange (except that
Bearer Certificates may not be surrendered for exchange at any such
office or agency in the United States or its territories and
possessions).
(c)(i) Registration of transfer of Investor Certificates
containing a legend substantially to the effect set forth on Exhibit
E-1 shall be effected only if such transfer (x) is made pursuant to an
effective registration statement under the Act, or is exempt from the
registration requirements under the Act, and (y) is made to a Person
which is not an employee benefit plan, trust or account, including an
individual retirement account, that is subject to ERISA or that is
described in Section 4975(e)(1) of the Code or an entity whose
underlying assets include plan assets by reason of a plan's investment
in such entity (a "Benefit Plan"). In the event that registration of a
transfer is to be made in reliance upon an exemption from the
registration requirements under the Act, the transferor or the
transferee shall deliver, at its expense, to the Transferor, the
Servicer and the Trustee, an investment letter from the transferee,
substantially in the form of the investment and ERISA representation
letter attached hereto as Exhibit E-2, and no registration of transfer
shall be made until such letter is so delivered.
Investor Certificates issued upon registration or transfer of, or
Investor Certificates issued in exchange for, Investor Certificates bearing the
legend referred to above shall also bear such legend unless the Transferor, the
Servicer, the Trustee and the Transfer Agent and Registrar receive an Opinion of
Counsel, satisfactory to each of them, to the effect that such legend may be
removed.
Whenever an Investor Certificate containing the legend referred to
above is presented to the Transfer Agent and Registrar for registration of
transfer, the Transfer Agent and Registrar shall promptly seek instructions from
the Servicer regarding such transfer and shall be entitled to receive
instructions signed by a Servicing Officer prior to registering any such
transfer. The Transferor hereby agrees to indemnify the Transfer Agent and
Registrar and the Trustee and to hold each of them harmless against any loss,
liability or expense incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by them in
relation to any such instructions furnished pursuant to this clause (i).
(ii) Registration of transfer of Investor Certificates
containing a legend to the effect set forth on Exhibit E-3 shall be
effected only if such transfer is made to a Person which is not a
Benefit Plan. By accepting and holding any such Investor Certificate,
an Investor Certificateholder shall be deemed to have represented and
warranted that it is not a Benefit Plan. By acquiring any interest in a
Book- Entry Certificate which contains such legend, a Certificate Owner
shall be deemed to have represented and warranted that it is not a
Benefit Plan.
Section 6.05. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate (together, in the case of Bearer Certificates, with
all unmatured Coupons (if any) appertaining thereto) is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Transfer Agent and Registrar and
the Trustee such security or indemnity as may be required by them to save each
of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Transferor shall
execute, the Trustee shall authenticate and the Transfer Agent and Registrar
shall deliver (in the case of Bearer Certificates, outside the United States),
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and aggregate fractional undivided
interest. In connection with the issuance of any new Certificate under this
Section, the Trustee or the Transfer Agent and Registrar may require the payment
by the Certificateholder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and Transfer Agent and
Registrar) connected therewith. Any duplicate Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 6.06. Persons Deemed Owners. The Trustee, the Paying Agent, the
Transfer Agent and Registrar, the Transferor, the Servicer and any agent of any
of them may (a) prior to due presentation of a Registered Certificate for
registration of transfer, treat the Person in whose name any Registered
Certificate is registered as the owner of such Registered Certificate for the
purpose of receiving distributions pursuant to the terms of the applicable
Supplement and for all other purposes whatsoever, and (b) treat the bearer of a
Bearer Certificate or Coupon as the owner of such Bearer Certificate or Coupon
for the purpose of receiving distributions pursuant to the terms of the
applicable Supplement and for all other purposes whatsoever; and, in any such
case, neither the Trustee, the Paying Agent, the Transfer Agent and Registrar,
the Transferor, the Servicer nor any agent of any of them shall be affected by
any notice to the contrary. Notwithstanding the foregoing, in determining
whether the Holders of the requisite Investor Certificates have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by any of the Transferor, the Servicer, any other Holder of a
Transferor Certificate or any Affiliate thereof, shall be disregarded and deemed
not to be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only
Certificates which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Certificates so owned which have been pledged in
good faith shall not be disregarded and may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Certificates and that the pledgee is not the
Transferor, the Servicer, any other Holder of a Transferor Certificate or any
Affiliate thereof. None of the Transferor, the Servicer, the Trustee, the
Registrar, the Transfer Agent or the Paying Agent will have any responsibility
or liability for any of the records relating to or on account of beneficial
ownership in Book-Entry Certificates or for maintaining, supervising or
reviewing records relating thereto.
Section 6.07. Appointment of Paying Agent. The Paying Agent shall make
distributions to Investor Certificateholders from the Collection Account or
applicable Series Account pursuant to the provisions of the applicable
Supplement and shall report the amounts of such distributions to the Trustee.
Any Paying Agent shall have the revocable power to withdraw funds from the
Collection Account or applicable Series Account for the purpose of making the
distributions referred to above. The Trustee may revoke such power and remove
the Paying Agent if the Trustee determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
or any Supplement in any material respect. The Paying Agent shall initially be
the Trustee and any co-paying agent chosen by the Transferor and acceptable to
the Trustee, including, if and so long as any Series or Class is listed on the
Luxembourg Stock Exchange and such exchange so requires, a co-paying agent in
Luxembourg or another western European city. In the event that any Paying Agent
shall resign, the Trustee shall appoint a successor to act as Paying Agent. The
Trustee shall act as Paying Agent until a successor is appointed. The Trustee
shall cause each successor or additional Paying Agent to execute and deliver to
the Trustee an instrument in which such successor or additional Paying Agent
shall agree with the Trustee that it will hold all sums, if any, held by it for
payment to the Investor Certificateholders in trust for the benefit of the
Investor Certificateholders entitled thereto until such sums shall be paid to
such Investor Certificateholders. The Paying Agent shall return all unclaimed
funds to the Trustee and upon removal shall also return all funds in its
possession to the Trustee. The provisions of Sections 11.01, 11.02, 11.03 and
11.05 shall apply to the Trustee also in its role as Paying Agent, for so long
as the Trustee shall act as Paying Agent. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
Section 6.08. Access to List of Registered Certificateholders' Names
and Addresses. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Servicer or the Paying Agent, within five Business
Days after receipt by the Trustee of a request therefor, a list of the names and
addresses of the Registered Certificateholders. If any Holder or group of
Holders of Investor Certificates of any Series or all outstanding Series, as the
case may be, evidencing not less than 10% of the aggregate unpaid principal
amount of such Series or all outstanding Series, as applicable (the
"Applicants"), apply to the Trustee, and such application states that the
Applicants desire to communicate with other Investor Certificateholders with
respect to their rights under this Agreement or any Supplement or under the
Investor Certificates and is accompanied by a copy of the communication which
such Applicants propose to transmit, then the Trustee,
after having been adequately indemnified by such Applicants for its costs and
expenses, shall afford or shall cause the Transfer Agent and Registrar to afford
such Applicants access during normal business hours to the most recent list of
Registered Certificateholders of such Series or all outstanding Series, as
applicable, held by the Trustee, within five Business Days after the receipt of
such application. Such list shall be as of a date no more than 45 days prior to
the date of receipt of such Applicants' request.
With respect to any Series of Registered Certificates, every Registered
Certificateholder, by receiving and holding a Registered Certificate, agrees
with the Trustee that neither the Trustee, the Transfer Agent and Registrar, nor
any of their respective agents, shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Registered Certificateholders hereunder, regardless of the sources from which
such information was derived.
Section 6.09. Authenticating Agent.
(a) The Trustee may appoint one or more authenticating agents with
respect to the Certificates which shall be authorized to act on behalf
of the Trustee in authenticating the Certificates in connection with
the issuance, delivery, registration of transfer, exchange or repayment
of the Certificates. Whenever reference is made in this Agreement to
the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an authenticating
agent and certificate of authentication executed on behalf of the
Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Transferor and the Servicer.
(b) Any institution succeeding to the corporate agency business of
an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any power or any further act on the
part of the Trustee or such authenticating agent. An authenticating
agent may at any time resign by giving notice of resignation to the
Trustee and to the Transferor. The Trustee may at any time terminate
the agency of an authenticating agent by giving notice of termination
to such authenticating agent and to the Transferor. Upon receiving such
a notice of resignation or upon such a termination, or in case at any
time an authenticating agent shall cease to be acceptable to the
Trustee or the Transferor, the Trustee promptly may appoint a successor
authenticating agent. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an authenticating agent. No successor
authenticating agent shall be appointed unless acceptable to the
Trustee and the Transferor. The Transferor agrees to pay to each
authenticating agent from time to time reasonable compensation for its
services under this Section. The provisions of Sections 11.01, 11.02,
11.03 and 11.05 shall be applicable to any authenticating agent.
(c) Pursuant to an appointment made under this Section, the
Certificates may have endorsed thereon, in lieu of the Trustee's
certificate of authentication, an alternate certificate of
authentication in substantially the following form:
This is one of the Certificates described in the Pooling and Servicing
Agreement.
----------------------------
----------------------------
as Authenticating Agent
for the Trustee,
By
-----------------------------
Authorized Officer
Section 6.10. Book-Entry Certificates. Unless otherwise specified in
the related Supplement for any Series or Class, the Investor Certificates, upon
original issuance, shall be issued in the form of one or more master Investor
Certificates representing the Book-Entry Certificates, to be delivered to the
Clearing Agency, by, or on behalf of, the Transferor. The Investor Certificates
shall initially be registered on the Certificate Register in the name of the
Clearing Agency or its nominee, and no Certificate Owner will receive a
definitive certificate representing such Certificate Owner's interest in the
Investor Certificates, except as provided in Section 6.12. Unless and until
definitive, fully registered Investor Certificates ("Definitive Certificates")
have been issued to the applicable Certificate Owners pursuant to Section 6.12
or as otherwise specified in any such Supplement:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Transferor, the Servicer and the Trustee may deal with the
Clearing Agency for all purposes (including the making of
distributions) as the authorized representatives of the respective
Certificate Owners;
(c) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this
Section shall control; and
(d) the rights of the respective Certificate Owners shall be
exercised only through the Clearing Agency and the Clearing Agency
Participants and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency
and/or the Clearing Agency Participants. Pursuant to the Depository
Agreement, unless and until Definitive Certificates are issued pursuant
to Section 6.12, the Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the related Investor
Certificates to such Clearing Agency Participants.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Investor Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
Investor Certificates, such direction or consent may be given by Certificate
Owners (acting through the Clearing Agency and the
Clearing Agency Participants) owning Investor Certificates evidencing the
requisite percentage of principal amount of Investor Certificates.
Section 6.11. Notices to Clearing Agency. Whenever any notice or other
communication is required to be given to Investor Certificateholders of any
Series or Class with respect to which Book-Entry Certificates have been issued,
unless and until Definitive Certificates shall have been issued to the related
Certificate Owners, the Trustee shall give all such notices and communications
to the applicable Clearing Agency.
Section 6.12. Definitive Certificates. If Book-Entry Certificates have
been issued with respect to any Series or Class and (a) the Transferor advises
the Trustee that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities under the Depository Agreement with respect to
such Series or Class and the Trustee or the Transferor is unable to locate a
qualified successor, (b) the Transferor, at its option, advises the Trustee in
writing that it elects to terminate the book-entry system with respect to such
Series or Class through the Clearing Agency or (c) after the occurrence of a
Servicer Default, Certificate Owners of such Series or Class evidencing not less
than 50% of the aggregate unpaid principal amount of such Series or Class advise
the Trustee and the Clearing Agency in writing through the Clearing Agency
Participants that the continuation of a book-entry system with respect to the
Investor Certificates of such Series or Class through the Clearing Agency is no
longer in the best interests of the Certificate Owners with respect to such
Certificates, then the Trustee shall notify all Certificate Owners of such
Certificates, through the Clearing Agency, of the occurrence of any such event
and of the availability of Definitive Certificates to Certificate Owners
requesting the same. Upon surrender to the Trustee of any such Certificates by
the Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Trustee shall authenticate and deliver such
Definitive Certificates. Neither the Transferor nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of such
Definitive Certificates all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of such
Definitive Certificates as Investor Certificateholders hereunder.
Section 6.13. Global Certificate; Exchange Date.
(a) If specified in the related Supplement for any Series or
Class, the Investor Certificates for such Series or Class will
initially be issued in the form of a single temporary global
Certificate (the "Global Certificate") in bearer form, without interest
coupons, in the denomination of the entire aggregate principal amount
of such Series or Class and substantially in the form set forth in the
exhibit with respect thereto attached to the related Supplement. The
Global Certificate will be executed by the Transferor and authenticated
by the Trustee at the written direction of the Transferor upon the same
conditions, in substantially the same manner and with the same effect
as the Definitive Certificates. The Global Certificate may be exchanged
as described below for Bearer or Registered Certificates in definitive
form (the "Definitive Euro-Certificates").
(b) The Manager shall, upon its determination of the date of
completion of the distribution of the Investor Certificates of such
Series or Class, so advise the Trustee, the Transferor, the
Depositaries, and each Foreign Clearing Agency forthwith. Without
unnecessary delay, but in any event not prior to the Exchange Date, the
Transferor will execute and deliver to the Trustee at its London office
or its designated agent outside the United States definitive Bearer
Certificates in an aggregate principal amount equal to the entire
aggregate principal amount of such Series or Class. All Bearer
Certificates so issued and delivered will have Coupons attached. The
Global Certificate may be exchanged for an equal aggregate principal
amount of Definitive Euro-Certificates only on or after the Exchange
Date. An institutional investor that is a U.S. Person may exchange the
portion of the Global Certificate beneficially owned by it only for an
equal aggregate principal amount of Registered Certificates bearing the
applicable legend set forth in the form of Registered Certificates
attached to the related Supplement and having a minimum denomination of
$500,000, which may be in temporary form if the Transferor so elects.
The Transferor may elect to waive the $500,000 minimum denomination
requirement. Upon any demand for exchange for Definitive
Euro-Certificates in accordance with this paragraph, the Transferor
shall cause the Trustee to authenticate and deliver the Definitive
Euro-Certificates to the Holder (x) outside the United States, in the
case of Bearer Certificates, and (y) according to the instructions of
the Holder, in the case of Registered Certificates, but in either case
only upon presentation to the Trustee of a written statement
substantially in the form of Exhibit D-1 with respect to the Global
Certificate or portion thereof being exchanged, signed by a Foreign
Clearing Agency and dated on the Exchange Date or a subsequent date, to
the effect that it has received in writing or by tested telex or
facsimile a certification substantially in the form of (i) in the case
of beneficial ownership of the Global Certificate or a portion thereof
being exchanged by a United States institutional investor pursuant to
the second preceding sentence, the certificate in the form of Exhibit
D-2 signed by the Manager which sold the relevant Certificates or (ii)
in all other cases, the certificate in the form of Exhibit D-3, the
certificate referred to in this clause (ii) being dated on the earlier
of the first actual payment of interest in respect of such Certificates
and the date of the delivery of such Certificate in definitive form.
Upon receipt of such certification, the Trustee shall cause the Global
Certificate to be endorsed in accordance with paragraph (d) below. Any
exchange as provided in this Section shall be made free of charge to
the Holders and the beneficial owners of the Global Certificate and to
the beneficial owners of the Definitive Euro-Certificates issued in
exchange, except that a person receiving Definitive Euro-Certificates
must bear the cost of insurance, postage, transportation and the like
in the event that such person does not receive such Definitive
Euro-Certificates in person at the offices of a Foreign Clearing
Agency.
(c) The delivery to the Trustee by a Foreign Clearing Agency of
any written statement referred to above may be relied upon by the
Transferor and the Trustee as conclusive evidence that a corresponding
certification or certifications has or have been delivered to such
Foreign Clearing Agency pursuant to the terms of this Agreement.
(d) Upon any such exchange of all or a portion of the Global
Certificate for a Definitive Euro-Certificate or Certificates, such
Global
Certificate shall be endorsed by or on behalf of the Trustee to
reflect the reduction of its principal amount by an amount equal to the
aggregate principal amount of such Definitive Euro-Certificate or
Certificates. Until so exchanged in full, such Global Certificate shall
in all respects be entitled to the same benefits under this Agreement
as Definitive Euro-Certificates authenticated and delivered hereunder
except that the beneficial owners of such Global Certificate shall not
be entitled to receive payments of interest on the Certificates until
they have exchanged their beneficial interests in such Global
Certificate for Definitive Euro-Certificates.
Section 6.14. Meetings of Certificateholders.
(a) If at the time any Bearer Certificates are issued and
outstanding with respect to any Series or Class to which any meeting
described below relates, the Servicer or the Trustee may at any time
call a meeting of Investor Certificateholders of any Series or Class or
of all Series, to be held at such time and at such place as the
Servicer or the Trustee, as the case may be, shall determine, for the
purpose of approving a modification of or amendment to, or obtaining a
waiver of any covenant or condition set forth in, this Agreement, any
Supplement or the Investor Certificates or of taking any other action
permitted to be taken by Investor Certificateholders hereunder or under
any Supplement. Notice of any meeting of Investor Certificate holders,
setting forth the time and place of such meeting and in general terms
the action proposed to be taken at such meeting, shall be given in
accordance with Section 13.05, the first mailing and publication to be
not less than 20 nor more than 180 days prior to the date fixed for the
meeting. To be entitled to vote at any meeting of Investor
Certificateholders a Person shall be (i) a Holder of one or more
Investor Certificates of the applicable Series or Class or (ii) a
person appointed by an instrument in writing as proxy by the Holder of
one or more such Investor Certificates. The only persons who shall be
entitled to be present or to speak at any meeting of Investor
Certificateholders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Transferor,
the Servicer and the Trustee and their respective counsel.
(b) At a meeting of Investor Certificateholders, persons entitled
to vote Investor Certificates evidencing a majority of the aggregate
unpaid principal amount of the applicable Series or Class or all
outstanding Series, as the case may be, shall constitute a quorum. No
business shall be transacted in the absence of a quorum, unless a
quorum is present when the meeting is called to order. In the absence
of a quorum at any such meeting, the meeting may be adjourned for a
period of not less than 10 days; in the absence of a quorum at any such
meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days; at the reconvening of any meeting further
adjourned for lack of a quorum, the persons entitled to vote Investor
Certificates evidencing at least 25% of the aggregate unpaid principal
amount of the applicable Series or Class or all outstanding Series, as
the case may be, shall constitute a quorum for the taking of any action
set forth in the notice of the original meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided above
except that such notice must be given not less than five days prior to
the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the
percentage of the aggregate principal amount
of the outstanding applicable Investor Certificates which shall
constitute a quorum.
(c) Any Investor Certificateholder who has executed an instrument
in writing appointing a person as proxy shall be deemed to be present
for the purposes of determining a quorum and be deemed to have voted;
provided that such Investor Certificateholder shall be considered as
present or voting only with respect to the matters covered by such
instrument in writing. Subject to the provisions of Section 13.01, any
resolution passed or decision taken at any meeting of Investor
Certificateholders duly held in accordance with this Section shall be
binding on all Investor Certificateholders whether or not present or
represented at the meeting.
(d) The holding of Bearer Certificates shall be proved by the
production of such Bearer Certificates or by a certificate,
satisfactory to the Servicer, executed by any bank, trust company or
recognized securities dealer, wherever situated, satisfactory to the
Servicer. Each such certificate shall be dated and shall state that on
the date thereof a Bearer Certificate bearing a specified serial number
was deposited with or exhibited to such bank, trust company or
recognized securities dealer by the Person named in such certificate.
Any such certificate may be issued in respect of one or more Bearer
Certificates specified therein. The holding by the Person named in any
such certificate of any Bearer Certificate specified therein shall be
presumed to continue for a period of one year from the date of such
certificate unless at the time of any determination of such holding (i)
another certificate bearing a later date issued in respect of the same
Bearer Certificate shall be produced, (ii) the Bearer Certificate
specified in such certificate shall be produced by some other Person or
(iii) the Bearer Certificate specified in such certificate shall have
ceased to be outstanding. The appointment of any proxy shall be proved
by having the signature of the Person executing the proxy guaranteed by
any bank, trust company or recognized securities dealer satisfactory to
the Trustee.
(e) The Trustee shall appoint a temporary chair of the meeting. A
permanent chair and a permanent secretary of the meeting shall be
elected by vote of the Holders of Investor Certificates evidencing a
majority of the aggregate unpaid principal amount of Investor
Certificates of the applicable Series or Class or all outstanding
Series, as the case may be, represented at the meeting. No vote shall
be cast or counted at any meeting in respect of any Investor
Certificate challenged as not outstanding and ruled by the chair of the
meeting to be not outstanding. The chair of the meeting shall have no
right to vote except as an Investor Certificateholder or proxy. Any
meeting of Investor Certificateholders duly called at which a quorum is
present may be adjourned from time to time, and the meeting may be held
as so adjourned without further notice.
(f) The vote upon any resolution submitted to any meeting of
Investor Certificateholders shall be by written ballot on which shall
be subscribed the signatures of Investor Certificateholders or proxies
and on which shall be inscribed the serial number or numbers of the
Investor Certificates held or represented by them. The permanent chair
of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the
meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Investor Certificateholders shall be
prepared by the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes on any vote
by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the
meeting and showing that said notice was published as provided above.
The record shall be signed and verified by the permanent chair and
secretary of the meeting and one of the duplicates shall be delivered
to the Servicer and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
Section 6.15. Uncertificated Classes. Notwithstanding anything to the
contrary contained in this Article VI or in Article XII, unless otherwise
specified in any Supplement any provisions contained in this Article VI and in
Article XII relating to the registration, form, execution, authentication,
delivery, presentation, cancellation and surrender of Certificates shall not be
applicable to any uncertificated Certificates.
[END OF ARTICLE VI]
ARTICLE VII
OTHER MATTERS RELATING TO EACH TRANSFEROR
Section 7.01. Liability of each Transferor. Each Transferor shall be
severally, and not jointly, liable for all obligations, covenants,
representations and warranties of such Transferor arising under or related to
this Agreement or any Supplement. Except as provided in the preceding sentence,
each Transferor shall be liable only to the extent of the obligations
specifically undertaken by it in its capacity as a Transferor.
Section 7.02. Merger or Consolidation of, or Assumption of the
Obligations of, a Transferor.
(a) No Transferor shall dissolve, liquidate, consolidate with or
merge into any other corporation, limited liability company or other
entity or convey, transfer or sell its properties and assets
substantially as an entirety to any Person unless:
(i)(x) the entity formed by such consolidation or into which
such Transferor is merged or the Person which acquires by
conveyance, transfer or sale the properties and assets of the
Transferor substantially as an entirety shall be, if such
Transferor is not the surviving entity, organized and existing
under the laws of the United States of America or any State or the
District of Columbia, and shall be a savings association, a
national banking association, a bank or other entity which is not
eligible to be a debtor in a case under Title 11 of the United
States Code or is a special purpose corporation or other entity
whose powers and activities are limited to substantially the same
degree as provided in the certificate of formation of CompuCredit
Funding and, if such Transferor is not the surviving entity, shall
expressly assume, by an agreement supplemental hereto, executed
and delivered to the Trustee, in form reasonably satisfactory to
the Trustee, the performance of every covenant and obligation of
such Transferor hereunder; and (y) such Transferor or the
surviving entity, as the case may be, has delivered to the Trustee
(with a copy to each Rating Agency) an Officer's Certificate and
an Opinion of Counsel each stating that such consolidation,
merger, conveyance, transfer or sale and such supplemental
agreement comply with this Section, that such supplemental
agreement is a valid and binding obligation of such surviving
entity enforceable against such surviving entity in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally from time
to time in effect or general principles of equity, and that all
conditions precedent herein provided for relating to such
transaction have been complied with; and
(ii) the Rating Agency Condition shall have been satisfied
with respect to such consolidation, merger, conveyance or
transfer.
(b) Except as permitted by subsection 2.07(c), the obligations,
rights or any part thereof of each Transferor hereunder shall not be
assignable nor shall any Person succeed to such obligations or rights
of any
Transferor hereunder except (i) for conveyances, mergers,
consolidations, assumptions, sales or transfers in accordance with the
provisions of the foregoing paragraph and (ii) for conveyances,
mergers, consolidations, assumptions, sales or transfers to other
entities (1) which such Transferor and the Servicer determine will not
result in an Adverse Effect, (2) which meet the requirements of clause
(ii) of the preceding paragraph and (3) for which such purchaser,
transferee, pledgee or entity shall expressly assume, in an agreement
supplemental hereto, executed and delivered to the Trustee in writing
in form satisfactory to the Trustee, the performance of every covenant
and obligation of such Transferor thereby conveyed.
Section 7.03. Limitations on Liability of Each Transferor. Subject to
Section 7.01, no Transferor nor any of the directors, officers, employees,
incorporators, agents, partners, members or managers of any Transferor acting in
such capacities shall be under any liability to the Trust, the Trustee, the
Certificateholders, any Series Enhancer, any other Transferor or any other
Person for any action taken or for refraining from the taking of any action in
good faith in such capacities pursuant to this Agreement, it being expressly
understood that such liability is expressly waived and released as a condition
of, and consideration for, the execution of this Agreement and any Supplement
and the issuance of the Certificate; provided, however, that this provision
shall not protect any Transferor or any such person against any liability which
would otherwise be imposed by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. Each Transferor and any director, officer,
employee, partner, member or manager or agent of such Transferor may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person (other than such Transferor) respecting any matters
arising hereunder.
[END OF ARTICLE VII]
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.01. Liability of the Servicer. The Servicer shall be liable
under this Article only to the extent of the obligations specifically undertaken
by the Servicer in its capacity as Servicer.
Section 8.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not consolidate with or merge
into any other corporation, limited partnership, limited liability company or
other entity or convey, transfer or sell its properties and assets substantially
as an entirety to any Person, unless:
(a)(i) the entity formed by such consolidation or into which
the Servicer is merged or the Person which acquires by conveyance,
transfer or sale the properties and assets of the Servicer
substantially as an entirety shall be, if the Servicer is not the
surviving entity, a corporation or other entity organized and
existing under the laws of the United States of America or any
State or the District of Columbia, and, if the Servicer is not the
surviving entity, such corporation or other entity shall expressly
assume, by an agreement supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the
performance of every covenant and obligation of the Servicer
hereunder;
(ii) the Servicer or the surviving entity, as the case may be
has delivered to the Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation, merger,
conveyance, transfer or sale comply with this Section, that such
supplemental agreement is a valid and binding obligation of such
surviving entity enforceable against such surviving entity in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights
generally from time to time in effect or general principles of
equity, and that all conditions precedent herein provided for
relating to such transaction have been complied with;
(iii) the Servicer shall have given the Rating Agencies
notice of such consolidation, merger or transfer or assets; and
(b) the corporation or other entity formed by such consolidation
or into which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the Servicer
substantially as an entirety shall be an Eligible Servicer.
Section 8.03. Limitation on Liability of the Servicer and Others.
Except as provided in Section 8.04 and Section 11.05, neither the Servicer nor
any of the directors, officers, partners, members, managers, employees or agents
of the Servicer in its capacity as Servicer shall be under any liability to the
Trust, the Trustee, the Certificateholders, any Series Enhancer or any other
Person for any action taken or for refraining from the taking of any action in
good faith in its capacity as Servicer pursuant to this Agreement; provided,
however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Servicer and any director, officer, employee,
partner, member or manager or agent of the Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person (other than the Servicer) respecting any matters arising hereunder.
The Servicer shall not be under any obligation to appear in, prosecute or
defend any legal action which is not incidental to its duties as Servicer in
accordance with this Agreement and which in its reasonable judgment may
involve it in any expense or liability. The Servicer may, in its sole
discretion, undertake any such legal action which it may deem necessary or
desirable for the benefit of the Certificateholders with respect to this
Agreement and the rights and duties of the parties hereto and the interests
of the Certificateholders hereunder.
Section 8.04. Servicer Indemnification of the Trust and the Trustee.
The Servicer shall indemnify and hold harmless the Trust and the Trustee
(including the Trustee in its capacity as Transfer Agent and Registrar or as
Paying Agent) and its directors, officers, employees, partners, members or
managers and agents from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of (a) any acts or omissions of the
Servicer with respect to the Trust pursuant to this Agreement or (b) the
administration by the Trustee of the Trust or otherwise incurred in connection
with the transactions contemplated hereby or by any supplement hereto (in the
case of clause (a) or (b), other than such as may arise from the negligence or
wilful misconduct of the Trustee), including any judgment, award, settlement,
reasonable and actual attorneys' fees and expenses and other costs or expenses
incurred in connection with the defense of any action, proceeding or claim.
Indemnification pursuant to this Section shall not be payable from the Trust
Assets. The Servicer's obligations under this Section 8.04 shall survive the
termination of this Agreement or the Trust or the earlier removal or resignation
of the Trustee.
Section 8.05. Resignation of the Servicer. The Servicer shall not
resign from the obligations and duties hereby imposed on it except (a) upon
determination that (i) the performance of its duties hereunder is no longer
permissible under applicable law and (ii) there is no reasonable action which
the Servicer could take to make the performance of its duties hereunder
permissible under applicable law or (b) upon the assumption, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, of the obligations and duties of the Servicer hereunder by any
of its Affiliates or by any other entity the appointment of which shall have
satisfied the Rating Agency Condition and, in either case, qualifies as an
Eligible Servicer. Any determination permitting the resignation of the Servicer
shall be evidenced as to clause (a) above by an Opinion of Counsel to such
effect delivered to the Trustee. No resignation shall become effective until the
Trustee or a Successor Servicer shall have assumed the responsibilities and
obligations of the Servicer in accordance with Section 10.02 hereof. If within
120 days of the date of the determination that the Servicer may no longer act as
Servicer under clause (a) above the Trustee is unable to appoint a Successor
Servicer, the Trustee shall serve as Successor Servicer. Notwithstanding the
foregoing, the Trustee shall, if it is legally unable so to act, petition a
court of competent
jurisdiction to appoint any established institution qualifying as an Eligible
Servicer as the Successor Servicer hereunder. The Trustee shall give prompt
notice to each Rating Agency and each Series Enhancer upon the appointment of a
Successor Servicer. Notwithstanding anything in this Agreement to the contrary,
CompuCredit may assign part or all of its obligations and duties as Servicer
under this Agreement to an Affiliate of CompuCredit so long as CompuCredit shall
have fully guaranteed the performance of such obligations and duties under this
Agreement.
Section 8.06. Access to Certain Documentation and Information Regarding
the Receivables. The Servicer shall provide to the Trustee access to the
documentation regarding the Accounts and the Receivables in such cases where the
Trustee is required in connection with the enforcement of the rights of
Certificateholders or by applicable statutes or regulations to review such
documentation, such access being afforded without charge but only (a) upon
reasonable request, (b) during normal business hours, (c) subject to the
Servicer's normal security and confidentiality procedures and (d) at reasonably
accessible offices in the continental United States designated by the Servicer.
Nothing in this Section shall derogate from the obligation of the Transferor,
the Trustee and the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors and the failure of the Servicer
to provide access as provided in this Section as a result of such obligation
shall not constitute a breach of this Section.
Section 8.07. Delegation of Duties. In the ordinary course of business,
the Servicer may at any time delegate its duties hereunder with respect to the
Accounts and the Receivables to any Person that agrees to conduct such duties in
accordance with the Credit Card Guidelines and this Agreement. Such delegation
shall not relieve the Servicer of its liability and responsibility with respect
to such duties, and shall not constitute a resignation within the meaning of
Section 8.05.
Section 8.08. Examination of Records. Each Transferor and the Servicer
shall indicate generally in their computer files or other records that the
Receivables arising in the Accounts have been conveyed to the Trustee, on behalf
of the Trust, pursuant to this Agreement for the benefit of the
Certificateholders. Each Transferor and the Servicer shall, prior to the sale or
transfer to a third party of any receivable held in its custody, examine its
computer records and other records to determine that such receivable is not, and
does not include, a Receivable.
[END OF ARTICLE VIII]
ARTICLE IX
INSOLVENCY EVENTS
Section 9.01. Rights upon the Occurrence of an Insolvency Event.
If CompuCredit Funding shall consent or fail to object to the
appointment of a bankruptcy trustee or conservator, receiver or liquidator in
any bankruptcy proceeding or other insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings of or relating to CompuCredit
Funding of or relating to all or substantially all of CompuCredit Funding's
property, or the commencement of an action seeking a decree or order of a court
or agency or supervisory authority having jurisdiction in the premises for the
appointment of a bankruptcy trustee or conservator, receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up, insolvency, bankruptcy,
reorganization, conservatorship, receivership or liquidation of such entity's
affairs, or notwithstanding an objection by CompuCredit Funding any such action
shall have remained undischarged or unstayed for a period of 60 days; or
CompuCredit Funding shall admit in writing its inability to pay its debts
generally as they become due, file, or consent or fail to object (or object
without dismissal of any such filing within 60 days of such filing) to the
filing of, a petition to take advantage of any applicable bankruptcy insolvency
or reorganization, receivership or conservatorship statute, make an assignment
for the benefit of its creditors or voluntarily suspend payment of its
obligations (any such act or occurrence with respect to any Person being an
"Insolvency Event"), each Transferor shall on the day any such Insolvency Event
occurs (the "Appointment Date"), immediately cease to transfer Principal
Receivables to the Trust and shall promptly give notice to the Trustee thereof.
Notwithstanding any cessation of the transfer to the Trust of additional
Principal Receivables, Principal Receivables transferred to the Trust prior to
the occurrence of such Insolvency Event, Collections in respect of such
Principal Receivables and Finance Charge Receivables (whenever created) accrued
in respect of such Principal Receivables shall continue to be a part of the
Trust Assets.
[END OF ARTICLE IX]
ARTICLE X
SERVICER DEFAULTS
Section 10.01. Servicer Defaults. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or to give notice to the Trustee to
make such payment, transfer or deposit on or before the date occurring
five Business Days after the date such payment, transfer or deposit or
such instruction or notice is required to be made or given, as the case
may be, under the terms of this Agreement or any Supplement;
(b) failure on the part of the Servicer duly to observe or perform
in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement, any Supplement, the Affinity Card
Agreement or the Facilities Management Agreement and which continues
unremedied for a period of 60 days after the date on which notice of
such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Trustee, or to the Servicer and the Trustee by
Holders of Investor Certificates evidencing not less than 10% of the
aggregate unpaid principal amount of all Investor Certificates (or,
with respect to any such failure that does not relate to all Series,
10% of the aggregate unpaid principal amount of all Series to which
such failure relates); or the Servicer shall assign or delegate its
duties under this Agreement, except as permitted by Sections 8.02 and
8.07;
(c) any representation, warranty or certification made by the
Servicer in this Agreement or any Supplement or in any certificate
delivered pursuant to this Agreement or any Supplement shall prove to
have been incorrect when made, which has an Adverse Effect on the
rights of the Investor Certificateholders of any Series (which
determination shall be made without regard to whether funds are then
available pursuant to any Series Enhancement) and which continues for a
period of 10 days after the date on which notice thereof, requiring the
same to be remedied, shall have been given to the Servicer by the
Trustee, or to the Servicer and the Trustee by the Holders of Investor
Certificates evidencing not less than 10% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to any
such representation, warranty or certification that does not relate to
all Series, 10% of the aggregate unpaid principal amount of all Series
to which such representation, warranty or certification relates); or
(d) the Servicer shall consent to the appointment of a bankruptcy
trustee or conservator or receiver or liquidator in any bankruptcy
proceeding or other insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all its property, or
a decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a bankruptcy
trustee or a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or the winding-up or liquidation of its affairs, shall
have been entered against the Servicer and such decree or order shall
have remained in force undischarged or unstayed for a period of 60
days; or the Servicer shall admit in writing its inability to pay its
debts
generally as they become due, file a petition to take advantage
of any applicable bankruptcy, insolvency or reorganization statute,
make any assignment for the benefit of its creditors or voluntarily
suspend payment of its obligations;
then, in the event of any Servicer Default, so long as the Servicer Default
shall not have been remedied, either the Trustee, or the Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid principal amount
of all Investor Certificates, by notice then given to the Servicer (and to the
Trustee if given by the Investor Certificateholders) (a "Termination Notice"),
may terminate all but not less than all the rights and obligations of the
Servicer as Servicer under this Agreement; provided, however, if within 60 days
of receipt of a Termination Notice the Trustee does not receive any bids from
Eligible Servicers in accordance with subsection 10.02(c) to act as a Successor
Servicer and receives an Officer's Certificate of the Transferor to the effect
that the Servicer cannot in good faith cure the Servicer Default which gave rise
to the Termination Notice, the Trustee shall grant a right of first refusal to
the Transferor which would permit the Transferor at its option to purchase the
Certificateholders' Interest on the Distribution Date in the next calendar
month.
The purchase price for the Certificateholders' Interest shall be equal
to the sum of the amounts specified therefor with respect to each outstanding
Series in the related Supplement. The Transferor shall notify the Trustee prior
to the Record Date for the Distribution Date of the purchase if it is exercising
such right of first refusal. If the Transferor exercises such right of first
refusal, the Transferor shall deposit the purchase price into the Collection
Account not later than 11:00 a.m., New York City time, on the Transfer Date
preceding such Distribution Date in immediately available funds. The purchase
price shall be allocated and distributed to Investor Certificateholders in
accordance with the terms of each Supplement.
After receipt by the Servicer of a Termination Notice, and on the date
that a Successor Servicer is appointed by the Trustee pursuant to Section 10.02,
all authority and power of the Servicer under this Agreement shall pass to and
be vested in the Successor Servicer (a "Service Transfer"); and, without
limitation, the Trustee is hereby authorized and empowered (upon the failure of
the Servicer to cooperate) to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or instruments, and
to do and accomplish all other acts or things necessary or appropriate to effect
the purposes of such Service Transfer. The Servicer agrees to cooperate with the
Trustee and such Successor Servicer in effecting the termination of the
responsibilities and rights of the Servicer to conduct servicing hereunder,
including the transfer to such Successor Servicer of all authority of the
Servicer to service the Receivables provided for under this Agreement, including
all authority over all Collections which shall on the date of transfer be held
by the Servicer for deposit, or which have been deposited by the Servicer, in
the Collection Account, or which shall thereafter be received with respect to
the Receivables, and in assisting the Successor Servicer. The Servicer shall
within 20 Business Days transfer its electronic records relating to the
Receivables to the Successor Servicer in such electronic form as the Successor
Servicer may reasonably request and shall promptly transfer to the Successor
Servicer all other records,
correspondence and documents necessary for the continued servicing of the
Receivables in the manner and at such times as the Successor Servicer shall
reasonably request. To the extent that compliance with this Section shall
require the Servicer to disclose to the Successor Servicer information of any
kind which the Servicer deems to be confidential, the Successor Servicer shall
be required to enter into such customary licensing and confidentiality
agreements as the Servicer shall deem reasonably necessary to protect its
interests.
Notwithstanding the foregoing, a delay in or failure of performance
referred to in paragraph (a) above for a period of 10 Business Days after the
applicable grace period or under paragraph (b) or (c) above for a period of 60
Business Days after the applicable grace period, shall not constitute a Servicer
Default if such delay or failure could not be prevented by the exercise of
reasonable diligence by the Servicer and such delay or failure was caused by an
act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence shall
not relieve the Servicer from using all commercially reasonable efforts to
perform its obligations in a timely manner in accordance with the terms of this
Agreement and the Servicer shall provide the Trustee, each Transferor and any
Series Enhancer with an Officer's Certificate giving prompt notice of such
failure or delay by it, together with a description of its efforts so to perform
its obligations.
Section 10.02. Trustee To Act; Appointment of Successor.
(a) On and after the receipt by the Servicer of a Termination
Notice pursuant to Section 10.01, the Servicer shall continue to
perform all servicing functions under this Agreement until the date
specified in the Termination Notice or otherwise specified by the
Trustee or until a date mutually agreed upon by the Servicer and
Trustee. The Trustee shall as promptly as possible after the giving of
a Termination Notice appoint an Eligible Servicer as a successor
servicer (the "Successor Servicer"), and such Successor Servicer shall
accept its appointment by a written assumption in a form acceptable to
the Trustee. In the event that a Successor Servicer has not been
appointed or has not accepted its appointment at the time when the
Servicer ceases to act as Servicer, the Trustee without further action
shall automatically be appointed the Successor Servicer. The Trustee
may delegate any of its servicing obligations to an Affiliate or agent
in accordance with Sections 3.01(b) and 8.07. Notwithstanding the
foregoing, the Trustee shall, if it is legally unable or unwilling so
to act, petition a court of competent jurisdiction to appoint any
established institution qualifying as an Eligible Servicer as the
Successor Servicer hereunder. The Trustee shall give prompt notice to
each Rating Agency and each Series Enhancer upon the appointment of a
Successor Servicer.
(b) Upon its appointment, the Successor Servicer shall be the
successor in all respects to the Servicer with respect to servicing
functions under this Agreement and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Servicer by the terms and provisions hereof, and all references in this
Agreement to the Servicer shall be deemed to refer to the Successor
Servicer.
(c) In connection with any Termination Notice, the Trustee will
review any bids which it obtains from Eligible Servicers and shall be
permitted to appoint any Eligible Servicer submitting such a bid as a
Successor Servicer for servicing compensation not in excess of the
aggregate Servicing Fees for all Series plus the sum of the amounts
with respect to each Series and with respect to each Distribution Date
equal to any Collections of Finance Charge Receivables allocable to
Investor Certificateholders of such Series which are payable to the
Holders of the Transferor Certificates after payment of all amounts
owing to the Investor Certificateholders of such Series with respect to
such Distribution Date or required to be deposited in the applicable
Series Accounts with respect to such Distribution Date and any amounts
required to be paid to any Series Enhancer for such Series with respect
to such Distribution Date pursuant to the terms of any Enhancement
Agreement; provided, however, that the Holders of the Transferor
Certificates shall be responsible for payment of their portion of such
aggregate Servicing Fees and all other such amounts in excess of such
aggregate Servicing Fees. Each holder of any of the Transferor's
Certificates agrees that, if CompuCredit (or any Successor Servicer) is
terminated as Servicer hereunder, the portion of the Collections in
respect of Finance Charge Receivables that the Transferor is entitled
to receive pursuant to this Agreement or any Supplement shall be
reduced by an amount sufficient to pay the Transferor's share of the
compensation of the Successor Servicer.
(d) All authority and power granted to the Successor Servicer
under this Agreement shall automatically cease and terminate upon
termination of the Trust pursuant to Section 12.01, and shall pass to
and be vested in the Transferor and, without limitation, the Transferor
is hereby authorized and empowered to execute and deliver, on behalf of
the Successor Servicer, as attorney-in-fact or otherwise, all documents
and other instruments, and to do and accomplish all other acts or
things necessary or appropriate to effect the purposes of such transfer
of servicing rights. The Successor Servicer agrees to cooperate with
the Transferor in effecting the termination of the responsibilities and
rights of the Successor Servicer to conduct servicing of the
Receivables. The Successor Servicer shall transfer its electronic
records relating to the Receivables to the applicable Transferor or its
designee in such electronic form as it may reasonably request and shall
transfer all other records, correspondence and documents to it in the
manner and at such times as it shall reasonably request. To the extent
that compliance with this Section shall require the Successor Servicer
to disclose to CompuCredit information of any kind which the Successor
Servicer deems to be confidential, CompuCredit shall be required to
enter into such customary licensing and confidentiality agreements as
the Successor Servicer shall deem necessary to protect its interests.
Section 10.03. Notification to Certificateholders. Within five Business
Days after the Servicer becomes aware of any Servicer Default, the Servicer
shall give notice thereof to the Trustee, each Rating Agency and each Series
Enhancer and the Trustee shall give notice to the Investor Certificateholders.
Upon any termination or appointment of a Successor Servicer pursuant to this
Article, the Trustee shall give prompt notice thereof to the Investor
Certificateholders.
[END OF ARTICLE X]
ARTICLE XI
THE TRUSTEE
Section 11.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of a Servicer Default of
which a Responsible Officer of the Trustee has actual knowledge and
after the curing of all Servicer Defaults which may have occurred,
undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement and no implied duties or
covenants by the Trustee shall be read into this Agreement. If a
Servicer Default to the actual knowledge of a Responsible Officer of
the Trustee has occurred (which has not been cured or waived) the
Trustee shall exercise such of the rights and powers vested in it by
this Agreement and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) The Trustee may conclusively rely, as to the truth of the
statements and correctness of the opinions expressed therein, upon all
resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to the Trustee pursuant to this
Agreement. The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine
them to determine whether they substantially conform to the
requirements of this Agreement. The Trustee shall give prompt written
notice to the Transferor and the Servicer of any material lack of
conformity of any such instrument to the applicable requirements of
this Agreement discovered by the Trustee which would entitle a
specified percentage of Investor Certificateholders to take any action
pursuant to this Agreement. If within five Business Days the Transferor
or the Servicer shall not have cured such material lack of conformity,
the Trustee shall provide notice of such material lack of conformity to
the Investor Certificateholders.
(c) Subject to paragraph (a), no provision of this Agreement shall
be construed to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct; provided, however, that:
(i) the Trustee shall not be liable for an error of judgment
made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of the Holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid
principal amount of all Investor Certificates (or, with respect to
any such action that does not relate to all Series, 50% of the
aggregate unpaid principal amount of the Investor Certificates of
all Series to which such action relates) relating to the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement; and
(iii) the Trustee shall not be charged with knowledge of any
failure by the Servicer to comply with the obligations of the Servicer
referred to in subsection 10.01 (a) or (b) nor with knowledge of a Pay
Out Event or Reinvestment Event unless a Responsible Officer of the
Trustee obtains actual knowledge of such failure or event or the
Trustee receives written notice of such failure or event from the
Servicer or any Holders of Investor Certificates evidencing not less
than 10% of the aggregate unpaid principal amount of all Investor
Certificates (or, with respect to any such failure that does not relate
to all Series, 10% of the aggregate unpaid principal amount of the
Investors Certificates of all Series to which such failure relates).
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability in the performance of any
of its duties hereunder or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in
this Agreement shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any obligations of the
Servicer under this Agreement except during such time, if any, as the
Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
(e) Except for actions expressly authorized by this Agreement, the
Trustee shall take no actions reasonably likely to impair the interests
of the Trust in any Receivable now existing or hereafter created or to
impair the value of any Receivable now existing or hereafter created.
(f) Except as expressly provided in this Agreement, the Trustee
shall have no power to vary the corpus of the Trust including by (i)
accepting any substitute obligation for a Receivable initially assigned
to the Trust under Section 2.01 or 2.09, (ii) adding any other
investment, obligation or security to the Trust or (iii) withdrawing
from the Trust any Receivables.
(g) In the event that the Paying Agent or the Transfer Agent and
Registrar shall fail to perform any obligation, duty or agreement in
the manner or on the day required to be performed by the Paying Agent
or the Transfer Agent and Registrar, as the case may be, under this
Agreement, the Trustee shall be obligated promptly upon its knowledge
thereof to perform such obligation, duty or agreement in the manner so
required.
Section 11.02. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 11.01:
(a) the Trustee may conclusively rely on and shall be fully
protected in acting on, or in refraining from acting in accordance
with, any resolution, certificate, statement, instrument, Officer's
Certificate, opinion, report, notice, request, consent, order,
appraisal, approval, bond or other paper or document believed by it to
be genuine and to have been signed or presented to it pursuant to this
Agreement by the proper party or parties;
(b) the Trustee may consult with counsel and any advice of counsel
subsequently confirmed in writing or an Opinion of Counsel shall be
full and complete authorization and protection in respect of any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such written advice of counsel or an Opinion of
Counsel;
(c) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto, at
the request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; provided, however, that nothing
contained herein shall relieve the Trustee of the obligations, upon the
occurrence of a Servicer Default (which has not been cured or waived)
to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;
(d) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(e) the Trustee shall not be bound to make any investigation into
the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
appraisal, approval, bond or other paper or document believed by it to
be genuine, unless requested in writing so to do by Holders of Investor
Certificates evidencing more than 25% of the aggregate unpaid principal
amount of all Investor Certificates (or, with respect to any such
matters that do not relate to all Series, 25% of the aggregate unpaid
principal amount of the Investor Certificates of all Series to which
such matters relate); provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses, or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee
may require reasonable indemnity against such cost, expense, or
liability as a condition to so proceed;
(f) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent, attorney, custodian or nominee appointed with due care by it
hereunder;
(g) except as may be required by subsection 11.01(a), the Trustee
shall not be required to make any initial or periodic examination of
any documents or records related to the Receivables or the Accounts for
the purpose of establishing the presence or absence of defects, the
compliance by the Transferor with its representations and warranties or
for any other purpose;
(h) whether or not therein expressly so provided, every provision
of
this Agreement relating to the conduct or affecting the liability of
or affording protection to the Trustee shall be subject to the
provisions of this Section 11.02;
(i) the Trustee shall have no liability with respect to the acts
or omissions of the Servicer (except and to the extent the Servicer is
the Trustee), including, acts or omissions in connection with the
servicing, management or administration of Receivables; calculations
made by the Servicer whether or not reported to the Trustee; and
deposits into or withdrawals from any accounts or funds established
pursuant to the terms of this Agreement; and
(j) in the event that the Trustee is also acting as Paying Agent
or Transfer Agent and Registrar hereunder, the rights and protections
afforded to the Trustee pursuant to this Article XI shall also be
afforded to such Paying Agent, Transfer Agent and Registrar.
Section 11.03. Trustee Not Liable for Recitals in Certificates. The
Trustee assumes no responsibility for the correctness of the recitals contained
herein and in the Certificates (other than the certificate of authentication on
the Certificates). Except as set forth in Section 11.15, the Trustee makes no
representations as to the validity or sufficiency of this Agreement or any
Supplement or of the Certificates (other than the certificate of authentication
on the Certificates) or of any Receivable or related document or as to the
perfection or priority of any security interest therein or as to the efficacy of
the Trust. The Trustee shall not be accountable for the use or application by
the Transferor of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Transferor
in respect of the Receivables or deposited in or withdrawn from the Collection
Account, any Series Accounts or any other accounts hereafter established to
effectuate the transactions contemplated by this Agreement and in accordance
with the terms of this Agreement.
Section 11.04. Trustee May Own Certificates. Subject to any
restrictions that may otherwise be imposed by Section 406 of ERISA or Section
4975(e) of the Code, the Trustee in its individual or any other capacity may
become the owner or pledgee of Investor Certificates with the same rights as it
would have if it were not the Trustee.
Section 11.05. The Servicer To Pay Trustee's Fees and Expenses. The
Servicer covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to receive, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) for all services rendered by it in the execution of the trust
hereby created and in the exercise and performance of any of the powers and
duties hereunder of the Trustee, and the Servicer will pay or reimburse the
Trustee upon its request for all reasonable expenses (including, without
limitation, expenses incurred in connection with notices or other communications
to Certificateholders), disbursements and advances incurred or made by the
Trustee in accordance with any of the provisions of this Agreement or any
Enhancement Agreement (including the reasonable fees and expenses of its agents,
any co-trustee and counsel, the Registrar, the Transfer Agent and the
Authenticating Agent) except any such expense, disbursement or advance as may
arise from its negligence or bad faith and except as provided in the following
sentence. If the Trustee is appointed Successor Servicer pursuant
to Section 10.02, the provisions of this Section shall not apply to expenses,
disbursements and advances made or incurred by the Trustee in its capacity as
Successor Servicer, which shall be paid out of the Servicing Fee. The Servicer's
covenant to pay the expenses, disbursements and advances provided for in this
Section shall survive the termination of this Agreement or the earlier
resignation or removal of the Trustee.
Section 11.06. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States or any state thereof authorized under such laws to
exercise corporate trust powers, have a net worth of at least $50,000,000, be
subject to supervision or examination by Federal or state authority and maintain
any credit or deposit rating required by any Rating Agency (which shall be Baa3,
in the case of ▇▇▇▇▇'▇ unless otherwise notified, and BBB- in the case of
Standard & Poor's unless otherwise notified) or any higher credit or deposit
rating required in connection with the issuance of a particular Series. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 11.07.
Section 11.07. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign and be discharged from the
trust hereby created by giving written notice thereof to the Transferor
and the Servicer. Upon receiving such notice of resignation, the
Transferor shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 11.06 and shall fail to
resign after request therefor by the Servicer, or if at any time the
Trustee shall be legally unable to act, or shall be adjudged a bankrupt
or insolvent, or if a receiver of the Trustee or of its property shall
be appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Servicer may
remove the Trustee and promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor
trustee.
(c) Any resignation or removal of the Trustee and appointment of
successor trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the
successor trustee as provided in Section 11.08.
(d) No Trustee under this Agreement shall be personally liable for
any action or omission of any successor trustee.
Section 11.08. Successor Trustee.
(a) Any successor trustee appointed as provided in Section 11.07
shall execute, acknowledge and deliver to the Transferor, to the
Servicer and to its predecessor Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee herein.
The predecessor Trustee shall deliver, at the expense of the Servicer,
to the successor trustee all documents or copies thereof and statements
held by it hereunder; and the Transferor and the predecessor Trustee
shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of Section 11.06.
(c) Notwithstanding any other provisions herein, the appointment
of a successor trustee shall not be effective unless the Rating Agency
Condition shall have been satisfied.
(d) Upon acceptance of appointment by a successor trustee as
provided in this Section, such successor trustee shall provide notice
of such succession hereunder to all Certificateholders and the Servicer
shall provide such notice to each Rating Agency and each Series
Enhancer.
Section 11.09. Merger or Consolidation of Trustee. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, provided such corporation shall be eligible under the
provisions of Section 11.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 11.10. Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any Requirements of Law of any
jurisdiction in which any part of the Trust may at the time be located,
the Trustee shall have the power and may execute and deliver all
instruments to appoint one or more persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any
part of the Trust, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to
the Trust, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and
trusts as the Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the
terms of eligibility as a successor trustee under Section 11.06 and no
notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 11.08.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee
or co-trustee is not authorized to act separately without the
Trustee joining in such act) except to the extent that under any
law of any jurisdiction in which any particular act or acts are to
be performed (whether as Trustee hereunder or as Successor
Servicer) the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall
refer to this Agreement and the conditions of this Article. Each
separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or
separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee and a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time constitute
the Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act
under or in respect of this Agreement on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of
acting, resign or be removed, all its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Trustee, to
the extent permitted by law, without the appointment of a new or
successor trustee.
Section 11.11. Tax Returns. In the event the Trust shall be required to
file tax returns, the Servicer shall prepare or shall cause to be
prepared such tax returns and shall provide such tax returns to the Trustee for
signature at least five days before such tax returns are due to be filed. The
Servicer, in accordance with the terms of each Supplement, shall also prepare or
shall cause to be prepared all tax information required by law to be distributed
to Investor Certificateholders and shall deliver such information to the Trustee
at least five days prior to the date it is required by law to be distributed to
Investor Certificateholders. The Trustee, upon request, will furnish the
Servicer with all such information known to the Trustee as may be reasonably
required in connection with the preparation of all tax returns of the Trust, and
shall, upon request, execute such returns. In no event shall the Trustee be
liable for any liabilities, costs or expenses of the Trust or any
Certificateholder arising under any tax law, including without limitation,
federal, state or local income or excise taxes or any other tax imposed on or
measured by income (or any interest or penalty with respect thereto arising from
a failure to comply therewith).
Section 11.12. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.
Section 11.13. Suits for Enforcement.
(a) If a Servicer Default shall occur and be continuing, the
Trustee, in its discretion may, subject to the provisions of Sections
11.01 and 11.14, proceed to protect and enforce its rights and the
rights of the Certificateholders under this Agreement by suit, action
or proceeding in equity or at law or otherwise, whether for the
specific performance of any covenant or agreement contained in this
Agreement or in aid of the execution of any power granted in this
Agreement or for the enforcement of any other legal, equitable or other
remedy as the Trustee, being advised by counsel, shall deem most
effectual to protect and enforce any of the rights of the Trustee or
the Certificateholders.
(b) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Certificateholder any plan of reorganization, arrangement, adjustment
or composition affecting the Investor Certificates or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the
claim of any Certificateholder in any such proceeding.
Section 11.14. Rights of Certificateholders To Direct Trustee. Except
as otherwise provided in the applicable Supplement, holders of Investor
Certificates evidencing more than 50% of the aggregate unpaid principal amount
of all Investor Certificates (or, with respect to any remedy, trust or power
that does not relate to all Series, 50% of the aggregate unpaid principal amount
of the Investor Certificates of all Series to which such remedy, trust or power
relates) shall have the right to direct the time, method, and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided, however, that,
subject to Section 11.01, the Trustee shall have the right to decline to follow
any such direction if the Trustee after being advised by counsel determines that
the action so directed may not lawfully be taken, or if a Responsible Officer or
Officers of the Trustee in good faith shall determine that the proceedings so
directed would be illegal or involve it in personal liability or be unduly
prejudicial to the rights of Investor Certificateholders not parties to such
direction; and provided further, that nothing in this Agreement shall impair the
right of the Trustee to take any action deemed proper by the Trustee and which
is not inconsistent with such direction of the Investor Certificateholders.
Section 11.15. Representations and Warranties of Trustee. The Trustee
represents and warrants that:
(i) the Trustee is a banking corporation organized and
existing under the laws of the State of New York;
(ii) the Trustee has full power and authority to execute,
deliver and perform this Agreement and each Supplement, and has
taken all necessary action to authorize the execution, delivery
and performance by it of this Agreement and each Supplement;
(iii) this Agreement and each Supplement has been duly
executed and delivered by the Trustee; and
(iv) the Trustee meets the eligibility requirements set forth
in Section 11.06.
Section 11.16. Maintenance of Office or Agency. The Trustee will
maintain at its expense the Corporate Trust Office where notices and demands to
or upon the Trustee in respect of the Certificates and this Agreement may be
served in the State of New York. The Trustee will give prompt notice to the
Servicer and to Investor Certificateholders of any change in the location of the
Certificate Register or the Corporate Trust Office.
[END OF ARTICLE XI]
ARTICLE XII
TERMINATION
Section 12.01. Termination of Trust. The Trust and the respective
obligations and responsibilities of the Transferor, the Servicer and the Trustee
created hereby (other than the obligation of the Trustee to make payments to
Investor Certificateholders as hereinafter set forth) shall terminate, except
with respect to the duties described in Section 8.04 and subsection 12.02(b),
upon the earlier of (i) August 29, 2018, (ii) at the option of the Transferor,
the day following the Distribution Date on which the Invested Amount for every
Series is zero and all amounts in respect of interest on all Certificates shall
have been paid and (iii) the time provided in Section 9.01.
Section 12.02. Final Distribution.
(a) The Servicer shall give the Trustee at least 30 days' prior
notice of the Distribution Date on which the Investor
Certificateholders of any Series or Class may surrender their Investor
Certificates for payment of the final distribution on and cancellation
of such Investor Certificates (or, in the event of a final distribution
resulting from the application of Section 2.06, 9.01 or 10.01, notice
of such Distribution Date promptly after the Servicer has determined
that a final distribution will occur, if such determination is made
less than 30 days prior to such Distribution Date). Such notice shall
be accompanied by an Officer's Certificate setting forth the
information specified in Section 3.05 covering the period during the
then-current calendar year through the date of such notice. Not later
than the fifth day of the month in which the final distribution in
respect of such Series or Class is payable to Investor
Certificateholders, the Trustee shall provide notice to Investor
Certificateholders of such Series or Class specifying (i) the date upon
which final payment of such Series or Class will be made upon
presentation and surrender of Investor Certificates of such Series or
Class at the office or offices therein designated, (ii) the amount of
any such final payment and (iii) that the Record Date otherwise
applicable to such payment date is not applicable, payments being made
only upon presentation and surrender of such Investor Certificates at
the office or offices therein specified (which, in the case of Bearer
Certificates, shall be outside the United States). The Trustee shall
give such notice to the Transfer Agent and Registrar and the Paying
Agent at the time such notice is given to Investor Certificateholders.
(b) Notwithstanding a final distribution to the Investor
Certificateholders of any Series or Class (or the termination of the
Trust), except as otherwise provided in this paragraph, all funds then
on deposit in the Collection Account and any Series Account allocated
to such Investor Certificateholders shall continue to be held in trust
for the benefit of such Investor Certificateholders and the Paying
Agent or the Trustee shall pay such funds to such Investor
Certificateholders upon surrender of their Investor Certificates, if
certificated (and any excess shall be paid in accordance with the terms
of any Enhancement Agreement). In the event that all such Investor
Certificateholders shall not surrender their Investor Certificates for
cancellation within six months after the date specified in the notice
from the Trustee described in paragraph (a), the Trustee shall give a
second notice to
the remaining such Investor Certificateholders to surrender their
Investor Certificates for cancellation and receive the final
distribution with respect thereto (which surrender and payment, in the
case of Bearer Certificates, shall be outside the United States). If
within one year after the second notice all such Investor Certificates
shall not have been surrendered for cancellation, the Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining such Investor Certificateholders concerning
surrender of their Investor Certificates, and the cost thereof shall be
paid out of the funds in the Collection Account or any Series Account
held for the benefit of such Investor Certificateholders. The Trustee
and the Paying Agent shall pay to the Transferor any monies held by
them for the payment of principal or interest that remains unclaimed
for two years. After payment to the Transferor, Investor
Certificateholders entitled to the money must look to the Transferor
for payment as general creditors unless an applicable abandoned
property law designates another Person.
(c) In the event that the Invested Amount with respect to any
Series is greater than zero on its Series Termination Date (after
giving effect to deposits and distributions otherwise to be made on
such Series Termination Date) the Trustee will sell or cause to be sold
on such Series Termination Date an amount of Principal Receivables (or
interests therein) equal to 100% of the Invested Amount with respect to
such Series on such Series Termination Date plus related Finance Charge
Receivables (after giving effect to such deposits and distributions);
provided, however, that in no event shall such amount exceed the Series
Allocation Percentage of Receivables with respect to such Series on
such Series Termination Date. The proceeds (the "Termination Proceeds")
from such sale shall be immediately deposited into the Collection
Account for such Series. The Termination Proceeds shall be allocated
and distributed to Investor Certificateholders of such Series in
accordance with the terms of the applicable Supplement.
Section 12.03. Transferor's Termination Rights. Upon the termination of
the Trust pursuant to Section 12.01 and the surrender of the Transferor
Certificates, the Trustee shall transfer, assign and convey to the Holders of
the Transferor Certificates or any of their designees, without recourse,
representation or warranty, all right, title and interest of the Trust in the
Receivables, whether then existing or thereafter created, all monies due or to
become due and all amounts received with respect thereto (including all moneys
then held in the Collection Account or any Series Account) and all proceeds
thereof, except for amounts held by the Trustee pursuant to subsection 12.02(b).
The Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, as shall be reasonably requested by
the Transferor to vest in the Holders of the Transferor Certificates or any of
their designees all right, title and interest which the Trust had in the
Receivables.
Section 12.04 Defeasance.
Notwithstanding anything to the contrary in this Agreement or any
Supplement:
(a) The Transferor may at its option be discharged from its
obligations with respect to all of the Investor Certificates issued by
the
Trust or any specified Series thereof on the date the applicable
conditions set forth in Section 12.04(c) are satisfied ("Defeasance");
provided, however, that the following rights, obligations, powers,
duties and immunities shall survive until otherwise terminated or
discharged hereunder: (A) the rights of Holders of Investor
Certificates of the Trust or any specified Series thereof to receive,
solely from the trust fund provided for in Section 12.04(c), payments
in respect of principal of and interest on such Investor Certificates
when such payments are due; (B) the Transferor's obligations with
respect to such Series of Certificates under Sections 6.03, 6.04 and
12.02; (C) the rights, powers, trusts, duties and immunities of the
Trustee, the Paying Agent and the Transfer Agent and Registrar
hereunder; and (D) this Section 12.04.
(b) Subject to Section 12.04(c), the Transferor at its option may
use Collections to purchase Permitted Investments rather than
additional Receivables for transfer to the Trust until such time as no
Receivables remain in the Trust.
(c) The following shall be the conditions to Defeasance under
Section 12.04(a): (1) the Transferor irrevocably shall have deposited
or caused to be deposited with the Trustee, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds in trust for making the payments described
below (A) Dollars in an amount, or (B) Permitted Investments which
through the scheduled payment of principal and interest in respect
thereof will provide, not later than the due date of payment thereon,
money in an amount, or (C) a combination thereof, in each case
sufficient to pay and discharge, and, which shall be applied by the
Trustee to pay and discharge, all remaining scheduled interest and
principal payments on all outstanding Investor Certificates of the
Trust or any specified Series thereof on the dates scheduled for such
payments in this Agreement and the applicable Supplements and all
amounts owed to the enhancement provider pursuant to any Enhancement
Agreement for any Series if so provided in the related Supplements or
agreements with such Provider; (2) prior to its first exercise of its
right to substitute money or Permitted Investments for Receivables, the
Transferor shall deliver to the Trustee (x) an Opinion of Counsel to
the effect that such deposit and termination of obligations will not
result in the Trust being required to register as an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended, and (y) an Opinion of Counsel with respect to such deposit and
termination to the effect that it will not cause the Trust or any
portion thereof to be treated as an association or publicly traded
partnership taxable as a corporation; and (3) such deposit and
termination of obligations will not result in a Pay Out Event for any
Series.
[END OF ARTICLE XII]
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01. Amendment; Waiver of Past Defaults.
(a) This Agreement may be amended by the parties hereto from time
to time prior to, or in connection with, the issuance of the first
Series of Investor Certificates hereunder without the requirement of
any consents or the satisfaction of any conditions set forth below.
This Agreement or any Supplement may be amended from time to time
(including in connection with the issuance of a Supplemental
Certificate, conveyance of a Participation Interest, allocation of
assets pursuant to Section 4.06, the designation of an Additional
Transferor, or to change the definition of Monthly Period,
Determination Date or Distribution Date) by the Servicer, the
Transferor and the Trustee, by a written instrument signed by each of
them, without the consent of any of the Certificateholders, provided
that (i) an Opinion of Counsel for the Transferor (which Opinion of
Counsel may, as to factual matters, rely upon Officer's Certificates of
the Transferor or the Servicer) is addressed and delivered to the
Trustee, dated the date of any such amendment, to the effect that the
conditions precedent to any such amendment have been satisfied, (ii)
the Transferor shall have delivered to the Trustee an Officer's
Certificate, dated the date of any such Amendment, stating that the
Transferor reasonably believes that such amendment will not have an
Adverse Effect and (iii) the Rating Agency Condition shall have been
satisfied with respect to any such amendment; provided, however, that
any such amendment to enable all or a portion of the Trust to qualify
as, and to permit an election to be made to cause the Trust to be
treated as a "financial asset securitization investment trust" under
the Internal Revenue Code (and, in connection with any such election,
to modify or eliminate existing provisions relating to the intended
Federal income tax treatment of the Certificates and the Trust) may be
made upon satisfaction of the Rating Agency Condition with respect to
such amendment without more.
(b) This Agreement or any Supplement may also be amended from time
to time (including in connection with the issuance of a Supplemental
Certificate) by the Servicer, the Transferor and the Trustee, with the
consent of the Holders of Investor Certificates evidencing not less
than 66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of all affected Series for which the Transferor has not
delivered an Officer's Certificate stating that there is no Adverse
Effect, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or any
Supplement or of modifying in any manner the rights of the
Certificateholders; provided, however, that no such amendment shall (i)
reduce in any manner the amount of or delay the timing of any
distributions to (changes in Pay Out Events or Reinvestment Events that
decrease the likelihood of the occurrence thereof shall not be
considered delays in the timing of distributions for purposes of this
clause) be made to Investor Certificateholders or deposits of amounts
to be so distributed or the amount available under any Series
Enhancement without the consent of each affected Certificateholder,
(ii) change the definition of or the manner of calculating the interest
of any Investor Certificateholder without the consent of each affected
Investor Certificateholder, (iii) reduce the aforesaid percentage
required to consent to any such amendment without the consent of each
Investor
Certificateholder or (iv) adversely affect the rating of any Series
or Class by each Rating Agency without the consent of the Holders of
Investor Certificates of such Series or Class evidencing not less than
66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of such Series or Class.
(c) Promptly after the execution of any such amendment or consent
(other than an amendment pursuant to paragraph (a)), the Trustee shall
furnish notification of the substance of such amendment to each
Investor Certificateholder, and the Servicer shall furnish notification
of the substance of such amendment to each Rating Agency and each
Series Enhancer.
(d) It shall not be necessary for the consent of Investor
Certificateholders under this Section to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof
by Investor Certificateholders shall be subject to such reasonable
requirements as the Trustee may prescribe.
(e) Notwithstanding anything in this Section to the contrary, no
amendment may be made to this Agreement or any Supplement which would
adversely affect in any material respect the interests of any Series
Enhancer without the consent of such Series Enhancer.
(f) Any Supplement executed in accordance with the provisions of
Section 6.03 shall not be considered an amendment to this Agreement for
the purposes of this Section.
(g) The Holders of Investor Certificates evidencing more than
66-2/3% of the aggregate unpaid principal amount of the Investor
Certificates of each Series or, with respect to any Series with two or
more Classes, of each Class (or, with respect to any default that does
not relate to all Series, 66-2/3% of the aggregate unpaid principal
amount of the Investor Certificates of each Series to which such
default relates or, with respect to any such Series with two or more
Classes, of each Class) may, on behalf of all Certificateholders, waive
any default by the Transferor or the Servicer in the performance of
their obligations hereunder and its consequences, except the failure to
make any distributions required to be made to Investor
Certificateholders or to make any required deposits of any amounts to
be so distributed. Upon any such waiver of a past default, such default
shall cease to exist, and any default arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any
right consequent thereon except to the extent expressly so waived.
(h) The Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Trustee's rights, duties or immunities
under this Agreement or otherwise. In connection with the execution of
any amendment hereunder, the Trustee shall be entitled to receive the
Opinion of Counsel described in subsection 13.02(d).
Section 13.02. Protection of Right, Title and Interest to Trust.
(a) The Servicer shall cause this Agreement, all amendments and
supplements hereto and all financing statements and continuation
statements and any other necessary documents covering the
Certificateholders' and the Trustee's right, title and interest to the
Trust to be promptly recorded, registered and filed, and at all times
to be kept recorded, registered and filed, all in such manner and in
such places as may be required by law fully to preserve and protect the
right, title and interest of the Certificateholders and the Trustee
hereunder to all property comprising the Trust. The Servicer shall
deliver to the Trustee file-stamped copies of, or filing receipts for,
any document recorded, registered or filed as provided above, as soon
as available following such recording, registration or filing. The
Transferor shall cooperate fully with the Servicer in connection with
the obligations set forth above and will execute any and all documents
reasonably required to fulfill the intent of this paragraph.
(b) Within 30 days after any Transferor makes any change in its
name, identity or corporate structure which would make any financing
statement or continuation statement filed in accordance with paragraph
(a) seriously misleading within the meaning of Section 9-402(7) (or any
comparable provision) of the UCC, such Transferor shall give the
Trustee notice of any such change and shall file such financing
statements or amendments as may be necessary to continue the perfection
of the Trust's security interest or ownership interest in the
Receivables and the proceeds thereof.
(c) Each Transferor and the Servicer shall give the Trustee prompt
notice of any relocation of any office from which it services
Receivables (or the underlying receivables) or keeps records concerning
the Receivables (or the underlying receivables) or of its principal
executive office and whether, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement
or of any new financing statement and shall file such financing
statements or amendments as may be necessary to perfect or to continue
the perfection of the Trust's security interest in the Receivables and
the proceeds thereof. Each Transferor and the Servicer shall at all
times maintain each office from which it services Receivables and its
principal executive offices within the United States.
(d) The Servicer shall deliver to the Trustee (i) upon the
execution and delivery of each amendment of this Agreement or any
Supplement, an Opinion of Counsel to the effect specified in Exhibit
C-1; (ii) semiannually, with respect to Automatic Additional Accounts
included as Accounts, an Opinion of Counsel substantially in the form
of Exhibit C-2, (iii) on each Addition Date on which any Participation
Interests are to be included in the Trust pursuant to subsection
2.09(b), an Opinion of Counsel covering the same substantive legal
issues addressed by Exhibits C-1 and C-2 but conformed to the extent
appropriate to relate to Participation Interests; and (iv) on or before
March 31 of each year, beginning with March 31, 1998, an Opinion of
Counsel substantially in the form of Exhibit C-3.
Section 13.03. Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor shall such death
or incapacity entitle such Certificateholder's legal representatives or
heirs to
claim an accounting or to take any action or commence any proceeding in
any court for a partition or winding up of the Trust, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or
any of them.
(b) No Investor Certificateholder shall have any right to vote
(except as expressly provided in this Agreement) or in any manner
otherwise control the operation and management of the Trust, or the
obligations of the parties hereto, nor shall anything herein set forth
or contained in the terms of the Certificates, be construed so as to
constitute the Investor Certificateholders from time to time as
partners or members of an association, nor shall any Investor
Certificateholder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to any
provision hereof.
(c) No Investor Certificateholder shall have any right by virtue
of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Investor Certificateholder previously shall have
made, and unless the Holders of Investor Certificates evidencing more
than 50% of the aggregate unpaid principal amount of all Investor
Certificates (or, with respect to any such action, suit or proceeding
that does not relate to all Series, 50% of the aggregate unpaid
principal amount of the Investor Certificates of all Series to which
such action, suit or proceeding relates) shall have made, a request to
the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 60
days after such request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Investor Certificateholder with every other Investor Certificateholder
and the Trustee, that no one or more Investor Certificateholders shall
have any right in any manner whatever by virtue or by availing itself
or themselves of any provisions of this Agreement to affect, disturb or
prejudice the rights of the holders of any other of the Investor
Certificates, or to obtain or seek to obtain priority over or
preference to any other such Investor Certificateholder, or to enforce
any right under this Agreement, except in the manner herein provided
and for the equal, ratable and common benefit of all Investor
Certificateholders except as otherwise expressly provided in this
Agreement. For the protection and enforcement of the provisions of this
Section, each and every Investor Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in
equity.
Section 13.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 13.05. Notices; Payments.
(a) All demands, notices, instructions, directions and
communications (collectively, "Notices") under this Agreement shall be
in writing and shall be deemed to have been duly given if personally
delivered at, mailed by registered mail, return receipt requested, or
sent by facsimile transmission
(i) in the case of the Transferor, to:
CompuCredit Funding Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
CompuCredit Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇)
(ii) in the case of the Servicer to:
CompuCredit Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇)
(iii) in the case of the Trustee, the Paying Agent or
Transfer Agent and Registrar, to:
Bankers Trust Company
Corporate Trust and Agency Group
Four ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance Group, 10th Floor
(facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇)
(iv) in the case of Moody's, to ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ABS ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
(facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇), (v) in the case of Standard &
Poor's, to ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset
Backed Group, 15th Floor (facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇),
(vi) in the case of Fitch, to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, Attention: Structured Finance Department
(facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇), and
(vii) to any other Person as specified in any Supplement; or,
as to each party, at such other address or facsimile number as
shall be designated by such party in a written notice to each
other party.
(b) Any Notice required or permitted to be given to a Holder of
Registered Certificates shall be given by first-class mail, postage
prepaid, at the address of such Holder as shown in the Certificate
Register. No Notice shall be required to be mailed to a Holder of
Bearer Certificates or Coupons but shall be given as provided below.
Any Notice so mailed within the time prescribed in this Agreement shall
be conclusively presumed to have been duly given, whether or not the
Investor Certificateholder receives such Notice. In addition, (a) if
and so long as any Series or Class is listed on the Luxembourg Stock
Exchange and such Exchange shall so require, any Notice to Investor
Certificateholders shall be published in an Authorized Newspaper of
general circulation in Luxembourg within the time period prescribed in
this Agreement and (b) in the case of any Series or Class with respect
to which any Bearer Certificates are outstanding, any Notice required
or permitted to be given to Investor Certificateholders of such Series
or Class shall be published in an Authorized Newspaper within the time
period prescribed in this Agreement.
Section 13.06. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such provisions shall be deemed
severable from the remaining provisions of this Agreement and shall in no way
affect the validity or enforceability of the remaining provisions or of the
Certificates or the rights of the Certificateholders.
Section 13.07. Certificates Nonassessable and Fully Paid. It is the
intention of the parties to this Agreement that the Certificateholders shall not
be personally liable for obligations of the Trust, that the interests in the
Trust represented by the Certificates shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever and that the Certificates
upon authentication and delivery thereof by the Trustee pursuant to Section 6.02
are and shall be deemed fully paid.
Section 13.08. Further Assurances. The Transferor and the Servicer
agree to do and perform, from time to time, any and all acts and to execute any
and all further instruments required or reasonably requested by the Trustee more
fully to effect the purposes of this Agreement, including the execution of any
financing statements or continuation statements relating to the Receivables for
filing under the provisions of the UCC of any applicable jurisdiction.
Section 13.09. Nonpetition Covenant. Notwithstanding any prior
termination of this Agreement, the Investor Certificateholders, the Servicer,
the Trustee, the Transferor, the Paying Agent, the authenticating agent, the
Transfer Agent, the Registrar, the Series Enhancers and each Holder of a
Supplemental Certificate shall not, prior to the date which is one year and one
day after the termination of this Agreement with respect to the Trust or the
Transferor, acquiesce, petition or otherwise invoke or cause the Trust or the
Transferor to invoke the process of any Governmental Authority for the purpose
of commencing or sustaining a case against the Trust or the Transferor under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Trust or the Transferor or any substantial part of its property or
ordering the winding-up or liquidation of the affairs of the Trust or the
Transferor.
Section 13.10. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Trustee or the
Certificateholders, any right, remedy, power or privilege under this Agreement
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges provided under this
Agreement are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
Section 13.11. Counterparts. This Agreement may be executed in two or
more counterparts (and by different parties on separate counterparts), each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
Section 13.12. Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Certificateholders,
any Series Enhancer and their respective successors and permitted assigns.
Except as otherwise expressly provided in this Agreement (including Section
7.04), no other Person will have any right or obligation hereunder.
Section 13.13. Actions by Certificateholders.
(a) Wherever in this Agreement a provision is made that an action
may be taken or a Notice given by Certificateholders, such action or
Notice may be taken or given by any Certificateholder, unless such
provision requires a specific percentage of Certificateholders.
(b) Any Notice, request, authorization, direction, consent, waiver
or other act by the Holder of a Certificate shall bind such Holder and
every subsequent Holder of such Certificate and of any Certificate
issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done or omitted to
be done by the Trustee or the Servicer in reliance thereon, whether or
not notation of such action is made upon such Certificate.
Section 13.14. Rule 144A Information. For so long as any of the
Investor Certificates of any Series or Class are "restricted securities" within
the meaning of Rule 144(a)(3) under the Act, each of the Transferor, the
Trustee, the Servicer and any Series Enhancer agree to cooperate with each other
to provide to any Investor Certificateholders of such Series or Class and to any
prospective purchaser of Certificates designated by such an Investor
Certificateholder, upon the request of such Investor Certificateholder or
prospective purchaser, any information required to be provided to such holder or
prospective purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act.
Section 13.15. Merger and Integration. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
Section 13.16. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
[END OF ARTICLE XIII]
IN WITNESS WHEREOF, the Transferor, the Servicer and the Trustee have
caused this Pooling and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
COMPUCREDIT FUNDING CORP.,
Transferor,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
COMPUCREDIT CORPORATION,
Servicer,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
BANKERS TRUST COMPANY,
Trustee
by /s/ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
Title: Vice President
EXHIBIT A
FORM OF TRANSFEROR CERTIFICATE
THIS TRANSFEROR CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NEITHER THIS TRANSFEROR CERTIFICATE NOR
ANY PORTION HEREOF MAY BE OFFERED OR SOLD EXCEPT IN COMPLIANCE WITH THE
REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM SUCH REGISTRATION PROVISIONS.
THIS TRANSFEROR CERTIFICATE IS NOT PERMITTED TO BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED EXCEPT IN COMPLIANCE
WITH THE TERMS OF THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.
No. R-1 One Unit
CompuCredit Card Master Trust
TRANSFEROR CERTIFICATE
THIS CERTIFICATE REPRESENTS AN INTEREST
IN CERTAIN ASSETS OF THE
COMPUCREDIT CREDIT CARD MASTER TRUST
Evidencing an interest in a trust, the corpus of which consists primarily of
an interest in receivables generated from time to time in the ordinary course
of business in a portfolio of revolving credit card accounts transferred by
CompuCredit Funding Corp. (the "Transferor").
(Not an interest in or obligation of the Transferor
or any affiliate thereof)
This certifies that COMPUCREDIT FUNDING CORP. is the registered
owner of a fractional interest in the assets of a trust (the "Trust") not
allocated to the Certificateholders' Interest or the interest of any Holder
of a Supplemental Certificate pursuant to the Pooling and Servicing Agreement
dated as of , 1997 (as amended and supplemented, the
"Agreement"), among CompuCredit Funding Corp., a Georgia corporation, as
Transferor, CompuCredit Corporation, as servicer (the "Servicer"), and
Bankers Trust Company, a New York banking corporation, as trustee (the
"Trustee"). The corpus of the Trust consists of (i) the transferor's
fractional undivided interest in a portfolio of certain receivables (the
"Receivables") existing in the revolving credit card accounts identified
under the Agreement from time to time (the "Accounts"), (ii) certain
Receivables generated under the Accounts from time to time thereafter, (iii)
certain funds collected or to be collected from accountholders in respect of
the Receivables, (iv) all funds which are from time to time on deposit in the
Collection Account, Special Funding Account and in the Series Accounts, (v)
the benefits of any Series Enhancements issued and to be issued by Series
Enhancers with respect to one or more Series of Investor Certificates and
(vi) all other assets and
A-1
interests constituting the Trust, including Interchange and Recoveries
allocated to the Trust pursuant to the Agreement and any Supplement. Although
a summary of certain provisions of the Agreement is set forth below, this
Certificate does not purport to summarize the Agreement and reference is made
to the Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee. A copy of the Agreement may be
requested from the Trustee by writing to the Trustee at the Corporate Trust
Office. To the extent not defined herein, the capitalized terms used herein
have the meanings ascribed to them in the Agreement.
This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement, as amended and
supplemented from time to time, the Transferor by virtue of the acceptance
hereof assents and is bound.
The Receivables consist of Principal Receivables which arise
generally from the purchase of merchandise and services and amounts advanced
to cardholders as cash advances and Finance Charge Receivables which
arise generally from Periodic Rate Finance Charges, Late Fees and other fees
and charges with respect to the Accounts.
This Certificate is the Transferor Certificate, which represents
the Transferor's interest in certain assets of the Trust, including the right
to receive a portion of the Collections and other amounts at the times and in
the amounts specified in the Agreement. The aggregate interest represented by
the Transferor Certificate at any time in the Receivables in the Trust shall
not exceed the Transferor's Interest at such time. In addition to the
Transferor Certificate, (i) Investor Certificates will be issued to investors
pursuant to the Agreement, which will represent the Certificateholders'
Interest, and (ii) Supplemental Certificates may be issued pursuant to the
Agreement, which will represent that portion of the Transferor's Interest not
allocated to the Transferor. This Transferor Certificate shall not represent
any interest in the Collection Account, the Special Funding Account or the
Series Accounts, except as expressly provided in the Agreement, or any Series
Enhancements.
Unless otherwise specified in a Supplement with respect to a
particular Series, the Transferor has entered into the Agreement, and this
Certificate is issued, with the intention that, for federal, state and local
income and franchise tax purposes, (i) the Investor Certificates of each
Series which are characterized as indebtedness at the time of their issuance
will qualify as indebtedness of the Transferor secured by the Receivables and
(ii) the Trust shall not be treated as an association taxable as a
corporation. The Transferor, by entering into the Agreement and by the
acceptance of this Transferor Certificate, agrees to treat the Investor
Certificates for federal, state and local income and franchise tax purposes
as indebtedness of the Transferor.
A-2
Subject to certain conditions and exceptions specified in the
Agreement, the obligations created by the Agreement and the Trust created
thereby shall terminate upon the earlier of (i) , 2018, (ii) the day
following the Distribution Date on which the Invested Amount and any amounts
required to be paid pursuant to any Enhancement Agreement for each Series is
zero (provided the Transferor has delivered a written notice to the Trustee
electing to terminate the Trust) and (iii) the time provided in Section 9.01
of the Agreement.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement or be valid for any
purpose.
IN WITNESS WHEREOF, the Transferor has caused this Certificate to
be duly executed.
COMPUCREDIT FUNDING CORP.
By
----------------------
Name:
Title:
Dated: [ , ]
----------- -- ----
A-3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Transferor Certificate described in the within-mentioned
Agreement.
---------------------------,
as Trustee,
By
------------------------
Authorized Signatory
or
By [ ]
--------------------------,
as Authenticating Agent
for the Trustee,
By
------------------------
Authorized Signatory
A-4
EXHIBIT B
FORM OF ANNUAL SERVICER'S CERTIFICATE
(To be delivered on or before March 31 of
each calendar year beginning with March 31, 1998,
pursuant to Section 3.05 of the Pooling and
Servicing Agreement referred to below)
COMPUCREDIT CORPORATION
COMPUCREDIT CREDIT CARD MASTER TRUST
The undersigned, a duly authorized representative of CompuCredit
Corporation, as Servicer ("CompuCredit"), pursuant to the Pooling and
Servicing Agreement dated as of , 1997 (as supplemented, the
"Agreement"), among CompuCredit Funding Corp., as transferor, CompuCredit,
and Bankers Trust Company, a New York banking corporation, as Trustee, does
hereby certify that:
1. CompuCredit is, as of the date hereof, the Servicer under the
Agreement. Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement.
2. The undersigned is a Servicing Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate to the
Trustee.
3. A review of the activities of the Servicer during the year
ended December 31, , and of its performance under the Agreement was
conducted under my supervision.
4. Based on such review, the Servicer has, to the best of my
knowledge, performed in all material respects its obligations under the
Agreement throughout such year and no default in the performance of such
obligations has occurred or is continuing except as set forth in paragraph 5
below.
5. The following is a description of each default in the
performance of the Servicer's obligations under the provisions of the
Agreement known to me to have been made by the Servicer during the year ended
December 31, which sets forth in detail (i) the nature of each such
default, (ii) the action taken by the Servicer, if any, to remedy each such
default and (iii) the current status of each such default: [If applicable,
insert "None."]
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this day of , 19 .
COMPUCREDIT CORPORATION,
Servicer,
By
----------------------
Name:
B-1
Title:
B-2
EXHIBIT C-1
FORM OF OPINION OF COUNSEL
WITH RESPECT TO AMENDMENTS
Provisions to be included in
Opinion of Counsel to be delivered pursuant
to Section 13.02(d) (i)
-----------------------
The opinions set forth below may be subject to all the
qualifications, assumptions, limitations and exceptions taken or made in the
Opinions of Counsel delivered on any applicable Closing Date.
(i) The amendment to the Pooling and Servicing Agreement,
Supplement, attached hereto as Schedule 1 (the "Amendment"), has been
duly authorized, executed and delivered by the Transferor and
constitutes the legal, valid and binding agreement of the Transferor,
enforceable in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws from time to time in effect affecting
creditors' rights generally. The enforceability of the Transferor's
obligations is also subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity
or at law)
(ii) The Amendment has been entered into in accordance with the
terms and provisions of Section 13.01 of the Pooling and Servicing
Agreement.
C-1
EXHIBIT C-2
FORM OF OPINION OF COUNSEL
WITH RESPECT TO ACCOUNTS
Provisions to be included in
Opinion of Counsel to be
delivered pursuant to
subsection 13.02(d)(ii) Or (iii)
The opinions set forth below may be subject to all the
qualifications, assumptions, limitations and exceptions taken or made in the
Opinions of Counsel delivered on any applicable Closing Date.
1. Except for any Receivable that is evidenced by an instrument,
the Receivables constitute either general intangibles or accounts under
Article 9 of the UCC.
2. The Pooling and Servicing Agreement creates in favor of the
Trustee a security interest in the rights of the relevant Transferor in such
of the Receivables identified in Schedule 1 to the Pooling and Servicing
Agreement as constitute accounts. To the extent that such security interest
is not an interest of a buyer of accounts, then the Pooling and Servicing
Agreement creates in favor of the Trustee a security interest in the rights
of such Transferor in the proceeds of such Receivables.
3. To the extent that transactions contemplated by the Pooling and
Servicing Agreement do not constitute a sale by the relevant Transferor to
the Trustee of such of the Receivables as constitute general intangibles or
the proceeds thereof, the Pooling and Servicing Agreement creates in favor of
the Trustee a security interest in the rights of such Transferor in such of
the Receivables as constitute general intangibles and the proceeds thereof.
4. The Receivables Purchase Agreement creates in favor of the
Transferor a security interest in the rights of CompuCredit Corporation in
such of the Receivables identified in Schedule 1 to the Receivables Purchase
Agreements as constitute accounts.
5. To the extent that transactions contemplated by the Receivables
Purchase Agreements do not constitute a sale by CompuCredit Corporation to
the Transferor of such of the Receivables as constitute general intangibles
or the proceeds thereof, the Receivables Purchase Agreements create in favor
of the Transferor a security interest in the rights of CompuCredit
C-2-1
Corporation in such of the Receivables as constitute general intangibles and
the proceeds thereof.
6. The security interests described in paragraphs 2, 3, 4 and 5
above are perfected and of first priority.
C-2-2
EXHIBIT C-3
PROVISIONS TO BE INCLUDED IN
ANNUAL OPINION OF COUNSEL
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the Opinions of
Counsel delivered on any applicable Closing Date. Unless otherwise
indicated, all capitalized terms used herein shall have the meanings ascribed
to them in the Pooling and Servicing Agreement and in the Assignment:
The Pooling and Servicing Agreement, together with the Assignments,
create in favor of the Trustee a security interest in the relevant
Transferor's rights in the Receivables identified in Schedule 1 to the
Pooling and Servicing Agreement. Such security interest is perfected
and of first priority.
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▇▇▇▇▇▇▇ ▇-▇
[FORM OF CLEARANCE SYSTEM CERTIFICATE
TO BE GIVEN TO THE TRUSTEE BY
EUROCLEAR OR CEDEL FOR
DELIVERY OF DEFINITIVE CERTIFICATES
IN EXCHANGE FOR A PORTION OF A
TEMPORARY GLOBAL SECURITY]
COMPUCREDIT CREDIT CARD MASTER TRUST,
Class [__] Series [199_-_] [Floating Rate] [_%]
Asset Backed Certificates
[Insert title or sufficient description of
Certificates to be delivered]
We refer to that portion of the temporary Global Certificate in respect
of the above-captioned issue which is herewith submitted to be exchanged for
definitive Certificates (the "Submitted Portion") as provided in the Pooling
and Servicing Agreement dated as of __________ __, 1997 (as amended and
supplemented, the "Agreement") in respect of such issue. This is to certify
that (i) we have received a certificate or certificates, in writing or by
tested telex, with respect to each of the persons appearing in our records as
being entitled to a beneficial interest in the Submitted Portion and with
respect to such persons beneficial interest either (a) from such person,
substantially in the form of Exhibit D-2 to the Agreement, or (b) from
[_____________], substantially in the form of Exhibit D-3 to the Agreement,
and (ii) the Submitted Portion includes no part of the temporary Global
Certificate excepted in such certificates
We further certify that as of the date hereof we have not received any
notification from any of the persons giving such certificates to the effect
that the statements made by them with respect to any part of the Submitted
Portion are no longer true and cannot be relied on as of the date hereof.
We understand that this certificate is required in connection with
certain securities and tax laws in the United States of America. If
administrative or legal proceedings are commenced or threatened in connection
with which this certificate
D-1-1
is or would be relevant, we irrevocably authorize you to produce this
certificate or a copy thereof to any interested party in such proceedings.
Dated:(1) [▇▇▇▇▇▇ Guaranty Trust, Company of
New York, Brussels office, as
operator of the
Euroclear Systems](2)
[Centrale de Livraison de
Valeurs Mobiliere S. A.](2)
By:
--------------------------------
----------------
(1) To be dated on the Exchange Date.
(2) Delete the inappropriate reference.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF CERTIFICATE TO BE DELIVERED
TO EUROCLEAR OR CEDEL
BY [INSERT NAME OF MANAGER]
WITH RESPECT TO REGISTERED CERTIFICATES SOLD TO
QUALIFIED INSTITUTIONAL BUYERS]
COMPUCREDIT CREDIT CARD MASTER TRUST,
Class [__] Series [199_-_] [Floating Rate] [_%]
Asset Backed Certificates
In connection with the initial issuance and placement of the above
referenced Asset Backed Certificates (the "Certificates"), an institutional
investor in the United States ("institutional investor") is purchasing U.S.
$_________ aggregate principal amount of the Certificates held in our account
at [▇▇▇▇▇▇ Guaranty Trust Company of New York, Brussels office, as operator of
the Euroclear System] [Cedel Bank] on behalf of such investor.
We reasonably believe that such institutional investor is a qualified
institutional buyer as such term is defined under Rule 144A of the Securities
Act of 1933, as amended.
[We understand that this certificate is required in connection with United
States laws. We irrevocably authorize you to produce this certificate or a
copy hereof to any interested party in any administrative or legal
proceedings or official inquiry with respect to the matters covered by this
certificate.]
The Definitive Certificates in respect of this certificate are to be
issued in registered form in the minimum denomination of U.S. $500,000 and
such Definitive Certificates (and, unless the Pooling and Servicing Agreement
or Supplement relating to the Certificates otherwise provides, any
Certificates issued in exchange or substitution for or on registration of
transfer of Certificates) shall bear the following legend:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 NEITHER THIS CERTIFICATE NOR ANY PORTION HEREOF
MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR
TO U.S. PERSONS (EACH AS DEFINED HEREIN), EXCEPT IN COMPLIANCE WITH
THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN. THIS CERTIFICATE CANNOT BE
EXCHANGED FOR A BEARER CERTIFICATE."
Dated: [____________________],
By:
------------------------------
Authorized Officer
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF CERTIFICATE TO BE DELIVERED
TO EUROCLEAR OR CEDEL BY A BENEFICIAL OWNER
OF CERTIFICATES, OTHER THAN A QUALIFIED INSTITUTIONAL BUYER]
COMPUCREDIT CREDIT CARD MASTER TRUST,
Class [__] Series [199_-_] [Floating Rate] [_%]
Asset Backed Certificates
This is to certify that as of the date hereof and except as provided in
the third paragraph hereof, the above-captioned Certificates held by you for
our account (i) are owned by a person that is a United States person, or (ii)
are owned by a United States person that is (A) the foreign branch of a
United States financial institution (as defined in U.S. Treasury Regulations
Section 1.165-12(c)(1)(v)) (a "financial institution") purchasing for its own
account or for resale, or (B) a United States person who acquired the
Certificates through the foreign branch of a financial institution and who
holds the Certificates through the financial institution on the date hereof
(and in either case (A) or (B), the financial institution hereby agrees to
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder),
or (iii) are owned by a financial institution for purposes of resale during
the Restricted Period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)). In addition, financial institutions described in
clause (iii) of the preceding sentence (whether or not also described in
clause (i) or (ii)) certify that they have not acquired the Certificates for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.
We undertake to advise you by tested telex if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Certificates in bearer form with respect to such of said
Certificates as then appear in your books as being held for our account.
This certificate excepts and does not relate to U.S. $__________
principal amount of Certificates held by you for our account, as to which we
are not yet able to certify beneficial ownership. We understand that delivery
of Definitive Certificates in such principal amount cannot be made until we
are able to so certify.
We understand that this certificate is required in connection with
certain securities and tax laws in the United States of America. If
administrative or legal proceedings are
D-3-1
commenced or threatened in connection with which this certificate is or would
be relevant, we irrevocably authorize you to produce this certificate or a
copy thereof to any interested party in such proceedings. As used herein,
"United States" means the United States of America (including the States and
the District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction; and "United States Person" means a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States, or any
political subdivision thereof, or an estate or trust the income of which is
subject to United States federal income taxation regardless of its source.
Dated:(1)
By:
-------------------------------
As, or an agent for, the
beneficial owner(s) of the
interest in the Certificates
to which this certificate
relates.
-------------
(1) This Certificate must be dated on the earlier of the date of the first
actual payment of interest in respect of the Certificates and the date
of the delivery of the Certificates in definitive form.
D-3-2
EXHIBIT E-1
[PRIVATE PLACEMENT LEGEND]
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED, SOLD, PLEDGED, OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY
APPLICABLE PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF
THIS CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING
AND SERVICING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT
PLAN (AS DEFINED BELOW).
E-1
EXHIBIT E-2
[FORM OF REPRESENTATION LETTER]
[DATE]
[TRUSTEE]
CompuCredit, Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Re: Purchase of $ (1)
principal amount of CompuCredit
Credit Card Master Trust Class [_]
Series [199_-_] [Floating Rate]
[_%] Asset Backed Certificates
Dear Sirs:
In connection with our purchase of the above-referenced Asset Backed
Certificates (the "Certificates") we confirm that:
(i) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "1933 Act"), and are
being sold to us in a transaction that is exempt from the registration
requirements of the 1933 Act;
(ii) any information we desire concerning the Certificates or any
other matter relevant to our decision to purchase the certificates is or
has been made available to us;
(iii) we have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
an investment in the Certificates, and we (and any account for which we
are purchasing under paragraph (iv) below) are able to bear the economic
risk of an investment in the Certificates; we (and any account for which
we are purchasing under paragraph (iv) below) are an "accredited
investor" (as such term is defined in Rule 501(a)(1), (2) or (3) of
Regulation D under the 1933
-------------------
(1) Not less than $250,000 minimum principal amount.
E-2-1
Act); and we are not, and none of such accounts is, a Benefit Plan;
(iv) we are acquiring the Certificates for our own account or for
accounts as to which we exercise sole investment discretion and not with a
view to any distribution of the Certificates, subject, nevertheless, to the
understanding that the disposition of our property shall at all times be and
remain within our control;
(v) we agree that the Certificates must be held indefinitely by us
unless subsequently registered under the 1933 Act or an exemption from any
registration requirements of that Act and any applicable state securities
laws available;
(vi) we agree that in the event that at some future time we wish to
dispose of or exchange any of the Certificates (such disposition or exchange
not being currently foreseen or contemplated), we will not transfer or
exchange any of the Certificates unless
(A)(1) the sale is of at least U.S. $250,000 principal amount of
Certificates to an Eligible Purchaser (as defined below), (2) a letter
to substantially the same effect as paragraphs (i), (ii), (iii), (iv),
(v) and (vi) of this letter is executed promptly by the purchaser and
(3) all offers or solicitations in connection with the sale, whether
directly or through any agent acting on our behalf, are limited only
to Eligible Purchasers and are not made by means of any form of general
solicitation or general advertising whatsoever; or
(B) the Certificates are transferred pursuant to Rule 144 under the
1933 Act by us after we have held them for more than three years; or
(C) the Certificates are sold in any other transaction that does
not require registration under the 1933 Act and, if the Transferor, the
Servicer, the Trustee or the Transfer Agent and Registrar so requests,
we theretofore have furnished to such party an opinion of counsel
satisfactory to such party, in form and substance satisfactory to such
party, to such effect; or
(D) the Certificates are transferred pursuant to an exception from
the registration requirements of the 1933 Act under Rule 144A under the
1933 Act; and
(vii) we understand that the Certificates will bear a legend to
substantially the following effect:
E-2-2
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT") NEITHER THIS CERTIFICATE NOR ANY PORTION
HEREOF MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH THE REGISTRATION PROVISIONS OF THE 1933 ACT AND ANY APPLICABLE
PROVISIONS OF ANY STATE BLUE SKY OR SECURITIES LAWS OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM SUCH REGISTRATION PROVISIONS. THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN."
"THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A
BENEFIT PLAN (AS DEFINED BELOW)."
The first paragraph of this legend may be removed if the Transferor, the
Servicer, the Trustee and the Transfer Agent and Registrar have received an
opinion of counsel satisfactory to them, in form and substance satisfactory
to them, to the effect that such paragraph may be removed.
"Eligible Purchaser" means either an Eligible Dealer or a corporation,
partnership or other entity which we have reasonable grounds to believe and
do believe can make representations with respect to itself to substantially
the same effect as the representations set forth herein. "Eligible Dealer"
means any corporation or other entity the principal business of which is
acting as a broker and/or dealer in securities. "Benefit Plan" means any
employee benefit plan, trust or account, including an individual retirement
account, that is subject to the Employee Retirement Income Security Act of
1974, as amended, or that is described in Section 4975(e)(l) of the Internal
Revenue Code of 1986, as amended, or an entity whose underlying assets
include plan assets by reason of a plan's investment in such entity.
Capitalized terms used but not defined herein shall have the meanings given
to such terms in the Pooling and Servicing Agreement, dated as of
_________________, 1997, among CompuCredit, Funding Corp., as transferor,
CompuCredit Corporation, as Servicer and _________________________________,
as trustee.
Very truly yours,
------------------------------------
(Name of Purchaser)
By: --------------------------------
(Authorized Officer)
E-2-3
EXHIBIT E-3
[ERISA LEGEND]
THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT PLAN
(AS DEFINED BELOW).(1)
-------------------------
(1) The following text should be included in any Certificate in which
the above legend appears:
The [Certificates] may not be acquired by or for the account
of any employee benefit plan, trust or account, including an
individual retirement account, that is subject to the Employee
Retirement Income Security Act of 1974, as amended, or that is
described in Section 4975(e)(1) of the Internal Revenue Code of
1986, as amended, or an entity whose underlying assets include plan
assets by reason of a plan's investment in such entity (a "Benefit
Plan"). By accepting and holding this Certificate, the Holder hereof
shall be deemed to have represented and warranted that it is not a
Benefit Plan. By acquiring any interest in this Certificate, the
applicable Certificate Owner or Owners shall be deemed to have
represented and warranted that it or they are not Benefit Plans.
E-3-1
SCHEDULE 1
List of Accounts
[Original list delivered to Trustee]
1
