Common use of Discount Option Clause in Contracts

Discount Option. (a) The Transferor shall have the option to designate a percentage, which may be a fixed percentage or a variable percentage based on a formula (the "Discount Percentage"), of Principal Receivables, without giving effect to any discounting pursuant to this Section 2.8, arising on or after the date of such designation, to be treated as Finance Charge Receivables. The Transferor shall provide to the Servicer, the Trustee, any Enhancement Provider and the Rating Agency 15 days' prior written notice of such designation, and such designation shall become effective on the date designated therein (i) unless such designation in the reasonable belief of the Transferor would cause a Pay Out Event to occur, or an event which, with notice or the lapse of time or both, would constitute a Pay Out Event and (ii) only if the Rating Agency shall have delivered a letter to the Transferor and the Trustee confirming that its then current rating of the Investor Securities of any Series then outstanding will not be reduced or withdrawn as a result of such designation. (b) After the date on which the Transferor's exercise of its discount option takes effect, and with respect to Receivables generated on and after such date, the Transferor, in accordance with Section 4.3, shall deposit into the Collection Account in immediately available funds an amount equal to the amount of the Discount Option Receivable Collections processed on such day. The deposit made by the Transferor into the Collection Account under the preceding sentence shall be considered a payment of such Discount Option Receivables and shall be applied as Finance Charge Receivables in accordance with Article IV.

Discount Option. (a) The Transferor shall have the option to designate a percentage, which may be a fixed percentage or a variable percentage based on a formula (the "“Discount Percentage"”), of Principal Receivables, without giving effect to any discounting pursuant to this Section 2.8, arising on or after the date of such designation, to be treated as Finance Charge Receivables. The Transferor shall provide to the Servicer, the Trustee, any Enhancement Provider and the Rating Agency 15 days' ’ prior written notice of such designation, and such designation shall become effective on the date designated therein (i) unless such designation in the reasonable belief of the Transferor would cause a Pay Out Event to occur, or an event which, with notice or the lapse of time or both, would constitute a Pay Out Event and (ii) only if the Rating Agency shall have delivered a letter to the Transferor and the Trustee confirming that its then current rating of the Investor Securities of any Series then outstanding will not be reduced or withdrawn as a result of such designation. (b) After the date on which the Transferor's ’s exercise of its discount option takes effect, and with respect to Receivables generated on and after such date, the Transferor, in accordance with Section 4.3, shall deposit into the Collection Account in immediately available funds an amount equal to the amount of the Discount Option Receivable Collections processed on such day. The deposit made by the Transferor into the Collection Account under the preceding sentence shall be considered a payment of such Discount Option Receivables and shall be applied as Finance Charge Receivables in accordance with Article IV.