EXECUTION COPY
Exhibit 10.4.3
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SERIES 1997-One SUPPLEMENT
Dated as of August 29, 1997
to
POOLING AND SERVICING AGREEMENT
Dated as of August 29, 1997
$125,000,000
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COMPUCREDIT CREDIT CARD MASTER TRUST
SERIES 1997-One
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among
COMPUCREDIT FUNDING CORP.
Transferor
COMPUCREDIT CORPORATION, L.P.
Servicer
and
Bankers Trust Company
Trustee
on behalf of the Series 1997-One Certificateholders
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TABLE OF CONTENTS
Page
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ARTICLE I
CREATION OF THE SERIES 1997-ONE CERTIFICATES
Section 1.01. Designation.......................................................................... 1
ARTICLE II
DEFINITIONS
Section 2.01. Definitions.......................................................................... 2
ARTICLE III
SERVICING FEE AND INTERCHANGE
Section 3.01. Servicing Compensation; Interchange.................................................. 15
ARTICLE IV
RIGHTS OF SERIES 1997-ONE CERTIFICATEHOLDERS AND
ALLOCATION AND APPLICATION OF COLLECTIONS
Section 4.01. Collections and Allocations.......................................................... 15
Section 4.02. Determination of Monthly Interest.................................................... 20
Section 4.03. Suspension of the Revolving Period;
Limited Amortization Period and Optional
Amortization......................................................................... 20
Section 4.04. Required Amount...................................................................... 21
Section 4.05. Application of Available Funds and
Available Principal Collections...................................................... 21
Section 4.06. Defaulted Amounts; Investor Charge-Offs.............................................. 24
Section 4.07. Excess Spread; Excess Finance Charge
Collections.......................................................................... 25
Section 4.08. Reallocated Principal Collections.................................................... 25
Section 4.09. Excess Finance Charge Collections.................................................... 26
Section 4.10. Reallocated Investor Finance Charge
Collections.......................................................................... 26
Section 4.11. Shared Principal Collections......................................................... 27
Section 4.12. Spread Account....................................................................... 27
Section 4.13. Invested Amount Increases............................................................ 29
ARTICLE V
DISTRIBUTIONS AND REPORTS TO
SERIES 1997-ONE CERTIFICATEHOLDERS
Section 5.01. Distributions........................................................................ 30
Section 5.02. Reports and Statements to Series
1997-One Certificateholders.......................................................... 31
ARTICLE VI
PAY OUT EVENTS
Section 6.01. Pay Out Events....................................................................... 32
ARTICLE VII
OPTIONAL REPURCHASE; SERIES TERMINATION
Section 7.01. Optional Repurchase.................................................................. 34
Section 7.02. Series Termination................................................................... 34
ARTICLE VIII
FINAL DISTRIBUTIONS
Section 8.01. Sale of Receivables or Certificateholders' Interest pursuant to Section
2.06 or 10.01 of the Agreement and Section 7.01 or 7.02 of this Supplement........... 35
Section 8.02. Distribution of Proceeds of Sale,
Disposition or Liquidation of the
Receivables pursuant to Section 9.01 of
the Agreement........................................................................ 36
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Ratification of Agreement............................................................ 37
Section 9.02. Counterparts......................................................................... 37
Section 9.03. Governing Law........................................................................ 38
Section 9.04. Tax Matters.......................................................................... 38
Section 9.05. Additional Provisions Regarding
Agreement............................................................................ 42
SECTION 9.06. Additional Provisions Regarding the
Servicer............................................................................. 42
EXHIBITS
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Exhibit A. Form of Class A Certificate
Exhibit B. Form of Class B Certificate
Exhibit C-1 Form of Monthly Servicer's Statement
Exhibit C-2 Form of Weekly Servicer Report
Exhibit D. Form of Class B Increase Notice
Exhibit E. Form of Investment Letter
SERIES 1997-One SUPPLEMENT, dated as of August 29, 1997 (the
"Supplement"), 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,
not in its individual capacity, but solely as Trustee.
Pursuant to the Pooling and Servicing Agreement dated as of August 29,
1997 (as amended and supplemented, the "Agreement"), among the Transferor, the
Servicer and the Trustee, the Transferor has created the Compucredit Credit Card
Master Trust (the "Trust"). Section 6.03 of the Agreement provides that the
Transferor may from time to time direct the Trustee to authenticate one or more
new Series of Investor Certificates representing fractional undivided interests
in the Trust. The Principal Terms of any new Series are to be set forth in a
Supplement to the Agreement.
Pursuant to this Supplement, the Transferor and the Trustee shall
create a new Series of Investor Certificates and specify the Principal Terms
thereof.
ARTICLE I
Creation of the Series 1997-One Certificates
Section 1.01. Designation.
(a) There is hereby created a Series of Investor Certificates to be
issued pursuant to the Agreement and this Supplement to be known as "Compucredit
Credit Card Master Trust, Series 1997-One." The Series 1997-One Certificates
shall be issued in two Classes, the first of which shall be known as the "Class
A Series 1997-One Floating Rate Variable Funding Certificates" and the second of
which shall be known as the "Class B Series 1997-One Floating Rate Variable
Funding Certificates."
(b) Series 1997-One shall be included in Group I and shall be a
Principal Sharing Series. Series 1997-One shall be an Excess Allocation Series.
Series 1997-One shall not be subordinated to any other Series. Notwithstanding
any provision in the Agreement or in this Supplement to the contrary, the first
Distribution Date with respect to Series 1997-One shall be the Distribution Date
related to the Monthly Period which follows the Monthly Period during which a
Class A Invested Amount Increase occurs.
(c) The opinions described in clauses (c) and (d) of the definition of
Tax Opinion in Section 1.01 of the Agreement shall not be applicable to the
Series 1997-One Certificates.
ARTICLE II
Definitions
Section 2.01. Definitions.
(a) Whenever used in this Supplement, the following words and phrases
shall have the following meanings, and the definitions of such terms are
applicable to the singular as well as the plural forms of such terms and the
masculine as well as the feminine and neuter genders of such terms.
"Administrative Agent" shall mean NationsBank, N.A., or any successor
designated as the Agent in the Certificate Purchase Agreement.
"Aggregate Subordination Percentage" shall mean, for any date of
determination, the percentage equivalent of a fraction, the numerator of which
is equal to the sum, for all FICO Risk Score ranges shown in the table below, of
(a) the total amount of Principal Receivables in the Trust (calculated without
taking into account any Discount Option Receivables) as of the last day of the
preceding Monthly Period for all Accounts with FICO Risk Scores in the range
specified in the left-hand column of the table below, multiplied by (b) the
Subordination Percentage associated with the FICO Risk Score range specified in
the right-hand column of the table below, and the denominator of which is equal
to the total amount of Principal Receivables in the Trust (calculated without
taking into account any Discount Option Receivables) as of the last day of the
preceding Monthly Period.
FICO Risk Subordination
Score Range(*) Percentage
------------------------------------------------ -----------------------------------
*[material omitted] *[material omitted]
(*) FICO risk score at the time of initial
booking of the account
"Amortization Period" shall mean, with respect to Series 1997-One, the
Controlled Amortization Period or the Early Amortization Period (or both), as
the context requires and, for purposes of Shared Principal Collections, the
Limited Amortization Period and an Optional Amortization Date, if so designated
by the Transferor.
"Available Funds" shall mean, with respect to any Monthly Period, an
amount equal to the sum of (a) the Reallocated Investor Finance Charge
Collections and (b) the amount of funds, if any, to be withdrawn from the Spread
Account which, pursuant to subsection 4.12(c), are required to be included in
Available Funds with respect to such Distribution Date.
"Available Principal Collections" shall mean, with respect to any
Monthly Period, an amount equal to the sum of (a) (i) an amount equal to the
Fixed/Floating Allocation Percentage of Series 1997-One Allocable Principal
Collections received during such Monthly Period minus (ii) the amount of
Reallocated Principal Collections with respect to such Monthly Period which
pursuant to Section 4.08 are required to fund the Class A Required Amount for
the related Distribution Date, (b) any Shared Principal Collections with respect
to other Series that are allocated to Series 1997-One in accordance with Section
4.04 of the Agreement and Section 4.11 hereof, (c)
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*Deleted per the Registrant's request for confidential treatment and filed
separately with the Commission pursuant to Rule 24b-2.
any other amounts which pursuant to Section 4.05 or 4.07 hereof are to be
treated as Available Principal Collections with respect to the related
Distribution Date.
"Available Spread Account Amount" shall mean, with respect to any
Distribution Date, the lesser of (a) the amount on deposit in the Spread Account
on such date (before giving effect to any deposit to be made to the Spread
Account on such date) and (b) the Required Spread Account Amount.
"Average Invested Amount" shall mean, for any period, the sum of the
Invested Amounts for each day in such period divided by the number of days in
such period.
"Base Rate" shall mean, with respect to any Monthly Period, the
annualized percentage equivalent of a fraction, the numerator of which is equal
to the sum of the Class A Monthly Interest and the Monthly Servicing Fee, if
any, with respect to the related Distribution Date and the denominator of which
is the Class A Average Invested Amount as of the last day of the preceding
Monthly Period.
"Certificate Assignment" shall have the meaning specified in Section
9.04(e).
"Certificate Purchase Agreement" shall mean the Certificate Purchase
Agreement dated as of August 29, 1997 by and among the Transferor, the
Administrative Agent and Enterprise Funding Corporation, and all amendments
thereto.
"Class A Average Invested Amount" shall mean, for any period, the sum
of the Class A Invested Amounts for each day in such period divided by the
number of days in such period.
"Class A Certificate Rate" shall have the meaning specified in the
Certificate Purchase Agreement.
"Class A Certificateholder" shall mean the Person in whose name a Class
A Certificate is registered in the Certificate Register.
"Class A Certificates" shall mean any one of the Certificates executed
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit A.
"Class A Floating Percentage" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class A Invested Amount as of
the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Invested Amount as of such day; provided,
however, that with respect to the first Monthly Period, the Class A Floating
Percentage shall mean the percentage equivalent of a fraction, the numerator of
which is the Class A Initial Invested Amount and the denominator of which is the
Initial Invested Amount; provided further, however, that with respect to any
Monthly Period in which one or more Reset Dates occur with respect to an
Invested Amount Increase or an Optional Amortization Date, the Class A Floating
Percentage shall be recalculated as provided above but as of such Reset Date for
the period from and after the date on which any such Reset Date occurs to but
excluding the date (if any) that another such Reset Date occurs or, if no other
Reset Date occurs during such Monthly Period, to and including the last day of
such Monthly Period.
"Class A Initial Invested Amount" shall mean $0.
"Class A Invested Amount" shall mean, on any date of determination, an
amount equal to (a) the Class A Initial Invested Amount, plus (b) the aggregate
principal amount of Class A Invested Amount Increases pursuant to Section 4.13
on or prior to such date, minus (c) the aggregate amount of principal payments
made to the Class A Certificateholders on or prior to such date, minus (d) the
excess, if any, of the aggregate amount of Class A Investor Charge-Offs for all
prior Distribution Dates over Class A Investor Charge-Offs reimbursed pursuant
to subsections 4.05(a)(vii) and 4.07(a) prior to such date.
"Class A Invested Amount Increase" shall have the meaning specified in
subsection 4.13(a).
"Class A Investor Charge-Offs" shall have the meaning specified in
subsection 4.06(a).
"Class A Investor Default Amount" shall mean, with respect to each
Monthly Period, an amount equal to the product of (i) the Investor Default
Amount for the related Monthly Period and (ii) the Class A Floating Percentage
for such Monthly Period.
"Class A Monthly Interest" shall have the meaning specified in
subsection 4.02(a).
"Class A Principal Percentage" shall mean, with respect to any Monthly
Period (i) during the Revolving Period, the Class A Floating Percentage and (ii)
during the Amortization Period or the Limited Amortization Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of which is the Class A Invested Amount as of the end of the
Revolving Period or suspension thereof, as the case may be, and the denominator
of which is the Invested Amount as of the end of the Revolving Period or
suspension thereof, as the case may be.
"Class A Required Amount" shall have the meaning specified in Section
4.04.
"Class B Average Invested Amount" shall mean, for any period, the sum
of the Class B Invested Amounts for each day in such period divided by the
number of days in such period.
"Class B Certificate Rate" shall mean, for any Interest Period with
respect to the Class B Certificates, a per annum rate of 0%, provided, however,
that upon notice to the Trustee and the Servicer, the Class B Certificate Rate
shall equal such other rate as shall be agreed upon by the Transferor and the
Class B Certificateholder, from time to time.
"Class B Certificateholder" shall mean the Person in whose name a Class
B Certificate is registered in the Certificate Register.
"Class B Certificates" shall mean any one of the Certificates executed
by the Transferor and authenticated by or on behalf of the Trustee,
substantially in the form of Exhibit B.
"Class B Floating Percentage" shall mean, with respect to any Monthly
Period, the percentage equivalent (which percentage shall never exceed 100%) of
a fraction, the numerator of which is equal to the Class B Invested Amount as of
the close of business on the last day of the preceding Monthly Period and the
denominator of which is equal to the Invested Amount as of the close of business
on such day; provided, however, that with respect to the first Monthly Period,
the Class B Floating Percentage shall mean the percentage equivalent of a
fraction, the numerator of which is the Class B Initial Invested Amount and the
denominator of which is the Initial Invested Amount; provided further, however,
that with respect to any Monthly Period in which one or more Reset Dates occur
with respect to an Invested Amount Increase or an Optional Amortization Date,
the Class B Floating Percentage shall be recalculated as provided above but as
of such Reset Date for the period from and after the date on which any such
Reset Date occurs to but excluding the date (if any) that another such Reset
Date occurs or, if no other Reset Date occurs during such Monthly Period, to and
including the last day of such Monthly Period.
"Class B Initial Invested Amount" shall mean $12,500,000.
"Class B Invested Amount" shall mean, on any date of determination, an
amount equal to (a) the Class B Initial Invested Amount, plus (b) the aggregate
principal amount of Class B Invested Amount Increases pursuant to Section 4.13
on or prior to such date, minus (c) the aggregate amount of principal payments
made to the Class B Certificateholders prior to such date, minus (d) the
aggregate amount of Class B Investor Charge-Offs for all prior Distribution
Dates, minus (e) the amount of Reallocated Principal Collections allocated on
all prior Distribution Dates pursuant to Section 4.08 minus (f) an amount equal
to the amount by which the Class B Invested Amount has been reduced on all prior
Distribution Dates pursuant to subsection 4.06(a), plus (g) the amount of
Available Funds allocated and available on all prior Distribution Dates pursuant
to subsection 4.05(a)(xii) for the purpose of reimbursing amounts deducted
pursuant to the foregoing clauses (d), (e) and (f); and plus (h) the amount of
Excess Spread and Excess Finance Charge Collections allocated and available on
all prior Distribution Dates pursuant to subsection 4.07(a) for the purpose of
reimbursing amounts deducted pursuant to the foregoing clauses (d), (e) and (f);
provided, however, that the Class B Invested Amount may not be reduced below
zero.
"Class B Invested Amount Increase" shall have the meaning specified in
subsection 4.13(b).
"Class B Investor Charge-Offs" shall have the meaning specified in
subsection 4.06(b).
"Class B Investor Default Amount" shall mean, with respect to each
Monthly Period, an amount equal to the product of (i) the Investor Default
Amount for the related Monthly Period and (ii) the Class B Floating Percentage
for such Monthly Period.
"Class B Monthly Interest" shall have the meaning specified in
subsection 4.02(b).
"Class B Principal Percentage" shall mean, with respect to any Monthly
Period, (i) during the Revolving Period, the Class B Floating Percentage and
(ii) during the Amortization Period or the Limited Amortization Period, the
percentage equivalent (which percentage shall never exceed 100%) of a fraction,
the numerator of
which is the Class B Invested Amount as of the end of the Revolving Period or
the suspension thereof, as the case may be, and the denominator of which is the
Invested Amount as of the end of the Revolving Period or the suspension thereof,
as the case may be.
"Closing Date" shall mean August 29, 1997.
"Commitment Termination Date" shall mean August 28, 1998, or such later
date as agreed to by the Administrative Agent and the Transferor.
"Controlled Amortization Period" shall mean, unless a Pay Out Event
with respect to Series 1997-One shall have occurred prior thereto, the period
commencing on the Termination Date (as defined in the Certificate Purchase
Agreement, excluding clause (v) thereof) and ending upon the first to occur of
(x) the commencement of the Early Amortization Period, (y) the payment in full
to Class A Certificateholders and the Class B Certificateholders of the Class A
Invested Amount and the Class B Invested Amount, respectively, and (z) the
Series 1997-One Termination Date.
"Delinquency Ratio" shall mean, for any Monthly Period, the ratio
(expressed as a percentage) of (i) the balance of all Receivables as to which,
as of the last day of such Monthly Period, any payment remains unpaid for more
than 30 days from the due date with respect thereto, but excludes Ineligible
Receivables, to (ii) the balance of all Receivables (excluding Ineligible
Receivables) as of the last day of such Monthly Period.
"Distribution Date" shall mean the fifteenth day of each calendar
month, or if such fifteenth day is not a Business Day, the next succeeding
Business Day.
"Early Amortization Period" shall mean the period commencing at the
close of business on the Business Day immediately preceding the day on which a
Pay Out Event with respect to Series 1997-One is deemed to have occurred, and
ending on the first to occur of (i) the payment in full of the Invested Amount
or (ii) the Series 1997-One Termination Date.
"Eligible Institution" shall mean any depositary 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 of AAA and Aaa or the
equivalent, as applicable, by each Rating Agency or (ii) a short-term unsecured
debt certificate of deposit rating of at least A-1 and P-1 by each Rating
Agency. Notwithstanding the previous sentence any institution the appointment of
which satisfies the Rating Agency Condition shall be considered an Eligible
Institution.
"Excess Finance Charge Collections" shall mean, with respect to any
Distribution Date, the aggregate amount of Collections of Finance Charge
Receivables allocable to other Series in excess of the amounts necessary to make
required payments with respect to such Series, if any.
"Excess Spread" shall mean, with respect to any Distribution Date, the
amount, if any, specified pursuant to subsection 4.05(a)(xiii) with respect to
such Distribution Date.
"Facility Limit" shall have the meaning specified in the Certificate
Purchase Agreement.
"FICO Risk Score" shall mean, at the time of initial booking of an
Account, the Fair, Xxxxxx & Co. credit risk score with respect to such Account.
"Finance Charge Shortfall" shall have the meaning specified in Section
4.09.
"Fixed/Floating Allocation Percentage" shall mean, with respect to any
day during a Monthly Period, the percentage equivalent (which percentage shall
never exceed 100%) of a fraction, the numerator of which is (a) during the
Revolving Period, the Series Adjusted Invested Amount for Series 1997-One as of
the last day of the immediately preceding Monthly Period (or, in the case of the
first Monthly Period, the Initial Invested Amount) and (b) during the
Amortization Period or any Limited Amortization Period, the Series Adjusted
Invested Amount for Series 1997-One as of the close of business on the date on
which the Revolving Period shall have terminated or been suspended, as the case
may be, and the denominator of which is the product of (x) the sum of (i) the
total amount of Principal Receivables in the Trust as of the last day of the
immediately preceding Monthly Period (or with respect to the first Monthly
Period, the total amount of Principal Receivables in the Trust as of the Closing
Date) and (ii) the principal amount on deposit in the Special Funding Account as
of such last day (or with respect to the first Monthly Period, the Closing Date)
and (y) the Series 1997-One Allocation Percentage as of the last day of the
immediately preceding Monthly Period; provided, however, that with respect to
any Monthly Period in which one or more Reset Dates occurs the Fixed/Floating
Allocation Percentage shall be recalculated as provided above but as of such
Reset Date for the period from and including such Reset Date to but excluding
the next such Reset Date, if any, or if no other Reset Date occurs during such
Monthly Period, to and including the last day of such Monthly Period, as
applicable; provided further, that the numerator in clause (b) above shall
continue to be the Series Adjusted Invested Amount for Series 1997-One as of the
close of business on the date on which the Revolving Period shall have been
terminated or suspended unless the Invested Amount is paid in full on such date.
"Floating Allocation Percentage" shall mean, with respect to any
Monthly Period, the percentage equivalent (which percentage shall never exceed
100%) of a fraction, the numerator of which is the Invested Amount as of the
last day of the preceding Monthly Period (or in the case of the first Monthly
Period, the Initial Invested Amount) and the denominator of which is the product
of (x) the Series 1997-One Allocation Percentage with respect to such Monthly
Period and (y) the sum of (i) the total amount of Principal Receivables in the
Trust as of such day (or with respect to the first Monthly Period, the total
amount of Principal Receivables in the Trust on the Closing Date) and (ii) the
principal amount on deposit in the Special Funding Account as of such last day
(or with respect to the first Monthly Period, the Closing Date); provided,
however, that with respect to any Monthly Period in which one or more Reset
Dates occurs, the Floating Allocation Percentage shall be recalculated as
provided above but as of such Reset Date, for the period from and after the date
on which any such Reset Date occurs to but excluding the date, if any, that
another such Reset Date occurs or, if no other Reset Date occurs during such
Monthly Period, to and including the last day of such Monthly Period.
"Funding Period" shall have the meaning specified in the Certificate
Purchase Agreement.
"Group I" shall mean Series 1997-One and each other Series specified in
the related Supplement to be included in Group I.
"Group I Investor Additional Amounts" shall mean, with respect to any
Monthly Period, the sum of (a) Series 1997-One Additional Amounts for such
Distribution Date and (b) for all other Series included in Group I, the sum of
(i) the aggregate net amount by which the Invested Amounts of such Series have
been reduced as a result of investor charge-offs, subordination of principal
collections and funding the investor default amounts in respect of any Class or
Series Enhancement interests of such Series as of such Distribution Date and
(ii) if the applicable Supplements so provide, the aggregate unpaid amount of
interest at the applicable certificate rates that has accrued on the amounts
described in the preceding clause (i) for such Distribution Date.
"Group I Investor Default Amount" shall mean, with respect to any
Distribution Date, the sum of (a) the Investor Default Amount for such
Distribution Date and (b) the aggregate amount of the investor default amounts
for all other Series included in Group I for such Distribution Date.
"Group I Investor Finance Charge Collections" shall mean, with respect
to any Distribution Date, the sum of (a) Investor Finance Charge Collections for
such Distribution Date and (b) the aggregate amount of the investor finance
charge collections for all other Series included in Group I for such
Distribution Date.
"Group I Investor Monthly Fees" shall mean with respect to any
Distribution Date, the sum of (a) Series 1997-One Monthly Fees for such
Distribution Date and (b) the aggregate amount of the servicing fees, investor
fees, fees payable to any Series Enhancer and any other similar fees, which are
payable out of reallocated investor finance charge collections pursuant to the
related Supplements, for all other Series included in Group I for such
Distribution Date.
"Group I Investor Monthly Interest" shall mean, with respect to any
Distribution Date, the sum of (a) Series 1997-One Monthly Interest for such
Distribution Date and (b) the aggregate amount of monthly interest, including
overdue monthly interest and interest on such overdue monthly interest, if such
amounts are payable out of reallocated investor finance charge collections
pursuant to the related Supplements, for all other Series included in Group I
for such Distribution Date.
"Initial Invested Amount" shall mean $12,500,000.
"Interest Distribution Date" shall have the meaning specified in
Section 4.02(c) hereof.
"Interest Period" shall mean, with respect to any Distribution Date,
the period from and including the Distribution Date immediately preceding such
Distribution Date (or, in the case of the first Distribution Date, from and
including the Closing Date) to but excluding such Distribution Date.
"Invested Amount" shall mean, as of any date of determination, an
amount equal to the sum of (a) the Class A Invested Amount as of such date and
(b) the Class B Invested Amount as of such date.
"Invested Amount Increase" shall mean a Class A Invested Amount
Increase or a Class B Invested Amount Increase.
"Investment Letter" shall have the meaning specified in Section
9.04(c).
"Investor Charge-Offs" shall mean Class A Investor Charge-Offs and
Class B Investor Charge-Offs.
"Investor Default Amount" shall mean, with respect to any Monthly
Period, an amount equal to the product of (a) the Series 1997-One Allocable
Defaulted Amount for the related Monthly Period and (b) the Floating Allocation
Percentage for such Monthly Period.
"Investor Finance Charge Collections" shall mean with respect to any
Distribution Date, an amount equal to the product of (a) (i) during the
Revolving Period or the Limited Amortization Period, the Floating Allocation
Percentage for the related Monthly Period and (ii) during the Amortization
Period, the Fixed/Floating Allocation Percentage for the related Monthly Period
and (b) Series 1997-One Allocable Finance Charge Collections deposited in the
Collection Account for the related Monthly Period.
"Limited Amortization Amount" shall mean for any Distribution Date
relating to a Limited Amortization Period, the excess, if any, of (i) the amount
specified in the notice delivered by the Transferor in accordance with Section
4.03 over (ii) the aggregate amount of principal distributed to the Class A
Certificateholders on all prior Distribution Dates, if any, in such Limited
Amortization Period.
"Limited Amortization Period" shall mean, unless the Controlled
Amortization Period or the Early Amortization Period shall have commenced prior
thereto, a period beginning on the first day of the Monthly Period specified in
the notice delivered by the Transferor in accordance with Section 4.03, and
ending upon the first to occur of (i) the commencement of the Controlled
Amortization Period or the Early Amortization Period and (ii) the last day of
the Monthly Period related to the Distribution Date on which the aggregate
amount distributed pursuant to Section 4.05 (c)(ii) equals the Limited
Amortization Amount for such Distribution Date.
"Monthly Interest" means, with respect to any Distribution Date, the
Class A Monthly Interest and the Class B Monthly Interest for such Distribution
Date.
"Monthly Servicing Fee" shall have the meaning specified in Section
3.01.
"Net Portfolio Yield" shall mean, with respect to any Monthly Period,
the annualized percentage equivalent of a fraction, (A) the numerator of which
is equal to (a) Investor Finance Charge Collections with respect to such Monthly
Period, plus (b) without duplication of amounts referred to in clause (a) above,
the amount of Interchange to be included as Series 1997-One Allocable Finance
Charge Collections for such Monthly Period pursuant to subsection 3.01(b), minus
(c) the Investor Default Amount for the Distribution Date with respect to such
Monthly Period, and (B) the denominator of which is the Class A Average Invested
Amount with respect to such Monthly Period.
"Net Yield" shall mean, with respect to any Monthly Period, (a) the Net
Portfolio Yield with respect to such Monthly Period minus (b) the Base Rate with
respect to such Monthly Period.
"Optional Amortization Amount" shall have the meaning specified in
subsection 4.03(b).
"Optional Amortization Date" shall have the meaning
specified in subsection 4.03(b).
"Optional Amortization Notice" shall have the meaning specified in
subsection 4.03(b).
"Participant" shall have the meaning specified in Section 9.04(f).
"Pay Out Event" shall mean any Pay Out Event specified in Section 6.01.
"Private Holder" shall mean each holder of a right to receive interest
or principal in respect of any direct or indirect interest in the Trust
including any financial instrument or contract the value of which is determined
in whole or part by reference to the Trust (including the Trust's assets, income
of the Trust or distributions made by the Trust), excluding any interest in the
Trust represented by any Series or Class of Certificates or any other interest
as to which the Transferor has provided to the Trustee an Opinion of Counsel to
the effect that such Series, Class or other interest will be treated as debt or
otherwise not as an equity interest in either the Trust or the Receivables for
federal income tax purposes, in each case, provided such interest is not
convertible or exchangeable into an interest in the Trust or the Trust's income
or equivalent value. Notwithstanding the immediately preceding sentence,
"Private Holder" shall also include any other Person that the Transferor
determines is, may be or may become a "partner" within the meaning of Section
1.7704-1(h)(1)(ii) of the United States Treasury Regulations (including by
reason of Section 1.7704-1(h)(3)). Private Holders include each holder of an
interest in the Series 1997-1 Certificates or the Transferor Certificates, the
Servicer, and the holder of any interest described in Section 12.02(c) of the
Agreement. Any Person holding more than one interest in the Trust each of which
separately would cause such Person to be a Private Holder shall be treated as a
single Private Holder. Each holder of an interest in a Private Holder which is a
partnership, S Corporation or a grantor trust under the Code shall be treated as
a Private Holder unless excepted with the consent of the Transferor (which
consent shall be based on an Opinion of Counsel generally to the effect that the
action taken pursuant to the consent will not cause the Trust to become a
publicly traded partnership treated as a corporation).
"Reallocated Investor Finance Charge Collections" shall mean that
portion of Group I Investor Finance Charge Collections allocated to Series
1997-One pursuant to Section 4.10.
"Reallocated Principal Collections" shall mean, with respect to any
Monthly Period, the product of (a) the Series 1997-One Allocable Principal
Collections deposited in the Collection Account for such Monthly Period, (b) the
Fixed/Floating Allocation Percentage, and (c) the Class B Principal Percentage.
"Reassignment Amount" shall mean, with respect to any Distribution
Date, after giving effect to any deposits and distributions otherwise to be made
on such Distribution Date, the sum of (i) the Invested Amount on such
Distribution Date plus (ii) Monthly Interest for such Distribution Date and any
Monthly Interest previously due but not distributed to the Series 1997-One
Certificateholders on a prior Distribution Date.
"Records" shall mean all Credit Card Agreements and other documents,
books, records and other information (including, without limitation, computer
programs, tapes, discs, punch cards, data processing software and related
property and rights) maintained with respect to Receivables and the related
Obligors.
"Required Subordinate Amount" shall mean, on any date of determination,
the greater of (a) $12,500,000 and (b) (i)(A) the Class A Invested Amount as of
the end of the day immediately preceding such determination date, divided by (B)
1 minus the Aggregate Subordination Percentage minus (ii) the Class A Invested
Amount as of the end of the day immediately preceding such determination date,
or such other amount as agreed to by the Administrative Agent and the
Transferor.
"Required Spread Account Amount" shall mean, shall mean, on any date of
determination, the product of (i) the Class A Invested Amount as of such date of
determination and (ii) the Spread Account Cap Percentage as of such date of
determination.
"Reset Date" shall mean each of (a) an Addition Date, (b) a date on
which an Invested Amount Increase occurs (c) an Optional Amortization Date and
(d) any date on which a new Series is issued.
"Revolving Period" shall mean the period beginning at the close of
business on the Series Cut-Off Date and ending on the earlier of (a) the close
of business on the day immediately preceding the day the Controlled Amortization
Period commences and (b) the close of business on the day immediately preceding
the day the Early Amortization Period commences; provided, however, that the
Revolving Period shall be temporarily suspended for the duration of any Limited
Amortization Period.
"Series Cut-Off Date" shall mean the close of business on August 22,
1997.
"Series 1997-One" shall mean the Series of Certificates the terms of
which are specified in this Supplement.
"Series 1997-One Additional Amounts" shall mean, with respect to any
Distribution Date, the sum of the amounts determined pursuant to subsections
4.05(a)(vii) and (xii) for such Distribution Date.
"Series 1997-One Allocable Defaulted Amount" shall mean the Series
Allocable Defaulted Amount with respect to Series 1997-One.
"Series 1997-One Allocable Finance Charge Collections" shall mean the
Series Allocable Finance Charge Collections with respect to Series 1997-One.
"Series 1997-One Allocable Principal Collections" shall mean the Series
Allocable Principal Collections with respect to Series 1997-One.
"Series 1997-One Allocation Percentage" shall mean the Series
Allocation Percentage with respect to Series 1997-One which shall be an amount
equal to, with respect to any Monthly Period, the percentage equivalent of a
fraction, the numerator of which is the Series Adjusted Invested Amount for
Series 1997-One as of the last day of the immediately preceding Monthly Period
plus the Series Required Transferor Amount as of such last day and the
denominator of which is the Trust Adjusted Invested Amount plus the sum of all
Series Required Transferor Amounts as of such last day; provided, however, that
with respect to any Monthly Period in which one or more Reset Dates
occurs, the Series 1997-One Allocation Percentage shall be recalculated as
provided above but as of such Reset Date for the period from and after the
date on which any such Reset Date occurs to but excluding the date, if any,
that another such Reset Date occurs or, if no other Reset Date occurs during
such Monthly Period, to and including the last day of such Monthly Period.
"Series 1997-One Certificate" shall mean a Class A Certificate or a
Class B Certificate.
"Series 1997-One Certificateholder" shall mean a Class A
Certificateholder or a Class B Certificateholder.
"Series 1997-One Certificateholders' Interest" shall mean the
Certificateholders' Interest for Series 1997-One.
"Series 1997-One Monthly Fees" shall mean, with respect to any
Distribution Date, the amount determined pursuant to subsection 4.05(a)(iv).
"Series 1997-One Monthly Interest" shall mean the amounts determined
pursuant to subsections 4.02(a) and (b).
"Series 1997-One Principal Shortfall" shall have the meaning specified
in Section 4.11.
"Series 1997-One Termination Date" shall mean the August 2007
Distribution Date.
"Series Invested Amount" shall mean, with respect to any date of
determination, the Initial Invested Amount plus the aggregate principal amount
of Invested Amount Increases and minus any payments of principal to the Series
1997-One Certificateholders during the Limited Amortization Period or on an
Optional Amortization Date.
"Series Required Transferor Amount" shall mean an amount equal to 0% of
the Invested Amount.
"Servicer Advance" shall have the meaning specified in Section 4.02(c).
"Servicing Base Amount" shall have the meaning specified in Section
3.01(a).
"Servicing Fee Rate" shall mean the greater of (a) 2.0% per annum and
(b) the percentage cost per annum of servicing the Accounts or Receivables
pursuant to the applicable fee schedule governing the then-effective servicing
or sub-servicing arrangement as estimated by independent public accountants on
behalf of the Trustee, the Class A Certificateholders and the Investor
Certificateholders of each other Series of Investor Certificates then
outstanding; provided, however, that during the period that Columbus Bank owns
the Accounts pursuant to the Affinity Card Agreement, the Servicing Fee Rate
shall be 0.10% per annum.
"Special Payment Date" shall mean each Distribution Date with respect
to the Early Amortization Period.
"Spread Account" shall have the meaning specified in subsection
4.12(a).
"Spread Account Cap Percentage" shall mean, as of any date of
determination, if the most recent two-month average (calculated as of the
Determination Date immediately preceding such date) of the Net Yield for such
date is greater than or equal to the percentage set forth in the left-hand
column of the table below, and less than the percentage set forth in the middle
column of the table below, an amount equal to the percentage set forth next to
such percentages in the right-hand column of the table below:
Average Net Yield
-----------------------------------------------------
Greater Than or Spread Account
Equal to Less Than Cap Percentage
-------- --------- --------------
6.0% 0%
5.0% 6.0% 3.0%
4.0% 5.0% 5.0%
3.0% 4.0% 7.0%
2.0% 3.0% 10.0%
0.0% 2.0% 100.0%
"Spread Account Draw Amount" shall have the meaning specified in
Section 4.04.
"Spread Account Surplus" shall mean, as of any date of determination,
the amount, if any, by which the amount on deposit in the Spread Account exceeds
the Required Spread Account Amount.
"Termination Date" shall mean the earliest to occur of (a) the
commencement of the Early Amortization Period, (b) the second Business Day prior
to the Commitment Termination Date and (c) the date of termination as specified
in the Certificate Purchase Agreement.
"Tranche" shall have the meaning assigned to such term in the
Certificate Purchase Agreement.
"Transferor Percentage" shall mean 100% minus (a) the Floating
Allocation Percentage, when used at any time with respect to Defaulted
Receivables, (b) the Floating Allocation Percentage, when used during the
Revolving Period or the Limited Amortization Period with respect to Finance
Charge Receivables, (c) the Fixed/Floating Allocation Percentage, when used
during the Amortization Period with respect to Finance Charge Receivables or (d)
the Fixed/Floating Allocation Percentage, when used at any time with respect to
Principal Receivables.
"Weekly Release Conditions" shall mean (i) the date specified in clause
(a) or (b) of the definition of "Termination Date" shall not have occurred and
(ii) the Servicer shall have delivered to the Administrative Agent a completed
and satisfactory Weekly Servicer Report.
"Weekly Servicer Report" shall mean a statement substantially in the
form of Exhibit C-2 prepared by the Servicer.
(b) Each capitalized term defined herein shall relate to the Series
1997-One Certificates and no other Series of Certificates issued by the Trust,
unless the context otherwise requires. All capitalized terms used herein and not
otherwise defined herein have the meanings ascribed to them in the Agreement. In
the event that any term or provision contained herein shall conflict with or be
inconsistent with any term or provision contained in the Agreement, the terms
and provisions of this Supplement shall govern.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Supplement shall refer to this Supplement as a whole
and not to any particular provision of this Supplement; references to any
Article, subsection, Section or Exhibit are references to Articles, subsections,
Sections and Exhibits in or to this Supplement unless otherwise specified; and
the term "including" means "including without limitation."
ARTICLE III
Servicing Fee and Interchange
Section 3.01. Servicing Compensation; Interchange.
(a) Servicing Fee. The share of the Servicing Fee allocable to the
Series 1997-One Certificateholders with respect to any Distribution Date (the
"Monthly Servicing Fee") shall be equal to one-twelfth of the product of (a) the
Servicing Fee Rate and (b) (i) the Average Invested Amount for the Monthly
Period preceding such Distribution Date, minus (ii) the product of the amount,
if any, on deposit in the Special Funding Account as of the last day of the
Monthly Period preceding such Distribution Date and the Series 1997-One
Allocation Percentage with respect to such Monthly Period (the amount calculated
pursuant to this clause (b) is referred to as the "Servicing Base Amount"). The
remainder of the Servicing Fee shall be paid by the Holders of the Transferor
Certificates or the investor certificateholders of other Series (as provided in
the related Supplements) and in no event shall the Trust, the Trustee or the
Series 1997-One Certificateholders be liable for the share of the Servicing Fee
to be paid by the Holders of the Transferor Certificates or the investor
certificateholders of any other Series.
(b) Interchange. On or before each Determination Date, the Transferor
shall notify the Servicer of the amount of Interchange to be included as Series
1997-One Allocable Finance Charge Collections with respect to the preceding
Monthly Period as determined pursuant to this subsection 3.01(b). Such amount of
Interchange shall be equal to the product of (i) the amount of Interchange
attributable to the Accounts, as reasonably estimated by the Transferor, and
(ii) the Series 1997-One Allocation Percentage. On each Transfer Date, the
Transferor shall pay to the Servicer, and the Servicer shall deposit into the
Collection Account, in immediately available funds, the amount of Interchange to
be so included as Series 1997-One Allocable Finance Charge Collections with
respect to the preceding Monthly Period and such Interchange shall be treated as
a portion of Series 1997-One Allocable Finance Charge Collections for all
purposes of this Supplement and the Agreement.
ARTICLE IV
Rights of Series 1997-One Certificateholders and
Allocation and Application of Collections
Section 4.01. Collections and Allocations.
(a) Allocations. Collections of Finance Charge Receivables and
Principal Receivables and Defaulted Receivables allocated to Series 1997-One
pursuant to Article IV of the Agreement (and, as described herein, Collections
of Finance Charge Receivables reallocated from other Series in Group I) shall be
allocated and distributed or reallocated as set forth in this Article. Anything
to the contrary in the Agreement notwithstanding, prior to the issuance of
another series of Investor Certificates all Collections of Finance Charge
Receivables and Principal Receivables and Defaulted Receivables pursuant to
Article IV of the Agreement will be deposited into the Collection Account and
withdrawn from the Collection Account only as provided below.
(b) Payments to the Transferor. The Servicer shall on the first
Business Day of each calendar week, upon satisfaction of the Weekly Release
Conditions, withdraw from the Collection Account and pay to the Holders of the
Transferor Certificates the following amounts:
(i) an amount equal to the Transferor Percentage for the
related Monthly Period of Series 1997-One Allocable Finance Charge
Collections deposited in the Collection Account; and
(ii) an amount equal to the Transferor Percentage for the
related Monthly Period of Series 1997-One Allocable Principal
Collections deposited in the Collection Account, if the Transferor
Amount (determined after giving effect to any Principal Receivables
transferred to the Trust on such date) exceeds zero; provided, however,
that if on such date the Available Spread Account Amount is less than
the Required Spread Account Amount (after giving effect to any deposits
into the Spread Account on such date pursuant to subsections
4.01(c)(ii)(w) and 4.05(a)(viii)), then an amount up to the Required
Spread Account Amount shall be deposited on such date into the Spread
Account.
The withdrawals to be made from the Collection Account pursuant to this
subsection 4.01(b) do not apply to deposits into the Collection Account that do
not represent Collections, including payment of the purchase price for the
Certificateholders' Interest pursuant to Section 2.06 or 10.01 of the Agreement,
payment of the purchase price for the Series 1997-One Certificateholders'
Interest pursuant to Section 7.01 of this Supplement and proceeds from the sale,
disposition or liquidation of Receivables pursuant to Section 9.01 or 12.02 of
the Agreement.
(c) Allocations to the Series 1997-One Certificateholders. The Servicer
shall, prior to the close of business on any Deposit Date, allocate to the
Series 1997-One Certificateholders the following amounts as set forth below:
(i) Allocations of Finance Charge Collections. The Servicer
shall allocate to the Series 1997-One Certificateholders the following
amounts as set forth below:
(x) Allocations During the Revolving Period and the
Limited Amortization Period. During the Revolving Period and
the Limited Amortization Period, the Servicer shall allocate
to the Series 1997-One Certificateholders and retain in the
Collection Account for application as provided herein an
amount equal to the product of (A) the Floating Allocation
Percentage and (B) the Series 1997-One Allocation Percentage
and (C) the aggregate amount of Collections of Finance Charge
Receivables deposited in the Collection Account on such
Deposit Date; provided, however, that after the date on which
an amount of such Collections of Finance Charge Receivables
equal to the amount specified in subsection 4.05(a)(i) has
been deposited into the Collection Account and allocated to
the Series 1997-One Certificateholders, such amount shall be
paid to the Servicer; provided further, however, that after
the date on which an amount of such Collections of Finance
Charge Receivables equal to the sum of the amounts specified
in subsections 4.05(a)(i)-(viii) have been deposited into the
Collection Account (or paid to the Servicer pursuant to the
immediately preceding proviso) and allocated to the Series
1997-One Certificateholders (and, with respect to the amount
specified in subsection 4.05(a)(viii), deposited into the
Spread Account), such amount shall be paid to the Holders of
the Transferor Certificates.
(y) Allocations During the Amortization Period.
During the Amortization Period, the Servicer shall allocate to
the Series 1997-One Certificateholders and retain in the
Collection Account for application as provided herein an
amount equal to the product of (A) the Fixed/Floating
Allocation Percentage and (B) the Series 1997-One Allocation
Percentage and (C) the aggregate amount of Collections of
Finance Charge Receivables deposited in the Collection Account
on such Deposit Date; provided, however, that after the date
on which an amount of such Collections of Finance Charge
Receivables equal to the amount specified in subsection
4.05(a)(i) has been deposited into the Collection Account and
allocated to the Series 1997-One Certificateholders, such
amount shall be paid to the Servicer; provided further,
however, that after the date on which an amount of such
Collections of Finance Charge Receivables equal to the sum of
the amounts specified in subsections 4.05(a)(i) -(viii) have
been deposited into the Collection Account (or paid to the
Servicer pursuant to the immediately preceding proviso) and
allocated to the Series 1997-One Certificateholders (and, with
respect to the amount specified in subsection 4.05(a)(viii),
deposited into the Spread Account), such amount shall be paid
to the Holders of the Transferor Certificates.
(ii) Allocations of Principal Collections. The Servicer shall
allocate to the Series 1997-One Certificateholders the following
amounts as set forth below:
(w) Allocations During the Revolving Period. During
the Revolving Period (A) an amount equal to the product of (I)
the Class B Principal Percentage and (II) the Fixed/Floating
Allocation Percentage and (III) the Series 1997-One Allocation
Percentage and (IV) the aggregate amount of Collections of
Principal Receivables deposited in the Collection Account on
such Deposit Date, shall be allocated to the Series 1997-One
Certificateholders and retained in the Collection Account
until applied as provided herein and (B) an amount equal to
the product of (I) the Class A Principal Percentage and (II)
the Fixed/Floating Allocation
Percentage and (III) the Series 1997-One Allocation Percentage
and (IV) the aggregate amount of Collections of Principal
Receivables deposited in the Collection Account on such
Deposit Date shall, if such Deposit Date is after an Optional
Amortization Notice has been given but prior to the related
Optional Amortization Date, be allocated to the Series
1997-One Certificateholders and retained in the Collection
Account until applied as provided herein; provided, however,
that, with respect to clause (B) above, if the sum of such
amount and all such preceding amounts since the date the
Optional Amortization Notice was given exceeds the Optional
Amortization Amount (less (x) any amounts which the Transferor
has notified the Trustee will be available to pay the Optional
Amortization Amount from the proceeds of the issuance of one
or more new Series of Investor Certificates and (y) any
amounts available in the Special Funding Account to pay such
Optional Amortization Amount), or if no Optional Amortization
Notice has been given or the needed amount has been allocated,
then such excess shall be first, if on such Deposit Date the
Available Spread Account Amount is less than the Required
Spread Account Amount (after giving effect to any deposits
into the Spread Account on such Deposit Date pursuant to
subsection 4.05(a)(viii)), deposited into the Spread Account,
second, if any other Principal Sharing Series is outstanding
and in its amortization period or accumulation period,
retained in the Collection Account for application, to the
extent necessary, as Shared Principal Collections on the
related Distribution Date, and third, paid to the Holders of
the Transferor Certificates on each Distribution Date;
provided, however, that any such amount to be paid to the
Holders of the Transferor Certificates shall be paid to such
Holders only if the Transferor Amount on such date is greater
than the Required Transferor Amount (after giving effect to
all Principal Receivables transferred to the Trust on such
day) and otherwise shall be deposited in the Special Funding
Account; provided further, however, that any such amount may
be paid to the Holders of the Transferor Certificates on the
first Business Day of each calendar week upon satisfaction of
the Weekly Release Conditions.
(x) Allocations During the Limited Amortization
Period. During the Limited Amortization Period, (A) an amount
equal to the product of (I) the Class B Principal Percentage
and (II) the Fixed/Floating Allocation Percentage and (III)
the Series 1997-One Allocation Percentage and (IV) the
aggregate amount of Collections of Principal Receivables
deposited in the Collection Account on such Deposit Date,
shall be allocated to the Series 1997-One Certificateholders
and retained in the Collection Account until applied as
provided herein and (B) an amount equal to the product of (I)
the Class A Principal Percentage and (II) the Fixed/Floating
Allocation Percentage and (III) the Series 1997-One Allocation
Percentage and (IV) the aggregate amount of Collections of
Principal Receivables deposited in the Collection Account on
such Deposit Date, shall be allocated to the Series 1997-One
Certificateholders and retained in the Collection Account
until applied as provided herein; provided, however, that,
with respect to clause (B) above,
after the date on which an amount of such Collections equal to
the Limited Amortization Amount has been deposited into the
Collection Account and allocated to the Series 1997-One
Certificateholders, such amount shall be first, if on such
Deposit Date the Available Spread Account Amount is less than
the Required Spread Account Amount (after giving effect to any
deposits into
the Spread Account on such Deposit Date pursuant to subsection
4.05(a)(viii)), deposited into the Spread Account, second, if
any other Principal Sharing Series is outstanding and in its
amortization period or accumulation period, retained in the
Collection Account for application, to the extent necessary,
as Shared Principal Collections on the related Distribution
Date, and third paid to the Holders of the Transferor
Certificates only if the Transferor Amount on such Deposit
Date is greater than the Required Transferor Amount (after
giving effect to all Principal Receivables transferred to the
Trust on such day) and otherwise shall be deposited in the
Special Funding Account; provided further, however, that any
such amount shall be paid to the Holders of the Transferor
Certificates on the first Business Day of each calendar week
upon satisfaction of the Weekly Release Conditions.
(y) Allocations During the Controlled Amortization
Period. During the Controlled Amortization Period, an amount
equal to the product of (I) the Fixed/Floating Allocation
Percentage and (II) the Series 1997-One Allocation Percentage
and (III) the aggregate amount of Collections of Principal
Receivables deposited in the Collection Account on such
Deposit Date, shall be allocated to the Series 1997-One
Certificateholders and retained in the Collection Account
until applied as provided herein; provided, however, that
after the date on which an amount of such Collections equal to
the Invested Amount has been deposited into the Collection
Account and allocated to the Series 1997-One
Certificateholders, such amount shall be first, if any other
Principal Sharing Series is outstanding and in its
amortization period or accumulation period, retained in the
Collection Account for application, to the extent necessary,
as Shared Principal Collections on the related Distribution
Date, and second paid to the Holders of the Transferor
Certificates only if the Transferor Amount on such Deposit
Date is greater than the Required Transferor Amount (after
giving effect to all Principal Receivables transferred to the
Trust on such day) and otherwise shall be deposited in the
Special Funding Account.
(z) Allocations During the Early Amortization Period.
During the Early Amortization Period, an amount equal to the
product of (I) the Fixed/Floating Allocation Percentage and
(II) the Series 1997-One Allocation Percentage and (III) the
aggregate amount of Collections of Principal Receivables
deposited in the Collection Account on such Deposit Date,
shall be allocated to the Series 1997-One Certificateholders
and retained in the Collection Account until applied as
provided herein; provided, however, that after the date on
which an amount of such Collections equal to the Invested
Amount has been deposited into the Collection Account and
allocated to the Series 1997-One Certificateholders, such
amount shall be first, if any other Principal Sharing Series
is outstanding and in its amortization period or accumulation
period, retained in the Collection Account for application, to
the extent necessary, as Shared Principal Collections on the
related Distribution Date, and second paid to the Holders of
the Transferor Certificates only if the Transferor Amount on
such date is greater than the Required Transferor Amount
(after giving effect to all Principal Receivables transferred
to the Trust on such day) and otherwise shall be deposited in
the Special Funding Account.
Section 4.02. Determination of Monthly Interest.
(a) The amount of monthly interest ("Class A Monthly Interest")
distributable from the Collection Account with respect to the Class A
Certificates on any Distribution Date shall be an amount determined as provided
in the Certificate Purchase Agreement.
(b) The amount of monthly interest ("Class B Monthly Interest")
distributable from the Collection Account with respect to the Class B
Certificates on any Distribution Date shall be an amount equal to the product of
(i) (A) a fraction, the numerator of which is the actual number of days in the
period from (and including) the immediately preceding Distribution Date (or in
the case of the first Distribution Date, the Closing Date) to (but excluding)
such Distribution Date and the denominator of which is 360, times (B) the Class
B Certificate Rate and (ii) the Class B Average Invested Amount with respect to
the related Interest Period.
(c) Interest accrued on each Tranche shall be payable on the day on
which such Tranche matures (each such day an "Interest Distribution Date"). The
Servicer, for so long as Compucredit is the Servicer, shall make an advance on
each Interest Distribution Date in an amount equal to the interest due and
payable with respect to each Tranche maturing on such Interest Distribution Date
(each such advance, a "Servicer Advance"). Such Servicer Advance shall be paid
to the Administrative Agent, for the benefit of the Class A Certificateholders,
on each such Interest Distribution Date. The Servicer shall not be required to
make a Servicer Advance to the extent that the Servicer, in its sole discretion,
determines that such Servicer Advance is unlikely to be recovered from amounts
retained in the Collection Account pursuant to Section 4.01(c)(i) and subsequent
applications of Available Funds pursuant to Section 4.05(a)(i). On each
Distribution Date, the Servicer shall be entitled to reimbursement, without
interest, for any Servicer Advances not previously reimbursed in accordance with
Section 4.05(a)(i).
Section 4.03. Suspension of the Revolving Period; Limited Amortization
Period and Optional Amortization. (a) The Transferor may from time to time at
its sole discretion, unless a Pay Out Event shall have occurred prior thereto,
suspend the Revolving Period and cause a Limited Amortization Period to commence
for one or more Monthly Periods by delivering to the Servicer, the Trustee and
the Administrative Agent written notice at least two Business Days prior to the
first day of the Monthly Period in which such Limited Amortization Period is
scheduled to commence, which notice shall specify the Limited Amortization
Amount for such Limited Amortization Period; provided, however, that any Limited
Amortization Amount shall be in an amount of $1,000,000 or any higher multiple
of $100,000; provided further that the Transferor may not cause a Limited
Amortization Period to commence unless, in the reasonable belief of the
Transferor, such Limited Amortization Period would not result in the occurrence
of a Pay Out Event.
(b) Optional Amortization. On any Business Day during the
Revolving Period, the Transferor may cause the Servicer to provide written
notice to the Trustee, the Administrative Agent and the Series 1997-One
Certificateholders (an "Optional Amortization Notice") at least five Business
Days prior to any Business Day that is the last day of a Funding Period (the
"Optional Amortization Date") stating its intention to cause a full amortization
of the Series 1997-One Certificates on the Optional Amortization Date in an
amount (the "Optional Amortization Amount") of (x) with respect to the Class A
Certificates, not less than the Class A Invested Amount on such Optional
Amortization Date and (y) with respect to the Class B Certificates, an
amount equal to the Class B Invested Amount on such date. The Optional
Amortization Notice shall state the Optional Amortization Date, the Optional
Amortization Amount and the allocation of such Optional Amortization Amount
among the various outstanding Tranches that mature on such Optional Amortization
Date. The Optional Amortization Amount shall be paid from any Available
Principal Collections on deposit in the Collection Account, from funds on
deposit in the Special Funding Account (but only to the extent withdrawals from
the Special Funding Account will not cause the Transferor Amount to be less than
the Required Transferor Amount after giving effect to such withdrawal) or from
the proceeds of the issuance of one or more new Series of Investor Certificates
issued substantially contemporaneously with such full amortization (or any
combination of the above). The accrued interest, if any, on the Class B Invested
Amount being paid on such date shall be payable on the first Distribution Date
on or after the related Optional Amortization Date. On the Optional Amortization
Date the Servicer shall pay (x) the Optional Amortization Amount with respect to
the Class A Certificates to the Administrative Agent for the benefit of the
Class A Certificateholders and (y) the Optional Amortization Amount with respect
to the Class B Certificates to the Class B Certificateholders.
Section 4.04. Required Amount. With respect to each Distribution Date,
on the related Determination Date, the Servicer shall determine the amount (the
"Class A Required Amount"), if any, by which (x) the sum of the amounts required
pursuant to subsections 4.05(a)(i), (ii), (iii), (iv), (v) and (vi) for such
Distribution Date, exceeds (y) the Available Funds for such Distribution Date.
In the event that the difference between (x) the Class A Required Amount for
such Distribution Date and (y) the amount of Excess Spread and Excess Finance
Charge Collections applied with respect thereto pursuant to subsection 4.07(a)
on such Distribution Date is greater than zero (the "Spread Account Draw
Amount"), the Servicer shall give written notice to the Trustee of such positive
Class A Required Amount on the date of computation.
Section 4.05. Application of Available Funds and Available
Principal Collections. The Servicer shall apply, or shall cause the Trustee to
apply by written instruction to the Trustee, on each Distribution Date,
Available Funds and Available Principal Collections on deposit in the Collection
Account with respect to such Distribution
Date to make the following distributions:
(a) On each Distribution Date, an amount equal to the Available Funds
with respect to such Distribution Date will be distributed in the following
priority:
(i) an amount equal to the Servicer Advances made with respect
to the preceding Monthly Period which have not been reimbursed pursuant
to 4.05(c)(i) and any unreimbursed Servicer Advances from prior
Interest Periods shall be distributed to the Servicer, to the extent
not distributed pursuant to subsection 4.01(c)(i)(x) and (y);
(ii) an amount equal to Class A Monthly Interest for such
Distribution Date, plus the amount of any Class A Monthly Interest
previously due but not distributed to Class A Certificateholders on a
prior Distribution Date shall be distributed to the Paying Agent for
payment to Class A Certificateholders on the applicable Distribution
Date;
(iii) an amount equal to the Class A Investor Default Amount
for such Distribution Date shall be treated as a portion of Available
Principal Collections for such Distribution Date;
(iv) an amount equal to the Monthly Servicing Fee for such
Distribution Date, plus the amount of any Monthly Servicing Fee
previously due but not distributed to the Servicer on a prior
Distribution Date, shall be distributed to the Servicer (unless such
amount has been netted against deposits to the Collection Account in
accordance with Section 4.03 of the Agreement);
(v) if the Transferor fails to deposit the amount the
Transferor is required to deposit on such Distribution Date into the
Special Funding Account pursuant to Section 3.09 of the Agreement, an
amount equal to the product of (a) the Class A Floating Percentage (b)
the Series 1997-One Allocation Percentage, (c) the Floating Allocation
Percentage, and (d) the amount the Transferor should have deposited
into the Special Funding Account on such Distribution Date shall be
treated as a portion of Available Principal Collections for such
Distribution Date;
(vi) if a Pay Out Event has occurred on or prior to such
Distribution Date, an amount up to the Class A Invested Amount on such
Distribution Date shall be treated as a portion of Available Principal
Collections for such Distribution Date and distributed to the Class A
Certificateholders;
(vii) an amount equal to the aggregate amount of Class A
Investor Charge-Offs which have not been previously reimbursed shall be
treated as a portion of Available Principal Collections for such
Distribution Date;
(viii) on each Distribution Date prior to the date on which
the Spread Account terminates pursuant to subsection 4.12(e), an amount
up to the excess, if any, of the Required Spread Account Amount for
such Distribution Date over the Available Spread Account Amount for
such Distribution Date shall be deposited into the Spread Account;
(ix) an amount equal to Class B Monthly Interest for such
Distribution Date, plus the amount of any Class B Monthly Interest
previously due but not distributed to Class B Certificateholders on a
prior Distribution Date shall be distributed to the Class B
Certificateholders;
(x) an amount equal to the Class B Investor Default Amount for
such Distribution Date shall be treated as a portion of Available
Principal Collections for such Distribution Date;
(xi) if the Transferor fails to deposit the amount the
Transferor is required to deposit on such Distribution Date into the
Special Funding Account pursuant to Section 3.09 of the Agreement, an
amount equal to the product of (a) the Class B Floating Percentage (b)
the Series 1997-One Allocation Percentage, (c) the Floating Allocation
Percentage, and (d) the amount the Transferor should have deposited
into the Special Funding Account on such Distribution Date shall be
treated as a portion of Available Principal Collections for such
Distribution Date;
(xii) an amount equal to the aggregate amount by which the
Class B Invested Amount has been reduced pursuant to clauses (d), (e)
and (f) of the definition of "Class B Invested Amount" in Section 2.01
of this Supplement (but not in excess of the aggregate amount of such
reductions which have not been previously reimbursed) shall be treated
as a portion of Available Principal Collections for such Distribution
Date; and
(xiii) the balance, if any, shall constitute Excess Spread and
shall be allocated and distributed or deposited as set forth in Section
4.07.
(b) On each Distribution Date with respect to the Revolving Period, an
amount equal to the Available Principal Collections deposited in the Collection
Account for the related Monthly Period shall be distributed in the following
order of priority:
(i) an amount equal to the excess, if any, of the Class B
Invested Amount over the Required Subordinate Amount shall be
distributed to the Class B Certificateholders; and
(ii) the balance of such Available Principal Collections shall
be treated as Shared Principal Collections and applied in accordance
with Section 4.04 of the Agreement.
(c) On each Distribution Date with respect to the Limited Amortization
Period, an amount equal to the Available Principal Collections deposited in the
Collection Account for the related Monthly Period shall be distributed in the
following order of priority:
(i) an amount equal to the excess, if any, of the Class B
Invested Amount over the Required Subordinate Amount shall be
distributed to the Class B Certificateholders;
(ii) an amount equal to the Limited Amortization Amount shall
be distributed to the Class A Certificateholders; and
(iii) the balance of such Available Principal Collections
shall be treated as Shared Principal Collections and applied in
accordance with Section 4.04 of the Agreement.
(d) On each Distribution Date with respect to the Controlled
Amortization Period, an amount equal to the Available Principal Collections
deposited in the Collection Account for the related Monthly Period shall be
distributed in the following order of priority:
(i) an amount equal to the Class A Invested Amount shall be
distributed to the Class A Certificateholders;
(ii) for each Distribution Date beginning on the Distribution
Date on which the Class A Invested Amount shall have been paid in full,
an amount up to the Class B Invested Amount shall be paid to the Class
B Certificateholders; and
(iii) for each Distribution Date beginning on the Distribution
Date on which the Class B Invested Amount is paid in full, an amount
equal to the balance, if any, of such Available Principal Collections
shall be treated as Shared Principal Collections and applied in
accordance with Section 4.04 of the Agreement.
(e) On each Distribution Date with respect to the Early Amortization
Period, an amount equal to Available Principal Collections deposited in the
Collection Account for the related Monthly Period shall be distributed in the
following order of
priority:
(i) an amount up to the Class A Invested Amount on such
Distribution Date shall be distributed to the Class A
Certificateholders;
(ii) for each Distribution Date beginning on the Distribution
Date on which the Class A Invested Amount is paid in full, an amount up
to the Class B Invested Amount on such Distribution Date shall be
distributed to the Class B Certificateholders;
(iii) for each Distribution Date, after giving effect to
paragraphs (i) and (ii) above, an amount equal to the balance, if any,
of such Available Principal Collections will be treated as Shared
Principal Collections and applied in accordance with Section 4.04 of
the Agreement.
Section 4.06. Defaulted Amounts; Investor Charge-Offs.
(a) On each Determination Date, the Servicer shall calculate the Class
A Investor Default Amount, if any, for the related Distribution Date. If, on any
Distribution Date, the Class A Required Amount for the related Monthly Period
exceeds the sum of (x) the amount of Reallocated Principal Collections allocated
to Series 1997-One with respect to such Monthly Period and (y) the amount of
Excess Spread and the Excess Finance Charge Collections allocable to Series
1997-One with respect to such Monthly Period, the Class B Invested Amount, if
any, will be reduced by the amount of such excess, but not by more than the
Class A Investor Default Amount for such Distribution Date. In the event that
such reduction would cause the Class B Invested Amount to be a negative number,
the Class B Invested Amount shall be reduced to zero, and the Class A Invested
Amount shall be reduced by the amount by which the Class B Invested Amount would
have been reduced below zero, but not by more than the excess, if any, of the
Class A Investor Default Amount for such Distribution Date over the amount of
the reduction, if any, of the Class B Invested Amount for such Distribution Date
(a "Class A Investor Charge-Off"). Class A Investor Charge-Offs shall thereafter
be reimbursed and the Class A Invested Amount increased (but not by an amount in
excess of the aggregate unreimbursed Class A Investor Charge-Offs) on any
Distribution Date by the amount of Available Funds and Excess Spread and Excess
Finance Charge Collections allocated and available for that purpose pursuant to
subsections 4.05(a)(vii) and 4.07(a).
(b) On each Determination Date, the Servicer shall calculate the Class
B Investor Default Amount. If on any Distribution Date the Class B Investor
Default Amount for the previous Monthly Period exceeds the sum of (x) the amount
of Available Funds allocated and available to pay the amount required pursuant
to subsection 4.05(a)(x) and (y) the amount of Excess Spread and Excess Finance
Charge Collections allocated to Series 1997-One with respect to the related
Monthly Period which are allocated and available to pay such amount pursuant to
subsection 4.07(a), the Class B Invested Amount will be reduced by the amount of
such excess but not by more than the lesser of the Class B Investor Default
Amount and the Class B Invested Amount for such Distribution Date (a "Class B
Investor Charge-Off"). The Class B Invested Amount will be reimbursed after any
reduction pursuant to this Section 4.06 on any Distribution Date by the sum of
(x) the amount of Available Funds allocated and available to pay the amount
required pursuant to subsection 4.05(a)(xii) and (y) the amount of Excess Spread
and Excess Finance Charge Collections allocated and available on such
Distribution date for that purpose as described under subsection 4.07(a).
Section 4.07. Excess Spread; Excess Finance Charge Collections. The
Servicer shall apply, or shall cause the Trustee to apply by written instruction
to the Trustee, on each Distribution Date, Excess Spread and Excess Finance
Charge Collections allocated to Series 1997-One with respect to the related
Monthly Period, to make the following distributions or deposits in the following
order of priority:
(a) an amount equal to the amount, if any, by which (x) the
amounts required pursuant to subsections 4.05(a)(i)-(xii) with respect
to such Distribution Date exceeds (y) Available Funds with respect to
such Distribution Date and shall be distributed by the Trustee in
accordance with, and in the priority set forth in, subsections
4.05(a)(i)-(xii).
(b) the balance, if any, will constitute a portion of Excess
Finance Charge Collections for such Distribution Date and will be
available for allocation to other Series or to the Holders of the
Transferor Certificates as described in Section 4.05 of the Agreement.
Section 4.08. Reallocated Principal Collections. On each Distribution
Date, the Servicer shall apply, or shall cause the Trustee to apply, Reallocated
Principal Collections with respect to such Distribution Date, to make the
following distributions or deposits in the following order of priority: an
amount equal to the excess, if any, of (i) the Class A Required Amount, if any,
with respect to such Distribution Date over (ii) the amount of Excess Spread and
Excess Finance Charge Collections allocated to Series 1997-One with respect to
the related Monthly Period shall be distributed by the Trustee to fund any
deficiency pursuant to and in the priority set forth in subsections 4.05(a)(i),
(ii), (iii), (iv), (v), (vi) and (vii).
On each Distribution Date, the Class B Invested Amount shall
be reduced by the amount of Reallocated Principal Collections for such
Distribution Date. In the event that such reduction would cause the Class B
Invested Amount (after giving to any Class B Investor Charge-Offs for such
Distribution Date) to be a negative number, the Class B Invested Amount (after
giving effect to any Class B Investor Charge-Offs for such Distribution Date)
shall be reduced to zero.
Section 4.09. Excess Finance Charge Collections. Series 1997-One shall
be an Excess Allocation Series. Subject to Section 4.05 of the Agreement, Excess
Finance Charge Collections with respect to the Excess Allocation Series for any
Distribution Date will be allocated to Series 1997-One in an amount equal to the
product of (x) the aggregate amount of Excess Finance Charge Collections with
respect to all the Excess Allocation Series for such Distribution Date and (y) a
fraction, the numerator of which is the Finance Charge Shortfall for Series
1997-One for such Distribution Date and the denominator of which is the
aggregate amount of Finance Charge Shortfalls for all the Excess Allocation
Series for such Distribution Date. The "Finance Charge Shortfall" for Series
1997-One for any Distribution Date will be equal to the excess, if any, of (a)
the full amount required to be paid, without duplication, pursuant to subsection
4.05(a) on such Distribution Date over (b) the sum of (i) the Reallocated
Investor Finance Charge Collections and (ii) the amount of funds, if any, to be
withdrawn from the Spread Account which, pursuant to subsection 4.12(c), are
required to be included in Available Funds with respect to such Distribution
Date.
Section 4.10. Reallocated Investor Finance Charge Collections.
(a) That portion of Group I Investor Finance Charge Collections for any
Distribution Date equal to the amount of Reallocated Investor Finance Charge
Collections for such Distribution Date will be allocated to Series 1997-One and
will be distributed as set forth in this Supplement.
(b) Reallocated Investor Finance Charge Collections with respect to any
Distribution Date shall equal the sum of (i) the aggregate amount of Series
1997-One Monthly Interest, Investor Default Amount, Series 1997-One Monthly Fees
and Series 1997-One Additional Amounts for such Distribution Date and (ii) that
portion of excess Group I Investor Finance Charge Collections to be included in
Reallocated Investor Finance Charge Collections pursuant to subsection (c)
hereof; provided, however, that if the amount of Group I Investor Finance Charge
Collections for such Distribution Date is less than the sum of (w) Group I
Investor Monthly Interest, (x) Group I Investor Default Amount, (y) Group I
Investor Monthly Fees and (z) Group I Investor Additional Amounts, then
Reallocated Investor Finance Charge Collections shall equal the sum of the
following amounts for such Distribution Date:
(A) The product of (I) Group I Investor Finance Charge
Collections (up to the amount of Group I Investor Monthly Interest) and
(II) a fraction, the numerator of which is Series 1997-One Monthly
Interest and the denominator of which is Group I Investor Monthly
Interest;
(B) the product of (I) Group I Investor Finance Charge
Collections less the amount of Group I Investor Monthly Interest (such
amount not less than zero) (up to the Group I Investor Default Amount)
and (II) a fraction, the numerator of which is the Investor Default
Amount and the denominator of which is the Group I Investor Default
Amount;
(C) the product of (I) Group I Investor Finance Charge
Collections less the amount of Group I Investor Monthly Interest and
the Group I Investor Default Amount (such amount not less than zero)
(up to Group I Investor Monthly Fees) and (II) a fraction, the
numerator of which is Series 1997-One Monthly Fees and the denominator
of which is Group I Investor Monthly Fees; and
(D) the product of (I) Group I Investor Finance Charge
Collections less the sum of (i) Group I Investor Monthly Interest, (ii)
the Group I Investor Default Amount and (iii) Group I Investor Monthly
Fees (such amount not less than zero) and (II) a fraction, the
numerator of which is Series 1997-One Additional Amounts and the
denominator of which is Group I Investor Additional Amounts.
(c) If the amount of Group I Investor Finance Charge Collections for
such Distribution Date exceeds the sum of (i) Group I Investor Monthly Interest,
(ii) Group I Investor Default Amount, (iii) Group I Investor Monthly Fees and
(iv) Group I Investor Additional Amounts, then Reallocated Investor Finance
Charge Collections for such Distribution Date shall include an amount equal to
the product of (x) the amount of such excess and (y) a fraction, the numerator
of which is the Invested Amount as of the last day of the second preceding
Monthly Period and the denominator of which is the sum of such Invested Amount
and the aggregate invested amounts for all other Series included in Group I as
of such last day.
Section 4.11. Shared Principal Collections. Subject to Section 4.04
of the Agreement, Shared Principal Collections for any Distribution Date will
be allocated to Series 1997-One in an amount equal to the product of (x) the
aggregate amount of Shared Principal Collections with respect to all
Principal Sharing Series for such Distribution Date and (y) a fraction, the
numerator of which is the Series
1997-One Principal Shortfall for such Distribution Date and the denominator of
which is the aggregate amount of Principal Shortfalls for all the Series which
are Principal Sharing Series for such Distribution Date. The "Series 1997-One
Principal Shortfall" will be equal to (a) for any Distribution Date with respect
to the Revolving Period, zero; provided, that if such Distribution Date is an
Optional Amortization Date, the Series 1997-One Shortfall shall be an amount
determined by the Transferor not to exceed the related Optional Amortization
Amount, (b) for any Distribution Date with respect to the Limited Amortization
Period, the excess, if any, of the Limited Amortization Amount over the amount
of Available Principal Collections for such Distribution Date (excluding any
portion thereof attributable to Shared Principal Collections) and (c) for any
Distribution Date with respect to the Controlled Amortization Period or the
Early Amortization Period, the excess, if any, of the Invested Amount over the
amount of Available Principal Collections for such Distribution Date (excluding
any portion thereof attributable to Shared Principal Collections).
Section 4.12. Spread Account.
(a) The Servicer shall establish and maintain, in the name of the
Trustee, on behalf of the Trust, for the benefit of the Class A
Certificateholders, an Eligible Deposit Account (the "Spread Account") bearing a
designation clearly indicating that the funds deposited therein are held for the
benefit of the Class A Certificateholders. The Spread Account shall initially be
established with the Trustee. The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Spread Account and in
all proceeds thereof. The Spread Account shall be under the sole dominion and
control of the Trustee for the benefit of the Class A Certificateholders. If at
any time the Spread 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 the Administrative
Agent shall consent) establish a new Spread Account meeting the conditions
specified above as an Eligible Deposit Account, and shall transfer any cash or
any investments to such new Spread Account. The Trustee, at the written
direction of the Servicer, shall (i) make withdrawals from the Spread Account
from time to time in an amount up to the Available Spread Account Amount at such
time, for the purposes set forth in this Supplement, and (ii) on each
Distribution Date prior to the termination of the Spread Account make a deposit
into the Spread Account in the amount specified in, and otherwise in accordance
with, subsection 4.05(a)(viii).
(b) Funds on deposit in the Spread Account shall be invested at the
written direction of the Servicer by the Trustee in Eligible Investments. In no
event shall the Trustee be liable for the selection of Eligible Investments or
for investment losses incurred thereon. The Trustee shall have no liability in
respect of losses incurred as a result of the liquidation of any Eligible
Investment prior to its stated maturity or the failure of the Servicer to
provide timely written investment direction. The Trustee shall have no
obligation to invest or reinvest any amounts held hereunder in the absence of
written investment direction. Funds on deposit in the Spread Account on any
Transfer Date, after giving effect to any withdrawals from the Spread Account on
such Transfer Date, shall be invested in such investments that will mature so
that such funds will be available for withdrawal on or prior to the following
Transfer Date. The Trustee shall maintain for the benefit of the Class A
Certificateholders possession of the negotiable instruments or securities, if
any, evidencing such Eligible Investments. 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. On each Distribution Date, all interest and earnings
(net of losses and investment expenses) accrued since the preceding Distribution
Date on funds on deposit in the Spread Account shall be retained in the Spread
Account (to the extent that the Available Spread Account Amount is less than the
Required Spread Account Amount) and the balance, if any, shall be deposited in
the Collection Account and treated as collections of Finance Charge Receivables
allocable to Series 1997-One. For purposes of determining the availability of
funds or the balance in the Spread Account for any reason under this Supplement,
except as otherwise provided in the preceding sentence, investment earnings on
such funds shall be deemed not to be available or on deposit.
(c) In the event that for any Distribution Date the Spread Account Draw
Amount is greater than zero, the Spread Account Draw Amount, up to the Available
Spread Account Amount, shall be withdrawn from the Spread Account on the related
Transfer Date by the Trustee (acting in accordance with the written instructions
of the Servicer), deposited into the Collection Account and included in
Available Funds for such Distribution Date.
(d) In the event that the Spread Account Surplus on any Distribution
Date, after giving effect to all deposits to and withdrawals from the Spread
Account with respect to such Distribution Date, is greater than zero, the
Trustee, acting in accordance with the written instructions of the Servicer,
shall withdraw from the Spread Account, and pay to the Transferor, an amount
equal to such Spread Account Surplus.
(e) Upon the earlier to occur of (i) the day on which the Class A
Invested Amount and all other accrued and unpaid amounts owing to the Class A
Certificateholders pursuant to the Certificate Purchase Agreement are paid in
full to the Class A Certificateholders and (ii) the termination of the Trust
pursuant to the Agreement, the Trustee, acting in accordance with the
instructions of the Servicer, after the prior payment of all amounts owing to
the Class A Certificateholders which are payable from the Spread Account as
provided herein, shall withdraw from the Spread Account and pay to the
Transferor all amounts, if any, on deposit in the Spread Account and the Spread
Account shall be deemed to have terminated for purposes of this Supplement.
Section 4.13. Invested Amount Increases. (a) The Class A
Certificateholders agree, by acceptance of the Class A Certificates, that the
Transferor may from time to time, prior to the commencement of the Controlled
Amortization Period or the Early Amortization Period, request upon one Business
Day prior written notice to each of the Trustee, the Servicer and the Class A
Certificateholders substantially in the form of Exhibit A to the Certificate
Purchase Agreement that the Class A Certificateholders acquire additional
undivided interests in the Trust in specified amounts (each such amount, a
"Class A Invested Amount Increase"); provided, however, that any applicable
conditions set forth in Section 2.2 of the Certificate Purchase Agreement shall
have been satisfied or waived as provided therein. The Class A
Certificateholders shall acquire such additional interest, upon payment, in
immediately available funds, to the Transferor of the amount of such Class A
Invested Amount Increase, in accordance with the payment instructions specified
in
the notice delivered with respect to such Class A Invested Amount Increase.
(b) The Class B Certificateholders agree, by acceptance of the Class B
Certificates, that the Transferor may from time to time, prior to the
commencement of the Controlled Amortization Period or the Early Amortization
Period, request upon one Business Day prior written notice to each of the
Trustee, the Servicer and the Class B Certificateholders substantially in the
form of Exhibit D that the Class B Certificateholders acquire additional
undivided interests in the Trust in specified amounts (each such amount, a
"Class B Invested Amount Increase"); provided, however, that (i) after giving
effect to such Class B Invested Amount Increase, the Transferor Amount shall not
be less than the Required Transferor Amount and (ii) after giving effect to such
Class B Invested Amount Increase, (a) the product of the Transferor Amount and
the Series 1997-One Allocation Percentage shall not be less than (b) the Series
Required Transferor Amount. The Class B Certificateholders shall acquire such
additional interest through a reduction of the Transferor Interest by the amount
of such Class B Invested Amount Increase.
(c) The Transferor may on any Business Day permanently reduce the
Facility Limit if the following conditions are met: (i) after giving effect to
such reduction, the Facility Limit would be not less than the Class A Invested
Amount on the date of such reduction (after giving effect to any increase
pursuant to Section 4.13(a) on or prior to the date of such reduction of the
Facility Limit) and (ii) the Commitments (as defined in the Certificate Purchase
Agreement) are reduced by the same amount on such date. In order to effect the
reduction of the Facility Limit pursuant to this Section 4.13(c), the Transferor
shall deliver to the Servicer, the Trustee and the Administrative Agent at least
five Business Days prior to such reduction a written notice executed by a duly
authorized representative of the Transferor specifying the decrease in the
Facility Limit, the date on which such decrease is to become effective and the
Class A Invested Amount on such date. The Administrative Agent shall, subject to
the provisions of the Certificate Purchase Agreement and the Program Support
Agreement (as defined in the Certificate Purchase Agreement), take all actions
necessary to reduce the Commitments to an amount that will permit the specified
reduction of the Facility Limit. Upon the date specified in such notice, if the
conditions set forth in this Section 4.13(c) have been met, the Facility Limit
shall be reduced by the amount specified in such notice.
(d) No decrease in the Class A Invested Amount pursuant to Section 4.03
shall limit the ability of the Transferor to increase the Class A Invested
Amount pursuant to Section 4.13(a).
ARTICLE V
Distributions and Reports to
Series 1997-One Certificateholders
Section 5.01. Distributions.
(a) On each Distribution Date, the Paying Agent shall distribute to
each Class A Certificateholder (other than as provided in Section 12.02 of the
Agreement) such amounts held by the Paying Agent that are allocated and
available on such Distribution Date to pay the Class A Monthly Interest, any
principal payable to and other amounts due to the Class A Certificates pursuant
to this Supplement.
(b) On each Special Payment Date, the Paying Agent shall distribute to
each Class A Certificateholder of record on the related Record Date (other than
as provided in Section 12.02 of the Agreement) such amounts held by the Paying
Agent that are allocated and available on such date to pay principal of the
Class A Certificates pursuant to this Supplement up to a maximum amount on any
such date equal to the Class A Invested Amount on such date.
(c) On each Distribution Date, the Paying Agent shall distribute to
each Class B Certificateholder of record on the related Record Date (other than
as provided in Section 12.02 of the Agreement) such amounts held by the Paying
Agent that are allocated and available on such Distribution Date to pay interest
on the Class B Certificates pursuant to this Supplement.
(d) On each Special Payment Date, the Paying Agent shall distribute to
each Class B Certificateholder of record on the related Record Date (other than
as provided in Section 12.02 of the Agreement) such amounts held by the Paying
Agent that are allocated and available on such date to pay principal of the
Class B Certificates pursuant to this Supplement up to a maximum amount on any
such date equal to the Class B Invested Amount on such date.
(e) The distributions to be made pursuant to this Section 5.01 are
subject to the provisions of Sections 2.06, 9.01, 10.01 and 12.02 of the
Agreement and Sections 8.01 and 8.02 of this Supplement.
(f) Except as provided in Section 12.02 of the Agreement with respect
to a final distribution, distributions to Series 1997-One Certificateholders
hereunder shall be made by wire transfer of immediately available funds to the
account that has been designated by the applicable Certificateholders not less
than ten Business Days prior to such Distribution Date.
Section 5.02. Reports and Statements to Series 1997-One
Certificateholders.
(a) Not later than each Determination Date, the Servicer shall deliver
to the Trustee, the Paying Agent and the Administrative Agent (i) a statement
substantially in the form of Exhibit C-1 prepared by the Servicer and (ii) a
certificate of a Servicing Officer substantially in the form attached thereto.
(b) A copy of each statement or certificate provided pursuant to
paragraph (a) or (b) may be obtained by any Series 1997-One Certificateholder or
any Certificate Owner thereof by a request in writing to the Servicer.
(c) On or before January 31 of each calendar year, beginning with
calendar year 1998, the Paying Agent, on behalf of the Trustee, shall furnish or
cause to be furnished to each Person who at any time during the preceding
calendar year was a Series 1997-One Certificateholder, a statement prepared by
the Servicer containing the information which is required to be contained in the
statement to Series 1997-One Certificateholders, as set forth in paragraph (a)
above aggregated for such calendar year or the applicable portion thereof during
which such Person was a Series 1997-One Certificateholder, together with other
information as is required to be provided by an issuer of indebtedness under the
Code. Such obligation of the Servicer shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by the
Paying Agent pursuant to any requirements of the Code as from time to time in
effect.
ARTICLE VI
Pay Out Events
Section 6.01. Pay Out Events. If any one of the following events shall
occur with respect to the Series 1997-One Certificates:
(a) the occurrence of an Insolvency Event relating to the
Transferor or Columbus Bank.
(b) the Trust becomes an investment company within the meaning
of the Investment Company Act;
(c) failure on the part of the Transferor (i) to make any
payment or deposit required by the terms of the Agreement or this
Supplement on or before the date occurring five Business Days after the
date such payment or deposit is required to be made therein or herein
or (ii) duly to observe or perform any other covenants or agreements of
the Transferor set forth in the Agreement, the Receivables Purchase
Agreement, the Certificate Purchase Agreement or this Supplement, which
failure has a material adverse effect on the Series 1997-One
Certificateholders and which continues unremedied for a period of 10
days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Transferor by the
Trustee, or to the Transferor and the Trustee by any Holder of the
Series 1997-One Certificates;
(d) any representation or warranty made by the Transferor in
the Agreement or this Supplement shall prove to have been incorrect
when made or when delivered, which continues to be incorrect for a
period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Transferor by the Trustee, or to the Transferor and the Trustee by
any Holder of the Series 1997-One Certificates, and as a result of
which the interests of the Series 1997-One Certificateholders are
materially and adversely affected for such period; provided, however,
that a Pay Out Event pursuant to this subsection 6.01(d) shall not be
deemed to have occurred hereunder if the Transferor has accepted
reassignment of the related Receivable, or all of such Receivables, if
applicable, during such period in accordance with the provisions of the
Agreement;
(e) any Servicer Default shall occur as a result of which the
interests of the Series 1997-One Certificateholders are materially and
adversely affected (provided that a Servicer Default under Section
10.01(d) of the Agreement is hereby deemed to materially and adversely
affect the Series 1997-One Certificateholders, and, notwithstanding
Section 10.01(d) of the Agreement, shall not be subject to any grace
period);
(f) on any date of determination, the Class B Invested Amount
is less than the Required Subordinate Amount and the Class B Invested
Amount continues to be less than the Required Subordinate Amount for a
period of two Business Days after such date of determination;
(g) on any date of determination, the Transferor Amount is
less than the Required Transferor Amount (after giving effect to all
Principal Receivables
transferred to the Trust on such date of determination) and which
shortfall continues unremedied for a period of five days after the date
of such determination;
(h) the average Net Yield for any two consecutive Monthly
Periods is reduced to a rate which is less than 2.0%;
(i) the average Delinquency Ratio for any two consecutive
Monthly Periods exceeds 10.0%;
(j) the date on which a Program Support Provider (as defined
in the Certificate Purchase Agreement) shall have given notice that an
event of default has occurred and is continuing under their respective
agreements with the Purchaser (as defined in the Certificate Purchase
Agreement);
(k) for so long as the Affinity Card Agreement is in effect,
the Letter of Credit (as such term is defined in the Affinity Card
Agreement) maintained by CompuCredit in favor of Columbus Bank pursuant
to Section 3.3 of the Affinity Card Agreement shall be terminated,
revoked, reduced or drawn on and such termination, revocation or
reduction has not been remedied within five days and, in the case of a
drawing, such drawing is not reimbursed within five days;
(l) default in the payment at stated maturity of any
indebtedness of CompuCredit or any direct affiliate thereof having an
outstanding principal amount greater than $1,000,000 and such default
remains unremedied for a period of 30 days beyond any applicable grace
period;
(m) the change in control of CompuCredit or the Transferor
subject to Sections 7.02 and 8.02 of the Agreement;
(n) any of Messrs. Xxxxx X. Xxxxx, Xxxxx X. Xxxxxx or Xxxxxxx
Xxxxxxx shall cease to be employed by CompuCredit, its affiliates or
agents, and such individual's position shall not be filled within 60
days of such individual's termination of employment or status as an
agent by an individual approved by the Administrative Agent;
(o) the Trustee shall, for any reason, fail to have a valid
and perfected first priority security interest in the Receivables;
(p) any material adverse change in the operations of the
Transferor, the Servicer or Columbus Bank, or any other event, which
materially affects the Transferor's or the Servicer's or Columbus
Bank's ability to either collect upon the Receivables or the
Transferor's, the Servicer's or Columbus Bank's ability to perform
thereunder, which has a material adverse effect on the Class A
Certificateholders;
(q) if during the period Columbus Bank services or subservices
the Receivables or the Accounts in any material respect, Columbus
Bank's senior unsecured debt ratings shall be downgraded below Baa2 or
BBB by Xxxxx'x or Standard & Poor's, respectively; and
(r) if, on any date, the product of (i) the Floating
Allocation Percentage (determined, for this purpose only, by using a
numerator equal to the Class A Invested Amount, or Class A Initial
Invested Amount, as applicable, in
lieu of the Invested Amount or Initial Invested Amount, as applicable)
and (ii) the sum of the principal amount on deposit in the Special
Funding Account and the total amount of Principal Receivables in the
Trust on such date, is less than the Class A Invested Amount on such
date.
then, in the case of any event described in subparagraph (a), (d) or (e), after
the applicable grace period, if any, set forth in such subparagraphs, either the
Trustee or the Holders of Series 1997-One Certificates evidencing more than 50%
of the aggregate unpaid principal amount of Series 1997-One Certificates by
notice then given in writing to the Transferor and the Servicer (and to the
Trustee if given by the Series 1997-One Certificateholders) may declare that a
Pay Out Event has occurred with respect to Series 1997-One as of the date of
such notice, and, in the case of any event described in subparagraph (b), (c),
(f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q) or (r) a Pay Out
Event shall occur with respect to Series 1997-One without any notice or other
action on the part of the Trustee or the Series 1997-One Certificateholders
immediately upon the occurrence of such event, unless such Pay Out Event is
waived by the Holders of Series 1997-One Certificates evidencing more than 50%
of the aggregate unpaid principal amount of Series 1997-One Certificates by
notice given in writing to the Trustee, the Transferor and the Servicer.
ARTICLE VII
Optional Repurchase; Series Termination
Section 7.01. Optional Repurchase.
(a) On any day occurring on or after the date on which the Invested
Amount is reduced to 10% or less of the largest Invested Amount at any time
on or after the Closing Date, the Transferor shall have the option to
purchase the Series 1997-One Certificateholders' Interest, at a purchase
price equal to (i) if such day is a Distribution Date, the Reassignment
Amount for such Distribution Date or (ii) if such day is not a Distribution
Date, the Reassignment Amount for the Distribution Date following such day.
(b) The Transferor shall give the Servicer and the Trustee at least 30
days prior written notice of the date on which the Transferor intends to
exercise such purchase option. Not later than 11:00 a.m., New York City time, on
such day the Transferor shall deposit the Reassignment Amount into the
Collection Account in immediately available funds. Such purchase option is
subject to payment in full of the Reassignment Amount. Following the deposit of
the Reassignment Amount into the Collection Amount in accordance with the
foregoing, the Invested Amount for Series 1997-One shall be reduced to zero and
the Series 1997-One Certificateholders shall have no further interest in the
Receivables. The Reassignment Amount shall be distributed as set forth in
subsection 8.01(b).
Section 7.02. Series Termination.
(a) If, on the June 2007 Distribution Date, the Invested Amount (after
giving effect to all changes therein on such date) would be greater than zero,
the
Servicer, on behalf of the Trustee, shall, within the 40-day period which
begins on such Distribution Date, solicit bids for the sale of Principal
Receivables and the related Finance Charge Receivables (or interests therein) in
an amount equal to the Invested Amount at the close of business on the last day
of the Monthly Period preceding the Series 1997-One Termination Date (after
giving effect to all distributions required to be made on the Series 1997-One
Termination Date, except pursuant to this Section 7.02). Such bids shall require
that such sale shall (subject to subsection 7.02(b)) occur on the Series
1997-One Termination Date. The Transferor shall be entitled to participate in,
and to receive from the Servicer a copy of each other bid submitted in
connection with, such bidding process.
(b) The Servicer, on behalf of the Trustee, shall sell such
Receivables (or interests therein) on the Series 1997-One Termination Date to
the bidder who made the highest cash purchase offer. The proceeds of any such
sale shall be treated as Collections on the Receivables allocated to the Series
1997-One Certificateholders pursuant to the Agreement and this Supplement;
provided, however, that the Servicer shall determine conclusively the amount of
such proceeds which are allocable to Finance Charge Receivables and the amount
of such proceeds which are allocable to Principal Receivables. During the period
from the June 2007 Distribution Date to the Series 1997-One Termination Date,
the Servicer shall continue to collect payments on the Receivables and allocate
and deposit such Collections in accordance with the provisions of the Agreement
and the Supplements.
ARTICLE VIII
Final Distributions
Section 8.01. Sale of Receivables or Certificateholders' Interest
pursuant to Section 2.06 or 10.01 of the Agreement and Section 7.01 or 7.02 of
this Supplement.
(a) (i) The amount to be paid by the Transferor with respect
to Series 1997-One in connection with a reassignment of Receivables to
the Transferor pursuant to Section 2.06 of the Agreement shall equal
the Reassignment Amount for the first Distribution Date following the
Monthly Period in which the reassignment obligation arises under the
Agreement.
(ii) The amount to be paid by the Transferor with respect to
Series 1997-One in connection with a repurchase of the
Certificateholders' Interest pursuant to Section 10.01 of the Agreement
shall equal the Reassignment Amount for the Distribution Date of such
repurchase.
(b) With respect to the Reassignment Amount deposited into the
Collection Account pursuant to Section 7.01 or any amounts allocable to the
Series 1997-One Certificateholders' Interest deposited into the Collection
Account pursuant to Section 7.02, the Trustee shall, in accordance with the
written direction of the Servicer, not later than 11:00 a.m., New York City
time, on the related Distribution Date, make deposits or distributions of the
following amounts (in the priority set forth below and, in each case after
giving effect to any deposits and distributions otherwise to be made on such
date) in immediately available funds: (i) (x) the Class A Invested Amount on
such Distribution Date will be distributed to the Paying Agent for payment to
the Class A Certificateholders and (y) an amount equal to the sum of (A) Class A
Monthly Interest for such Distribution Date and (B) any Class A Monthly Interest
previously due but not distributed to the Class A Certificateholders on a prior
Distribution Date will be distributed to the Paying Agent for payment to the
Class A Certificateholders and (ii) (x) the Class B Invested Amount on such
Distribution Date will be distributed to the Paying Agent for payment to the
Class B Certificateholders and (y) an amount equal to the sum of (A) Class B
Monthly Interest for such Distribution Date and (B) any Class B Monthly Interest
previously due but not distributed to the Class B Certificateholders on a prior
Distribution Date will be distributed to the Paying Agent for payment to the
Class B Certificateholders.
(c) Notwithstanding anything to the contrary in this Supplement or the
Agreement, all amounts distributed to the Paying Agent pursuant to subsection
8.01(b) for payment to the Series 1997-One Certificateholders shall be deemed
distributed in full to the Series 1997-One Certificateholders on the date on
which such funds are distributed to the Paying Agent pursuant to this Section
and shall be deemed to be a final distribution pursuant to Section 12.02 of the
Agreement.
Section 8.02. Distribution of Proceeds of Sale, Disposition or
Liquidation of the Receivables pursuant to Section 9.01 of the Agreement.
(a) Not later than 4:00 p.m., New York City time, on the Distribution
Date following the date on which the Insolvency Proceeds are deposited into the
Collection Account pursuant to subsection 9.01(b) of the Agreement, the Trustee
shall in accordance with the written direction of the Servicer (in the following
priority and, in each case, after giving effect to any deposits and
distributions otherwise to be made on such Distribution Date) (i) deduct an
amount equal to the Class A Invested Amount on such Distribution Date from the
portion of the Insolvency Proceeds allocated to Series 1997-One Allocable
Principal Collections and distribute such amount to the Paying Agent for payment
to the Class A Certificateholders, provided that the amount of such distribution
shall not exceed the product of (x) the portion of the Insolvency Proceeds
allocated to Series 1997-One Allocable Principal Collections and (y) the
Fixed/Floating Allocation Percentage with respect to the related Monthly Period
and (ii) deduct an amount equal to the Class B Invested Amount on such
Distribution Date from the portion of the Insolvency Proceeds allocated to
Series 1997-One Allocable Principal Collections and distribute such amount to
the Paying Agent for payment to the Class B Certificateholders, provided that
the amount of such distribution shall not exceed (x) the product of (A) the
portion of such Insolvency Proceeds allocated to Series 1997-One Allocable
Principal Collections and (B) the Fixed/Floating Allocation Percentage with
respect to the related Monthly Period minus (y) the amount distributed to the
Paying Agent pursuant to clause (i) of this sentence. To the extent that the
product of (A) the portion of the Insolvency Proceeds allocated to Series
1997-One Allocable Principal Collections and (B) the Fixed/Floating Allocation
Percentage with respect to the related Monthly Period exceeds the aggregate
amounts distributed to the Paying Agent pursuant to the preceding sentence, the
excess shall be allocated to the Transferor's Interest and shall be released to
the Holders of the Transferor Certificates on such Distribution Date.
(b) Not later than 4:00 p.m., New York City time, on such
Distribution Date, the Trustee shall in accordance with the written direction of
the Servicer (in the following priority and, in each case, after giving effect
to any deposits and distributions otherwise to be made on such Distribution
Date) (i) deduct an amount equal to the sum of (x) Class A Monthly Interest for
such Distribution Date and (y) any Class A Monthly Interest previously due but
not distributed to the Class A Certificateholders on a prior Distribution Date
from the portion of the Insolvency Proceeds allocated to Collections of Finance
Charge Receivables and distribute such
amount to the Paying Agent for payment to the Class A Certificateholders,
provided that the amount of such distribution shall not exceed the product of
(x) the portion of the Insolvency Proceeds allocated to Series 1997-One
Allocable Finance Charge Collections and (y) the Floating Allocation
Percentage with respect to the related Monthly Period and (ii) deduct an
amount equal to the sum of (x) Class B Monthly Interest for such Distribution
Date and (y) Class B Monthly Interest previously due but not distributed to
the Class B Certificateholders on a prior Distribution Date from the portion
of the Insolvency Proceeds allocated to Series 1997-One Allocable Finance
Charge Collections and distribute such amount to the Paying Agent for payment
to the Class B Certificateholders, provided that the amount of such
distribution shall not exceed (x) the product of (x) the portion of the
Insolvency Proceeds allocated to Series 1997-One Allocable Finance Charge
Collections and (y) the Floating Allocation Percentage with respect to the
related Monthly Period minus (y) the amount distributed to the Paying Agent
pursuant to clause (i) of this sentence. To the extent that the product of
(A) the portion of the Insolvency Proceeds allocated to Series 1997-One
Allocable Finance Charge Collections and (B) the Floating Allocation
Percentage with respect to the related Monthly Period exceeds the aggregate
amount distributed to the Paying Agent pursuant to the preceding sentence,
the excess shall be allocated to the Transferor's Interest and shall be
released to the Holders of the Transferor Certificates on such Distribution
Date.
(c) Notwithstanding anything to the contrary in this Supplement or the
Agreement, all amounts distributed to the Paying Agent pursuant to this Section
for payment to the Series 1997-One Certificateholders shall be distributed in
full to the Series 1997-One Certificateholders on the date on which funds are
distributed to the Paying Agent pursuant to this Section and shall be deemed to
be a final distribution pursuant to Section 12.02 of the Agreement.
ARTICLE IX
Miscellaneous Provisions
Section 9.01. Ratification of Agreement. As supplemented by this
Supplement, the Agreement is in all respects ratified and confirmed and the
Agreement as so supplemented by this Supplement shall be read, taken and
construed as one and the same instrument.
Section 9.02. Counterparts. This Supplement may be executed in two or
more counterparts, and by different parties on separate counterparts, each of
which shall be an original, but all of which shall constitute one and the same
instrument.
Section 9.03. Governing Law. THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.04. Tax Matters. (a) Notwithstanding anything to the contrary
herein, each of the Paying Agent, Servicer or Trustee shall be entitled to
withhold any amount that it determines in its sole discretion is required to be
withheld pursuant to Section 1446 of the Code and such amount shall be deemed to
have been paid for all purposes of the Agreement.
(b) Each of the Series 1997-One Certificateholders agrees that
prior to the
date on which the first interest payment hereunder is due thereto, it will
provide to the Servicer and the Trustee (i) if such Series 1997-One
Certificateholder is incorporated or organized under the laws of a jurisdiction
outside the United States, two duly completed copies of the United States
Internal Revenue Service Form 4224 or, if the Transferor in its sole discretion
consents, Form 1001, or in either case successor applicable or required forms,
(ii) a duly completed copy of United States Internal Revenue Service Form W-9
or, if the Transferor in its sole discretion consents, Form W-8, or in either
case successor applicable or required forms, and (iii) such other forms and
information as may be required to confirm the availability of any applicable
exemption from United States federal, state or local withholding taxes. Each
Series 1997-One Certificateholder agrees to provide to the Servicer and Trustee,
like additional subsequent duly completed forms (subject to like consent)
satisfactory to the Servicer and Trustee on or before the date that any such
form expires or becomes obsolete, or upon the occurrence of any event requiring
an amendment, resubmission or change in the most recent form previously
delivered by it, and to provide such extensions or renewals as may be reasonably
requested by the Servicer or Trustee. Each Series 1997-One Certificateholder
certifies, represents and warrants that as of the date of this Agreement, or in
the case of a Series 1997-One Certificateholder which is an assignee as of the
date of such Certificate Assignment, that it is entitled (x) to receive payments
under this Agreement without deduction or withholding (other than pursuant to
Section 1446 of the Code, if applicable) of any United States federal income
taxes and (y) to an exemption from United States backup withholding tax. Each
Series 1997-One Certificateholder represents and warrants that it shall pay any
taxes imposed on such Series 1997-One Certificateholder attributable to its
interest in the Series 1997-One Certificates.
(c) Each Series 1997-One Certificateholder agrees with the
Transferor that: (a) such Series 1997-One Certificateholder will deliver to the
Transferor on or before the Closing Date or the effective date of any
participation or Certificate Assignment a letter in the form annexed hereto as
Exhibit E (an "Investment Letter"), executed by such assignee Series 1997-One
Certificateholder, in the case of a Certificate Assignment, or by the
Participant, in the case of a participation, with respect to the purchase by
such Series 1997-One Certificateholder or Participant of a portion of an
interest relating to the Series 1997-One Certificate and (b) all of the
statements made by such Series 1997-One Certificateholder in its Investment
Letter shall be true and correct as of the date made.
(d) Each Series 1997-One Certificateholder, by its holding of
an interest in the Series 1997-One Certificates, hereby severally represents,
warrants and covenants, and each Series 1997-One Certificateholder that acquires
an interest in the Series 1997-One Certificates by Certificate Assignment shall
be deemed to have severally represented, warranted and covenanted upon such
Certificate Assignment that: (i) such Series 1997-One Certificateholder has not
acquired and shall not sell, trade or transfer any interest in the Series
1997-One Certificates, nor cause any interest in the Series 1997-One
Certificates to be marketed, on or through either (A) an "established securities
market (or the substantial equivalent thereof)" within the meaning of Section
7704(b)(1) of the Code (including an interdealer quotation system that regularly
disseminates firm buy or sell quotations by identified brokers or dealers by
electronic means or otherwise) or (B) a "secondary market" (or the substantial
equivalent thereof) within the meaning of Section 7704(b)(2) of the Code
(including a market wherein interests in the Series 1997-One Certificates are
regularly quoted by any person making a market in such interests and a market
wherein any person regularly makes available bid or offer quotes with respect to
interests in the Series 1997-One Certificates and stands ready to effect buy or
sell transactions
at the quoted prices for itself or on behalf of others), and (ii) unless the
Transferor consents otherwise, such Series 1997-One Certificateholder (A) is
properly classified as, and shall remain classified as, a "corporation" as
described in Section 7701(a)(3) of the Code and (B) is not, and shall not
become, an "S corporation" as described in Section 1361 of the Code. Each Series
1997-One Certificateholder represents, warrants and covenants that it shall (A)
cause each of its Participants otherwise permitted hereunder to make
representations, warranties and covenants similar to the foregoing for the
benefit of the Transferor and the Trust at the time such Participant becomes a
Participant and (B) forward a copy of such representations, warranties and
covenants to the Trustee. In the event of any breach of the representation,
warranty and covenant of a Series 1997-One Certificateholder or its Participant
that such Series 1997-One Certificateholder or participant shall remain
classified as a corporation other than an S corporation, such Series 1997-One
Certificateholder shall notify the Transferor promptly upon such Series 1997-One
Certificateholder's becoming aware of such breach, and thereupon the Series
1997-One Certificateholder hereby agrees to use reasonable efforts to procure a
replacement investor which is acceptable to the Transferor not so affected to
replace such affected Series 1997-One Certificateholder. In any such event, the
Transferor shall also have the right to procure a replacement investor. Each
affected Series 1997-One Certificateholder hereby agrees to take all actions
necessary to permit a replacement investor to succeed to its rights and
obligations hereunder. Each Series 1997-One Certificateholder which has a
Participant which has breached its representation, warranty and covenant that it
shall remain classified as a corporation other than an S corporation hereby
agrees (without limiting the right of the Transferor to procure a replacement
investor for such Series 1997-One Certificateholder as provided above in this
paragraph) to notify the Transferor of such breach promptly upon such Series
1997-One Certificateholder's becoming aware thereof and to use reasonable
efforts to procure a replacement Participant, as applicable, not so affected
which is acceptable to the Transferor to replace any such Participant.
(e) Subject to the provisions of subsection (h), each Series 1997-One
Certificateholder may at any time sell, assign or otherwise transfer, to the
extent of such Series 1997-One Certificateholder's interest in the Series
1997-One Certificates (each, a "Certificate Assignment"), to any Person to which
the Transferor may consent, which consent shall not be unreasonably withheld (it
being understood that such consent shall be considered to be withheld reasonably
on the basis that following such proposed Certificate Assignment the number of
Private Holders would exceed 80 or otherwise cause the Trust to be in jeopardy
of being treated as taxable as a publicly traded partnership pursuant to Section
7704 of the Code) all or part of its interest in the Series 1997-One
Certificates; provided, however, that any Certificate Assignment shall be void
unless (i) the minimum amount of such Certificate Assignment shall be
$5,000,000, (ii) such assignee Series 1997-One Certificateholder shall comply
with this Section 9.04 and shall have delivered to the Trustee, prior to the
effectiveness of such Certificate Assignment, a copy of an agreement under which
such assignee Series 1997-One Certificateholder has made the representations,
warranties and covenants required to be made pursuant to this Section 9.04, and
(iii) such proposed assignee shall provide the forms described in clauses (i),
(ii) and (iii) of subsection 9.04(b) (subject to the Transferor's consent, as
applicable and as set forth therein) in the manner described therein. In
connection with any Certificate Assignment, the assignor Series 1997-One
Certificateholder shall request in writing to the Trustee (who shall promptly
deliver it to the
Transferor) for the consent of the Transferor (the Transferor shall respond to
any such request within ten Business Days after its receipt and the Transferor
will not unreasonably withhold such consent) it being understood that the
obtaining of such consent is a condition to the effectiveness of the Certificate
Assignment. Each assignee Series 1997-One Certificateholder is subject to the
terms and conditions of subsection 9.04(b) on an ongoing basis and hereby makes
the certifications, representations and warranties contained therein.
(f) Subject to the provisions of subsection (h), any Series 1997-One
Certificateholder may at any time grant a participation in all or part (but not
less than $5,000,000 of its interest in Series 1997-One Certificates to any
Person to which the Transferor may consent, which consent shall not be
unreasonably withheld (it being understood that such consent shall be considered
to be withheld reasonably on the basis that following such proposed
participation the number of Private Holders would exceed 80 or otherwise cause
the Trust to be in jeopardy of being treated as taxable as a publicly traded
partnership pursuant to Section 7704 of the Code) (each such Person, a
"Participant"); provided, however, that such participation shall be void, unless
such Participant complies with the applicable provisions of this Section 9.04
and such Series 1997-One Certificateholder delivers to the Trustee, prior to the
effectiveness of its participation, a copy of an agreement under which such
Participant has made the representations, warranties and covenants required to
be made pursuant to this Section. In connection with the granting of any such
participation to any Person, the granting Series 1997-One Certificateholder
shall provide a written request to the Trustee (who shall promptly deliver it to
the Transferor) for the consent of the Transferor to the granting of the
specified interest to any identified prospective Participant, the Transferor
shall respond to any such request within ten Business Days after its receipt, it
being understood that the obtaining of such consent is a condition to the
effectiveness of a participation. Each Series 1997-One Certificateholder hereby
acknowledges and agrees that any such participation will not alter or affect in
any way whatsoever such Series 1997-One Certificateholder's direct obligations
hereunder and that the Transferor shall have no obligation to have any
communication or relationship whatsoever with any Participant of such Series
1997-One Certificateholder in order to enforce the obligations of such Series
1997-One Certificateholder hereunder. Each Series 1997-One Certificateholder
shall promptly notify the Trustee (which shall promptly notify the Transferor)
in writing of the identity and interest of each Participant upon any such
disposition. As a condition of granting any participation, the Series 1997-One
Certificateholder hereby agrees to deliver to the Transferor a certification of
the proposed Participant pursuant to which the Participant certifies, represents
and warrants that (i) such Participant is entitled to (x) receive payments with
respect to its participation without deduction or withholding of any United
States federal income taxes and (y) an exemption from United States backup
withholding tax, (ii) prior to the date on which the first interest payment is
due to the Participant, such Series 1997-One Certificateholder will provide to
the Servicer and Trustee, the forms described in clauses (i), (ii) and (iii) of
subsection 9.04(b) (subject to the Transferor's consent, as applicable and as
set forth therein) as though the Participant were a Series 1997-One
Certificateholder, (iii) such Series 1997-One Certificateholder similarly will
provide subsequent forms as described in subsection 9.04(b) with respect to such
Participant as though it were a Series 1997-One Certificateholder, and (iv) such
Participant will pay any taxes imposed on its participation interest in the
Series 1997-One Certificates.
(g) Any holder of an interest in the Trust acquired pursuant
to Section 12.02(c) of the Agreement in respect of the Series 1997-One
Certificates shall be
required to represent and covenant in connection with such acquisition that (x)
it has neither acquired, nor will it sell, trade or transfer any interest in the
Trust or cause any interest in the Trust to be marketed on or through either (i)
an "established securities market" within the meaning of Code section
7704(b)(1), including without limitation an interdealer quotation system that
regularly disseminates firm buy or sell quotations by identified brokers or
dealers by electronic means or otherwise or (ii) a "secondary market (or the
substantial equivalent thereof)" within the meaning of Code section 7704(b)(2),
including a market wherein interests in the Trust are regularly quoted by any
person making a market in such interests and a market wherein any person
regularly makes available to the public bid or offer quotes with respect to
interests in the Trust and stands ready to effect buy or sell transactions at
the quoted prices for itself or on behalf of others, (y) unless the Transferor
consents otherwise (which consent shall be based on an Opinion of Counsel
generally to the effect that the action taken pursuant to the consent will not
cause the Trust to become a publicly traded partnership treated as a
corporation), such holder (i) is properly classified as, and will remain
classified as, a "corporation" as described in Code section 7701(a)(3) and (ii)
is not, and will not become, an S corporation as described in Code section 1361,
and (z) it will (i) cause any participant with respect to such interest
otherwise permitted hereunder to make similar representations and covenants for
the benefit of the Transferor and the Trust and (ii) forward a copy of such
representations and covenants to the Trustee. Each such holder shall further
agree in connection with its acquisition of such interest that, in the event of
any breach of its (or its participant's) representation and covenant that it (or
its participant) is and shall remain classified as a corporation other than an S
corporation, the Transferor shall have the right to procure a replacement
investor to replace such holder (or its participant), and further that such
holder shall take all actions necessary to permit such replacement investor to
succeed to its rights and obligations as a holder (or to the rights of its
participant).
(h) Except (i) as provided in subsections (e) and (f) above and (ii) in
connection with any pledge to any Federal Reserve Bank to secure any obligation
of a Series 1997-One Certificateholder, no Investor Certificateholder may
transfer, assign, exchange or otherwise convey or pledge, hypothecate, or
otherwise grant a security interest in a Series 1997-One Certificate and any
such attempted transfer, assignment, exchange, conveyance, pledge, hypothecation
or grant shall be void.
Section 9.05. Additional Provisions Regarding Agreement.
(a) The Transferor may not either (i) convey Participation Interests
pursuant to Section 2.09(b) of the Agreement, (ii) designate Additional
Transferors pursuant to Section 2.09(d) of the Agreement, (iii) exercise its
defeasance option with respect to Series 1997-One pursuant to Section 12.04 of
the Agreement or (iv) change the Discount Percentage pursuant to Section 2.12 of
the Agreement, without the prior written consent of the Administrative Agent.
(b) Promptly after the execution of any amendment or consent pursuant
to Section 13.01 of the Agreement (other than an amendment pursuant to
13.01(a)), the Trustee shall furnish notification of the form of such amendment
to the Administrative Agent and the consent of the Administrative Agent shall be
necessary to approve the particular form of any proposed amendment.
(c)(i) On the date of execution of this Supplement, the
Transferor shall have a net worth calculated in accordance with generally
accepted accounting
principles of at least $10,000,000 and (ii) the Transferor shall make no
distributions of dividends or returns of capital comprising its net worth, as
calculated in accordance with generally accepted accounting principles, except
to the extent that, after giving effect thereto, the Transferor shall have a net
worth at least equal to the greater of (a) 10% of the highest balance of
Principal Receivables outstanding with respect to the immediately preceding
twelve (12) calendar month period or (b) $10,000,000.
(d) For so long as no other Series of Investor Certificates other than
Series 1997-One is outstanding, Sections 3.06(a) and (b) of the Agreement shall
not be applicable.
SECTION 9.06. Additional Provisions Regarding the Servicer.
(a) No Extension or Amendment of Receivables. Except as otherwise
expressly permitted by the Agreement and the Credit Card Guidelines, the
Servicer will not extend, amend or otherwise modify the terms of any Receivable,
or amend, modify or waive any term or condition of any Account related thereto.
The Servicer further covenants that, except as otherwise required by any
Requirement of Law, it shall not reduce the periodic finance charges assessed on
any Receivable or other fees on any Account if, as a result of such reduction,
the reasonable expectation of the Net Yield as of such date would be less than
2.00% or has a material adverse effect on the Series 1997-One Certificateholders
and unless (a) such reduction is made applicable to the comparable segment of
the consumer revolving credit accounts owned or serviced by the Servicer that
have characteristics the same as, or substantially similar to, the Accounts that
are the subject of such change or (b) if it does not own such a comparable
segment, it will not make any such change with the intent to materially benefit
the Transferor or itself over the Series 1997- One Certificateholders.
(b) No Assignment. The Servicer shall not assign any of its rights or
delegate any of its duties hereunder or under the Agreement, other than
delegation to Columbus Bank pursuant to the Subservicer Letter Agreement, dated
as of August 29, 1997, by and between the Servicer and Columbus Bank, without
the prior written consent of the Agent.
(c) Furnishing of Information and Inspection of Records. (i) The
Servicer will furnish to the Transferor from time to time such information with
respect to the Receivables as the Transferor may reasonably request, including,
without limitation, listings identifying the Obligor and the outstanding
Principal Balance for each Receivable.
(ii) The Servicer will at any time and from time to time
during regular business hours permit the Transferor or its agents,
designees, or representatives, (a) to examine and make copies of and
take abstracts from all Records and (b) to visit the offices and
properties of the Servicer for the purpose of examining such Records,
and to discuss matters relating to Receivables or the Servicer's
performance under the Agreement with any of the officers, directors,
employees or independent public accountants of the Servicer having
knowledge of such matters.
(d) Keeping of Records and Books of Account. The Servicer will maintain
and implement administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables in the event
of the destruction of the originals thereof, and keep and maintain, all
documents, books,
records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records adequate
to permit the daily identification of each new Receivable and all Collections of
and adjustments to each existing Receivable). The Servicer will give the
Transferor notice of any material change in the administrative and operating
procedures of the Servicer referred to in the previous sentence.
Section 9.07. Notices. The Trustee shall give notice to the Agent of
any proposed change or amendment to either the Affinity Card Agreement or the
Facilities Management Services Agreement with respect to which the Trustee's
consent is sought pursuant to the Agreement.
Section 9.08. Miscellaneous.
(a) Notwithstanding anything to the contrary contained herein,
prior to the date the first Class A Invested Amount Increase occurs, the amounts
payable to the Holders of the Transferor Certificate pursuant to Section 4.01(b)
and 4.01(c)(ii) shall not be subject to the Weekly Release Conditions and shall
be withdrawn by the Servicer on Deposit Dates and paid to the Holders of the
Transferor Certificates.
(b) Notwithstanding anything to the contrary contained herein,
prior to the date the first Class A Invested Amount Increase occurs, the
obligation of the Servicer to deliver any report pursuant to Articles IV and V
hereof or any other certificate required hereunder to the Class A
Certificateholders shall not be effective.
IN WITNESS WHEREOF, the undersigned have caused this Supplement to be
duly executed and delivered by their respective duly authorized officers on the
day and year first above written.
COMPUCREDIT FUNDING CORP.
Transferor
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
COMPUCREDIT CORPORATION
Servicer
By: /s/ Xxxxx X. Xxxxxx
------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
BANKERS TRUST COMPANY
not in its individual capacity,
but solely as Trustee,
By: /s/ Xxxxxxxx X.X. Xxxxx
------------------------------
Name: Xxxxxxxx X.X. Xxxxx
Title: Vice President
EXHIBIT A
FORM OF CLASS A CERTIFICATE
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 AND THE SERIES 1997-ONE SUPPLEMENT THERETO REFERRED
TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED TO
AN EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT THAT IS SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR DESCRIBED IN SECTION
4975 (e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED, EXCEPT IN ACCORDANCE
WITH THE POOLING AND SERVICING AGREEMENT AND SERIES 1997-ONE SUPPLEMENT
REFERRED TO HEREIN.
REGISTERED $
----------
No. R-
------- CUSIP NO.
COMPUCREDIT CREDIT CARD MASTER TRUST
SERIES 1997-ONE
CLASS A FLOATING RATE VARIABLE FUNDING CERTIFICATE
Evidencing an undivided interest in certain assets of 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 consumer revolving credit card accounts serviced by
COMPUCREDIT CORPORATION
and other assets and interests constituting the Trust under the Pooling and
Servicing Agreement referred to below.
(Not an interest in or obligation of Compucredit Corporation,
Compucredit Funding Corp. or any of their respective affiliates). This
certifies that Enterprise Funding Corporation (the "Class A
Certificateholder") is the registered owner of a fractional undivided
interest in certain assets of a trust (the "Trust")
created pursuant to the Pooling and Servicing Agreement, dated as of August ,
1997 (the "Agreement"), as supplemented by the Series 1997-One Supplement
dated as of August , 1997 (the "Supplement"), among Compucredit Funding
Corp., as Transferor, Compucredit Corporation, as Servicer, and Bankers Trust
Company, a banking corporation organized under the laws of the State of New
York, as trustee (the "Trustee"). The corpus of the Trust consists of (i) in
the case of Receivables arising in the 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, the Receivables created from time to time after the
Initial Cut-Off Date until the termination of the Trust, (iii) all
Interchange and Recoveries allocable to the Trust as provided in the
Agreement, (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 of the Transferor's rights
under the Receivables Purchase Agreement and (x) all amounts received with
respect to any of the foregoing; (xi) all proceeds (including "proceeds" as
defined in the UCC) thereof and (xii) 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 the 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. The Holder of this Certificate is
entitled to the benefits of the subordination of the Class B Certificates to
the extent provided in the Supplement. Although a summary of certain
provisions of the Agreement and the Supplement is set forth below and in the
Summary of Terms and Conditions attached hereto and made a part hereof, this
Class A Certificate does not purport to summarize the Agreement and the
Supplement and reference is made to the Agreement and the Supplement 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 and the Supplement (without
schedules) 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 or the
Supplement, as applicable.
This Class A Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement and the Supplement, to
which Agreement and Supplement, each as amended and
A-2
supplemented from time to time, the Class A Certificateholder by virtue of
the acceptance hereof assents and is bound.
It is the intent of the Transferor and the Class A
Certificateholder that, for federal, state and local income and franchise tax
purposes only, the Class A Certificate will qualify as indebtedness of the
Transferor secured by the Receivables. The Class A Certificateholder, by the
acceptance of this Class A Certificate, agrees to treat this Class A
Certificate for federal, state and local income and franchise tax purposes as
debt of the Transferor.
In general, payments of principal with respect to the Class A
Certificate are limited to the class A Invested Amount, which may be less
than the unpaid principal balance of the Class A Certificate.
This Class A Certificate 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 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 Class A 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 Class A Certificate,
the applicable Certificate Owner or Owners shall be deemed to have
represented and warranted that it or they are not Benefit Plans.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Class A Certificate
shall not be entitled to any benefit under the Agreement or the Supplement or
be valid or any purpose.
A-3
IN WITNESS WHEREOF, the Transferor has caused this Class A
Certificate to be duly executed.
COMPUCREDIT FUNDING CORP.
By:
-------------------------
Name:
Title:
Dated: August ____, 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Class A Certificate described in the within-mentioned Agreement
and Supplement.
BANKERS TRUST COMPANY,
as Trustee,
By:
-------------------------
Authorized Officer
or
By:
-------------------------
as Authenticating Agent
for the Trustee,
By:
-------------------------
Authorized Officer
COMPUCREDIT CREDIT CARD MASTER TRUST
SERIES 1997-ONE
CLASS A FLOATING RATE VARIABLE FUNDING CERTIFICATE
Summary of Terms and Conditions
The Receivables consist of Principal Receivables which arise
generally from the purchase of goods and services and amounts advanced to
cardmembers as cash advances and Finance Charge Receivables. This Class A
Certificate is one of a Series of Certificates entitled Compucredit Credit
Card Master Trust, Series 1997-One (the "Series 1997-One Certificates"), and
one of a class thereof entitled Class A Series 1997-One Floating Rate
Variable Funding Certificates, (the "Class A Certificate"), each of which
represents a fractional, undivided interest in certain assets of the Trust.
The assets of the Trust are allocated in part to the Investor
Certificateholders of all outstanding Series (the "Certificateholders'
Interest") with the remainder allocated to the Holder of the Transferor
Certificate. The aggregate interest represented by the Class A Certificate at
any time in the Principal Receivables in the Trust shall not exceed an amount
equal to the Class A Invested Amount at such time. The Class A Initial
Invested Amount is $0. The Class A Invested Amount on any determination date
will be an amount equal to (a) the Class A Initial Invested Amount, plus (b)
the aggregate principal amount of Class A Invested Amount Increases pursuant
to Section 4.13 of the Supplement prior to such date, minus (c) the aggregate
amount of principal payments made to the Class A Certificateholders on or
prior to such date, minus (d) the excess, if any, of the aggregate amount of
Class A Investor Charge-Offs for all prior Distribution Dates over Class A
Investor Charge-Offs reimbursed pursuant to subsections 4.05(a)(vii) and
4.07(a) of the Supplement prior to such date.
Subject to the terms and conditions of the Agreement, 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, which will represent
fractional, undivided interests in certain of the Trust Assets.
On each Distribution Date, the Paying Agent shall distribute to each
Class A Certificateholder of record on the last day of the preceding calendar
month (each a "Record Date") such amounts as are payable to the Class A
Certificateholders pursuant to the Agreement and the Supplement.
Distributions with respect to this Class A Certificate will be made by the
Paying Agent by wire transfer of immediately available funds to the account
that has been designated by the Certificateholder of this Class A Certificate
not less than ten business Days prior to such Distribution Date. Final
payment of this Class A Certificate will be made only upon presentation and
surrender of this Class A Certificate at the office or agency specified in
the notice of final distribution delivered by the Trustee to the Series
1997-One
S-1
Certificateholders in accordance with the Agreement and the Supplement.
On any day occurring on or after the day on which the Invested Amount is
reduced to 10% or less of the largest Initial Invested Amount at any time on
or after the Closing Date, the Transferor has the option to repurchase the
Series 1997-One Certificateholders' Interest in the Trust. The repurchase
price will be equal to (a) if such day is a Distribution Date, the
Reassignment Amount for such Distribution Date or (b) if such day is not a
Distribution Date, the Reassignment Amount for the Distribution Date
following such day. Following the deposit of the Reassignment Amount in the
Collection Account, the Invested Amount for Series 1997-One shall be reduced
to zero and the Series 1997-One Certificateholders will not have any interest
in the Receivables and the Series 1977-One Certificates will represent only
the right to receive such Reassignment Amount.
This Class A Certificate does not represent an obligation of, or an
interest in, the Transferor or the Servicer or any affiliate of either of
them and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other governmental agency or instrumentality. This
Class A Certificate is limited in right of payment to certain Collections
with respect to the Receivables (and certain other amounts), all as more
specifically set forth hereinabove and in the Agreement and the Supplement.
The transfer or exchange of this Class A Certificate shall be registered
in the Certificate Register upon surrender of this Class A Certificate for
registration of transfer or exchange at any office or agency maintained by
the Transfer Agent and Registrar accompanied by a written instrument of
transfer, in a form satisfactory to the Trustee or the Transfer Agent and
Registrar, duly executed by the Class A Certificateholder or such Class A
Certificateholder's attorney, and duly authorized in writing with such
signature guaranteed, and thereupon one or more new Class A Certificates of
authorized denominations and for the same aggregate fractional undivided
interest will be issued to the designated transferee or transferees.
As provided in the Agreement and subject to certain limitations therein
set forth, Class A Certificates are exchangeable for new Class A Certificates
evidencing like aggregate fractional, undivided interests as requested by the
Class A Certificateholder surrendering such Class A Certificates. No service
charge may be imposed for any such exchange but the Servicer or Transfer Agent
and Registrar may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith.
The Servicer, the Trustee, the Paying Agent and the Transfer Agent and
Registrar and any agent of any of them, may treat the person in whose name
this Class A Certificate is registered as the owner hereof for all purposes,
and neither the
S-2
Servicer nor the Trustee, the Paying Agent, the Transfer Agent and Registrar,
nor any agent of any of them, shall be affected by notice to the contrary
except in certain circumstances described in the Agreement.
THIS CLASS A CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
S-3
ASSIGNMENT
Social Security or other identifying number of assignee _______________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________________________
(name and address of assignee)
the within certificate and all rights thereunder, and hereby irrevocably
constitutes and appoints _______________________, attorney, to transfer said
certificate on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: _______________________ _________________________(1)
Signature Guaranteed:
______________________
-------------
(1) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within
Certificate in every particular, without alteration, enlargement or any
change whatsoever.
FORM OF CLASS B CERTIFICATE EXHIBIT B
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 AND THE SERIES 1997-ONE SUPPLEMENT THERETO REFERRED
TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED TO
AN EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT THAT IS SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR DESCRIBED IN SECTION
4975(e)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED,
ASSIGNED, EXCHANGED OR OTHERWISE PLEDGED OR CONVEYED, EXCEPT IN ACCORDANCE
WITH THE POOLING AND SERVICING AGREEMENT AND SERIES 1997-ONE SUPPLEMENT
REFERRED TO HEREIN.
REGISTERED $
--------------
NO. R- CUSIP No.
---------
COMPUCREDIT CREDIT CARD MASTER TRUST
SERIES 1997-ONE
CLASS B FLOATING RATE VARIABLE FUNDING CERTIFICATE
Evidencing an undivided interest in certain assets of 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 consumer revolving
credit card accounts serviced by
COMPUCREDIT CORPORATION
and other assets and interests constituting the Trust under the Pooling and
Servicing Agreement referred to below.
(Not an interest in or obligation of Compucredit Corporation, Compucredit
Funding Corp. or any of their respective affiliates). This certifies that
[_______________________] (the "Class B Certificateholder") is the registered
owner of a fractional, undivided interest in certain assets of a trust (the
"Trust") created pursuant to the Pooling and Servicing Agreement, dated as of
August __, 1997 (the "Agreement"), as supplemented by the Series 1997-One
Supplement dated as of August __, 1997 (the
"Supplement"), among Compucredit Funding Corp. as Transferor, Compucredit
Corporation, as Servicer, and Bankers Trust Company, a banking corporation
organized under the laws of the State of New York, as trustee (the
"Trustee"). The corpus of the Trust consists of (i) in the case of
Receivables arising in the 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,
the Receivables created from time to time after the Initial Cut-Off Date
until the termination of the Trust, (iii) all Interchange and Recoveries
allocable to the Trust as provided in the Agreement, (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 of the Transferor's rights under the Receivables Purchase
Agreement and (x) all amounts received with respect to any of the foregoing;
(xi) all proceeds (including "proceeds" as defined in the UCC) thereof and
(xii) 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 the 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.
Although a summary of certain provisions of the Agreement and the Supplement
is set forth below and in the Summary of Terms and Conditions attached hereto
and made a part hereof, this Class B Certificate does not purport to
summarize the Agreement and the Supplement and reference is made to the
Agreement and the Supplement 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 and
the Supplement (without schedules) 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 or the Supplement, as applicable.
This Class B Certificate is issued under and is subject to the
terms, provisions and conditions of the Agreement and the Supplement, to
which Agreement and Supplement, each as amended and supplemented from time to
time, the Class B Certificateholder by virtue of the acceptance hereof
assents and is bound.
B-2
THIS CLASS B CERTIFICATE IS SUBORDINATED TO THE EXTENT NECESSARY
TO FUND PAYMENTS ON THE CLASS A CERTIFICATES TO THE EXTENT SPECIFIED IN THE
SUPPLEMENT.
It is the intent of the Transferor and the Class B
Certificateholder that, for federal, state and local income and franchise tax
purposes only, the Class B Certificate will qualify as indebtedness of the
Transferor secured by the Receivables. The Class B Certificateholder, by the
acceptance of this Class B Certificate, agrees to treat this Class B
Certificate for federal, state and local income and franchise tax purposes as
debt of the Transferor.
In general, payments of principal with respect to the Class B
Certificate are limited to the Class B Invested Amount, which may be less
than the unpaid principal balance of the Class B Certificate.
This Class B Certificate 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 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 Class B 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 Class B Certificate, the
applicable Certificate Owner or Owners shall be deemed to have represented
and warranted that it or they are not Benefit Plans.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Class B Certificate
shall not be entitled to any benefit under the Agreement or the Supplement or
be valid for any purpose.
B-3
IN WITNESS WHEREOF, the Transferor has caused this Class B
Certificate to be duly executed.
COMPUCREDIT FUNDING CORP.
By: _____________________________
Name:
Title:
Dated: August , 1997
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Class B Certificate described in the within mentioned
Agreement and Supplement.
BANKERS TRUST COMPANY,
as Trustee,
By:
--------------------------------
Authorized Officer
or
By:
--------------------------------
as Authenticating Agent
for the Trustee,
By:
--------------------------------
Authorized Officer
EXHIBIT C-1
FORM OF MONTHLY PAYMENT INSTRUCTIONS AND
NOTIFICATION TO THE TRUSTEE
----------------------------------------
COMPUCREDIT CREDIT CARD MASTER TRUST
SERIES 1997-ONE
----------------------------------------
Monthly Period - From: __/__/__
To: __/__/__
Determination Date __/__/__
Distribution Date __/__/__
Number of days in the Monthly Period __
Facility Amount $_____________
Revolving Period or Amortization Period? _____________
Termination Event? ___
Pursuant to Section 3.04(b) of the Pooling and Servicing Agreement dated as
of August __, 1997 (the "Pooling and Servicing Agreement") among CompuCredit
Corporation, as Servicer ("CompuCredit"), CompuCredit Funding Corp., as
Transferor ("Funding"), and Bankers Trust Company, as Trustee, (the
"Trustee") and section 5.02(b) of the Series 1997-One Supplement to Pooling
and Servicing Agreement dated as of August __, 1997 (the "Series Supplement")
among CompuCredit, Funding and the Trustee (the Pooling and Servicing
Agreement together with the Series Supplement, the "Agreement"), Compucredit
is required to prepare certain information each month regarding the current
distributions to the Certificateholders and the performance of the
CompuCredit Credit Card Master Trust (the "Trust") during the previous month.
The undersigned, a duly authorized representative of the Servicer, does
hereby certify:
i. Capitalized terms used in this Certificate have their respective
meanings set forth in the Agreement, References herein to certain
sections and subsections are references to their respective sections
and subsections of the Agreement.
ii. This Certificate is being delivered pursuant to Section 5.02(b) of
the Series Supplement.
iii. CompuCredit is the Servicer under the Agreement. The undersigned is
an authorized officer of the Servicer.
C-1
iv. The date of this Certificate is on or prior to the Determination
Date prior to the Distribution Date specified above.
v. No Termination Event has occurred under the Agreement.
vi. As of the date hereof, to the best knowledge of the undersigned,
the Servicer has performed in all material respects all its
obligations under the Agreement through the Monthly Period
preceding such Distribution Date [or, if there has been a default
in the performance of any such obligation, set forth in detail the
(i) nature of such default, (ii) the action taken by the Servicer,
if any, to remedy such default and (iii) the current status of
each such default; if applicable, insert "None"].
A. PRINCIPAL BALANCE INFORMATION
1. Aggregate Principal Receivables outstanding during
the Monthly Period (excluding Finance Charge
Receivables and Defaulted Receivables:
(a) such Principal Receivables outstanding on the
last day of prior Monthly Period................... ________
(b) such Principal Receivables outstanding on the
last day of Monthly Period......................... ________
(c) average daily Principal Receivables outstanding
during the Monthly Period.......................... ________
(d) Principal Balance of all Ineligible Receivables
outstanding on the last day of Monthly Period...... ________
2. Discount Percentage (as defined in Section 2.12 of the
Pooling and Servicing Agreement)....................... ________
3. (a) Principal Receivables as of the last day of Prior
Monthly Period (line ____ minus (line ____ times
line ____)........................................ ________
(b) Average Principal Receivables during the Monthly
Period (line ____ minus (line ____ times line
____) ............................................ ________
(c) Principal Receivables as of the last day of
Monthly Period (line ____ minus (line ____
times line ____).................................. _________
C-2
B. INVESTOR INFORMATION
4. The average Invested Amount during
the Monthly Period: .................................. ____________
5. Invested Amounted on the last day of
the prior Monthly Period.............................. ____________
(a) Class A Invested Amount on the
last day of the prior Monthly
Period............................................ ____________
(b) Class B Invested Amount on the
last day of the prior Monthly
Period............................................ ____________
6. Invested Amount Increases made during
the Monthly Period.................................... ____________
(a) Class A Invested Amount Increases
made during the Monthly Period.................... ____________
(b) Class B Invested Amount Increases
made during the Monthly Period.................... ____________
7. Invested Amount on the last day of
the Monthly Period.................................... ____________
(a) Class A Invested Amount on the
last day of the Monthly Period.................... ____________
(b) Class B Invested Amount on the
last day of the Monthly Period.................... ____________
C. DEFAULT INFORMATION
8. Defaulted Amounted for the Monthly
Period................................................ ____________
9. Series 1997-One Allocable Defaulted
Amount for the Monthly Period ........................ ____________
10. Investor Default Amount for the
Monthly Period........................................ ____________
(a) Class A Investor Default Amount .................. ____________
(b) Class B Investor Default Amount .................. ____________
11. Investor Default Amount for the prior
Monthly Period........................................ ____________
(a) Class A Investor Default Amount .................. ____________
(b) Class B Investor Default Amount .................. ____________
C-3
D. INVESTOR PERCENTAGES FOR THE MONTHLY PERIOD
12. Series 1997-One Allocation Percentage................. ____________%
13. Fixed/Floating Allocation Percentage for the related
Monthly Period (during the Revolving period line ____
divided by line ____; during the Amortization Period,
line ____ divided by line ____, as of the related
Monthly Period........................................ ____________%
14. Floating Allocation Percentage for the related Monthly
Period (line ___ divided by line ____)................ ____________%
15. Class A Floating Percentage........................... ____________%
16. Class B Floating Percentage........................... ____________%
17. Class A Principal Percentage.......................... ____________%
18. Class B Principal Percentage.......................... ____________%
E. COLLECTIONS INFORMATION FOR THE MONTHLY PERIOD
19. (a) The aggregate amount of Cash Collections for
the Monthly Period................................ ____________
(b) Compensation due to Columbus Bank pursuant to
Exhibit C in the Affinity Card Agreement.......... ____________
(c) The aggregate amount of Series 1997-One Cash
Collections for the Monthly Period................ ____________
20. Interchange........................................... ____________
21. Aggregate amount of Collections of Principal
Receivables (actual Collections of Principal
Receivables without regard to Discount Option
Receivables, if any).................................. ____________
22. Collections of Discount Option Receivables (line ____
times line ____)...................................... ____________
23. Collections of Principal Receivables (line ____
minus line ____)...................................... ____________
24. The aggregate amount of Collections of Finance Charge
Receivables (line 17(c) plus line 18 minus line 21) ____________
25. The Fixed/Floating Allocation Percentage of Principal
Receivables (line ____ times line ____)............... ____________
C-4
26. Transferor Percentage of Collections of Principal
Receivables .......................................... __________
27. The Floating Allocation Percentage of Finance Charge
Receivables (line ____ times line ____) ............... __________
28. Transferor Percentage of Collections of Finance
Charge Receivables ................................... __________
29. Special Funding Account balance .......................$__________
30. Required Spread Account Amount ........................$__________
31. Available Spread Account Amount .......................$__________
32. Check: line 17 plus line 18 minus line 23 minus line
24 minus line 25 minus line 26 must equal zero ........ __________
F. WITHDRAWAL INFORMATION FROM THE COLLECTION ACCOUNT RELATING
TO COLLECTIONS OF FINANCE CHARGE RECEIVABLES AND REALLOCATED
PRINCIPAL COLLECTIONS
Pursuant to Subsection 4.05(a)(i)
33. Servicer Advances made with respect to the preceding
Monthly Period ........................................$___________
34. Servicer Advances reimbursed during Monthly Period
pursuant to Section 4.05(c)(i) ........................$___________
35. Unreimbursed Servicer Advances from such Monthly
Period (line 31 minus line 32) ........................$___________
36. Unreimbursed Service Advances from previous Monthly
Periods ...............................................$___________
Pursuant to Subsection 4.05(a)(ii)
37. Class A Monthly Interest ............................. $___________
[(a) Program Fee (one-twelfth of 1% times
line _____) .....................................$___________
(b) Facility Fee (one-twelfth of 0.5%
times $125,000,000) .............................$___________
(c) Administrative Fee (one-twelfth of 0.10%
times $125,000,000) .............................$___________
(d) Dealer Fee (one-twelfth of 0.05% times
line ______)] ...................................$___________
38. Class A Monthly Interest previously due and unpaid ....$___________
C-5
Pursuant to Subsection 4.05(a)(iii)
39. The Monthly Servicing Fee for the preceding Monthly
Period ................................................$___________
40. Accrued and unpaid Monthly Servicing Fees .............$___________
Pursuant to Subsection 4.05(a)(iv)
41. Class A Investor Default Amount for the preceding
Monthly Period shall be treated as Available
Principal Collections (line ____ times line ____) .....$___________
Pursuant to Subsection 4.05(a)(v)
42. If the Transferor fails to deposit the amount the
Transferor is required to deposit on such
Distribution Date into the Special Funding Account
pursuant to Section 3.09 of the Agreement, the
product of (a) the Class A Floating Percentage, (b)
the Series 1997-One Allocation Percentage, (c) the
Floating Allocation Percentage and (d) the amount the
Transferor should have deposited into the Special
Funding Account on such Distribution Date shall be
treated as a portion of Available Principal
Collections ...........................................$___________
Pursuant to Subsection 4.05(a)(vi)
43. If a Pay Out Event has occurred, an amount up to the
Class A Invested Amount shall be treated as Available
Principal Collections and distributed to the Class A
Certificateholders ....................................$___________
Pursuant to Subsection 4.05(a)(vii)
44. The aggregate Class A Investor Charge-Offs which have
not been previously reimbursed shall be treated as a
portion of Available Principal Collections
(line ___) ............................................$___________
C-6
Pursuant to Subsection 4.05(a)(viii)
45. On each Distribution Date prior to the date on which
the Spread Account terminates pursuant to subsection
4.12(e) of the Series Supplement, an amount up to the
excess, if any, of the Required Spread Account Amount
over the Available Spread Account Amount shall be
deposited into the Spread Account .....................$___________
Pursuant to Subsection 4.05(a)(ix)
46. The Class B Monthly Interest ..........................$___________
47. Class B Monthly Interest previously due and unpaid ....$___________
Pursuant to Subsection 4.05(a)(x)
48. The Class B Investor Default Amount shall be treated
as a portion of Available Principal Collections (line
____ times line ____) .................................$___________
Pursuant to Subsection 4.05(a)(xi)
49. If the Transferor fails to deposit the amount the
Transferor is required to deposit on such
Distribution Date into the Special Funding Account
pursuant to Section 3.09 of the Agreement, the
product of (a) the Class B Floating Percentage, (b)
the Series 1997-One Allocation Percentage, (c) the
Floating Allocation Percentage and (d) the amount the
Transferor should have deposited into the Special
Funding Account on such Distribution Date shall be
treated as a portion of Available Principal
Collections ...........................................$___________
Pursuant to Subsection 4.05(a)(xii)
50. The aggregate amount by which the Class B Invested
Amount has been reduced pursuant to clauses (d), (e)
and (f) of the definition of "Class B Invested
Amount" in Section 2.01 of the Series Supplement
shall be treated as a portion of Available Principal
Collections. ..........................................$___________
C-7
Pursuant to Subsection 4.05(a)(xiii)
51. Amount constituting Excess Spread to be allocated and
distributed or deposited as set forth in Section 4.07
of the Series Supplement (line 22 minus line 31 minus
lines 34 throught 48) .................................. $_________
52. Amount on line ____ allocated per Section 4.07 to
other Series ........................................... $_________
53. Amount on line ____ allocated per Section 4.07 to
Transferor ............................................. $_________
G. WITHDRAWAL INFORMATION FROM THE COLLECTION ACCOUNT RELATING
TO COLLECTIONS OF PRINCIPAL RECEIVABLES
54. Collections of Principal Receivables (line 21) ......... $_________
55. Collections of Finance Charge Receivables
recharacterized as Collections of Principal
Receivables:
(a) Class A Investor Default Amount for the
preceding Monthly Period shall be treated as
Available Principal Collections (line 39) ........ $_________
(b) If the Transferor fails to deposit the amount
the Transferor is required to deposit on such
Distribution Date into the Special Funding
Account pursuant to Section 3.09 of the
Agreement, the product of (a) the Class A
Floating Percentage and (b) the amount the
Transferor should have deposited into the
Special Funding Account on such Distribution
Date shall be treated as a portion of Available
Principal Collections (line 40) .................. $_________
(c) If a Pay Out Event has occurred, an amount up
to the Class A Invested Amount shall be treated
as Available Principal Collections and
distributed to the Class A Certificateholders
(line 41) ........................................ $_________
(d) The aggregate Class A Investor Charge-Offs
which have not been previously reimbursed shall
be treated as a portion of Available Principal
Collections (line 42) ............................ $_________
C-8
(e) The Class B Investor Default Amount shall be
treated as a portion of Available Principal
Collections (line 46) ............................ $_________
(f) If the Transferor fails to deposit the amount
the Transferor is required to deposit on such
Distribution Date into the Special Funding
Account pursuant to Section 3.09 of the
Agreement, the product of (a) the Class B
Floating Percentage and (b) the amount the
Transferor should have deposited into the
Special Funding Account on such Distribution
Date shall be treated as a portion of Available
Principal Collections (line 47) .................. $_________
(g) The aggregate amount by which the Class B
Invested Amount has been reduced pursuant to
clauses (d), (e) and (f) of the definition of
"Class B Invested Amount" in Section 2.01 of
the Series Supplement shall be treated as a
portion of Available Principal Collections
(line 48) ........................................ $_________
56. Net Collections of Finance Charge Receivables
recharacterized as Collections of Principal
Receivables (sum of lines 53(a) through 53 (g) ......... $_________
57. Reallocated Principal Collections pursuant to Section
4.08 ................................................... $_________
58. Amounts deposited into Spread Account pursuant to
Subsection 4.01(b)(11) ................................. $_________
59. Amount deposited into Spread Account pursuant to
Subsections 4.01(c)(ii)(w) and 4.01(c)(ii)(x) .......... $_________
60. Shared Principal Collections allocated to Series
1997-One ............................................... $_________
61. Total Collections of Principal Receivables deposited
in the Collection Account (line 52 plus line 54 minus
line 55 minus line 56 minus line 57 plus line 58) ...... $_________
If Revolving Period, the amount specified in line 59 shall
be allocated as follows:
C-9
Pursuant to Subsection 4.05(b)(i)
62. The excess, if any, of the Class B Invested Amount
over the Required Subordinate Amount ................... $_________
Pursuant to Subsection 4.05(b)(ii)
63. Amount to be treated as Shared Principal Collections
(line ____ minus line _____) ........................... $_________
64. Amount to be treated as reinvestment of Collections
of Principal Receivables ............................... $_________
If Limited Amortization Period, the amount specified in line 59 shall
be allocated as follows:
Pursuant to Subsection 4.05(c)(i)
65. The excess, if any, of the Class B Invested Amount
over the Required Subordinate Amount ................... $_________
Pursuant to Subsection 4.05(c)(ii)
66. Limited Amortization Amount ............................ $_________
Pursuant to Subsection 4.05(c)(iii)
67. Amount to be treated as Shared Principal Collections
(line ____ minus line _____) ........................... $_________
68. Amount to be treated as reinvestment of Collections
of Principal Receivables ............................... $_________
If Controlled or Early Amortization Period, the amount
specified in line 59 shall be allocated as follows:
Pursuant to Subsections 4.05(d)(i) and (e)(i)
69. Class A Invested Amount ................................ $_________
Pursuant to Subsections 4.05(d)(ii) and (e)(ii)
70. After the Class A Invested Amount is paid in full, an
amount up to the Class B Invested Amount ............... $_________
Pursuant to Subsections 4.05(d)(iii) and (e)(iii)
71. After the Class B Invested Amount is paid in full,
amount to be treated as Shared Principal Collections
(line ____ minus line ____) ............................ $_________
C-10
H. INSTRUCTION TO MAKE CERTAIN PAYMENTS (FUNDS MOVEMENT ANALYSIS)
Pursuant to Section 5.01 of the Series Supplement, the Servicer does hereby
instruct the Trustee to pay in accordance with Section 5.01 from amounts held by
the Paying Agent, on _________________, which date is a Distribution Date under
the Series Supplement, the following amounts as set forth below:
72. Total Collections (line ____) .......................... $_________
73. Permitted withdrawals made by the Transferror from
the Collection Account during the Monthly Period
(a) Amounts withdrawn pursuant to line 32 ............ $_________
(b) Amounts in respect of Collections of Principal
Receivables previously withdrawn ................. $_________
(c) Amounts in respect of Collections of Finance
Charge Receivables previously withdrawn .......... $_________
74. Net Collections (line ____ minus line ____) ............ $_________
75. Pay to Servicer
(a) Payment of the sum of (line ____ plus line ____
plus line ____ plus line ____) plus (portion of
line ____, if applicable) ........................ $_________
76. Pay to Class B Certificateholders
(a) Payment of the sum of (line ____ plus line ____
plus (line ____ or line ____ or line ____ or
line ____, as applicable) plus (portion of line
____, if applicable) ............................. $_________
77. Pay to Spread Account
(a) Deposit the amounts specified in line ____ and
line ____ ........................................ $_________
78. Pay to Class A Certificateholders
(a) Payment of the sum of (line ____ plus line
____) plus (line ____ or line ____ or line
____, as applicable) plus (portion of line
____, if applicable) ............................. $_________
C-11
79. Pay to Transferor
(a) Payment of line ____, if applicable .............. $_________
80. Check: Sum of lines ____ through ____ must equal line
____ ................................................... $_________
I. ACCRUED AND UNPAID AMOUNTS
After giving effect to the withdrawals and transfers to be made in
accordance with this notice, the following amounts will be accrued and unpaid
with respect to all Monthly Periods preceding the current calendar month.
81. The aggregate amount of all unreimbursed Class A
Investor Charge-Offs ................................... $_________
82. The aggregate amount by which the "Class B Invested
Amount" has been reduced pursuant to clauses (c),
(d), (e) and (f) of the definition thereof ............. $_________
83. Previously due and unpaid Class A Monthly Interest ..... $_________
84. Previously due and unpaid Servicing fees ............... $_________
J. MANAGEMENT REPORTING DATA
85. Number of re-aged accounts and receivables for the
related monthly period ................................. $_________
86. Dollar amount of re-aged accounts and receivables for
the related monthly period ............................. $_________
87. Losses by fraud ........................................ $_________
88. Total losses by non-fraud .............................. $_________
89. Non-fraud losses by bankruptcy ......................... $_________
90. Non-fraud losses by non-bankruptcy ..................... $_________
91. Total number of accounts ............................... $_________
92. End of month delinquencies
(a) 30-59 days delinquent ............................ $_________
(b) 60-89 days delinquent ............................ $_________
(c) 90+ days delinquent .............................. $_________
(c) Total 30+ days delinquent ........................ $_________
C-12
93. Transferor's Interest as a percentage of the
aggregate amount of Principal Receivables outstanding
as of the last day of the Monthly Period ............... $_________
94. Transferor Percentage as of the end of the prior
Monthly Period (prior period line ____) ................ $_________
95. Net Portfolio Yield .................................... $_________
96. Base Rate .............................................. $_________
97. Net Yield .............................................. $_________
98. Prior Monthly Period Net Yield ......................... $_________
99. FICO score distribution:
-----------------------------------------------------------------
FICO Risk Score Subordination
Range* Receivables Percentage Total
-----------------------------------------------------------------
*[material omitted] *[material omitted]
TOTAL
*FICO Risk Score at the time of initial booking of account.
100. Aggregate Subordination Percentage total (line ____)
divided by line ____ ................................... $_________
101. Required Subordinate Amount (the greater of
$12,500,000.00 or the current month Class A Invested
(line ____ divided by 1 minus the Aggregate
Subordination Percentage (line ____) minus the
current month Class A Invested Amount (line ____) ...... $_________
102. Description of servicing currently provided by CB&T
versus in-house ........................................ $_________
103. CompuCredit Stockholder's Equity ....................... $_________
104. Ratio of Stockholder's Equity to total managed assets .. $_________
105. Vintage loss data, beginning March 1988, (including
average FICO score by vintage) ......................... $_________
C-13
------------------
*Deleted per the Registrant's request for confidential treatment and filed
separately with the Commission pursuant to Rule 24b-2.
In-House CB&T
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
IN WITNESS WHEREOF, the undersigned has duly executed this
Certificate this ____ day of _________, ____.
COMPUCREDIT CORPORATION,
By:
--------------------------
Name:
Title:
C-14
EXHIBIT C-2
FORM OF WEEKLY SERVICER REPORT
I, [Name of Officer], the undersigned [Title of Officer] of CompuCredit
Funding Corp., a Georgia corporation, pursuant to Section 4.01 of the Series
Supplement dated August 29, 1997 (the "Series Supplement"), by and among the
Transferor, CompuCredit Corporation, a Georgia corporation, as servicer (in
such capacity, the "Servicer"), and Bankers Trust Company as Trustee (the
"Trustee"), hereby certify that as of ___________ __, 19__:
(1) Total Principal Receivables in Trust $__________
(2) Total Special Funding Account Balance $__________
(3) Total Class A Invested Amount $__________
(4) Total Class B Invested Amount $__________
(5) Line 1 plus Line 2 minus Line 3 minus
Line 4 is not less than zero [YES]
(6) No Payout Event has occurred [YES]
(7) Transferor Amount is equal to or greater
than the Required Transferor Amount [YES]
(8) The date specified in Clause (a) or (b) of the
Definition of Termination Date have not occurred. [YES]
(9) Principal collections on deposit in the
Collection Account $__________
(10) Amount on deposit in the Spread Account $__________
(11) Required Spread Account Amount $__________
(12) Amount to be withdrawn $__________
Capitalized terms used and not otherwise defined herein shall have the
meaning assigned to such terms in the Series Supplement, the Pooling and
Servicing Agreement, dated
C-2-1
as of August 29, 1997, by and among the Transferor, the Servicer and the
Trustee.
C-2-2
IN WITNESS WHEREOF, I have duly executed and delivered this Weekly
Servicer Report on this __ day of _________, 199_.
COMPUCREDIT FUNDING CORP.,
as Transferor
By:___________________________
Name:
Title:
C-2-3
EXHIBIT D
FORM OF CLASS B INVESTED AMOUNT INCREASE NOTICE
I, [Name of Officer], the undersigned [Title of Officer] of CompuCredit
Funding Corp., a Georgia corporation, pursuant to Section 4.13(b) of the
Series Supplement dated August 29, 1997 (the "Series Supplement"), by and
among the Transferor, CompuCredit Corporation, a Georgia corporation, as
servicer (in such capacity, the "Servicer"), and Bankers Trust Company as
Trustee (the "Trustee"), hereby certify that:
(1) The Class B Invested Amount as of the
Business Day immediately preceding the
date hereof ............................. $________
(2) The total amount of the Class B
Invested Amount Increase requested
by the Transferor ........................ $________
(3) The Class B Invested Amount after
giving effect to the Class B
Invested Amount Increase (line 1
plus line 2) ............................. $________
(4) The Transferor Amount after giving
effect to the Class B Invested
Amount Increase, each as of the
Business Day immediately preceding
the date hereof .......................... $________
(5) The Transferor Amount is not less
than the Required Transferor Amount ...... [Yes]
(6) The product of the Transferor
Amount and the Series 1997--One
Allocation Percentage minus the
Series Required Transferor
Amount is not less than zero ............. [Yes]
Capitalized terms used and not otherwise defined herein shall have the
meaning assigned to such terms in the Series Supplement, the Pooling and
Servicing Agreement, dated as of August 29, 1997, by and among the
Transferor, the Servicer and the Trustee.
D-1
IN WITNESS WHEREOF, I have duly executed and delivered this Class B
Investment Amount Increase Notice on this ___ day of ________, 199_.
COMPUCREDIT FUNDING CORP.,
as Transferor
By: --------------------
Name:
Title:
D-2
EXHIBIT E
FORM OF INVESTMENT LETTER
________________, 19__
CompuCredit Funding Corporation
Bankers Trust Company, as Trustee
Re: Purchase of Class A Certificate
Ladies and Gentlemen:
This letter (the "Investment Letter") is delivered by Enterprise
Funding Corporation (the "Purchaser") and NationsBank, N.A., as Bank Investor
(the "Bank Investor") pursuant to Section 9.04 of the Series 1997-One
Supplement, dated as of August 29, 1997 relating to the CompuCredit Credit
Card Master Trust (the "Series Supplement"). Capitalized terms used herein
without definition shall have the meanings set forth in the Series 1997-One
Supplement or in the Certificate Purchase Agreement (as defined therein).
The Purchaser and the Bank Investor, each as to itself, represents to the
Transferor as follows:
i) it is authorized to enter into the Certificate Purchase
Agreement and to perform its obligations thereunder and to consummate the
transactions contemplated thereby;
ii) it has knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an
investment in the Class A Certificate and it is able to bear the
economic risk of such investment;
iii) It has reviewed the Pooling and Servicing Agreement and
Series Supplement (including the schedule and exhibits thereto) and have
had the opportunity to perform due diligence with respect thereto and to
ask questions of and receive answers from the Transferor and its
representatives concerning the Transferor, the Trust and the Class A
Certificate;
iv) NationsBank, N.A. is an agent on behalf of the Purchaser and
neither the Purchaser nor the Bank Investor is acquiring the Class A
Certificate as an agent or otherwise for any other person. The
Purchaser is a Delaware
corporation and has its principal office within the State of New York and the
Bank Investor is a national banking association with its principal office in
Charlotte, North Carolina;
v) each of the Purchaser, NationsBank, N.A., as agent for the
Purchaser (the "Agent"), and the Bank Investor is an "accredited investor" as
defined in Rule 501, promulgated by the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended. The
Purchaser, the Agent and the Bank investor understand that the offering and
sale of the Class A Certificate have not been and will not be registered
under the Securities Act of 1933, as amended, and have not and will not be
registered or qualified under any applicable "blue sky" law, and that the
offering and sale of the Class A Certificate have not been reviewed by,
passed on or submitted to any federal or state agency or commission,
securities exchange or other regulatory body;
vi) the Purchaser, through the Agent, and the Bank Investor is
acquiring or will acquire the Class A Certificate without a view to any
distribution, resale or other transfer thereof. The purchaser, the Agent and
the Bank Investor will not resell or otherwise transfer the Class A
Certificate or any portion thereof, (A) with a letter from the buyer or
transferee thereof in substantially the form hereof and (B) (i) pursuant to
an effective registration statement under the Securities Act of 1933, as
amended; (ii) in a transaction exempt from the registration requirements of
the Securities Act of 1933, as amended, and applicable state securities or
"blue sky" laws; (iii) to the Transferor or any affiliate of the Transferor;
(iv) to a person who the Purchaser and the Agent or the Bank Investor
reasonably believes is a qualified institutional buyer (within the meaning
thereof in Rule 144A under the Securities Act of 1933, as amended) that is
aware that the resale or other transfer is being made in reliance upon Rule
144A; or (v) pursuant to Regulation S under the Securities Act of 1933, as
amended.
vii) The Purchaser, the Agent and the Bank Investor understand that the
Class A Certificate will bear a legend to substantially the following effect:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), IN RELIANCE UPON EXEMPTIONS PROVIDED
BY THE SECURITIES ACT. NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE
MADE EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISION OF THE SECURITIES
ACT AND ANY APPLICABLE PROVISION UNDER STATE BLUE SKY OR SECURITIES LAWS OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM SUCH PROVISION. THE TRANSFER OF THIS
CERTIFICATE IS SUBJECT TO CERTAIN CONDITIONS SET FORTH IN THE POOLING AND
2
SERVICING AGREEMENT AND SERIES SUPPLEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE ACQUIRED BY (A)
AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE
RETIREMENT SECURITY ACT OF 1974, AS AMENDED ("ERISA") THAT IS SUBJECT TO THE
PROVISIONS OF TITLE 1 OF ERISA, (B) A PLAN DESCRIBED IN SECTION 4975 (E)(1)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR (C) ANY ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN IS INVESTMENT IN
THE ENTITY (EACH A "BENEFIT PLAN"). BY ACCEPTING AND HOLDING THIS CERTIFICATE
OR ANY INTEREST HEREIN, THE HOLDER HEREOF OR ANY OWNER OF AN INTEREST HEREIN
SHALL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT IT IS NOT A BENEFIT
PLAN.
viii) this Investment Letter has been duly authorized, executed and
delivered and constitutes the legal, valid and binding obligations of the
Purchaser, the Agent and the Bank Investor, enforceable against the
Purchaser, the Agent and the Bank Investor in accordance with its terms,
except as such enforceability may be limited by receivership,
conservatorship, bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general principles of equity;
ix) each of the Purchaser, the Agent and the Bank Investor represents
and warrants that it is not (i) an employee benefit plan as defined in Section
3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii) a
plan described in Section 4975(e)(1) of the Internal Revenue Code, or (iii)
an entity whose underlying assets include plan assets by reason of a plan's
investment in such entity;
x) Each of the Purchaser and the Bank Investor represents, warrants
and covenants that it has not and will not acquire, and shall not sell, trade
or transfer any interest in the Class A Certificates to be marketed on or
through either (i) an "established securities market" within the meaning of
Section 7704(b)(1) of the Internal Revenue Code of 1986 (the "Code")
(including an interdealer quotation system that regularly disseminates firm
buy or sell quotations by identified brokers or dealers by electronic means
or otherwise) or (ii) a "secondary market" (or the substantial equivalent
thereto) within the meaning of Code Section 7704(b)(2) (including a market
wherein interests in the Class A Certificate are regularly quoted by any
person making a market in such interests and a market wherein any person
regularly makes available bid or offer quotes with respect to interests in
the Class A Certificates and stands ready to effect buy or sell transactions
at the quoted prices for itself or on behalf of others).
3
xi) Unless the Transferor consents otherwise each of the Purchaser and
the Bank Investor represents, warrants and covenants that it (i) is properly
classified as, and will remain classified as, a "corporation" as described in
Code Section 7701 (a)(3) and (ii) is not, and will not become, an 'IS
corporation" under Code section 1361. Each of the Purchaser and the Bank
Investor represents, warrants and covenants that it shall (i) cause each of
its Participants otherwise permitted hereunder to make representations,
warranties and covenants as required by Section 9.04 of the Series Supplement
for the benefit of the Transferor and the Trust at the time such Participant
became a Participant and (ii) forward a copy of such representations,
warranties and covenants to the Trustee. In the event of any breach of the
representation, warranty and covenant of the Purchaser or the Bank Investor
or its Participant that such Purchaser or Bank Investor or its Participant
that such Purchaser or Bank Investor or its Participant that such Purchaser
or Bank Investor or its participant shall remain classified as a corporation
other than an S corporation, such Purchaser or Bank investor shall notify the
Transferor promptly upon such Purchaser's or Bank Investor's becoming aware
of such breach, and thereupon such Purchaser or Bank Investor hereby agrees
to use reasonable efforts to procure a replacement investor to succeed to its
rights and obligations hereunder. In any event, the transferor shall also
have a right to procure a replacement investor. Each affected Purchaser
hereby agrees to take all actions necessary to permit a replacement investor
to succeed to its rights and obligations hereunder. Each Purchaser or Bank
Investor which has a participant which has breached its representation,
warranty and covenant that it shall remain classified as a corporation other
than an S corporation hereby agrees (without limiting the right of the
Transferor to procure a replacement investor for such Purchaser as provided
above in this paragraph) to notify the Transferor of such breach promptly
upon such Purchaser's becoming aware thereof and to use reasonable efforts to
procure a replacement Participant, as applicable, not so affected which is
acceptable to the Transferor to replace any such Participant.
[if Bank Investor is organized under the laws of any jurisdiction outside
the United States:
xii) Under applicable law no taxes will be required to be withheld by
the Trust, the Trustee, the Transferor, or the Servicer with respect to any
payments to be made to such Bank Investor in respect of an interest in the
Class A Certificates, and the Bank Investor covenants that it will pay all
taxes attributable to its investment in the Class A Certificates.
xiii) The Bank Investor agrees (for the benefit of the Trust, the
Trustee, the Transferor and the Servicer) to provide those forms required to
be provided by Section 9.04 at the time and in the manner described therein,
and to
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comply with all applicable U.S. laws and regulations with regard to the
related withholding tax exemptions.)
The Transferor hereby consents to the transfer of the Class A
Certificate by the Purchaser to the Bank Investor.
Very truly yours,
ENTERPRISE FUNDING CORPORATION
as Purchaser
By:
-------------------------------
Name:
Title:
NATIONSBANK, N.A.,
as Agent and Bank Investor
By:
-------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Senior Vice President
AGREED TO AS OF THE DATE FIRST ABOVE WRITTEN:
COMPUCREDIT FUNDING CORP.
By:
-------------------------------
Name:
Title:
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