Exhibit 10.7.1
AFFINITY CARD AGREEMENT
THIS AFFINITY CARD AGREEMENT ("Agreement"), made as of the 6th day of
January, 1997, between COLUMBUS BANK AND TRUST COMPANY, a bank organized
under the laws of the State of Georgia with offices at 0000 Xxxxxxxx,
Xxxxxxxx, Xxxxxxx 00000 (hereinafter referred to as "CB&T"), and CompuCredit,
L.P., a limited partnership organized under the laws of the State of Georgia
with offices at Xxx Xxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000
(hereinafter referred to as "CompuCredit").
WITNESSETH:
WHEREAS, CB&T is a bank authorized to engage in the business of issuing
to consumers lines of credit that are accessible by credit cards; and
WHEREAS, CB&T is a licensed principal member of Visa, U.S.A., Inc.
("Visa"); and
WHEREAS, CompuCredit has relationships with consumers and is desirous of
having CB&T issue Visa credit cards to consumers who are creditworthy under
the standards contemplated hereby; and
WHEREAS, on the terms and conditions described herein, CB&T and
CompuCredit desire to enter into a relationship under which, among other
things, CB&T will issue such credit cards and CompuCredit will perform
certain services; and
WHEREAS, under certain circumstances, in order to assist CB&T in
connection with the funding of receivables, CompuCredit shall purchase
certain of the accounts receivable generated by the use of Credit Cards;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth and for other goods and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, CB&T and
CompuCredit agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Except as otherwise specifically indicated, the
following terms shall have the indicated meanings;
"Cardholder" shall mean an individual in whose name a Credit Card
Account is established.
"Cardholder Agreement" shall mean an agreement between CB&T and a
Cardholder for the extension of credit in connection with a Credit Card
Account.
"Aspire Card" shall mean a Visa Card bearing the name or logo "Aspire"
on the front thereof.
"Credit Card" or "Card" shall mean each Aspire Card.
"Credit Card Account" or "Account" shall mean an account that is opened
by CB&T pursuant to which one or more Credit Cards are issued to a
Cardholder, including, without limitation, any and all documents, books and
records pertaining thereto and any and all rights, remedies, benefits,
interests and titles, both legal and equitable, to which CB&T as creditor and
issuer may now or hereafter be entitled with respect thereto.
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"Credit Card Receivables" shall mean all amounts owing to CB&T on the
Accounts, including, without limitation, principal balances from outstanding
purchases and cash advances, accrued finance charges, late charges, returned
check charges and any other charges and fees, whether or not billed, as of
the close of business on a given day, less any payments and credits received
in respect to the Accounts prior to the close of business on such day.
"Net Excess Amount" means, for any relevant period (such period not to
exceed one month in duration), the amount collected from all Cardholders by
CB&T with respect to Accounts, less accrued amounts set forth on Exhibit C.
"Program" shall mean the affinity credit card program conducted pursuant
to the terms hereof.
"Program Receivables" shall means the net outstanding book principal
balances of purchases and cash advances made on the Accounts.
"Solicitation Materials" means any applications, marketing materials,
advertising pieces, sales literature, telemarketing scripts, any other
materials used to induce persons to apply for Credit Cards, and any other
materials used to induce use of the Credit Cards.
1.2 Construction. Unless the context otherwise clearly indicates,
words used in the singular include the plural and words used in the plural
include the singular.
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ARTICLE 2
ESTABLISHMENT OF CREDIT CARD ACCOUNTS
2.1 ISSUANCE OF CREDIT CARDS. CB&T shall issue Credit Cards to each
applicant for a Card who qualifies for such type of Card under the Credit
Criteria (as defined in Section 2.3 hereof). CB&T shall extend credit with
respect to said Credit Cards, and CompuCredit shall not be considered a
creditor on any Credit Card Account for any purpose whatsoever. Subject to
the Operating Regulations (as defined in Section 2.11 hereof) and the terms
of Section 2.9 herein, each Credit Card shall have the name, logo and/or
trademark of Aspire Card on the front thereof and shall be of a design
approved by CB&T, CompuCredit and Visa, as applicable.
2.2 SOLICITATION OF NEW ACCOUNTS. CompuCredit shall, at its own expense,
have the sole and exclusive right to solicit applications for Credit Cards
from individuals, corporations, partnerships and/or other entities on behalf
of CB&T. CompuCredit shall bear all marketing expenses incurred in connection
with the Program. CompuCredit shall, at its own expense, create, produce and
mail Solicitation Materials to promote the Program and solicit new Credit
Card Accounts for CB&T. CompuCredit shall provide copies of all Solicitation
Materials to CB&T for its review and approval as soon as practicable, but no
less than 20 business days prior to their first intended use. CB&T shall respond
by approving, or giving specific reasons for disapproval, within ten business
days of receipt and shall not unreasonably withhold or delay its approval of
such materials. No Solicitation Materials may be distributed by CompuCredit
without the approval of CB&T. The frequency and timing of such solicitations
shall be
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determined by CompuCredit in consultation with CB&T. In CompuCredit's
discretion, solicitations may be conducted by direct mail, telephone, or
other means. CompuCredit shall (i) prepare and include on or with each
solicitation any notices and disclosures required under applicable laws and
regulations as determined by CB&T from time to time, (ii) provide such
notices and disclosures to CB&T for its review and approval, and (iii)
otherwise conduct all such solicitation activities in compliance with all
material applicable laws and regulations. CB&T shall be identified to
Cardholders as the Card issuer and the creditor for loans made on the Credit
Card Accounts.
2.3 APPLICATIONS
(a) CB&T will require that each person who desires to become a
Cardholder complete a written application or apply for a Credit Card in
response to a telemarketing solicitation. CB&T shall ensure that the form of
the written application, the telemarketing script and all other Solicitation
Materials are in compliance with all material applicable laws and
regulations. The credit criteria for issuing Credit Cards (the "Credit
Criteria") established by CB&T in consultation with CompuCredit are set forth
in the Aspire Operations Manual (as defined in Section 2.6 below). CB&T will
notify CompuCredit at least 180 days in advance of any changes to the Credit
Criteria which have not previously been consented to by CompuCredit.
(b) CB&T shall approve an applicant for a Credit Card only if the
applicant meets the applicable Credit Criteria. In the event that an
applicant for a Card does not meet the Credit Criteria, CB&T shall notify
the applicant in accordance with applicable laws and regulations.
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2.4 Establishment of Credit Card Accounts. Upon approval of an
application, CB&T shall establish a Credit Card Account for the applicant.
CB&T shall provide one or more Credit Cards to each approved applicant and
shall automatically issue a renewal card to each Cardholder at each scheduled
Credit Card renewal date, if such Cardholder continues to meet the Credit
Criteria. CB&T shall prepare and provide to each Cardholder a Cardholder
Agreement and disclosure statement and such other notices or documents
related to such Cardholder's Credit Card Account as are required from time to
time, in the determination of CB&T, under applicable laws and regulations.
The Cardholder Agreement and disclosure statement and other documents shall
provide, as appropriate, that they are governed by Georgia law and federal
law. CB&T shall be responsible for preparing and providing said documents and
shall ensure that they comply with all material applicable laws and
regulations.
2.5 Account Terms. The terms and conditions for the Credit Cards
applicable to the Credit Card Accounts are set out in the forms of Cardholder
Agreements attached hereto as Exhibit B and incorporated herein. CB&T shall
ensure that the terms and conditions for the Credit Cards (including, without
limitation, the interest rates, fees and charges) are in compliance with all
material applicable laws and regulations. Changes in the Account terms and
conditions shall be made by CB&T with the written consent of CompuCredit,
which consent shall not unreasonably be withheld.
2.6 Account Administration. Except as otherwise provided herein, or in
the agreements referred to in Section 2.8 hereof, CB&T will perform or
provide for the performance of all services that may be required in order to
establish and maintain the
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Credits Card Accounts, including, but not limited to: credit approval,
issuance of Credit Cards, making of credit card loans and receipt of payments
from Cardholders. CB&T and CompuCredit shall cooperate in the development of
one or more manuals of operations, policies and procedures for the operation
of the Program (collectively, "Aspire Operations Manual" or "Manual"), the
contents of which are hereby incorporated herein by reference. All
administration and services to be provided by CB&T shall be provided by CB&T
in accordance with the terms of the Solicitation Materials and Cardholder
Agreements, the Aspire Operations Manual, the Operating Regulations (as
defined in Section 2.11 below) and this Agreement. CompuCredit acknowledges
that it has reviewed and understands such policies and procedures and hereby
agrees that CB&T shall apply such policies and procedures for the services
provided under this Agreement. CB&T may subcontract with a third party to
provide any service required to be provided by CB&T hereunder, provided the
CompuCredit shall approve such third party and the terms of any agreement
with said party.
2.7 Non-Credit Revenue on Accounts
(a) CompuCredit shall, at its own expense and at no cost to CB&T,
arrange for third parties to provide enhancements to Cardholders in connection
with the Program.
(b) CompuCredit shall be entitled, at its own expense, to solicit
Cardholders for goods and services, including, without limitation, insurance
products, and to place solicitation or promotional materials in communications
by CB&T to Cardholders. CompuCredit shall provide copies of all such
solicitation and promotional materials to
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CT&T for its review and approval as soon as practicable, but no less than 20
business days prior to their first intended use. CB&T shall respond by
approving, or giving specific reasons for disapproval, within ten business
days of receipt and shall not unreasonably withhold or delay its approval of
such documents. No solicitation or promotional materials may be distributed
by CompuCredit without the approval of CB&T. CompuCredit shall meet all
applicable standard and requirements of "TSYS" (as defined in Section 2.8
hereof) in connection with inserts in periodic statements and shall comply
with applicable laws and regulations in connection therewith.
(c) CompuCredit shall be entitled to retain all income
and fees, if any, resulting from the foregoing enhancements, solicitations and
promotions.
(d) Any rebates, marketing fees, revenues or other fees
or discounts that are paid or granted by VISA to CB&T with respect, or
apportionable, to Accounts shall be paid over to CompuCredit as additional
consideration under this Agreement net of any Visa Base 1 or Base 2 xxxxxxxx
to CB&T with respect, or apportionable, to Accounts.
2.8 Ancillary Agreements. The following additional agreements
have been entered into in connection with the Program and have been approved
by CompuCredit:
(i) A processing agreement between CB&T and Total System
Services, Inc. ("TSYS") (the "Processing Agreement"), under which TSYS will
provide certain data processing, authorization, settlement and related
services with respect to the Accounts; and
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(ii) A data processing agreement between CB&T and Synovus
Data Corp. ("SDC") (the "SDC Agreement"), under which SDC will provide
certain data processing services with respect to the Accounts.
2.9 Use of Names and Trademarks
(a) CompuCredit hereby authorizes CB&T, during the term
of this Agreement and for a period of up to 180 days after any purchase of
Accounts by CompuCredit, on a non-exclusive, nonassignable basis, to use
CompuCredit's name and such trademarks of CompuCredit, including, without
limitation, the "Aspire" servicemark, as may be used in connection with the
Credit Card Accounts (the "CompuCredit Credit Card Marks" or "CompuCredit
Marks") in the forms and formats approved by CompuCredit: (i) on Credit
Cards, and (ii) on periodic statements, Cardholder Agreements and other
communications to Cardholders with respect to the Credit Card Accounts.
CompuCredit represents and warrants to CB&T that CompuCredit has the power
and authority to provide the authorization herein granted. It is expressly
agreed that CB&T is not acquiring any right, title or interest in the name
"CompuCredit" or any trade names, trademarks, logos or service marks of
CompuCredit or of the Credit Card design, all of which shall be the property
of CompuCredit. CB&T shall make no use of any trade names, trademarks, logos
or service marks of CompuCredit, or of the Credit Card design without
CompuCredit prior written consent, except as specifically authorized in this
Section 2.9.
(b) CB&T hereby authorizes CompuCredit during the term
of this Agreement and for a period of up to 180 days after any purchase of
Accounts by CompuCredit, on
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a non-exclusive, nonassignable basis, to use CB&T's name and such trademarks
of CB&T as may be used in connection with the Credit Card Accounts (the "CB&T
Credit Card Marks" or "CB&T Marks"), in the forms and formats approved by
CB&T, in communications to Cardholder's with respect to the Credit Card
Accounts made by CompuCredit pursuant to its obligations under this
Agreement. It is expressly agreed that CompuCredit is not acquiring any
right, title or interest in the names "Columbus Bank and Trust Company" or
"CB&T" or any trade names, trademarks, logos or service marks of CB&T, all of
which shall be the property of CB&T. CompuCredit shall make no use of the
names "Columbus Bank and Trust Company" or "CB&T," or of any trade names,
trademarks, logos or service marks of CB&T, without CB&T's prior written
consent, except as specifically authorized in this Section 2.9.
(c) Use of Name and Trademarks. Except as otherwise provided herein,
neither party shall use the registered trademarks, service marks, logo, name
or any other proprietary designations of the other party without that party's
prior written consent. Each party shall submit to the other party for prior
approval any advertising or promotional materials referring to or describing
the Credit Card Program in which such trademarks are to be used, which
approval shall not unreasonably be withheld or delayed.
2.10 Cooperation. Each party hereto agrees to cooperate fully with the
other party hereto in furnishing any information or performing any action
reasonably requested by such party that is needed by the requesting party to
perform its obligations under this Agreement or to comply with applicable
laws and regulations.
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Each party agrees that it shall furnish the other party with true, accurate
and complete copies of such records and all other information with respect
to the Credit Card Accounts and the Program as such party or its authorized
representatives may reasonably request, provided however that neither party
shall be required to divulge any records to the extent prohibited by
applicable law.
2.11 Visa Membership. At all times during the term of this Agreement,
CB&T shall use its best efforts to maintain its membership in Visa. CB&T
shall be responsible for making all reports to Visa which may be required by
its membership therein. CB&T will comply with the operating rules and
regulations of Visa ("Operating Regulations") in connection with the Program.
However, if CB&T loses its membership, CompuCredit may terminate this
agreement and the Facilities Management Services Agreement without any
termination fee.
2.12 Non-exclusive Arrangement. There shall be no restriction on CB&T's
right to issue credit cards independent of the Program and to perform credit
card services on its own behalf or for other parties or affinity groups.
2.13 Ownership of Account Relationships. During the term hereof, CB&T
shall not, directly or indirectly, transfer, sell or disclosure to any other
person or entity any list (whether in written or other form) containing the
names, addresses and/or telephone numbers of Cardholders that exists by
reason of those persons being Cardholders (a "Cardholder List"). CB&T shall
not, directly or indirectly, solicit Cardholders by using a Cardholder List,
in whole or in part, for any other credit card, or for any other purpose,
without the prior written consent of CompuCredit. This Section 2.13 shall not
prohibit
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any transfer, sale or disclosure of the name, address or telephone number of,
or any solicitation of, any person of whose existence CB&T has or obtains
knowledge otherwise than by reason of CB&T's participation in this Agreement.
2.14 Performance. CB&T represents and warrants that it has, or will
have on or before December 1, 1996, all of the necessary facilities and
personnel to establish, operate and administer the Program in accordance with
the terms of this Agreement; that it shall perform its obligations hereunder
at all times and in all respects in accordance with all material applicable
federal, state, and local laws and regulations; and that it will perform its
obligations hereunder in a timely manner and with due care.
2.15 Assistance with Conversion. Upon any termination of this
Agreement, CB&T shall provide to CompuCredit all assistance reasonably
necessary to enable CompuCredit to convert the accounts serviced hereunder to
the processing system designated by CompuCredit, and cooperate with
CompuCredit in its efforts to effect such conversion, at the earliest
practicable date.
2.16 Accuracy of Account Records. The Cardholder Agreement and Account
records of CB&T shall at all times fully and accurately reflect in all
material respects the true outstanding balance of the Accounts.
2.17 Reports. CB&T shall provide to CompuCredit periodic reports
(through TSYS or otherwise), including, without limitation, new account
application status reports, delinquent account reports, charge-off
documentation and settlement reports, and such other reports as CompuCredit
may reasonably request from time to time. The frequency and content of such
reports shall be mutually agreed upon by CB&T and
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CompuCredit, consistent with CB&T's and/or TSYS' systems capability, as
applicable, and CB&T's and/or TSYS' report production schedule.
Unless otherwise agreed to by CompuCredit in writing, CB&T shall submit
to CompuCredit a monthly status report, in addition to the standard reports
described in the immediately preceding paragraph. The report shall (i)
generally describe CB&T's activities and accomplishments during the preceding
six months; (ii) list the status of projects and tasks requested by
CompuCredit; (iii) summarize account activity; and (iv) identify actual or
anticipated problem areas and the impact of such problem areas.
CompuCredit may, at its own expense and upon reasonable prior notice,
have full access to and the right to inspect and copy the books, records and
data records of CB&T, or to which CB&T has access as a client of any
subcontractor performing work for or on behalf of CB&T, relating to the
Program, and during the term of this Agreement, CB&T shall furnish to
CompuCredit all such information concerning Accounts established and
administered by CB&T pursuant to this Agreement as CompuCredit may reasonably
request.
2.18 Expenses. CompuCredit agrees to reimburse CB&T for those
reasonable and customary outside legal fees actually incurred related to
CB&T's review and approval of the Solicitation Materials.
2.19 No Further Fees. The amounts set forth in Exhibit C and other
amounts expressly provided for in this Agreement include all amounts
chargeable by CB&T under this Agreement, and CompuCredit shall not be
required to pay, and CB&T shall
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not be permitted to invoice CompuCredit for, any other charges in connection
herewith, except for those additional services agreed to by CompuCredit in
writing.
ARTICLE 3
FINANCIAL TERMS
3.1 Co-Branding Fee. CompuCredit shall pay to CB&T a co-branding fee
of $10,000 per year with such fee to be paid annually within 30 days of
CompuCredit's receipt of a xxxx from CB&T; provided, however, that
CompuCredit shall pre-pay the fee for the first two years.
3.2 Deposit. Throughout the term of this Agreement, CompuCredit shall
maintain at CB&T a non-interest bearing deposit of $1,000,000 (the
"Deposit"). Such deposit shall be refundable to CompuCredit and paid to
CompuCredit by CB&T after termination of this Agreement, after all amounts
due to CB&T pursuant to this Agreement have been paid, but in no event
earlier than 30 days following termination of this Agreement. The Deposit
shall bear interest at CB&T's Prime Rate from the date of termination of this
Agreement until the Deposit is refunded to CompuCredit.
3.3 Letter of Credit. During the term of this Agreement, CompuCredit
shall maintain an irrevocable letter of credit it the amount of $10,000,000
(such letter and any replacement or additional letters are collectively
referred to as "Letter of Credit") in favor of CB&T with a financial
institution approved by CB&T to secure its obligations under this Agreement.
The Letter of Credit shall be substantially in the form attached as Exhibit
D. CB&T may require CompuCredit to increase the amount of the Letter of
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Credit or obtain a new letter of credit if deemed necessary by CB&T to cover
potential liabilities of the Program. If at any time CompuCredit does not
make any payment under this Agreement when due, after expiration of any
applicable notice and cure period, CB&T may immediately access the Letter of
Credit. CompuCredit may revoke the Letter of Credit after termination of this
Agreement.
3.4 Marketing Fee. CB&T shall pay to CompuCredit daily a marketing fee
equal to the Net Excess Amount attributable to Program Receivables owned by
CB&T.
3.5 Program Fee. To induce CB&T to enter into this Agreement and
establish the Program provided for herein, CompuCredit agrees that for any
month in which (i) the amount calculated pursuant to Exhibit C exceeds (ii)
the total amount collected from all Cardholders by CB&T with respect to all
Accounts, CompuCredit shall pay to CB&T, within 15 days of receipt of an
invoice from CB&T, a program fee for the month equal to the amount by which
(i) above exceeds (ii).
ARTICLE 4
PURCHASE AND SALE OF RECEIVABLES AND ACCOUNTS
4.1 Purchase and Sale of Receivables.
(a) At any time when outstanding Program Receivables exceed $1,000,000,
CB&T shall thereafter sell to CompuCredit and CompuCredit shall thereafter
purchase from CB&T, on a daily basis, (i) 100% of the Program Receivables in
excess of $1,000,000 and (ii) all of CB&T's right, title and interest in and
to Net Excess Amount attributable to the purchased Program Receivables. For
purposes hereof, the purchase
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price ("Purchase Price") shall be equal to 100% of the Program Receivables in
excess of $1,000,000. With respect to Program Receivables sold to CompuCredit
under this Section 4.1(a), CB&T shall pay daily to CompuCredit the Net Excess
Amount attributable to Program Receivables owned by CompuCredit. CB&T may net
daily all amounts due to or from the parties under this Section 4.1(a)
("Settlement Amount"). CB&T shall provide CompuCredit daily with a report
setting forth the calculation of all amounts due under this Section 4.1(a).
(b) No later than 1:00 p.m. (eastern time) on each banking day, CB&T
shall notify by facsimile transmission the Chief Financial Officer or such
officer's designee at CompuCredit of the Settlement Amount due to or owed by
CompuCredit for transactions pursuant to Section 4.1(a) above. For purposes
hereof, "banking day" shall mean a day that CB&T is open for business and
excluding Saturdays, Sundays and legal holidays. Payments due for any day
shall be made by the appropriate party by wire transfer no later than 4:00
p.m. (eastern time), unless CB&T is late in notifying CompuCredit of the
Settlement Amount due for any day, in which case the appropriate party shall
use all reasonable efforts to send the wire transfer within the time period
set forth above or as soon thereafter as possible, but in any event no later
than 5:00 p.m. (eastern time) of the next banking day following CompuCredit's
receipt of notice from CB&T. In the event the wire transfer is not received
by 5:00 p.m. (eastern time) of the next banking day following CompuCredit's
receipt of notice from CB&T, CB&T may immediately access the Letter of Credit.
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The party receiving payment shall promptly notify the party sending
payment by facsimile transmission if any such required payment is not
received when due and shall use reasonable efforts to provide such notice to
the party sending payment by 5:30 p.m. (eastern time) of the due date but in
no event shall such notice be given later than 12:30 p.m. (eastern time) of
the banking day following said due date.
(c) In the event CompuCredit has reason to dispute the accuracy of the
Settlement Amount reported by CB&T for any day, CompuCredit shall promptly so
notify CB&T, but such notice shall not effect either party's obligation for
timely payment of the Settlement Amount as noticed by CB&T.
In the event it is determined that CompuCredit was correct in disputing
the accuracy of the Settlement Amount for a given day, or if CB&T shall fail
for any other reason to properly remit the Settlement Amount due for any
given day to CompuCredit, CB&T shall promptly remit to CompuCredit (i) the
amount due CompuCredit with interest thereon computed at the rate of three
(3) percentage points above the CB&T "prime rate" in effect on the date said
sum was first due, or (ii) $100, whichever is greater.
If CompuCredit shall fail for any reason to remit to CB&T the Settlement
Amount due for any given day, then CompuCredit shall promptly remit to CB&T
the amount due CB&T with interest thereon from the date such sum was due
until the date the Settlement Amount is paid computed at the rate of three
(3) percentage points above the CB&T "prime rate" in effect on the date said
sum was first due. However, if CompuCredit makes a payment under this
provision and CB&T uses the Letter of Credit
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to satisfy the Settlement Amount then CB&T shall promptly remit to
CompuCredit (i) the amount due CompuCredit with interest thereon computed at
the rate of three (3) percentage points above the CB&T "prime rate" in effect
on the date said sum was paid in duplicate, or (ii) $100, whichever is greater.
If CompuCredit fails on any given day to pay the Purchase Price
indicated by CB&T, as provided hereunder, even in the event CompuCredit
disputes such amount, and such failure is not cured within five (5) banking
days from the date CompuCredit receives notification of nonpayment, CB&T may
(but need not and without waiver of its rights), in addition to any other
rights and remedies it may have, upon notice to CompuCredit sell to any third
party any interest in the Program Receivables that CompuCredit failed to
purchase; provided, however, that CB&T shall not sell any interest in Program
Receivables until it shall have utilized all funds available under the Letter
of Credit to purchase Program Receivables for CompuCredit's account.
(d) CB&T shall remain the owner of all Credit Card Accounts,
notwithstanding any sale of any Program Receivables to CompuCredit or a third
party, under this Section 4.1. CompuCredit shall not be deemed to have
assumed any obligations of CB&T with respect to the Credit Card Accounts by
virtue of any purchase of an interest in Program Receivables hereunder.
Except as otherwise provided herein, CB&T shall not sell any Credit Card
Receivables or any interest therein to any third party without the prior
written consent of CompuCredit.
(e) The sale of receivables contemplated in (a) hereof shall occur upon
settlement therefor by or on behalf of CompuCredit and no additional
documents shall
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be required by the parties to effect any such sale. Notwithstanding the
foregoing, if, in the reasonable judgment of either party, in connection with
any such purchase and sale, any additional instrument, document, or
certificate is required to further evidence such purchase and sale, the other
party shall execute and deliver any such document.
4.2 Sale of Accounts
(a) Except as provided in this Agreement, CB&T shall not sell or
transfer any Credit Card Account created under the Program, or any interest
therein, to any unaffiliated party without the prior written consent of
CompuCredit.
(b) Upon expiration or termination of this Agreement, CompuCredit shall
have the right, exercisable by providing written notice to CB&T no later than
sixty (60) days after notice of termination is provided by a party hereunder,
to purchase the Accounts and all Credit Card Receivables then owned by CB&T
or to arrange for said purchase by a financial institution designated by
CompuCredit. The purchase price for said Accounts and Credit Card Receivables
shall be equal to 100% of the Program Receivables then owed by CB&T. The
terms of Section 8.1(e) hereof shall apply to any such purchase.
4.3 Covenants of CB&T. During the term of this Agreement, (i) CB&T
shall take no action (or fail to take any action) which would serve to allow
for the creation of a lien, pledge, security interest or other encumbrance on
any of the Credit Card Receivables or Accounts, (ii) CB&T shall take no
action (or fail to take any action) that could result in CB&T no longer being
the lawful owner of the Accounts and Credit Card Receivables, (iii) CB&T
shall take no action (or fail to take any action) that could prevent
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CB&T from having the absolute right and authority to sell the Accounts and
Credit Card Receivables.
ARTICLE 5
ADDITIONAL PRODUCTS AND SERVICES
5.1 Additional Services. In the event CompuCredit requests CB&T to
perform any additional services in connection with the Cards issued under the
Program which are not already required to be performed under this Agreement
by CB&T, and which would entail additional expense by CB&T, and CB&T agrees
to provide such services in connection with Cards issued hereunder, then the
details and the costs of such services shall be agreed to by CompuCredit and
CB&T in writing and shall be attached to this Agreement as an amendment or
set forth in a separate document.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of CB&T. CB&T hereby represents and
warrants CompuCredit as follows:
(a) Organization. CB&T is a bank duly organized, validly existing and in
good standing under the laws of the State of Georgia.
(b) Capacity; Authority; Validity. CB&T has all necessary corporate
power and authority to enter into this Agreement and to perform all of the
obligations to be performed by it under this Agreement. This Agreement and
the consummation by
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CB&T of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of CB&T, and this Agreement has been
duly executed and delivered by CB&T and constitutes the valid and binding
obligation of CB&T and is enforceable in accordance with its terms (except
as such enforceability may be limited by equitable limitations on the
availability of equitable remedies and by bankruptcy and other laws affecting
the rights of creditors generally).
(c) Compliance. All aspects of the Program, all terms of the Accounts
and the Cardholder Agreements, and all Solicitation Materials and other
documents, materials and agreements supplied or communicated in any form to
Cardholders, prospective Cardholders or others in connection with the Program
comply and will comply in all material respects with applicable law and
regulations.
(d) Conflicts; Defaults. Neither the execution and delivery of this
Agreement by CB&T nor the consummation of the transactions contemplated
herein by CB&T will (i) conflict with, result in the breach of, constitute a
default under, or accelerate the performance required by, the terms of any
contract, instrument or commitment to which CB&T is a party or by which CB&T
is bound, (ii) violate the articles of incorporation or bylaws, or any other
equivalent organizational document, of CB&T, (iii) result in the creation of
any lien, charge or encumbrance upon any of the Credit Card Accounts or the
Credit Card Receivables (except pursuant to the terms hereof), or (iv)
require the consent or approval of any other party to any contract,
instrument or commitment to which CB&T is a party or by which it is bound.
CB&T is not subject to any agreement
21
with any regulatory authority which would prevent the consummation by CB&T of
the transactions contemplated by this Agreement.
(e) Litigation. At the date of this Agreement, there is not pending any
claim, litigation, proceeding, arbitration, investigation or material
controversy before any governmental agency to which CB&T is a party, which
adversely affects any of its assets or the ability of CB&T to consummate the
transactions contemplated hereby, and, to the best of CB&T's knowledge, no
such claim, litigation, proceeding, arbitration, investigation or controversy
has been threatened or is contemplated and no facts exist which would provide
a basis for any such claim, litigation, proceeding, arbitration,
investigation or controversy.
(f) No Consent, Etc. At the date of this Agreement, no consent of any
person (including without limitation, any stockholder or creditor of CB&T)
and no consent, license, permit or approval or authorization or exemption by
notice or report to, or registration, filing or declaration with, any
governmental authority is required (other than those previously obtained and
delivered to CompuCredit) in connection with the execution or delivery of
this Agreement by CB&T, the validity of this Agreement with respect to CB&T,
the enforceability of this Agreement against CB&T, the consummation by CB&T
of the transactions contemplated hereby, or the performance by CB&T of its
obligations hereunder.
(g) FDIC Insurance. CB&T is, and at all times during the term hereof
will remain, a member of the Federal Deposit Insurance Corporation.
22
6.2 Representations and Warranties of CompuCredit. CompuCredit hereby
represents and warrants to CB&T as follows:
(a) Organization. CompuCredit is a limited partnership duly
organized, validly existing and in good standing under the laws of the State
of Georgia.
(b) Capacity; Authority; Validity. CompuCredit has all necessary
power and authority to enter into this Agreement and to perform all of the
obligations to be performed by it under this Agreement. This Agreement and
the consummation by CompuCredit of the transactions contemplated hereby have
been duly and validly authorized by all necessary action on the part of
CompuCredit, and this Agreement has been duly executed and delivered by
CompuCredit and constitutes the valid and binding obligation of CompuCredit
and is enforceable in accordance with its terms (except as such
enforceability may be limited by equitable limitations on the availability of
equitable remedies and by bankruptcy and other laws affecting the rights of
creditors generally).
(c) Conflicts; Defaults. Neither the execution and delivery of this
Agreement by CompuCredit nor the consummation of the transactions
contemplated herein by CompuCredit will (i) conflict with, result in the
breach of, constitute a default under, or accelerate the performance provided
by the terms of any contract, instrument or commitment to which CompuCredit
is a party or by which it is bound, (ii) violate the certificate of
incorporation or bylaws, or any other equivalent organizational document, of
CompuCredit, (iii) require any consent or approval under any judgment, order,
writ, decree, permit or license, to which CompuCredit is a party or by which
it is bound, or
23
(iv) require the consent or approval of any other party to any contract,
instrument or commitment to which CompuCredit is a party or by which it is
bound. CompuCredit is not subject to any agreement with any regulatory
authority which would prevent the consummation by CompuCredit of the
transactions contemplated by this Agreement.
(d) Litigation. There is no claim, or any litigation, proceeding,
arbitration, investigation or controversy pending, to which CompuCredit is a
party and by which it is bound, which adversely affects CompuCredit's ability
to consummate the transactions contemplated hereby and, to the best of
CompuCredit's knowledge and information, no such claim, litigation,
proceeding, arbitration, investigation or controversy has been threatened or
is contemplated; to the best of CompuCredit's knowledge, no facts exist
which would provide a basis for any such claim, litigation, proceeding,
arbitration, investigation or controversy.
(e) No Consent, Etc. No consent of any person (including without
limitation, any stockholder or creditor of CompuCredit) and no consent,
license, permit or approval or authorization or exemption by notice or report
to, or registration, filing or declaration with, any governmental authority
is required (other than those previously obtained and delivered to CB&T) in
connection with the execution or delivery of this Agreement by CompuCredit,
the validity or enforceability of this Agreement against CompuCredit, the
consummation of the transactions contemplated thereby, or the performance by
CompuCredit of its obligations thereunder.
24
ARTICLE 7
CONFIDENTIAL INFORMATION
7.1 Confidential Information. All material and information supplied by
one party to the other party in the course of the negotiation of this
Agreement and its performance hereunder, including, but not limited to,
information concerning either party's marketing plans; technological
developments, objectives and results; and financial results are confidential
and proprietary to the disclosing party ("Confidential Information").
Confidential Information does not include any information that was (i) known
to the receiving party at the time of disclosure or developed independently
by such party without violating the terms herein; (ii) in the public domain
at the time of disclosure or enters the public domain following disclosure
through no fault of the receiving party; or (iii) disclosed to the receiving
party by a third party that is not prohibited by law or agreement from
disclosing the same. Notwithstanding the foregoing, but without limiting the
effect of the last sentence of Section 2.12(b) hereof, each Cardholder List
shall be deemed Confidential Information owned by CompuCredit.
7.2 Protection of Confidential Information. Confidential Information
shall be used by each party solely in the performance of its obligations
pursuant to this Agreement. Each party shall receive Confidential Information
in confidence and not disclose Confidential Information to any third party,
except as may be necessary to perform its obligations pursuant to this
Agreement and except as may be required by law or agreed upon in writing by
the other party. Each party shall take all reasonable steps to safeguard
Confidential Information disclosed to it so as to ensure that no
25
unauthorized person shall have access to any Confidential Information. Each
party shall, among other safeguards which it may consider necessary, require
its employees, agents, and subcontractors having access to Confidential
Information to enter into appropriate confidentiality agreements containing
such terms as are necessary to satisfy its obligation herein. Each party
shall promptly report to the other party any unauthorized disclosure or use
of any Confidential Information of that party of which it becomes aware. Upon
request or upon termination of this Agreement, each party shall return to
the other party all Confidential Information in its possession or control. No
disclosure by a party hereto of Confidential Information of such party shall
constitute a grant to the other party of any interest or right whatsoever in
such Confidential Information, which shall remain the property solely of the
disclosing party. Nothing contained herein shall limit a party's rights to
use its Confidential Information in any manner whatsoever.
7.3 Survival. The terms of this Article 7 shall survive the termination
of this Agreement.
ARTICLE 8
MISCELLANEOUS
8.1 Term and Termination.
(a) Term. This Agreement shall commence on the date first above written
and shall continue in full force and effect until December 31, 1998 (the
"Initial Term"), unless otherwise terminated as provided in Section 8.1(b) or
(c) herein. After the Initial Term, this Agreement shall be extended for
renewal terms of two (2) years each
26
("Renewal Term"), unless one party notifies the other party of its intent to
terminate this Agreement at least 180 days prior to the end of the Initial
Term or any Renewal Term. The termination of this Agreement shall not
terminate, affect or impair any rights, obligations or liabilities of either
party hereto that may accrue prior to such termination or that, under the
terms of this Agreement, continue after the termination.
(b) Termination. (i) Either party to this Agreement may
terminate this Agreement, reserving all other remedies and rights hereunder
in whole or in part, upon the following conditions:
(A) Event of Default. Subject to the terms of
Section 8.1(f) hereof, upon the occurrence of an Event of Default caused by
one party, the nondefaulting party may terminate this Agreement by giving ten
(10) banking days' notice (five banking days in the case of CompuCredit's
failure to purchase Credit Card Receivables pursuant to Section 4.1 hereof
and exhaustion of the Letter of Credit) prior written notice to the
defaulting party of its intent to terminate this Agreement. For purposes of
this Agreement, an "Event of Default" hereunder shall occur in the event either
party defaults in the performance of any of its material duties or
obligations under this Agreement and fails to correct the default, to the
reasonable satisfaction of the other party, within a 30-day cure period
(which cure period shall be five (5) banking days for CompuCredit's failure
to purchase Credit Card Receivables pursuant to Section 4.1 hereof and
exhaustion of the Letter of Credit) commencing upon receipt of notice from
the other party. Notwithstanding the foregoing, except in the case of an
Event of Default consisting of a failure by CompuCredit to purchase Credit
Card Receivables
27
pursuant to Section 4.1 hereof and exhaustion of the Letter of Credit, notice
of termination may not be sent until the party seeking to terminate has
followed the provisions of Section 8.1(f) hereof. In the event CB&T
terminates this Agreement because of a failure of CompuCredit to purchase
Credit Card Receivables pursuant to Section 4.1 hereof and exhaustion of the
Letter of Credit, CompuCredit shall pay CB&T a termination fee of $50,000 in
addition to any other sums owed to CB&T hereunder.
(B) Bankruptcy. Either party may terminate this
Agreement, at any time upon notice to the other party, after the filing by
the other party of any petition in bankruptcy or for reorganization or debt
consolidation under the federal bankruptcy laws or under any comparable law,
or upon the other party's making of an assignment of its assets for the
benefit of creditors, or upon the application of the other party for the
appointment of a receiver or trustee of its assets.
(C) Termination for Force Majeure or Changes in
Laws or Regulations. This Agreement may be terminated by either party on or
after the ninetieth (90th) day following the giving of notice by the other
party that such notice-giving party's performance is: (A) prevented or
delayed by a force majeure event listed in Section 8.7 hereof, if the failure
to perform has not been cured at the end of such ninety (90) day period, or
(B) rendered (through no act or omission of such party) illegal or
impermissible for that party or its ultimate parent corporation due to
changes in laws or regulations applicable to the terminating party.
(ii) In the event CompuCredit terminates this Agreement
other than pursuant to Section 8.1(b)(i) above, or in the event CompuCredit
purchases the Credit Card
28
Accounts pursuant to Section 8.1(e) below, and does not simultaneously with
such termination or purchase enter into the Facilities Management Services
Agreement (substantially in the form attached hereto as Exhibit E),
CompuCredit shall pay a termination fee to CB&T equal to the greater of
(a) six times the total amount of fees, as set forth on Exhibit C hereto,
incurred for the calendar month preceding such termination or purchase or
(b) six times the minimum monthly servicing fee set forth on Exhibit C.
(c) Ownership of a Bank by CompuCredit. If CompuCredit
receives approval to establish or obtain control of any bank, thrift or
industrial loan company, upon notice to CB&T, CompuCredit may terminate this
Agreement and exercise its rights under Section (e) hereof to purchase all
Accounts and Credit Card Receivables then owned by CB&T or an affiliate of
CB&T, for a total price equal to 100% of the Program Receivables then owed by
CB&T and any affiliate of CB&T, with such sale to occur as expeditiously as
possible on a mutually agreed upon date.
(d) Duties After Termination. Upon termination of this
Agreement, in order to preserve the goodwill of Cardholders both parties
shall cooperate in order to ensure a smooth and orderly termination of their
relationship and a transition of Cardholder Accounts. In the event CB&T
terminates this Agreement, CB&T shall continue to maintain and service the
Accounts and fulfill all of its obligations hereunder for a period of up to
180 days after the termination in order to allow CompuCredit to convert the
Accounts to an alternative credit card issuer or processor; provided, however,
that if the termination results from a failure of CompuCredit to purchase
Credit Card Receivables
29
under the terms of Section 4.1 hereof and the exhaustion of the Letter of
Credit, then CB&T, upon one (1) day's prior notice to CompuCredit, may refuse
to authorize any new charges on Accounts.
(e) Purchase of Accounts.
(i) (A) CompuCredit shall have the right,
exercisable by providing written notice to CB&T, to purchase, and (B) CB&T
shall have the right, upon the expiration or termination of this Agreement,
exercisable by providing written notice to CompuCredit, to cause CompuCredit
to purchase, all of the Credit Card Accounts and (to the extent not
previously purchased by CompuCredit) all of the Credit Card Receivables as of
the date of such purchase; provided, however, that should CompuCredit exercise
its right to purchase the Credit Card Accounts before that date which is two
years following the date of this Agreement (the "Initial Termination Date"),
then (1) CompuCredit and CB&T shall execute, in conjunction with any such
purchase, the Facilities Management Services Agreement (substantially in the
form attached hereto as Exhibit E), (2) such Facilities Management Services
Agreement shall have an initial term that will expire on the initial
Termination Date, and (3) this Agreement shall terminate upon the signing of
such Facilities Management Services Agreement. CompuCredit may fulfill such
obligation by arranging for said purchase to be made by a third party
designated by CompuCredit. The purchase price in the event of a purchase and
sale under this Section 8.1(e) shall be equal to 100% of the Program
Receivables owned by CB&T on the date of purchase.
30
(ii) CB&T shall transfer to CompuCredit all books and records relating
to the Accounts and Credit Card Receivables and each party shall return all
property belonging to the other party which is in its possession or control
at the time of termination and shall discontinue the use of and return to the
other party, or at the request of the other party destroy, all written and
printed materials bearing the other party's name and logo.
(iii) In the event CompuCredit defaults in its obligation to purchase the
Accounts and CompuCredit's Letter of Credit becomes exhausted, CB&T (without
limiting any other remedy it may have) may elect to retain the Accounts, in
which case CB&T shall so notify CompuCredit and may repurchase from
CompuCredit CompuCredit's interest in any Credit Card Receivables, for a
total price equal to 100% of the Program Receivables owned by CompuCredit on
the purchase date, or the parties may mutually agree to sell the Accounts and
Credit Card Receivables to an unrelated purchaser, in which case any premium
received on the sale of the Accounts shall be payable in full to CompuCredit,
less any fees due to CB&T under this Agreement and any reasonable and
actually incurred expenses incurred by CB&T in connection with the sale of
the Accounts.
(iv) From and after the date of purchase, CB&T agrees to (A) segregate,
specially xxxx and otherwise appropriately identify all Accounts purchased by
CompuCredit as belonging to CompuCredit and (B) to execute and deliver to
CompuCredit such additional documents and instruments and to take such
31
action, all without further consideration, as CompuCredit shall reasonably
request to effectuate the giving, granting, bargaining, sale, conveyance,
setting over, delivery, transfer, confirmation and assignment provided for
therein, including, without limitation, such Uniform Commercial Code
financing statements as may be requested by CompuCredit. CompuCredit agrees
to reimburse CB&T for those reasonable and customary outside legal fees
actually incurred related to the purchase not to exceed $5,000 in aggregate,
if the purchase is by CompuCredit or an affiliate of CompuCredit. CompuCredit
agrees to reimburse CB&T for those reasonable and customary outside legal
fees actually incurred relating to a purchase by an entity that is not
CompuCredit or an affiliate of CompuCredit.
(v) CB&T shall (A) give such further assurances to CompuCredit
and shall execute, acknowledge and deliver all such acknowledgements,
assignments and other instruments and take such further action as may be
reasonably necessary and appropriate to effectively vest in CompuCredit the
full legal and equitable title to all Accounts and Credit Card Receivables
purchased by CompuCredit and (B) make reasonable efforts to assist
CompuCredit in the orderly transition of the operations being acquired by
CompuCredit, including sending to CompuCredit any payments on Accounts which
may be received by CB&T after Closing. CB&T agrees to work with CompuCredit's
personnel to assure a smooth transition of the Accounts and continuity of
operations with respect to the Accounts.
(f) Resolution of Disputes. The parties agree that it is their desire
to use their best efforts to resolve amicably any and all disputes or
disagreements that may arise
32
between them with respect to the interpretation of any provision of this
Agreement or with respect to the performance by the parties under this
Agreement, in order to avoid an early termination of this Agreement. Toward
that end, the parties agree that in the event any dispute or disagreement
arises that cannot be resolved at the operating level by the employees of
each party having direct responsibility for the performance or operating
function in question, each of the parties will promptly appoint a designated
officer to meet the purpose of endeavoring to resolve such dispute or
negotiate an adjustment to such provision. Any disputes that, if not
resolved, may lead to an allegation by one party that an Event of Default has
occurred by the other party shall be referred to the Chief Financial Officer
of CB&T and the Chief Financial Officer of CompuCredit, who shall confer and
diligently attempt to find reasonable methods of correcting the condition
giving rise to the anticipated Event of Default. No legal proceedings for the
resolution of any such dispute may be commenced or notice of termination of
this Agreement may be served until such Chief Financial Officers have so
conferred, and until either party concludes, in good faith, that amicable
resolution through continued negotiation of the matter at issue does not
appear likely and one party provides written notice of same to the other
party.
8.2 Indemnification
(a) Except to the extent of any Losses which arise form the direct
acts or omissions of CB&T or an affiliate of CB&T, CompuCredit will indemnify
and hold harmless CB&T and its respective directors, officers, employees,
agents and affiliates and permitted assigns ("CB&T Indemnified Parties") from
and against any all "Losses"
33
(as herein defined) arising out of (i) any failure of CompuCredit to comply
with any of the terms and conditions of this Agreement, (ii) any inaccuracy
of a representation or warranty made by CompuCredit herein, or (iii) any
infringement or alleged infringement of any of the CompuCredit Card Marks, or
the use thereof hereunder, on the rights of any third party.
(b) Except to the extent of any Losses which arise from the direct
acts or omissions of CompuCredit, CB&T shall be liable to and shall indemnify
and hold harmless CompuCredit and its respective officers, directors,
employees, agents and affiliates, from and against any Losses (as defined
below) arising out of (i) the failure of CB&T to comply with any of the terms
and conditions of this Agreement, (ii) the inaccuracy of any representation
or warranty made by CB&T herein, (iii) any infringement or alleged
infringement of any of the CB&T Credit Card Marks, or the use thereof
hereunder, on the rights of any third party, or (iv) any losses resulting
from a failure of CB&T to comply, in respect of its obligations in connection
with the Program hereunder, with any applicable laws or regulations whether
immaterial or material, regardless of whether such failure to comply would
constitute a breach of a representation, warranty or covenant of CB&T
hereunder.
(c) For the purposes of this Agreement, the term "Losses" shall mean
all out-of-pocket costs, damages, losses, fines, penalties, judgments,
settlements, and expenses whatsoever, including, without limitation, (i)
outside attorneys' fees and disbursements and court costs reasonably incurred
by the indemnified party; and (ii) costs (including reasonable expenses and
reasonable value of time spent)
34
attributable to the necessity that any officer or employee (other than
in-house attorneys) of any Indemnified Party spend more than 25% of his or
her normal business hours, over a period of two (2) months, in connection
with any judicial, administrative, legislative, or other proceeding.
8.3 Procedures For Indemnification
(a) Notice of Claims. In the event any claim is made, any suit or
action is commenced, or any knowledge of a state of facts that, if not
corrected, would give rise to a right of indemnification of a party hereunder
("Indemnified Party") by the other party ("Indemnifying Party") is received,
the Indemnified Party will give notice to the Indemnifying Party as promptly
as practicable, but, in the case of lawsuit, in no event later than the time
necessary to enable the Indemnifying Party to file a timely answer to the
complaint. The Indemnified Party shall make available to the Indemnifying
Party and its counsel and accountants at reasonable times and for reasonable
periods, during normal business hours, all books and records of the
Indemnified Party relating to any such possible claim for indemnification,
and each party hereunder will render to the other such assistance as it may
reasonably require of the other (at the expenses of the party requesting
assistance) in order to insure prompt and adequate defense of any suit, claim
or proceeding based upon a state of facts which may give rise to a right of
indemnification hereunder.
(b) Defense And Counsel. Subject to the terms hereof, the Indemnifying
Party shall have the right to defend any suit, claim or proceeding. The
Indemnifying Party shall notify the Indemnified Party via facsimile
transmission, with a copy by mail,
35
within ten (10) days of having been notified pursuant to this Section 8.3(a)
if the Indemnifying Party elects to employ counsel and assume the defense of
any such claim, suit or action. The Indemnifying Party shall institute and
maintain any such defense diligently and reasonably and shall keep the
Indemnified Party fully advised of the status thereof. The Indemnified Party
shall have the right to employ its own counsel if the Indemnified Party so
elects to assume such defense, but the fees and expense of such counsel shall
be at the Indemnified Party's expenses, unless (i) the employment of such
counsel shall have been authorized in writing by the Indemnifying Party; (ii)
such Indemnified Party shall have reasonably concluded that the interests of
such parties are conflicting such that it would be inappropriate for the same
counsel to represent both parties (in which case the Indemnifying Party shall
not have the right to direct the defense of such action on behalf of the
Indemnified Party), and in either of such events such reasonable fees and
expenses shall be borne by the Indemnifying Party; or (iii) the Indemnifying
Party shall not have employed counsel to take charge of the defense of such
action after electing to assume the defense thereof.
(c) Settlement of Claims. The Indemnifying Party shall not have the
right to compromise and settle any suit, claim or proceeding in the name of
the Indemnified Party; provided, however, that the Indemnifying Party shall
not compromise or settle a suit, claim or proceeding (i) unless it
indemnifies the Indemnified Party for all Losses arising out of or relating
thereto and (ii) with respect to any suit, claim or proceeding which seeks
any non-monetary relief, without the consent of the Indemnified Party, which
consent shall not be reasonably withheld. Any final judgment or decree
36
entered on or in, any claim, suit or action which the Indemnifying Party did
not assume the defense of in accordance herewith, shall be deemed to have
been consent to by, and shall (subject to the other provisions hereof) be
binding upon, the Indemnifying Party as fully as if the Indemnifying Party
had assumed the defense thereof and a final judgment or decree had been
entered in such suit or action, or with regard to such claim, by a court of
competent jurisdiction for the amount of such settlement, compromise,
judgment or decree. The Indemnifying Party shall be subrogated to any claims
or rights of the Indemnified Party as against any other Persons with respect
to any amount paid by the Indemnifying Party under this Section 8.3.
(d) Indemnification Payments. Amounts owing under Section 8.2 shall be
paid promptly upon written demand for indemnification containing in
reasonable detail the facts giving rise to such liability, provided,
however, that if the Indemnifying Party notifies the Indemnified Party
within thirty (30) days of receipt of such demand that it disputes its
obligation to indemnify and the parties are not otherwise able to reach
agreement, the controversy shall be settled by final judgment entered by a
court of competent jurisdiction.
(e) Survival. The terms of Section 8.2 and 8.3 shall survive the
termination of this Agreement provided, however, that a direct claim made by
a party hereto against the other party hereto for breach of any part of this
Agreement other than Sections 8.2 and 8.3 hereof, shall only survive the
termination of this Agreement for a period of five years.
37
8.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia without regard to its
conflict of laws rules.
8.5 Press Releases. Except as may be required by law or regulation or a
court or regulatory authority or any stock exchange, neither CB&T nor
CompuCredit, nor their respective parents or affiliates, shall issue a press
release or make public announcement or any disclosure to any third party
related to the terms of this Agreement without the prior consent of the other
party hereto, which consent shall not be unreasonably withheld or delayed.
8.6 Relationship of the Parties. CB&T and CompuCredit agree that in
performing their responsibilities pursuant to this Agreement they are in the
position of independent contractors. This Agreement is not intended to
create, nor does it create and shall not be construed to create, a
relationship of partners or joint venturers or any association for profit
between and among CB&T and CompuCredit.
8.7 Force Majeure. In the event that either party fails to perform its
obligations under this Agreement in whole or in part as a consequence of
events beyond its reasonable control (including, without limitation, acts of
God, fire, explosion, public utility failure, accident, floods, embargoes,
epidemics, war, nuclear disaster or riot), such failure to perform shall not
be considered a breach of this Agreement during the period of such
disability. In the event of any force majeure occurrence as set forth in
this Section, the disabled party shall use its best effort to meet its
obligations as set forth in this Agreement. The disabled party shall promptly
and in writing advise the
38
other party if it is unable to perform due to a force majeure event, the
expected duration of such inability to perform and of any developments (or
changes therein) that appear likely to affect the ability of that party to
perform any of its obligations hereunder a whole or in part.
8.8 Books and Records. Each party shall maintain books of account and
records, in accordance with standard accounting practices and procedures, of
all financial transactions arising in connection with its obligations
pursuant to this Agreement for a period of not less than five years from the
date last recorded or created, and after such time the other party will be
offered a reasonable opportunity to take possession of such records at its
expense prior to their destruction. In addition to and notwithstanding the
foregoing, to the extent either party has sole possession of any records
required to be maintained by the other party pursuant to applicable state or
federal laws or regulations, the party with possession shall maintain such
records in such form and for such time periods as are provided for in such
laws and regulations. Subject to the first sentence of this Section, either
party may, at its own expense and upon reasonable prior notice, have full
access to and the right to inspect and copy the books and records of the
other party relating to services performed herein by that party, and during
the term of this Agreement, each party shall furnish to the other party all
such information concerning transactions and services provided by it pursuant
to this Agreement as that party may reasonably request.
8.9 Notices. All notices, requests and approvals required by this
Agreement (i) shall be in writing, (ii) shall be addressed to the parties as
indicated below unless
39
notified in wiring of a change in address, and (iii) shall be deemed to have
been given either when personally delivered or, if sent by mail, in which
event it shall be sent postage prepaid, upon delivery thereof, or, if sent by
telegraph, telex, facsimile (with oral confirmation of receipt), or
nationally recognized overnight delivery, upon delivery thereof. The
addresses of the parties are as follows:
To CB&T: COLUMBUS BANK AND TRUST COMPANY
Attention: President
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
-OR-
X.X. Xxx 000
Xxxxxxxx, Xxxxxxx 00000-0000
FAX: (000) 000-0000
To CompuCredit: COMPUCREDIT, L.P.
Attention: Chief Financial Xxxxxxx
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
8.10 Modification and Changes. This Agreement, together with any Exhibits
attached hereto, constitutes the entire agreement between the parties
relating to the subject matter herein. This Agreement may only be amended by
a written document signed by both parties; provided, however, that there may
be separate written agreements signed by both parties from time to time that
serve to augment certain of the provisions contained herein. In the course of
the planning and coordination of this Agreement, written documents have been
exchanged between the parties. Such
40
written documents shall not be deemed to amend or supplement this Agreement
unless signed by both parties.
8.11 Assignment. This Agreement and the rights and obligations created
under it shall be binding upon and inure solely to the benefit of the parties
hereto and their respective successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. Except as
otherwise provided herein, this Agreement shall not be assigned by either
party, except to a wholly-owning parent or to a wholly-owned subsidiary of
such assigning party's wholly-owning parent, without the written consent of
the other party, which consent shall not unreasonably be withheld or delayed,
and any such permitted assignment shall terminate when such assignee is no
longer a wholly-owning parent of such party or a wholly-owned subsidiary of
such party or of such party's wholly-owning parent.
8.12 Effectiveness. This Agreement shall become effective when it has
been accepted and executed on behalf of CB&T by an authorized officer and on
behalf of CompuCredit by an authorized officer.
8.13 Waivers. Neither of the parties shall be deemed to have waived any
of its rights, powers or remedies hereunder unless such waiver is approved in
writing by the waiving party.
8.14 Severability. If any provision of this Agreement or portion thereof
is held invalid, illegal, void or unenforceable by reason of any rule of law,
administrative or judicial provision or public policy, all other provisions
of this Agreement shall nevertheless remain in full force and effect.
41
8.15 Headings. The headings contained herein are for convenience of
reference only and are not intended to define, limit, expand or describe the
scope or intent of any provision of this Agreement.
8.16 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes and
all of which shall be deemed, collectively, one agreement, but in making
proof hereof it shall not be necessary to exhibit more than one.
8.17 Expenses. Except as otherwise specifically provided in this
Agreement, all parties shall pay their own costs and expenses in connection
with this Agreement and the transactions contemplated hereby, including,
without limitation, all regulatory fees, attorneys' fees, accounting fees and
other expenses.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
COLUMBUS BANK AND TRUST COMPANY COMPUCREDIT, L.P.
By: CompuCredit Management
Corp., its sole General Partner
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxx
------------------------------ ---------------------------
Title: AVP Bankcard Title: President
-------------------------- -----------------------
42
Exhibit A
[Intentionally Left Blank]
43
Exhibit B
VISA-Registered Trademark- GOLD CREDIT CARD
ACCOUNT AGREEMENT
(NY Residents: RETAIL INSTALLMENT
CREDIT AGREEMENT)
Dear Customer:
This Agreement is your contract concerning the use of your Account. It
contains disclosures required by the federal Truth in Lending Act, along with
important information about your Account. Since the terms of this Agreement
become effective immediately when you have accepted, signed, or used your
Account, we encourage you to read all of it and keep it for your records.
Please feel free to call with any questions you may have. We look forward to
serving you.
PARTNERSHIP CARD SERVICE
X.X. XXX 000-X, XXXXXXXX, XXXXXXX 00000-0000
PHONE: 0-000-000-0000
COLUMBUS BANK AND TRUST COMPANY
BANK CREDIT CARD
AGREEMENT
(NY Residents: RETAIL INSTALLMENT
CREDIT AGREEMENT)
-------------------------------------------------------------------------------
Cardholder Agreement
This Agreement contains the terms which govern the use of your Card, and
outlines both your responsibilities and ours. You do not have to sign the
Agreement, but once you have accepted, signed or used the Card, or the
Account, the Agreement will be in force. Please read it in its entirety and
keep it for your reference. This Agreement begins on the earlier of (i) the
date you sign an Account application that is approved by us, or (ii) the
first date that we extend credit to you on your account, as evidenced by a
signed sales slip or memorandum, a cash advance transaction, or otherwise.
Prior to the date this Agreement begins, you will not be liable for any
purchase or lease of property or services by use of the Card after its loss
or theft.
Definitions
To simplify this Agreement for you, the definitions listed below will apply
throughout, both in this Agreement and in your monthly statement. In addition,
the words you, your, and yours refers to the Cardholder who holds the Card
and is responsible for the Account. The words we, us, and our refer to
Columbus Bank & Trust Company, Columbus, Georgia and any agent through which
the Account is established.
Account: The Credit Card Account, for which you were issued a Card imprinted
with your Account number, that is subject to all the terms and conditions of
this Agreement.
Account Year: The 12-month period (consisting of 12 Billing Cycles)
commencing with the first billing cycle that begins when the Account is
opened, and each successive 12-month period thereafter.
Annual Percentage Rate: The yearly rate at which you are charged for your
credit.
ATM: Automated Teller Machine
Billing Cycle: The time interval covered by a monthly statement. Each Billing
Cycle is approximately 30 days in length.
Card: Any Visa Credit Card issued by us which you may use to obtain cash,
make Purchases, or lease goods or services on credit. Use of your Account
number to obtain credit will be considered a use of the card.
Card Carrier: The card carrier we send with your card.
Cardholder: The person to whom a Card is issued, or who has agreed to pay
obligations arising from a Card issued to another Person.
Cash Advance: Credit extended to you in the form of a cash loan through any
financial institution honoring the Card, either presented directly or through
any other credit instrument, check, device, overdraft coverage plan or ATM
that we make available to you.
Closing Date: The date of the last day of a Billing Cycle.
Convenience Check or Check: Any check we make available to you for the
purpose of drawing against your Account. These are subject to the same terms
and definitions as Cash Advances.
Credit Line: The maximum amount of credit available to you on your Account.
Finance Charge: The cost of credit extended to you on your Account. This is
computed by applying the Monthly Periodic Rate to your Average Daily Balance,
and adding a fixed fee to Cash Advance transactions.
Monthly Periodic Rate: A periodic interest rate amounting to one-twelfth of
the Annual Percentage Rate.
New Balance: The total outstanding Account balance on the Closing Date
specified in your monthly statement.
Other Charges: Charges to your Account other than Finance Charges. These are
listed below under "Account Fees."
Periodic Rate: The percentage rate of Finance Charge imposed against a
balance for a period. In this Agreement, a "Monthly" Periodic Rate is used.
Person: A natural person; also a corporation, partnership, proprietorship,
association, cooperative, estate, trust, government unit, or other entity.
Previous Balance: The balance of your Account at the beginning of a Billing
Cycle. This will be the same as the "New Balance" shown on your previous xxxx.
Prime Rate: The base interest rate on corporate loans at the larger U.S.
banks as published daily in the "Money Rates" section of The Wall Street
Journal. The rate applicable to your Account will be the highest Prime Rate
published on the 25th day of the calendar month preceding the month in which
the Billing Cycle begins (or if not published on that day, on the day of its
next publication following that date).
Purchase: Extensions of credit to your Account for the purpose of purchasing
or leasing goods or services from participating establishments.
User: Any Person authorized by you to obtain credit under your Account.
USING YOUR CREDIT CARD
-------------------------------------------------------------------------------
Purchases or Cash Advances
You may use your Card or Convenience Checks to purchase or lease goods or
services from participating establishments. You may also use your Card to
obtain Cash Advances from your Account by presenting it to us, or to any
institution that accepts the Card for that purpose, or by making a withdrawal
of cash at an ATM. You will owe us for these amounts, plus any applicable
Finance Charges and Other Charges, payable in U.S. dollars.
Your Credit Line
You may not use your Account in any way that would cause you to go over your
Credit Line. We may refuse to authorize or accept any transaction on your
Account that would cause you to exceed your Credit Line or if your Account is
delinquent. We may temporarily agree to allow you to exceed your limit;
however, in that case you must repay the excess amount according to the
terms of this Agreement. We may change your Credit Line at any time and will
notify you accordingly.
Convenience Checks
We may supply you with personalized Convenience Checks that are subject to
the following conditions. Payment of a Check will be considered as a Cash
Advance on your Account. Your Check must be written in U.S. dollars. Only the
person whose name appears on the Check may sign it. We are authorized to pay
any Check drawn on your Account even if the signature does not correspond
exactly to the signature on our records.
You agree that Convenience Checks written on your Account will not be
returned to you. We are entitled to return your Check unpaid if there is not
enough available credit in your Account or if your Account is in default. If
we honor the Check under these circumstances, the amount in excess of your
Credit Line will be due immediately. You may not use a Convenience Check to
make payments on your Account.
We may pay Checks dated more than six months prior to the date they are
presented for payment. You may stop payment on a Check if we receive your
instruction within ample time to act on your request. A verbal request is
binding on us for 14 calendar days and a written request for six months,
unless you notify us otherwise in writing.
You may not write a postdated Check, but we may pay a Check regardless of a
postdate. We will not certify a Convenience Check.
MAKING PAYMENTS
-------------------------------------------------------------------------------
Monthly Statements
We will send a statement at the end of each monthly Billing Cycle if there is
a debit or credit balance on your Account of $1 or more, a balance on which a
Finance Charge has been imposed, or as otherwise required by applicable law.
You agree to pay us, or any party to whom we may transfer and assign your
Account, in U.S. dollars according to all terms and conditions of this
Agreement.
The Minimum Payment is 3% of the New Balance, or at least $10. If you elect
not to pay your balance in full, you must pay the Minimum Payment within 25
days of the Closing Date of the Billing Cycle, which is shown as the
"Payment Due Date" on your statement. Your Minimum Payment will also include
any past due amount and any amount by which the New Balance exceeds the
Credit Line, whichever of these two is greater.
You may at any time pay off your entire balance in full or more than the
Minimum Payment without incurring any additional charge for prepayment.
Security Interest
If we now or in the future, hold any title, pledge or security interest in
any of your property other than your principal residence, it may be that the
terms of the instrument creating such title, pledge or security interest
will also secure your obligations on this Account.
HOW FINANCE CHARGES ARE DETERMINED
-------------------------------------------------------------------------------
Your FINANCE CHARGE will include a fixed fee amounting to 3% ($2 minimum; $50
maximum) of each Cash Advance posted during a Billing Cycle, and an amount
computed by applying a Monthly Periodic Rate to the sum of (i) your Average
Daily Balance of Cash Advances and (ii) your Average Daily Balance of
Purchases. Subject to any grace period, finance charges on Purchases will be
imposed at the Periodic Rate from the date each Purchase is made and will
continue to accrue on unpaid balances as long as they remain unpaid. You will
have a 25-day grace period to repay your New Balance before a Finance Charge
on Purchases will be imposed. However, you will only be entitled to this
grace period if your Previous Balance is (i) zero, (ii) a credit balance, or
(iii) paid in full by the "Payment Due Date" shown on your monthly billing
statement. Finance charges on Cash Advances (in addition to Fixed fees) will
be imposed at the Periodic Rate from the date each Cash Advance is made and
will continue to accrue on unpaid balances as long as it remains unpaid.
There is no time period within which to pay to avoid Finance Charges on Cash
Advances.
To get the Average Daily Balance of Cash Advances, we take the beginning
balance of your Account each day, including unpaid Finance Charges and Other
Charges, add any new Cash Advances as of the date of transaction, and
subtract any payments and credits (as of the date of posting), and all
outstanding Purchases. This gives us the daily balance for Cash Advances.
Then we add all these daily balances for the Billing Cycle together and
divide the total by the number of days in the Billing Cycle. This gives us
the Average Daily Balance of Cash Advances.
To get the Average Daily Balance of Purchases we take the beginning balance
of your Account each day, including unpaid Finance Charges and other
Charges, add any new Purchases as of the date of transaction, and subtract
any payments and credits (as of the date of posting), and all outstanding
Cash Advances. This gives us the daily balance for Purchases. Then, we add
all these daily balances for the Billing Cycle together and divide the total
by the number of days in the Billing Cycle. This gives the Average Daily
Balance of Purchases.
Computing The Annual Percentage Rate (APR) and Monthly Periodic Rate
Your Monthly Periodic Rate and corresponding Annual Percentage Rate may vary.
The Monthly Periodic Rate applied in any billing period will be equal to 1/12
of the total of (i) the highest Prime Rate published in the "Money Rates"
section of The Wall Street Journal on the 25th day of the calendar month
preceding the month in which the Billing Cycle begins (or if not published
that day, on the day of its next publication following that date) and (ii)
10.75%. However, the Monthly Periodic Rate will in no event be less than
1.58333% (corresponding ANNUAL PERCENTAGE RAGE 19%). If the prime rate
increases, the Monthly Periodic Rate and corresponding Annual Percentage Rate
may increase, and, as a result, the Finance Charge, the Minimum Payment, and
the number of payments may also increase. Any new Monthly Periodic Rate will
apply to your entire balance.
The current Monthly Periodic Rate (and corresponding Annual Percentage Rate)
under the above formula are printed on your Card Carrier. Your Card Carrier
is hereby incorporated into and made a part of this Agreement.
ACCOUNT FEES
-------------------------------------------------------------------------------
In addition to Finance Charges and fixed fees for Cash Advances, a variety of
fees and charges may be applied to your Account, as follows:
Annual Fee
You agree to pay us an annual fee of $50 for the use of your Card and access
to all Card benefits over twelve (12) months following the assessment of the
fee. The fee for the initial twelve (12) month period be assessed upon
opening your account. Subsequent annual fees will be assessed during the
month of account anniversary. If we revoke your Card, we will refund a pro
rata portion of the annual fee to you.
Late Payment Charge
If you do not make your minimum payment before the Closing Date of the
Billing Cycle, we will apply a late payment charge of $25 to your Account.
Overlimit Fee
If your New Balance exceeds your Credit Line on the Closing Date of the
Billing Cycle, we will apply an overlimit fee of $25 to your Account.
Returned Check Fee
Should any check or money order in payment of your Account be returned to us
unpaid for any reason we will apply a returned check fee in the amount of
$25 to your account.
YOUR BILLING RIGHTS AND OUR RESPONSIBILITIES
-------------------------------------------------------------------------------
Lost Cards and Unauthorized Use
If your Card is lost or stolen, or used without your consent, you may be
liable for the unauthorized use of your Card, but you will not be liable for
unauthorized use that occurs after you notify us orally or in writing of the
loss, theft or possible unauthorized use at:
Security Department
BankCard Center
X.X. Xxx 000-X
Xxxxxxxx XX 00000
0-000-000-0000
or
000-000-0000 Outside U.S. or in the Columbus, GA area.
In any case, your liability will not exceed $50.
Your Billing Rights - Keep This Notice For Future Use
-------------------------------------------------------------------------------
This notice contains important information about your rights and our
responsibilities under the Fair Credit Billing Act.
Notify us in case of errors or questions about your xxxx.
If you think your xxxx is wrong, or if you need more information about a
transaction on your xxxx, please write to us at Dispute Resolution Office,
Partnership Card Services, X.X. Xxx 000-X, Xxxxxxxx, XX 00000-0000. We must
hear from you no later than 60 days after we send you the first xxxx on which
the error or problem appeared. You can telephone us, but doing so will not
preserve your rights.
In your letter, give us the following information.
- Your name and Account number.
- The dollar amount of the suspected error.
- Describe the error and explain, if you can, why you believe there is an
error. If you need more information, describe the item you are not sure
about.
If you have authorized us to pay your Card xxxx automatically from your
savings or Checking Account, you can stop the payment on any amount you think
is wrong. To stop paymnet, your letter must reach us three business days
before the automatic payment is scheduled to occur.
Your rights and our responsibilities after we receive your written notice.
We must acknowledge your letter within 30 days unless we have corrected the
error by then. Within 90 days, we must either correct the error or explain
why we believe the xxxx is correct.
After we receive your letter, we cannot try to collect any amount you
question or report you as delinquent. We can continue to xxxx you for the
amount in question, including Finance Charges, and we can apply any unpaid
amount against your Credit Line. You do not have to pay any questioned amount
while we are investigating, but you are still obligated to pay the parts of
your xxxx that are not in question.
If we find that we have made a mistake on your xxxx, you will not have to pay
any Finance Charges related to any questioned amount. If we did not make a
mistake, you may have to pay Finance Charges, and you will have to make up
any missed payments on the questioned amount. In either case, we will send
you a statement of the amount you owe and the date that it is due.
If you fail to pay the amount that we think you owe, we may report you as
delinquent. However, if our explanation does not satisfy you and you write to
us within 10 days telling us that you still refuse to pay, we must tell anyone
we report you to that you have a question about your xxxx, and we must tell
you the name of anyone to whom we reported you. We must tell anyone we report
you to that the matter has been settled between us when it is settled.
If we do not follow these rules, we cannot collect the first $50 of the
questioned amount, even if your xxxx was correct.
Special Rule for Credit Card Purchases
If you have a problem with the quality of property or services that you
purchased with a credit card, and you have tried in good faith to correct the
problem with the merchant, you may have the right not to pay the remaining
amount due on the property or services. There are two limitations on this
right: (1) you must have made the purchase in your home state or, if not
within your home state, within 100 miles of your current mailing address; and
(2) the purchase price must have been more than $50. These limitations do not
apply if we own or operate the merchant, or if we mailed you the advertisement
for the property or services.
Telephone Monitoring
From time to time, we may monitor telephone calls regarding your Account with
us to assure the quality of our service.
OUR RIGHTS, AND HOW THEY AFFECT YOU
-------------------------------------------------------------------------------
Refunds
If a seller agrees to give a refund, you will accept a credit on your Account
instead of a cash refund.
No Waiver of Rights; Disputed Amounts
We can accept late or partial payments without losing any of our rights under
this Agreement. You agree not to send us partial payments marked "paid in
full," "without recourse," or similar language. If you send such a payment,
we may accept it without losing any of our rights under this Agreement. All
written communications concerning disputed amounts, including any check or
other payment instrument that indicates that the payment constitutes "payment
in full" of the amount owed or that is tendered with other conditions or
limitations or as full satisfaction of a disputed amount, must be mailed or
delivered to X.X. Xxx 000-X, Xxxxxxxx, Xxxxxxx 00000-0000.
Credit Reports and Information Reporting
You authorize us to make or have made any credit, employment, or other
investigative inquiries we deem appropriate to extend you credit or collect
the amounts owed to us on your Account. We may report your performance under
this Agreement and can furnish information about your Account or credit file
to consumer reporting agencies and others who may properly receive the
information, including your failure to make minimum payments on time. We
(including any assignee) may also obtain follow-up credit reports on you and
may exchange information about you or your Account with our (its) affiliates.
Otherwise, no one else will be given information about your Account without
your permission or proper legal authority. We will try to notify you by
telephone or mail of any legal process served to us in order to give you an
opportunity to object to it, unless the law prohibits the notice. You can
request that we not furnish marketing information concerning you which
discloses your identity by calling us at (000) 000-0000 or writing to us at
X.X. Xxx 000-X, Xxxxxxxx, Xxxxxxx 00000-0000.
Collection and Default
Unless prohibited by applicable law, your Account is considered to be in
default if (1) you do not make at least the Minimum Payment on or before the
Payment Due Date, (2) you try to exceed or do exceed your Credit Line without
permission, (3) you become subject to bankruptcy or insolvency proceedings,
(4) you become subject to attachment or garnishment proceedings, (5) you give
us any false information or signature, (6) you die, or (7) you fail to comply
with any portion of this Agreement. Our accepting a late or partial payment
does not waive the default. Default on this Account will constitute default
on all accounts you hold with us.
If you are in default, we may declare the entire balance due immediately.
Unless prohibited by applicable law, you must pay all costs and attorneys'
fees related to the collection of your Account.
Change of Terms
Subject to the limitations of aplicable law, we may, at any time, change any
of the terms and conditions of, or add new terms or conditions to, this
Agreement. We will mail written notice of such a change to you when and in
the manner required by applicable law. As of the effective date, the changed
terms will apply to new Purchases and Cash Advances and also to the
outstanding balance of your Account, subject to the limitations of applicable
law.
Delay in Enforcement
We can delay enforcing our rights under this Agreement without losing them.
OTHER PROVISIONS
--------------------------------------------------------------------------------
Ownership and Use of Your Card
As the Account Cardholder, you are liable for all credit obtained under your
Account, whether by yourself or as authorized User. If you authorize another
person to use your Card or a Convenience Check, you are liable for any credit
obtained on your Account for as long as that person holds the Card or Check.
In addition, you will remain liable until you recover possession of the Card
or Check. Misuse of your Card by an authorized User will not be considered
unauthorized use. Upon demand, you must return any Card we supply to you or
destroy the Card by cutting it in half immediately. Convenience Checks must
be mailed or returned to us upon request.
Transactions
You will retain for statement verification your copy of each purchase slip,
Cash Advance or other transaction to your Account.
Transfer and Termination of Your Account
You may not transfer your Account to any other Person. We may assign your
Account to any other Person at any time. Either you or we may terminate or
suspend your credit privileges at any time. However, you will remain liable
for all charges until they are paid in full.
Foreign Currency Conversion
You may make a Purchase or obtain a Cash Advance in a currency other than
U.S. dollars. If you do, the VISA association will convert the transaction
into U.S. dollars according to their procedures. The conversion rate they use
may differ from any published rate in effect on the day that you made the
transaction or it was posted to your Account. You agree to pay us the amount
as converted into U.S. dollars according to VISA association procedures.
Honoring Your Card
We are not liable for the failure or refusal of a merchant, ATM or other
institution to honor your Card. Although you may have credit available, we
will not be liable for the failure to authorize credit due to operational
difficulties or mistakes. Transactions made above a certain dollar amount may
require authorization by us before the transaction can be approved. In
addition, we may limit the number and amount of transactions approved in one
day for security reasons.
Change of Address, Employment and Telephone
We will send all written notices and statements to your address as it appears
on our records. To avoid delays and missed payments that could affect your
credit standing, you agree to advise us promptly if you change your mailing
address, place of employment, or telephone number.
Severability
In the event that any provision of this Agreement is determined to be invalid
or unenforceable for any reason, the remaining provisions will remain in
effect.
Headings and Governance
The headings used in this Agreement are for the convenience of reference only
and are not intended to define or describe the scope or intent of any portion
of the Agreement. This Agreement is governed by federal law and the laws of
the state of Georgia, as applicable.
NOTICE TO THE BUYER
1. DO NOT SIGN THIS CREDIT AGREEMENT BEFORE YOU READ IT OR IF IT CONTAINS ANY
BLANK SPACES.
2. YOU ARE ENTITLED TO A COMPLETELY FILLED IN COPY OF THIS CREDIT AGREEMENT.
Your signature on the application represents your signature on this Agreement.
(NY Residents: RETAIL INSTALLMENT CREDIT AGREEMENT).
-----------------------------------
[put signature of Bank Officer here]
-----------------------------------
[put title of Bank Officer here]
-----------------------------------
DATE: [put date of printing here]
MARYLAND RESIDENTS: Finance charges will be imposed in amounts or at rates
not in excess of those permitted by law. You have the right to receive an
answer to a written inquiry concerning the status of your Account.
NEW JERSEY RESIDENTS: Where this Agreement refers to acts or practices by us
which are or may be required by "applicable law," such acts or practices are
not required by New Jersey law, subject to the following limitation: we will
send prior written notice of any increase in the rate or amount of finance
charge (except for any increase in the rate or amount of finance charge that
results from an increase in the Prime Rate as described above in the
paragraph entitled "Computing The Annual Percentage Rate (APR) and Monthly
Periodic Rate"). Where this Agreement refers to acts or practices that may or
will be taken by us unless prohibited by, or subject to, or as permitted by,
requirements or limitations of "applicable law," New Jersey law permits the
act or practice subject to the following limitation: we do not impose
collection costs and may impose attorneys' fees under the paragraph above
entitled "Collection and Default" up to a maximum of 20% of the first $500 of
your outstanding balance and 10% of the excess.
VIRGINIA RESIDENTS: To avoid additional finance charges being applied to your
current purchases on next month's statement, pay the new balance on this
statement in full by the due date.
WISCONSIN RESIDENTS: We will not charge you attorneys' fees, court costs, or
other collection costs incurred as a result of your default.
-------------------------------------------------------------------------------
--------------------------------------------------------------------------------
For Your Information
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exhibit C
-------------------------------------------------------------------------------
ASPIRECARD--Card Servicing Pricing December 1996
-------------------------------------------------------------------------------
Portfolio Services
Project Management
TSYS Liaison
Customer Service *[material omitted]
Accounting
Fraud Detection
Monitoring
--------------------------------------------------------------------------------
Application - $12.50 per manual review, judgementally only
Processing - $3 per keyed application--approved/declined
- $1.50 per keyed application in response to
in-bound telemarketing or solicitation
- $.50 per application transmitted into ACE from
marketing agency
- $3 per fulfillment package (including cost of
card, credit bureau check, and mailing)
-
--------------------------------------------------------------------------------
Inbound telephone $0.94 per call
applications
--------------------------------------------------------------------------------
Collections *[material omitted] monthly per delinquent account
worked by a collector (calls and/or skip tracing)
--------------------------------------------------------------------------------
Fraud/Investigations $50 per hour for case management approved by
CompuCredit; plus out-of-pocket expenses for
out-of-office investigations only.
--------------------------------------------------------------------------------
Information Support Customized TSYS Total Access reports $75 per hour
--------------------------------------------------------------------------------
Customized Projects Additional services quoted on a project basis
--------------------------------------------------------------------------------
Pass-Through - $1,000 per month per TSYS data transmission type
Expenses - TSYS charges for data circuit to CompuCredit
for collections
--------------------------------------------------------------------------------
Monthly Minimum $10,000 monthly servicing fee
--------------------------------------------------------------------------------
------------------
* Deleted per the Registrant's request for confidential treatment and filed
separately with the Commission pursuant to Rule 24b-2
45
Exhibit D
BANK LETTERHEAD
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(Date)
Beneficiary: Columbus Bank & Trust Company
X.X. Xxx 000
Xxxxxxxx, XX 00000
RE: CompuCredit, L.P.
Letter of Credit No.______________________
We have established this Irrevocable Letter of Credit No._____in your favor
as "Beneficiary" for drawings up to U.S. $_______________effective (date),
and expiring at our office located at (bank address), with our close of
business on (date).
The term "Beneficiary" includes any successor by operation of law of the
named Beneficiary including, without limitation, any liquidator,
rehabilitator, receiver or conservator.
We hereby undertake to promptly honor your sight draft(s) drawn on us,
indicating our Credit No.______, for all or any part of this Credit if
presented at (Bank) on or before the expiration date or any automatically
extended expiration date.
Such a sight draft shall be accompanied by a certification by an officer
stating that an Event of Default shall have occurred under that certain
Affinity Card Agreement, dated November _____, 1996, between you and
CompuCredit L.P., due to CompuCredit, L.P.'s failure to perform under said
Affinity Card Agreement.
Except as stated herein, this undertaking is not subject to any condition or
qualification. The obligation of the Bank under this Letter of Credit shall
be the individual obligation of the Bank, in no way contingent upon
reimbursement with respect thereto.
It is a condition of this Letter of Credit that it shall be deemed automatically
extended without amendment for one year from the expiration date hereof, or
any future expiration date, unless sixty (60) days prior to any expiration
date we shall notify you by Registered Mail that we elect not to consider
this Letter of Credit renewed for any such additional period.
This Letter of Credit is subject to and governed by the Laws of the State of
Georgia and the 1993 revision of the Uniform Customs and Practice for
Documentary Credits of the
46
International Chamber of Commerce (Publication 500) and, in the event of any
conflict, the Laws of the State of Georgia will control.
(Bank Name)
By:
-------------------------------------
Title:
----------------------------------
By:
-------------------------------------
Title:
----------------------------------
47
Exhibit E
FACILITIES MANAGEMENT SERVICES AGREEMENT
This Agreement (the "Agreement") is made and entered into this
______ day of _______________, 19___ by and between COLUMBUS BANK AND TRUST
COMPANY ("CB&T") of Columbus, Georgia, and CompuCredit, L.P., a Georgia
limited partnership ("CompuCredit") of Atlanta, Georgia.
PREAMBLE
The terms and provisions of this Agreement provide for the
utilization by CompuCredit of CB&T's facilities management services
("Services") commencing with the purchase by CompuCredit of certain credit
card accounts ("Accounts") originated by CB&T pursuant to the Affinity Card
Agreement of even date herewith between CB&T and CompuCredit. Capitalized
terms used, but not defined, herein are used as defined in the Affinity Card
Agreement. To provide for the receipt of the Services by CompuCredit and in
consideration of the terms and provisions specified in this Agreement, the
parties hereto agree as follows:
SECTION 1
SERVICES PROVIDED BY CB&T
Upon any purchase of the Accounts by CompuCredit pursuant to the
Affinity Card Agreement referenced above, CB&T will provide the Services
identified and described on Exhibit A, attached hereto and made a part hereof
by reference, and shall provide such Services in accordance with the Aspire
Operations Manual ("Manual"), which is made a part hereof by reference,
except as otherwise provided herein. The Manual shall be signed by
CompuCredit and CB&T and shall provide for written amendments thereto from
time to time as agreed to by the parties. All services shall be provided in
accordance with applicable VISA Operating Regulations and procedures. CB&T
will provide the Services in connection with (i) the Aspire Card and (ii)
such other credit cards or bankcards as agreed in writing by CompuCredit and
CB&T (collectively,
"CompuCredit Cards"). CompuCredit acknowledges that it has reviewed and
understands such policies and procedures and hereby agrees that CB&T shall
apply such policies and procedures for the services provided under this
Agreement.
CB&T shall provide to CompuCredit periodic reports (through Total Systems
Services, Inc. ("TSYS") or otherwise), including but not limited to, new
account application status reports, delinquent account reports, charge-off
documentation and settlement reports, and such other reports as CompuCredit
may reasonably request from time to time. The frequency and content of such
reports shall be mutually agreed upon by CB&T and CompuCredit, consistent
with CB&T and/or TSYS' systems capability, as applicable, and CB&T's and/or
TSYS' report production schedule.
Unless otherwise agreed to by CompuCredit in writing, CB&T shall submit to
CompuCredit a monthly status report, in addition to the standard reports
described in the immediately preceding paragraph. The report shall (i)
generally describe CB&T's activities and accomplishments during the preceding
six (6) months; (ii) list the status of projects and tasks assigned by
CompuCredit; (iii) summarize account activity; and (iv) identify actual or
anticipated problem areas and the impact of such problems areas.
CompuCredit may, at its own expense and upon reasonable prior notice, have
full access to and the right to inspect and copy the books, records and data
records of CB&T relating to services performed herein by CB&T (or to which
CB&T has access as a client of any subcontractor performing work for or on
behalf of CB&T), and during the term of this Agreement, CB&T shall furnish
to CompuCredit all such information concerning transactions and services
provided by CB&T or on CB&T's behalf pursuant to this Agreement as CompuCredit
may reasonably request.
In the event that CompuCredit requests that CB&T perform any additional
facilities management services in connection with the CompuCredit Cards, and
CB&T agrees to provide such services, then the details and the cost of such
services shall be agreed to by CompuCredit and CB&T in writing and shall be
attached to this Agreement as an amendment or set forth in a separate
document.
2
SECTION 2
TERM
A. Initial Term. The Initial Term of this Agreement shall commence on
December ___, 1996 and shall continue until December 31, 1998 (the "Initial
Term").
B. Renewals. After the Initial Term, this Agreement shall be extended
for renewal terms of two (2) years each ("Renewal Term") unless one party
notifies the other party of its intent to terminate this Agreement at least 180
days prior to the end of the Initial Term or any Renewal Term.
C. Termination
(1) In the event CompuCredit terminates this Agreement, other than
as provided in Paragraph B of this Section 2 or other than for breach
pursuant to Paragraph 3 or 4 of this Section 2, CompuCredit shall pay a
termination fee to CB&T equaling six times the total amount of Fees (defined
in Section 3 hereof) incurred for the calendar month preceding termination or
six times the minimum monthly servicing fee, whichever is greater.
(2) CB&T may terminate this Agreement in the event CompuCredit
fails to make or adequately and timely provide for the payment of fees and
expenses due hereunder, but only if CB&T gives CompuCredit written notice of
such failure and CompuCredit fails to remedy such failure within fifteen (15)
business days after its receipt of said notice. Upon the expiration of the
fifteen (15) day period provided for above, CB&T may terminate this Agreement
by giving CompuCredit written notice, which termination shall be effective
seven (7) business days after receipt of such notice by notice by
CompuCredit. If such failure to pay is remedied by CompuCredit within such
fifteen (15) day period, then this Agreement shall continue as though no such
notice had been given.
(3) If either party fails to observe, keep or perform any material
term or condition of this Agreement, or the Manual, required to be observed,
kept or performed by that party, the other party, in addition to any other
rights and remedies it may have, shall have the right to terminate this
Agreement without paying a termination fee; provided, however, that the party
seeking to terminate the Agreement gives the other
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party a written notice of such failure claimed to be a breach of terms and
conditions of this Agreement, and the party receiving said notice fails to
remedy the breach, to the reasonable satisfaction of the non-breaching party,
within thirty (30) days after receipt of said notice. If the breach is not
remedied by the defaulting party within the thirty (30) day period provided
for above, the non-defaulting party may terminate this Agreement by giving
the defaulting party written notice effective immediately. If the breach is
remedied by the defaulting party within such thirty (30) day period, then
this Agreement shall continue as though no such notice had been given.
(4) In the event either party to this Agreement shall cease
conducting business in the ordinary course, become insolvent, make a general
assignment for the benefit of creditors, suffer or permit the appointment of a
receiver for its business or assets, or shall avail itself of, or become
subject to, and proceeding under the federal bankruptcy laws of any statute
of any state relating to insolvency or the protection of the rights of
creditors, then at the option of the other party hereto, the other party may
terminate this Agreement at any time upon notice of the other party.
(5) Termination of this Agreement shall not terminate CompuCredit's
obligation to pay CB&T for all services performed and expenses incurred under
the Agreement prior to the discontinuance of performance of the Services by
CB&T hereunder.
(6) In the event that CompuCredit does not terminate this Agreement
and CompuCredit sells in excess of the greater of (i) 10% of the Accounts
within any 12-month period or (ii) 25,000 Accounts within any 12-month
period, and CB&T ceases to service such accounts, CB&T shall receive a
deconversion fee equaling six (6) times a percentage (described below) of the
total amount of Fees incurred for the calendar month preceding the first sale
of the Accounts. The applicable percentage for purposes of the foregoing
calculation is the number of Accounts sold during the 12-month period divided
by the total number of Accounts being serviced by CB&T during the calendar
month preceding the sale of the Accounts that would make this subsection
applicable.
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D. Post-Termination
(1) Duties After Termination. Upon termination of this
Agreement, in order to preserve the goodwill of Cardholders both parties
shall cooperate in order to ensure a smooth and orderly termination of their
relationship and a transition of Cardholder Accounts. In the event CB&T
terminates this Agreement, CB&T shall continue to maintain and service the
Accounts and fulfill all of its obligations hereunder for a period of up to
180 days after the termination in order to allow CompuCredit to convert the
Accounts to an alternative servicer.
(2) Assistance with Conversion. Upon any termination of this
Agreement, CB&T shall provide to CompuCredit all assistance reasonably
necessary to enable CompuCredit to convert the accounts serviced hereunder to
the processing system designated by CompuCredit and shall cooperate with
CompuCredit in its efforts to effect such conversion at the earliest
practicable date.
SECTION 3
FEES
A. Servicing Fees. CompuCredit agrees to pay fees and reimburse
expenses to CB&T (Collectively, "Fees") in return for the Services provided by
CB&T under this Agreement in accordance with Exhibit B, attached hereto and
made a part hereof by reference. CompuCredit agrees to pay all invoices from
CB&T for such Services within thirty (30) days of receipt thereof.
B. No Further Fees. The servicing fees set forth in Exhibit B
shall be deemed to include all fees and expenses related to this Agreement,
and CompuCredit shall not be required to pay any other charges in connection
herewith, except for those additional services agreed to by CompuCredit in
writing.
SECTION 4
CONFIDENTIAL INFORMATION
A. All material and information supplied by one party to the other
party in the course of the negotiation of this Agreement and its performance
hereunder, including.
5
but not limited to, information concerning either party's marketing plans;
technological developments, objectives and results; and financial results are
confidential and proprietary to the disclosing party ("Confidential
Information"), Confidential Information does not include any information that
was (i) known to the receiving party at the time of disclosure or developed
independently by such party without violating the terms herein; (ii) in the
public domain at the time of disclosure or enters the public domain following
disclosure through no fault of the receiving party; or (iii) disclosed to the
receiving party by a third party that is not prohibited by law or agreement
from disclosing the same. Notwithstanding the foregoing, each CompuCredit
list containing the names, addresses and/or telephone numbers of CompuCredit
Card cardholders shall be deemed Confidential Information owned by
CompuCredit; provided, however, that this provision shall not prohibit any
transfer, sale or disclosure of the name, address or telephone number of, or
any solicitation of, any person of whose existence CB&T has or obtains
knowledge otherwise than by reason of CB&T's participation in this Agreement
or the Affinity Card Agreement.
B. Confidential Information shall be used by each party solely in
the performance of its obligations pursuant to this Agreement. Each party
shall receive Confidential Information in confidence and not disclose
Confidential Information to any third party, except as may be necessary to
perform its obligations pursuant to this Agreement and except as may be
required by law or agreed upon in writing by the other party. Each party
shall take all reasonable steps to safeguard Confidential Information
disclosed to it so as to ensure that no unauthorized person shall have access
to any Confidential Information. Each party shall, among other safeguards
which it may consider necessary, require its employees, agents, and
subcontractors having access to Confidential Information to enter into
appropriate confidentiality agreements outlining such terms as are necessary
to satisfy its obligation herein. Each party shall promptly report to the
other party and unauthorized disclosure or use of any Confidential Information
of that party to which it became aware. Upon request or upon termination of
this Agreement, each party shall return to the other party all Confidential
Information in its possession or control. No disclosure by a party hereto of
Confidential
6
Information of such party shall constitute a grant to the other party of any
interest or right whatsoever in such Confidential Information, which shall
remain the property solely of the disclosing party. Nothing contained herein
shall limit a party's rights to use its Confidential Information in any manner
whatsoever.
C. The terms of this Section 4 shall survive the termination of this
Agreement.
SECTION 5
USE OF NAMES AND TRADEMARKS
A. CompuCredit hereby authorizes CB&T, during the term of this
Agreement, on a non-exclusive, non-assignable basis, to use CompuCredit's
name and such trademarks of CompuCredit, including, without limitation, the
"Aspire" servicemark, as may be necessary in connection with the Services
provided under this Agreement (the "CompuCredit Credit Card Marks"), in the
forms and formats approved by CompuCredit, in various communications to
cardholders with respect to the CompuCredit Cards.
B. CB&T hereby authorizes CompuCredit, during the term of this
Agreement, on a non-exclusive, non-assignable basis, to use CB&T's name and
such trademarks of CB&T as may be used in connection with the Services
provided under this Agreement (the "CB&T Credit Card Marks"), in the forms
and formats approved by CB&T, in communications to CompuCredit Card
cardholders with respect to the CompuCredit Card accounts serviced pursuant
to this Agreement.
C. Except as otherwise provided herein, neither party shall use the
registered trademarks, service marks, logo, name or any other proprietary
designations of the other party without that party's prior written consent.
Each party shall submit to the other party for prior approval any advertising
or promotional materials relating to the services provided under this
Agreement in which such trademarks are to be used, and/or for any materials
that will be provided to the cardholders of the CompuCredit Cards pursuant to
this Agreement in which such trademarks are to be used, which approval shall
not unreasonably be withheld or delayed.
7
SECTION 6
INDEMNIFICATION
A. Except to the extent of any Losses which arise from the direct acts
or omissions of CB&T or an affiliate of CB&T, CompuCredit will indemnify and
hold harmless CB&T, and its directors, officers, employees, agents and
affiliates and permitted assigns from and against any and all "Losses" (as
herein defined) arising out of (i) any failure of CompuCredit to comply with
any of the terms and conditions of this Agreement, (ii) any inaccuracy of a
representation or warranty made by CompuCredit herein, or (iii) any
infringement or alleged infringement on the rights of any third party by use
of any of the CompuCredit Credit Card Marks, or the use thereof hereunder.
B. Except to the extent of any Losses which arise from the direct acts
or omissions of CompuCredit, CB&T shall be liable to and shall indemnify and
hold harmless CompuCredit and its officers, directors, employees, agents,
affiliates, and permitted assigns from and against any Losses (as defined
below) arising out of (i) any failure of CB&T to comply with any of the terms
and conditions of this Agreement, (ii) any inaccuracy of a representation or
warranty made by CB&T herein, (iii) any infringement or alleged infringement
on the rights of any third party by use of the CB&T Credit Card Marks, or the
use thereof hereunder, or (iv) any losses resulting from a failure of CB&T to
comply, in respect of its obligations in connection with the Program
hereunder, with any applicable laws or regulations whether immaterial or
material regardless of whether such failing to comply would constitute a
breach of a representation, warranty or covenant of CB&T hereunder.
C. For the purposes of this Section 6, the term "Losses" shall mean
all out-of-pocket costs, damages, losses, and expenses whatsoever, including,
without limitation, (i) outside attorneys' fees and disbursements and court
costs reasonably incurred by the indemnified party and (ii) costs (including
reasonable expenses and reasonable value of time spent) attributable to the
necessity that any officer or employee (other than in-house attorneys) of any
Indemnified Party spend more than 25% of his or her normal business hours,
over a period of two (2) months, in connection with any judicial,
administrative, legislative, or other proceeding arising out of the
obligations or services
8
provided hereunder by such party, including without limitation, any claim
that a party hereto has failed to obtain any permission or license to use any
software utilized in the performance of this Agreement.
SECTION 7
NOTICES
A. Any written notice required or permitted to be given by CompuCredit
to CB&T hereunder shall be addressed to:
COLUMBUS BANK AND TRUST COMPANY
Attention: BankCard Center Manager
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxx 00000
--OR--
X.X. Xxx 000
Xxxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
and any written notice required, or permitted to be given by CB&T to
CompuCredit under this Agreement shall be addressed to:
COMPUCREDIT, L.P.
Attention: Chief Financial Xxxxxxx
Xxx Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
FAX: (000) 000-0000
B. All written notices provided for hereunder shall be delivered in
person, sent by courier, sent by certified mail with a return receipt
requested, sent by nationally recognized overnight delivery service, or
transmitted by facsimile (with oral confirmation of receipt) and shall be
effective when delivered or received. The parties to this Agreement, by
notice in writing, may designate another address or office to which notices
shall be given pursuant to this Agreement.
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SECTION 8
ADDITIONAL PROVISIONS
A. Nothing herein contained shall be construed as constituting a
partnership, joint venture or agency between CompuCredit and CB&T.
B. This Agreement shall not be assignable in whole or in part by either
party without the other party's prior written consent, except that such
consent shall not be required for the assignment of this Agreement to an
entity that is an affiliate of the assigning party (which assignment shall
not relieve the assigning party of any obligation hereunder). Upon notice to
CompuCredit, CB&T may sub-contract with other entities with respect to the
provision of the Services hereunder, but no such subcontracts shall alter
CompuCredit's rights against CB&T under this Agreement.
C. Each party to this Agreement hereby represents and warrants to the
other that it has the full right, power and authority to enter into and
perform this Agreement in accordance with all the terms, provisions,
covenants and conditions hereof, and that the execution and delivery of this
Agreement has been duly authorized by proper corporate action.
D. Any delay, waiver, or omission by CompuCredit or CB&T to exercise any
right or power arising from any breach or default of the other party in any
of the terms, provisions, or covenants of this Agreement shall not be
construed to be a waiver of any subsequent breach or default of the same or
any other terms, provisions or covenants on the part of the other party.
E. CB&T represents and warrants that any media used to render the
Services and which were generated by CB&T of affiliated companies (including
without limitation TSYS) contain no computer instructions, circuitry or other
technological means whose purpose is to disrupt, damage, or interfere with
CompuCredit's use of its computer and telecommunications facilities for their
commercial, test, or research purposes.
F. CB&T hereby represents and warrants to CompuCredit that it has the
full right and authority to use any and all software used in the performance
of its obligations under this Agreement.
10
G. This Agreement shall be binding upon and shall insure to the
benefit of the parties hereto and their representatives and their respective
successors and assigns.
H. This Agreement constitutes the entire agreement between the
parties hereto relating to the subject matter hereof; provided, however, that
there may be separate written agreements signed by both parties from time to
time which serve to augment certain of the provisions contained herein. No
modification or amendment of this Agreement shall be effective unless and
until set forth in writing and signed by both parties hereto.
I. This Agreement shall be governed in all respects by and
construed in accordance with the laws of the State of Georgia.
J. Except as otherwise specifically provided in this Agreement,
all parties shall pay their own costs and expenses in connection with this
Agreement and the transactions contemplated hereby, including, without
limitation, all regulatory fees, attorneys' fees, accounting fees and other
expenses.
K. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original for all purposes and all of which shall
be deemed, collectively, one agreement, but in making proof hereof it shall
not be necessary to exhibit more than one.
L. CB&T represents and warrants that it has, or will have on or
before December 1, 1996, all of the necessary facilities and personnel to
provide the Services in accordance with the terms of this Agreement; that it
shall perform its obligations hereunder at all times and in all respects in
accordance with all material applicable federal, state, and local laws and
regulations; and that it will perform its obligations hereunder in a timely
manner and with due care.
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IN WITNESS WHEREOF each of the parties has caused this agreement to
be executed on its behalf by its duly authorized officers as of the day,
month and year first above written.
COMPUCREDIT L.P. COLUMBUS BANK AND TRUST
By: CompuCredit Management Corp., COMPANY
Its sole General Partner
By: By:
---------------------------- -------------------------
Title: Title:
------------------------- ----------------------
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Exhibit A
ASPIRE CARD PROGRAM SERVICE FEATURES
Project Management: Program Administrator
Report Management
Accounting: Settlement of all Visa transactions
Calculation and settlement of Visa quarterly fees
Customer Service: Customer Support provided 8 a.m. - 9 p.m. ET, seven
days a week
1-800 number of VRU
Chargebacks
Inquiries
Customer Service Mail (name changes, adding
authorized users, etc.)
Convenience Checks
Charge Plus Insurance
Balance Transfers
Automatic Payment Deductions
VRU: VRU available to provide 24 hours Customer Service, 7
days a week
Information available:
Balance
Last Payment
Credit Limit
Last five transactions
Originating Services: Data entry of applications
Processing of fulfillment material for approved
accounts
In-bound applications: Processing of inbound telephone applications
Credit: Review of pending accounts to approve/decline based
on judgmental criteria
Collection: The Melita Team primarily works one and two month
accounts using the power dialer, using Behavioral
Scoring to set collection priorities.
The Bankruptcy staff knows the importance of handling
each case quickly and efficiently. Knowledge of
regulations, aggressive actions and negotiations help
us maximize our recovery without an overburden of
legal fees.
The Recovery Team has helped keep net charge-off
figures low by bringing in the recover dollars. If
the in-house recovery specialist can't help the
customer, we use collection agencies or
13
attorneys. The effectiveness of each are monitored to
insure maximized recovery potential.
Fraud/Investigations: Credit Bureau Fraud Detection Analysis
Alert File (Internal Fraud Detection)
Handwriting analysis on suspicious written requests
Clearing House Alert File (Visa Fraud File)
Monitoring of various fraud detection reports to
include:
Activity Exceeds Maximum Report
Large Dollars Payment Report
Over Limit Report
Credit Balance Report
External programs focusing on top fraud states
through VSIL (Visa Strategic Information Line) and
TOSS (Total Office Security System)
Networking contacts with federal, state and local law
enforcement to include a twenty year association with
the International Association of Credit Card
Investigators.
Data Processing: CB&T utilizes two sister companies, Synovus Data
Corp. and Total System Services for data processing.
Total System Services provides the platform that
houses all account information and the software that
operates the authorization system, credit analysis
system, collections systems and the fraud detection
system, among others. TSYS also generates the
plastics and statements for all accounts. Synovus
Data Corp. processes convenience checks through the
Federal Reserve System, remittance processing ACH
transmissions for CB&T.
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Exhibit B
-------------------------------------------------------------------------------
ASPIRE CARD
Card Servicing Pricing - December, 1996
-------------------------------------------------------------------------------
Portfolio Services
Project Management
TSYS Liaison
Customer Service *[material omitted]
Accounting
Fraud Detection
Monitoring
--------------------------------------------------------------------------------
Application - $12.50 per manual review; judgmental only
Processing - $3 per keyed application - approved/declined
- $1.50 per keyed application in response to
in-bound telemarketing or solicitation
- $.50 per application transmitted into ACE from
marketing agency
- $3 per fulfillment package (including cost of
card, credit bureau check, and mailing)
--------------------------------------------------------------------------------
Inbound telephone $0.94 per call
applications
--------------------------------------------------------------------------------
Collections *[material omitted] monthly per delinquent account
worked by a collector (calls and/or skip tracing)
--------------------------------------------------------------------------------
Fraud/ $50 per hour for case management approved by
Investigations CompuCredit; plus out-of-pocket expenses for out of
office investigations only
--------------------------------------------------------------------------------
Information Support Customized TSYS Total Access reports $75 per hour
--------------------------------------------------------------------------------
Customized Additional services quoted on a project basis
Projects
--------------------------------------------------------------------------------
Pass-through - $1,000 per month per TSYS data transmission type
Expenses - TSYS charges for data circuit to CompuCredit for
collections
--------------------------------------------------------------------------------
Monthly Minimum $10,000 Monthly Servicing Fee
--------------------------------------------------------------------------------
------------------
* Deleted per the Registrant's request for confidential treatment and filed
separately with the Commission pursuant to Rule 24b-2
15
